Findings Of Fact Harbour Shores Hospital is a 60-bed short-term psychiatric facility, with 36 adult beds and 24 adolescent beds. The facility opened in October 1985, and had an occupancy of 62 percent at the time of the final hearing in March 1986. T. 14, 20. The hospital is an integral part of Lawnwood Medical Center, Inc., located in Ft. Pierce, Florida, and Lawnwood is owned by Hospital Corporation of America. T. 13-14. Hospital Corporation of America now operates 5,000 psychiatric beds in the United States. T. 18. Lawnwood Medical Center, Inc. (Lawnwood), submitted an application for certificate of need number 3363 on June 14, 1984, for the conversion of 12 short-term psychiatric beds to 12 short-term inpatient hospital substance abuse beds. T. 15. No construction is needed to convert these 12 beds. T. 16. The Department of Health and Rehabilitative Services (HRS) initially denied the application. T. 106. All references in this order to Harbour Shores Hospital shall include the Petitioner, Lawnwood, unless specifically stated otherwise. The parties stipulated that the only issue in this case is need and any ancillary issue which is based upon need. T. 4-5. HRS has a rule governing short and long-term hospital inpatient hospital substance abuse beds, which is rule 10-5.11(27), Florida Administrative Code. Subparagraph (f)1 of the rule contains what HRS calls bed allocations" and calculates need for a health service district as a whole. Harbour Shores Hospital is located in St. Lucie County in Health District IX. District IX is composed of St. Lucie, Indian River, Martin, Okeechobee, and Palm Beach Counties. HRS Ex. 2, p.7. The District IX Local Health Council has identified two subdistricts for purposes of allocating short term psychiatric and substance abuse beds. Subdistrict 1 is St. Lucie, Martin, Indian River, and Okeechobee Counties, and subdistrict 2 is Palm Beach County. HRS Exhibit 2, p. 7; T. 110. HRS proposes to determine need as of January 1989 using the date of the application as the starting point for the five year period specified in rule 10- 5.11(27)(f)1, Florida Administrative Code. T. 107-6. The basis of this decision is a new policy by HRS to implement the Gulf Court decision. There is a need for only 1 additional short-term substance abuse bed in District IX by January 1989 based upon Rule 10-5.11(27)(f)1, Florida Administrative Code. T. 109. HRS Exhibit 1. HRS proposes also to refer to such need for short term substance abuse beds as indicated by local health council plans, relying upon rule 10- 5.11(27)(h)3, Florida Administrative Code. T. 110. The local health plan for District IX allocates needed beds based upon the subdistricts described above. HRS Exhibit 2, p. 6. Further, the local health plan has adopted the method of HRS found in rule 10-5.11(27), supra, for calculating need, and calculates such need using the HRS rule factor of .06 substance 3. All references in this order to Harbour Shores Hospital shall include the Petitioner, Lawnwood, unless specifically stated otherwise. The parties stipulated that the only issue in this case is need and any ancillary issue which is based upon need. T. 4-5. HRS has a rule governing short and long term hospital inpatient hospital-substance abuse beds, which is Rule 10-5.11(27), Florida Administrative Code. Subparagraph (f)1 of the rule contains what HRS calls bed "allocations" and calculates need for a health service district as a whole. Harbour Shores Hospital is located in St. Lucie County in Health District IX. District IX is composed of St. Lucie, Indian River, Martin, Okeechobee, and Palm Beach Counties. HRS Ex. 2, p.7. The District IX Local Health Council has identified two subdistricts for purposes of allocating short-term psychiatric and substance abuse beds. Subdistrict 1 is St. Lucie, Martin, Indian River, and Okeechobee Counties, and subdistrict 2 is Palm Beach County. HRS Exhibit 2, p.7; T. 110. HRS proposes to determine need as of January 1989 using the date of the application as the starting point for the five-year period specified in Rule 10-5.11(27)(f)1, Florida Administrative Code. T. 107-8. The basis of this decision is a new policy by HRS to implement the Gulf Court decision. There is a need for only 1 additional short-term substance abuse bed in District IX by January 1989 based upon Rule 10-5.11(27)(f)1, Florida Administrative Code. T. 109. Exhibit 1. HRS proposes also to refer to such need for short term substance abuse beds as indicated by local health council plans, relying upon rule 10- 5.11(27)(h)3, Florida Administrative Code. T. 110. The local health plan for District IX allocates needed beds based upon the subdistricts described above. HRS Exhibit 2, p. 6. Further, the local health plan has adopted the method of HRS found in rule 10-5.11(27), supra, for calculating need, and calculates such need using the HRS rule factor of .06 substance abuse beds per 1,000 population in each of the two subdistricts. HRS Exhibit 2, pp. 5 and 8, paragraph II. Using current estimates of the populations of each subdistrict in January 1909, HRS projects that subdistrict 1 will have a surplus of 15 substance abuse beds in 1989, and all net need (16 beds) will be in subdistrict 2, which is Palm Beach County. T. 111; HRS Exhibit 1. HRS has not adopted these subdistricts by rule. T. 128-29. There was no evidence to substantiate the reasonableness of the subdistricts adopted in the local health plan. T. 131. The following is a summary of the existing and approved short-term substance abuse beds in District IX, showing county of location, and occupancy rates for 1985: Humana Hospital 16 Licensed Indian River 8509 Sebastian Lake Hospital 16 Licensed Palm Beach 3558 Palm Beaches Fair Oaks 17 Licensed Palm Beach 3807 Savannas 20 Approved St. Lucie Hospital Beds Status County Patient Days Occupancy 145.7% 60.7% 60.7% The number of patient days at Fair Oaks, however, is for four months, August, October, November, and December 1985. Thus, the actual number of patient days, 1269, has been multiplied by 3 to obtain an estimate for an entire year. T. 23- 24, 61-62. The occupancy rate is the number of patient days divided by the product of the number of days in the year (365) and the number of licensed beds. Using the statistics in paragraph 10, the average occupancy rate for the three existing facilities in District IX was 88.8 percent. If one assumes, as did Petitioner's expert, that the utilization rates for short-term substance abuse beds will at least remain the same as in 1935, with the addition of the 20 new beds at Savannas Hospital, District IX may have an occupancy rate of 63.8 percent and subdistrict 1 may have an occupancy rate of 64.8 percent . The 20 new beds at the Savannas Hospital are those granted to Indian River Community Mental Health Center, Inc., and are projected to open in November 1986. T. 83. As discussed above, Harbour Shores Hospital had been in operation about five months by the time of the March 1986 hearing, and its 60 short term psychiatric beds were averaging 62 percent occupancy, which is about 15 percent above the occupancy projected in its certificate of need application. T. 38. Harbour Shores serves patients from the four counties of subdistrict 1, St. Lucie, Martin, Indian River, and Okeechobee, and serves a significant number of patients from Palm Beach County as well; three to four percent of its patients also come from Brevard and Broward Counties. T. 19. About 80 percent of the patients at Harbour Shores in the first five months of its operation had a substance abuse problem secondary to the primary diagnosis of mental illness. T. 30, 50, 63. This is consistent with experience throughout Florida. T. 63. Most of these "dually diagnosed" patients have been through a detoxification program before entering Harbour Shores Hospital. T. 30. In its beginning months of operation, Harbour Shores has had patients referred from the courts, law enforcement agencies, community and social agencies, physicians, and from HRS. T. 21-22, 59. Harbour Shores can expect to obtain substance abuse referrals from these agencies. Staff at Harbour Shores works with the DWI Board, Students Against Drunk Driving, and school administrative personnel. T. 39-40. In October and November 1985, Harbour Shores received 38 requests from physicians, the courts, law enforcement agencies, and social agencies, for admission of patients for substance abuse treatment. T. 22, 49. There is no evidence that Harbour Shores had any such requests in December 1985 or January 1986. In February 1986, it had 14 such requests, and in March to the date of the hearing, it had 5 requests. T. 48. There is no evidence as to whether these requests were for short or long-term substance abuse services, or whether these were requests from different patients or multiple requests from the same patient. There is also no evidence that the persons requesting substance abuse treatment were not adequately treated at existing facilities. Thus, the data from these few months is not an adequate basis for determining future need for short term substance abuse beds. Ms. Peggy Cioffi is the coordinator for the Martin County Alcohol and Drug Abuse Program. Deposition, Ms. Peggy Cioffi, p. 2. Ms. Cioffi testified as to the need for substance abuse services in her area. She did not testify as an expert witness. Her program is primarily designed to assist the County Court in referrals of misdemeanants and others within the Court's jurisdiction who need substance abuse services. Id. Ms. Cioffi has difficulty placing persons needing inpatient or residential treatment. Id. at p. 3. She related an example of a county prisoner who asked to be detained in jail three months for lack of an alcohol program. Id. at p. 4. Ms. Cioffi did not state whether this person needed residential or inpatient hospital care. She also had recently reviewed a 14 page county court docket and determined that 67 percent of those charged represented alcohol or drug related offenses. Id. Ms. Cioffi did not clearly show how she was able to infer this fact. Further, Ms. Cioffi was unable to tell from this statistic how many of these defendants needed short term inpatient hospital substance abuse treatment. Id. at p. 6. She stated that a very high percentage of these could benefit from some kind of services, but did not separate the kinds of services, Id. at p.7. Ms. Cioffi stated that she often had to wait to find a place for a person in the following facilities: Dunklin, CARP, and Alcohope. Id. at p. 5. Ms. Cioffi stated that these were "residential" facilities, but she did not state whether these facilities were the equivalent of short-term inpatient hospital substance abuse facilities. These facilities are located in District IX, Id. at p. 7, but are not short-term in patient hospital substance abuse beds licensed as such. See paragraph 10 above. See also T. 96-99. In summary, although Ms. Cioffi identified a generalized need for residential or hospital substance abuse treatment, she did not draw any distinction between the two services. If there was a similarity, she did not provide evidence of the similarity. Lacking evidence in the record that need for residential treatment programs can be used to show need for inpatient hospital beds, Ms. Cioffi's testimony is insufficient to show need for the services sought by the Petitioner. The Honorable Marc Cianca is a County Judge in St. Lucie County. Deposition, Judge Marc Cianca, p. 2. Judge Cianca was of the opinion that his area attracted semi-young people with substance abuse problems in greater numbers than the retirement population. Id. at 17-18. He frequently was frustrated in his efforts to find substance abuse services for defendants in his Court. Id. at 3-5. Judge Cianca felt that most of the people he saw needed long-term therapy, beginning with inpatient services, followed by long-term follow-up programs. Id. at 12-14. Like the testimony of Ms. Cioffi (which concerned the same group of persons before the County Court), Judge Cianca did not clearly distinguish need for short-term inpatient hospital substance abuse services from need for all other forms of substance abuse treatment, and the record on this point is silent as well. For this reason, Judge Cianca's opinion that 100 short-term inpatient hospital substance abuse beds are needed must be rejected. The testimony of Ms. Cioffi and Judge Cianca is insufficient as a predicate for determining need for the inpatient hospital beds sought by the Petitioner for another reason, and that is the lack of evidence that the persons identified as needing substance abuse services will have the ability to pay for such services at Petitioner's facility, or that third party payment will be available for them. The people in need in Ms. Cioffi's testimony normally do not have funds to pay for treatment. Cioffi, p. 8. Similarly, a substantial number of the people in need seen by Judge Cianca do not have insurance coverage and would not be able to use Harbour Shores unless they qualified for Medicaid and unless Harbour Shores took all of those qualified for Medicaid. Id. at 7, 15-16. A substantial number of the persons needing substance abuse treatment do not have jobs or insurance and must rely upon "welfare" for services. Id. at 15, 17. These persons cannot afford certain programs, and must rely upon state aid through programs such as those provided by Indian River Community Mental Health Center, and for these programs there is always a waiting list. Id. at There is no evidence that any of these persons are eligible for Medicaid. Ms. Sharon Heinlen, Director of Planning and Development for Harbour Shores Hospital, who testified for the Petitioner as an expert in health planning and hospital administration, had not studied the Medicaid population in the area to determine need. T. 76. Although Harbour Shores had about 15 percent of its psychiatric patient days devoted to Medicaid patients, T. 33, the validity of this percentage for substance abuse patients, or for the reasonably near future, was not established by other evidence. Petitioner's formal application for this certificate of need projects 5 percent of its gross revenues from Medicaid and another 5 percent devoted to bad debt, indigents, and Baker Act cases. Petitioner's Exhibit 1, p. 5. But the application does not state whether this percentage will be evenly distributed among psychiatric and substance abuse patients. In any event, the percentages of indigent care and Medicaid care are too small to satisfy the need identified by Judge Cianca and Ms. Cioffi. Stated another way, the need identified by those two witnesses is not relevant to Petitioner's application except with respect to a small percentage. Harbour Shores plans to have after care for substance abuse patients. T. 40. The Savannas Hospital is the name of the hospital to be completed in November 1986 to provide, among other services, 20 short term inpatient hospital substance abuse beds under the certificate of need granted to Indian River Community Mental Health Center, Inc. T. 82-83. The primary service area of the Savannas Hospital will be the same four counties as now served by Harbour Shores Hospital, as well as Palm Beach County. T. 84. The Savannas Hospital intends to be licensed. T. 84. The Savannas Hospital is located in Port St. Lucie, in St. Lucie County. T. 95-96. The service proposed is a comprehensive substance abuse service. T. 87. Five of the twenty substance abuse beds will be devoted to detoxification. T. 92. The Savannas Hospital will be operated by the Mediplex Group in partnership with Indian River Community Mental Health Center, Inc. T. 82. The land will be owned by Mediplex. T. 95. The Savannas Hospital will be a private, for profit, hospital, while the Mental Health Center will be a not-for- profit facility. T. 86. The Savannas Hospital publicly states that it will take five percent indigent patients, which does not include Medicare. T. 87. There is no commitment to provide more indigent care. T. 89. All other patients acre expected to be fully paying. T. 93. The actual figure for free or nonpaying patients has not yet been calculated. T. 94. The Savannas Hospital will not serve Medicaid substance abuse patients because it is a freestanding facility. T. 36, 86. Humana Hospital Sebastian is the closest facility to Harbour Shores currently in operation providing inpatient short-term hospital substance abuse services, and Humana Sebastian can accept Medicaid patients. T. 59. Ms. Elizabeth Dudek testified for HRS as an expert in health planning and certificate of need review in Florida. Ms. Dudek has reviewed all of the applications made in District IX for substance abuse beds since November 1983, and as a supervisor, has reviewed all of the applications in the state for substance abuse beds. T. 104. She has been in contact with the District Alcohol, Drug Abuse, and Mental Health Program Office and has attended public hearings, as well as administrative hearings, concerning substance abuse beds in District IX. T. 104-05. She also listened to all of the evidence presented at the final hearing. It was Ms. Dudek's opinion that there was no need for the substance abuse beds sought by the Petitioner. T. 127-28. Ms. Sharon Heinlen was also qualified as an expert in health planning, as well as hospital administration. T. 13. Ms. Heinlen has only recently moved to Florida, T. 11, 66, and stated that she did not know Florida well enough to know what might be the best thing to advocate in Florida with respect to whether all hospitals should provide all services. T. 65-66. She had conducted studies of District IX, however. T. 66. The average occupancy rates for District IX testified to by Ms. Heinlen were mathematically incorrect, and the correct lower rates do not support her opinion that additional short term substance abuse beds are needed. See FF 11. The fact that about 80 percent of the psychiatric patients now are at Harbour Shores Hospital also have a substance abuse problem does not necessarily support Ms. Heinlen's opinion as to need. See FF 12. This statistic is consistent with experience in all of Florida, and therefore should be accommodated by the HRS numeric need methodology. Moreover, it must be inferred that hospitalization of these patients as psychiatric patients was proper, rather than as substance abuse patients, and that even if additional substance abuse beds were available, these patients still would need to be in a psychiatric bed for treatment of the primary diagnosis. As discussed in FF 14, the data concerning recent requests for substance abuse services at Harbour Shores Hospital is not sufficient to conclude that a need exists for additional beds. As discussed in FF 17, Ms. Heinlen did not have an adequate basis for any opinion as to the need for short-term substance abuse beds for Medicaid patients in District IX. Finally, Ms. Heinlen testified that there was a waiting list for patients to be admitted to licensed short-term substance abuse beds at Fair Oaks and Lake Hospital, but the testimony was hearsay. T. 28. Since this evidence conflicts with the relatively low occupancy rates at these same facilities, and has not otherwise been corroborated by non-hearsay evidence, it must be rejected as a basis for a finding of fact. Further, due to the conflict with the low occupancy rates, it is rejected as a basis for Ms. Heinlen's expert opinion. In summary, Ms. Heinlen's expert opinion that there is a need for short-term, inpatient hospital substance abuse beds in District IX must be rejected. It is the position of HRS that even if the rule showed a need, the occupancy factor would be a factor in showing no need. T. 134. Conversely, if the rule showed no need, the occupancy factor would be one factor among others which night show need. Id.
The Issue The issue in these consolidated cases is whether proposed amendments to Rule 10-5.011(1)(o), and (p) F.A.C. relating to certificates of need for hospital inpatient general psychiatric services, are invalid exercises of delegated legislative authority, as defined in Section 120.52(8), F.S.
Findings Of Fact Metamorphosis of the Rules Prior to 1983, hospitals were not separately licensed, and certificates of need (CON) were not required for the designation of beds for psychiatric and substance abuse services. In 1983, statutory amendments to Chapter 381, F.S. addressed psychiatric beds as reviewable projects in the CON program. In 1983, HRS adopted rules establishing four new categories of beds, now found in Rules 10-5.011(1)(o), (p), and (q), F.A.C.: Short-term psychiatric, long-term psychiatric, and short and long-term substance abuse. At the time that the categories were created, HRS conducted an inventory of the hospitals, asking how many beds were designated in each category. Based on the responses, published in the Florida Administrative Weekly, future projections of need were made and applications were considered for CONs. Another category of psychiatric beds was not included in the 1983 rules. Intensive residential treatment programs for children and adolescents were created by statute in 1982, and are defined in Section 395.002(8), F.S. as: a specialty hospital accredited by the Joint Commission on Accreditation of Hospitals which provides 24-hour care and which has the primary functions of diagnosis and treatment of patients under the age of IS having psychiatric disorders in order to restore such patients to an optimal level of functioning. These facilities, called IRTFs, may become licensed as hospitals pursuant to Section 395.003(2)(f), F.S., but as hospitals they must obtain CON approval pursuant to Sections 381.702(7) and (12), F.S. and Section 381.706(1) (b), F.S. IRTFs have no statutory or regulatory restrictions on length of stay and were approved by HRS at one time under an unwritten policy that there be one such facility available in each HRS planning district, without regard to the availability of other long or short term psychiatric programs. In 1985, HRS proposed a rule amendment which would have eliminated the short and long term distinction, as well as the distinction between psychiatric services and substance abuse services. Six months later, the proposed rule amendment was withdrawn. It was highly controversial; several challenges were filed; objections were made by various local health councils; and a new administrator took over. The agency decided to rework its proposed change~;. The agency next began the process of revision in 1987, and in 1988 convened a workshop group to review an issue paper prepared by agency staff. Another work group met in 1989 to consider the consolidation of psychiatric and substance abuse rules. HRS staff reviewed literature on the subjects of substance abuse and psychiatric services, including literature relating to access by indigent patients and the provision of services to children and adolescents. Staff prepared rule drafts which were circulated in- house, including the alcohol, drug abuse and mental health program office; and to such outside groups as the Association of Voluntary Hospitals of Florida, the Florida Hospital Association and the League of Hospitals. The proposed rule amendments which are the subject of this proceeding were filed on January 19, 1990 (substance abuse), and on January 26, 1990 (inpatient psychiatric services) in the Florida Administrative Weekly. The Parties HRS administers the CON program pursuant to Section 381.701, et seq., F.S. (1989). The CON program regulates entry into the Florida health care market by providers through review and approval of certain capital expenditures, services and beds. The petitioner, Florida League of Hospitals, Inc. is a nonprofit corporation which is organized and maintained for the benefit of investor-owned hospitals which comprise its membership. The remaining petitioners and intervenors are current providers of hospital inpatient psychiatric services, long and short term, and of inpatient substance abuse services, long and short term. The petitioners and intervenors are all substantially affected by the proposed rules and have stipulated to the standing of all parties in this proceeding. Abolishing Distinctions Between Long-Term & Short-Term Psychiatric Beds "Short term hospital inpatient psychiatric services" is defined in existing rule 10-5.011(1)(o)1, FAC, as follows: Short term hospital inpatient psychiatric services means a category of services which provides a 24-hour a day therapeutic milieu for persons suffering from mental health problems which are so severe and acute that they need intensive, full-time care. Acute psychiatric inpatient care is defined as a service not exceeding three months and averaging length of stay of 30 days or less for adults and a stay of 60 days or less for children and adolescents under 18 years. "Long term psychiatric services" is defined in existing rule 10- 5.011(1)(p)1., FAC as a category of services which provides hospital based inpatient services averaging a length of stay of 90 days. Neither rule addresses services to adults with an average length of stay (ALOS) of 30-90 days, or services to children and adolescents with a 60-90 day ALOS. Because of this, and the "averaging" process, long term hospitals legitimately serve "short term" patients and short term hospitals may serve "long term" patients. One party has calculated than a long term facility could legally provide short term services for 80% of its patients, and long term services for only 20% of its patients and still have an ALOS of 90 days. Under the existing rules a facility must file a CON application to convert from long term to short term beds, or vice versa, and is subject to sanctions for failure to comply with the designation on its CON. The proposed changes would repeal rule 10-5.011(1) (p), FAC regarding long term services, and would amend rule 10- 5.011(1) (o), FAC to delete the definition of short term services, thereby permitting facilities to serve patients without regard to length of stay. The proposed changes are supported by several factors upon which a reasonable person could rely. Substantial changes have occurred in the last decade in clinical practices and in third party reimbursement to reduce the ALOS for hospital inpatient psychiatric care. Prior to the 1960s, there was no distinction between long and short term care, as all hospital based care was long term with an emphasis on psychoanalytic therapy. Beginning in the 1960s, the concept of community mental health programs evolved with an emphasis on deinstitutionalization of patients in large public "asylums" and with a goal of treatment in the least restrictive environment. In more recent years the trend has spread to the private sector. Improvements in the availability and use of psychiatric drugs, the use of outpatient care or partial hospitalization, and improved follow up care have led to a dramatic decrease in ALOS. Long term care is costly, and whether third party payors have been a driving force, or are merely responding to the trends described above, long term inpatient reimbursement is virtually nonexistent. During the 19805, most insurance companies imposed a 30-day limit on psychiatric inpatient care or imposed monetary limits which would have effectively paid for less than a 90-day term. CHAMPUS, the program providing insurance to military dependents, was providing long term coverage in 1982, but by 1986 its coverage was rarely available for more than 30-60 days, and today, under CHAMPUS' case management system, 30 days is a "luxurious amount". Other large third-party payors such as Blue Cross/Blue Shield have similar limits or aggressively use case management (the close scrutiny of need on a case by case basis) to limit reimbursement for inpatient care. Of the two or three long term facilities in existence at the time that HRS' rules were originally adopted, only one, Anclote Manor still reported an ALOS of over 90 days by 1989, dropping from an ALOS of 477.9 days in 1986 to 145.4 days in 1989. At the same time its occupancy rate dropped below 50%. There is an interesting dialogue among experts as to whether there still exists a clinical distinction between long term and short term inpatient psychiatric care. Studies at the Florida Mental Health Institute found no difference in rate of rehospitalization over a 12 month period between patients who were in a nine week program and patients from Florida State Hospital with a 500 day length of stay. Some mental health practitioners are looking now at treating the chronic psychiatric patient with repeated short term hospital stays and less intensive care between episodes, rather than a single long term inpatient stay. Other practitioners maintain that a long term psychiatric problem is behavioral in nature and requires a total life readjustment and longer length of stay. Whichever practice may be preferable, the facts remain that fewer and fewer mental patients are being treated with long term hospitalization. The proposed rules would not foreclose any facility from providing long term care, if it finds the need. To the extent that a clinical distinction exists between short and long term care, the existing rules do not address that distinction, except from a wholly arbitrary length of stay perspective. The existing rules no longer serve valid health care objectives. Existing providers with short term CONs are concerned that the allowing long term facilities to convert will further glut an underutilized market and will result in an increase in vacant beds and a rise in the cost of health services, contrary to the intent of the CON program. Intensive residential treatment facilities (IRTFs), which will be folded into the need methodology for children and adolescent beds, have no current restrictions on length of stay and may already compete with impunity with the short term providers. Moreover, long term facilities are also providing substantial short term care as a result of the trends discussed above. HRS has not consistently enforced the length of stay restrictions of long term providers' CONs. Whether those CONs were improvidently granted is beside the point. The capital costs have already been incurred; the beds are available; and the beds are being used, in part, for short term services. Abolishing the distinction is a rational approach to current conditions. And in determining that all existing providers would be placed in the same position regarding length of stay, HRS avoids the regulatory nightmare of trying to enforce limitations on existing providers and approving new beds without limitations. Creating a Distinction Between Adult and Children/Adolescent Beds Rule 10-5.011(1)(o)3.c. creates a CON distinction between general psychiatric services for adults, and those services for children and adolescents. Rule 10-5.011(1)(o)4., as proposed, would create separate need criteria for hospital inpatient general psychiatric services for adults and for children/adolescents. Adolescents are defined in Rule 10- 5.011(1)(o)2.a., as persons age 14 through 17 years. Persons over 17 years are adults, and under 14 years are children. There are valid clinical reasons to distinguish between programs fob the separate age groups. Although there is some overlap, differing therapies are appropriate with different ages. The types of services offered to adults are not the same as those which are offered to children. Children, for example, often receive academic educational services while being hospitalized. Adults receive career or vocational counseling and marriage counseling. The required separation by age categories would remove some flexibility from providers. However, this is offset by the Department's valid need to track for planning purposes inpatient services to children and adolescents separately from those provided to adults. Based on anecdotal evidence, HRS' Office of Alcohol, Drug Abuse and Mental Health Program Office is concerned about the possible overutilization of hospital inpatient services for children and adolescents and the potential that when insurance reimbursement expires they are discharged without clinical bases. Taking Inventory Under the proposed rule, in order to separately regulate adult and children/adolescent beds, HRS will fix an inventory of uses as of the time that the rule takes effect. For facilities with CONs which already allocate beds between the two groups, the proposed rule will have no effect. For facilities without a designation, as long as adults and children/adolescents are kept in separate programs, the allocation can now be mixed and changed at will. The rule amendment will freeze that use in place. HRS has conducted a preliminary survey to determine the existing uses of psychiatric, substance abuse and residential treatment program beds. The survey of approximately 120 facilities is complete, but is not intended to limit those facilities unless their CON already provides a limit. A final inventory will be taken after the proposed rules become effective. The inventory will be published, and providers will be given an opportunity to contest its findings. The ultimate outcome will be amended CONs and licenses which reflect each facility's mix of adult and children/adolescent beds. The process is a fair and reasonable means of commencing separate regulation of services to these age groups. The Definitions Proposed rules 10-5.011(1)(o)2.1., 2.p., and 2.t.) define "hospital inpatient general psychiatric services", "psychiatric disorder" and "substance abuse", respectively. Each of these provisions defines the terms by reference to classifications contained in the Diagnostic and Statistical Manual of Mental Diseases (DSM-III-R Manual) and equivalent classifications contained- in the International Classification of Diseases (ICD-9 Codes). The rule as originally proposed included the phrase "or its subsequent revisions", after incorporating the manuals by reference. In testimony, and in the parties second agreement (Hearing Office exhibit 3) the phrase is deleted. However, it still appears in proposed rule 10-5.011(1) (o)2.1., perhaps inadvertently. The DSM-III-R is a generally recognized manual for the classification of mental disorders and is widely used by clinicians and medical records professionals to categorize the conditions of patients. The ICD-9 codes are broader than just mental disorders, but they have a section on mental disorders with numbers that are identical to those in the DSM-III-R. Although the manuals are complex and subject to interpretation, clinicians are accustomed to their use and they provide a reasonable guide as to the services which may be provided in an inpatient substance abuse program, as distinguished from an inpatient psychiatric program. Advertising Limited Proposed rule 10-5.011(1)(o)3.d. (as amended in the parties second agreement, Hearing Officer exhibit #3), provides: D. Advertising of services. The number of beds for adult or for children and adolescent hospital inpatient general psychiatric services shall be indicated on the face of the hospital's license. Beds in intensive residential treatment programs for children and adolescents which are licensed as specialty hospital beds will be indicated as intensive residential treatment program beds on the face of the hospital's license. Only hospitals with separately-licensed hospital inpatient general psychiatric services, including facilities with intensive residential treatment programs for children and adolescents which are licensed as specialty hospitals, can advertise to the public the availability of hospital inpatient general psychiatric services. A hospital with separately licensed hospital inpatient general psychiatric services that does not have a certificate of need for hospital inpatient substance abuse services may advertise that they [sic] provide services for patients with a principal psychiatric diagnosis excluding substance abuse and a secondary substance abuse disorder. The Department does not currently have CON, licensure, or other rules which limit the ability of a health care provider to advertise its services, and has never used advertising as a factor in conducting CON review for any proposed services. HRS included provisions regarding advertising in its proposed rules because it had evidence that existing facilities have used misleading advertisements. The evidence came from other providers, rather than consumers. However, it is the consumer whom the agency feels may be confused by advertising which implies that services are available when such services cannot be legally provided under the facility's license. The advertising provision is prospective in nature, seeking to prevent licensed providers from advertising services for which they are not licensed. The provisions do not relate to CON review, and the staff is unclear as to how the rule would be implemented. Licensing and CON review are two separate functions within the agency. Although the term is not defined in the proposed rule, advertising broadly includes word of mouth referrals and public presentations by professionals in the community, as well as traditional media and written advertisements. Properly utilized, advertising helps consumers exercise choice and gain access to needed services. Improper advertising is subject to the regulation of federal and state agencies other than the department. New Need Methodology, with Preferences Proposed Rule 10-5.011(1)(o)4., deletes the existing population ratio methodology and creates a need formula based upon use rate, for adult and children/adolescent inpatient psychiatric services. Certain preferences are also described. 34. Rule 10-5.011(1) (o)4.e.(III) provides: In order to insure access to hospital inpatient general psychiatric services for Medicaid-eligible and charity care adults, forty percent of the gross bed need allocated to each district for hospital inpatient general psychiatric services for adults should be allocated to general hospitals. The same provision for children and adolescent services is found in rule 10-5.011(1)(o)4.h.(III). Medicaid reimbursement is not available for inpatient services in a specialty hospital. 35. Rule 10-5.011(1)(o)4.i. provides: Preferences Among Competing Applicants for Hospital Inpatient General Psychiatric Services. In weighing and balancing statutory and rule review criteria, preference will be given to applicants who: Provide Medicaid and charity care days as a percentage of its total patient days equal to or greater than the average percentage of Medicaid and charity care patient days of total patient days provided by other hospitals in the district, as determined for the most recent calendar year prior to the year of the application for which data are available from the Health Care Cost Containment Board. Propose to serve the most seriously mentally ill patients (e.g. suicidal patients; patients with acute schizophrenia; patients with severe depression) to the extent that these patients can benefit from a hospital-based organized inpatient treatment program. Propose to service Medicaid-eligible persons. Propose to service individuals without regard to their ability to pay. Provide a continuum of psychiatric services for children and adolescents, including services following discharge. The preferences are similar to those in CON rules relating to other types of health services and are intended to implement, in part, the legislative mandate that the agency consider an applicant's ". . . past and proposed provision of health care services to medicaid patients and the medically indigent." Section 381.705(1) (n), F.S. Under Medicaid reimbursement general hospitals are paid a set per diem based on a variety of services provided to all Medicaid patients, regardless of actual cost of the individual service. As psychiatric services are generally less costly than other services on a per diem basis, hospitals may recoup a greater percentage of their costs in serving Medicaid psychiatric patients. This and the fact that public hospitals receive some governmental subsidies do not obviate the need for incentives in the CON program. Not all of the charity care provided by these hospitals is funded and a large amount is written off. Although Petitioners argue that the preferences are not needed, or are too generous, none provide competent evidence that the facilities who do not enjoy the preferences are unduly prejudiced. The 40% allocation of bed need to general hospitals is a guideline, not a maximum, as applied by the agency, and presumes that there are general hospitals competing in any batch in question. It is not intended to frustrate a separate section of the rule which allows a hospital with at least an 85% occupancy rate to expand regardless of need shown in the formula and the occupancy rate district-wide. See 10- 5.011(1) (o)4.d. and g. "Evaluation of Treatment Outcomes" The proposed rules contain three provisions relating to a hospital's evaluation of its patients' treatment outcomes. Rule 10-5.011(1) (o)3.i, includes among "required services", ". . . an overall program evaluation of the treatment outcomes for discharged patients to determine program effectiveness." Rule 10-5.011(1)(o)8.j., requires in the application, A description of the methods to be used to evaluate the outcome of the treatments provided and to determine the effectiveness of the program, including any summary evaluation outcome results for hospital inpatient psychiatric services provided at other facilities owned or operated by the applicant in Florida and other states. The data shall exclude patient specific information. Rule 10-5.011(1)(o)9.e., imposes a similar additional requirement in applications from providers seeking more beds: A summary description of any treatment outcome evaluation of the hospital inpatient general psychiatric services provided at the facility for which additional beds are requested, for children, adolescents or adults as applicable to the facility for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool. The purpose of these requirements, according to HRS, is to insure that hospitals will know whether its patients are better off when they leave than when they were admitted to the program. Most hospitals have such knowledge. The terms, "outcome determination", "summary evaluation outcome results", "summary description of treatment outcome evaluation" and "overall program evaluation of treatment outcomes", are nowhere defined in the proposed rules, and the department intends to leave to each applicant or provider the methodology for determining whether its patients are "better off" for having been in its program. Hospitals do not routinely evaluate their patients after discharge and such follow up would be difficult and costly. Most hospitals do, however, establish a treatment plan upon admission, continue to review and revise that plan as needed throughout treatment, and determine the patients' readiness for discharge based on the goals successfully attained. This is the process described by Florida Hospital's Center of Psychiatry Administrative Director. The rules require no more than a description similar to that provided by Florida Hospital. The rules set no standards and do not dictate that follow- up of discharged patients be accomplished, even though post discharge evaluation may be of value and is generally accepted as the best tool for measuring treatment effectiveness. The measurement of treatment outcome is an inexact process and relies on a series of subjective standards which need to be described. HRS does not intend to set those standards and, other than have its applicants demonstrate that a process is in place, the agency has no idea how the required information will impact its CON review. Without definitions and standards, the agency will have no way of comparing one applicant's information with another's. Without specificity and more guidance the rules fail to apprise the applicant of what is required and will provide no meaningful information to the agency in its CON review function. Miscellaneous Provisions The Non-Physician Director. The proposed definition of "Hospital Inpatient General Psychiatric Services" in Rule 10-5.011(1) (o)2.1. includes services provided under the direction of a psychiatrist or clinical psychologist In drafting this definition, agency staff relied on advice from experts at their workshops and on advice from the agency's own Alcohol, Drug Abuse and Mental Health Program Office, to the effect that professionals, other than physicians, are qualified to direct the units. Interpretation and Application. It is not the intention of HRS that its rules be interpreted to override good medical practice or the sound judgement of treating physicians. Thus, the rules would not prohibit stabilization of a patient who is presented to the emergency room of a hospital without a CON for substance abuse or psychiatric services. Stabilized Alzheimers patients may be housed in nursing homes. Nor do the rules prohibit or subject to sanctions the occasional admission of a psychiatric or substance abuse patient to a non-substance abuse or psychiatric bed so long as this occurs infrequently in a hospital without psychiatric or substance abuse programs. "Scatter" beds are not eliminated. Those beds would continue to be licensed as acute-care beds, as they would not be considered part of an organized program, with staff and protocols, to provide psychiatric or substance abuse services. Proposed rule 10-5.011(1)(o)4.h.(v) provides that applicants for IRTPs for children and adolescents seeking licensing as a specialty hospital must provide documentation that the district's licensed non-hospital IRTPs do not meet the need for the proposed service. The department is not seeking specific utilization data in this regard, as such is not available. General information on the availability of alternatives to inpatient hospital services is obtainable from local health councils and mental health professionals in the community. Quarterly Reports. Proposed rule 10-5.011(1)(o)10. requires: Facilities providing licensed hospital inpatient general psychiatric services shall report to the department or its designee, within 45 days after the end of each calendar quarter, the number of hospital inpatient general psychiatric services admissions and patient days by age and primary diagnosis ICD-9 code. The Health Care Cost Containment Board (HCCCB) is already collecting similar quarterly data from providers. The reporting system is being updated and improved but in the meantime HRS is experiencing problems with the type and accuracy of the data it receives from HCCCB. One problem is that HCCCB collects its data with regard to all discharges in a psychiatric or substance abuse diagnostic category, whereas HRS is interested only in data from a psychiatric or substance abuse program. Until the system improves, HRS needs the information it seeks from the providers in order to plan and apply the need methodology. The agency intends to designate local health councils to collect the data and has already worked with them to set up a system. If reports provided to the HCCCB comply with the proposed requirement, HRS has no problem in receiving a duplicate of those reports. The Economic Impact Statement Pursuant to Section 120.54(2), F.S., HRS prepared an economic impact statement for the proposed rule. It was authored by Elfie Stamm, a Health Services and Facilities Consultant Supervisor with HRS. Ms. Stamm has a Masters degree in psychology and has completed course work for a Ph.D. in psychology. She has been employed by HRS for 13 years, including the last ten years in the Office of Comprehensive Health Planning. She is responsible for developing CON rules, portions of the state health plan, and special health care studies. It was impossible for Ms. Stamm to determine how the rule could impact the public at large. The economic impact statement addresses generally the effect of abolishing the distinction between long and short term services and acknowledges that the rule will increase competition among short term service providers. The impact statement also addresses a positive impact on current long term providers.
Findings Of Fact Procedural History On August 15, 1983, the Manatee Mental Health Center, Inc., d/b/a Manatee Crisis Center applied to the Department of Health and Rehabilitative Services for a certificate of need number 2681 to operate 42 short term psychiatric hospital beds and 12 short term substance abuse hospital beds. The application was denied in free form action by SIRS on January 30, 1984, and on February 23, 1984, MMHC timely requested a formal administrative hearing. On April 16, 1984, Charter Medical-Southeast, Inc., d/b/a Charter Haven Hospital petitioned to intervene in this case. The petition was granted May 7, 1984. On October 17, 1985, Manatee Memorial Hospital petitioned to intervene. The petition was granted December 5, 1985. On March 28, 1986, Charter Medical- Southeast, Inc., d/b/a Charter Hospital of Tampa Bay petitioned to intervene, and the petition was granted by order dated April 11, 1986. On March 18, 1986, MMH moved to dismiss Charter Haven as a party. On April 2, 1986 and April 16, 1986, Charter Haven filed amended petitions to intervene. The amended petitions sought comparative review as well, and consolidation. On May 5, 1986, the final hearing in this case commenced. The first portion of the hearing was directed to the issue of Charter Haven's petition to intervene and to consolidate for purposes of comparative review. On May 7, 1986, the motions of MMHC and MMH to dismiss Charter Haven granted, and this was confirmed by findings of fact and conclusions of law entered in an order dated May 14, 1986. The final hearing was continued to July 7, 1986. All portions of the order of May 14, 1986, including the findings of fact and conclusions of law, are herein by reference, and a copy of that order is attached to this recommended order as Appendix B. Additionally, all testimony and evidence received since the commencement of the final hearing of May 5, 1986, are a part of the record in this case. Description of MMHC The Petitioner, MMHC, is a private not-for-profit corporation which contracts with HRS to provide community mental health services pursuant toChapter 394, Florida Statutes. As a community mental health facility, it also provides alcohol programs pursuant to Chapter 395, Florida Statutes, and drug abuse treatment programs pursuant to Chapter 396, Florida Statutes. I-2, 47, 51. As a community mental health center, MMHC is required to provide and does provide a wide variety of inpatient and outpatient services dealing with mental health and substance abuse. Among the services provided by MMHC are outpatient services; inpatient services; residential services; case management; suicide crisis counseling; outpatient programs for chronically mentally ill adults, elderly persons, and children and adolescents; programs for the moderately mentally ill and institutionally dysfunctional persons; outpatient chemical dependency services; employee assistance programs; crisis stabilization inpatient services; detoxification services; and 28-day substance abuse inpatient services. I-2, 43-44. MMHC is required by contract with SIRS, generally speaking, to provide all of these services if not by name, then by subject. I-2, 51. The primary service area of MMHC is Manatee County. I-2, 57. The primary source of funds to MMHC comes from the state, either as state money or federal money allocated by the state, but Manatee County provides some matching money. I-2, 52- 53. Additionally, MMHC receives some money from payment of charges by patients themselves. I-2, 53-55. As a community mental health center, MMHC has the responsibility to tailor its services to serve the middle and lower socioeconomic populations in Manatee County. I-2, 54-57. It is not usual for MMHC to serve patients from upper management or professional persons, or persons other than those in the middle and lower socioeconomic classes. I-2, 83. It is the mission of MMHC to insure that its services are financially accessible to everyone in the community. Id. MMHC is responsible to provide financially accessible services to the "medically underserved" which includes two groups: the "financially indigent" who meet federal poverty guidelines, and the "medically indigent" who do not meet federal poverty guidelines, but who do not have insurance or enough income to pay for health care. I-2, 56-57. The "medically indigent" also includes in concept those persons with insurance who cannot pay the co-payment or deductible. The financially indigent are eligible for 100 percent free care supported by Baker Act and Myers Act funds. MMHC has facilities at ten different sites in Manatee County. I-2, 44. The largest is Glen Oaks, which houses a 12-bed psychiatric crisis stabilization unit (CSU), a 12 bed substance abuse "28-day" unit, and a 12-bed alcohol detoxification unit. I-2, 44, 46. Glen Oaks also currently rents 18 beds that are unfunded and that have been classified as "minimum residential" to satisfy state requirements. I-2, 46, 11-2, 83. Glen Oaks is located just outside Bradenton on the east side, I-2, 50, and is relatively close to MMH. The 12 CSU beds are licensed under Chapter 394, Florida Statutes, and are funded under the Baker Act to provide psychiatric care for the financially indigent only. I-2, 55. The funding under the Baker Act is by the state, with matching county funds, rather than patient fees. I-2, 46. The 12-bed detoxification and 12-bed substance abuse units are operated by contract with HRS under Chapter 396, Florida Statutes, and receive Myers Act state funds matched with county funds. I-2, 51-2, 60. Both units also appear to receive a small amount of revenue from patient fees. I-2, 55. Substantially all of the persons who use the detoxification beds are financially indigent. Id. These 18 "minimum residential" beds were rented as a means to generate enough revenues to cover overhead expenses. I-2, 48. These beds are not considered by MMHC to be a part of the treatment program of Glen Oaks because no services are brought to these persons at the Glen Oaks facility. I-2, 48, 11-2, Persons who rent these beds for $400 to $800 per month are all clients of MMHC who are involved in outpatient programs, primarily the chemical dependency program. I-2, 47-48. The only services provided for the persons renting these beds are room and board. II-2, 63. Medications are controlled by the nursing staff only as a precaution with respect to patients in the other 36 inpatient beds. Id., II-2, 85. The classification of these 18 beds as "minimum residential" is to meet HRS regulations; HRS is aware of this classification and concurs in it. II-2, 83. The building at Glen Oaks was designed for acute inpatient beds, and the 18 minimal residential beds are not suitable for that design and intended purpose. II-2, 86. Under Chapter 394, Florida Statutes, MMHC is designated as a Baker Act public receiving facility for screening, evaluation, and treatment of psychiatric emergencies. I-2, 59. This program operates in a specially provided space at the Glen Oaks facility. I-2, 65. Law officers often bring in such emergency patients. I-2, 66. MMHC has five part-time physicians (four psychiatrists and one internist) working in various programs. I-2, 60-61. There is also one full- time psychiatrist who is the medical director. V-2, 4. These physicians provide psychiatric evaluations, admission and treatment in the inpatient program, chemotherapy in the outpatient programs, consultation to the clinical staff, training, and participate in quality assurance. I-2, 61. The medical director and two psychiatrists work in the inpatient program and the other two psychiatrists work in the outpatient programs. II-2, 13-14. Admissions to the 36 beds currently at Glen Oaks come from either the outpatient programs of MMHC or from emergency screening described above. I-2, 61-62. Thus, generally speaking, admissions to MMHC inpatient beds do not come from physicians in private practice. Hospitals, including MMH, receive admissions from physicians in private practice, from emergency room visits, and (in the case of MMH) from referrals from MMHC. I-2, 62-63, 58, 60. MMHC uses non-physician clinicians to recommend admissions initially. Admissions are then made by physicians after examination and evaluation. Id. Currently, the 36 inpatient beds at Glen Oaks are operated much the same as licensed hospital beds providing the same services in a licensed hospital, except that revenues at MMHC do not come from patient charges but from governmental funding, and MMHC does not have an organized medical staff of physicians who are in private practice. It uses, rather, employed physicians on contract. I-2, 46. Third party payors such as Medicare and commercial insurance companies will not pay for inpatient care at Glen Oaks because it is not licensed as a hospital. I-2, 58, VI-2, 18, 31- 33. Almost all patients who come into the MMHC system and need inpatient care, but have third-party payor coverage, are referred to MMH. I-2, 58. A few patients needing inpatient substance abuse treatment who have third-party payor coverage can be treated at MMHC, but most cannot. Id. By mistake some insured patients are admitted to the CSU for psychiatric care, but treatment is then provided without expectation of reimbursement. I-2, 58. Patients with insurance or other third-party coverage will elect to go where their insurance will pay the bill, VI-2, 40, assuming competence to make the choice. The ability of MMHC to provide indigent care is becoming more difficult due to inflation and current levels of governmental funding. I-2, 53- 54, 125. Expenses have been increasing at about nine to ten percent a year, but public funding has been increasing at about four to five percent a year. I-2, 125. The smaller percentage of increase each year of public funding has not kept pace with the increase in workload caused by increases in population. IX- 2, 47. Moreover, public funding has typically been targeted to particular priorities rather than to general and overall operations. I-2, 125, IX-2, 47. As a consequence, the capability of MMHC to provide care to the various categories of indigent persons in Manatee County has been impaired. VI-2, 31. MMHC has in recent years been able to operate with a small net surplus of revenues over expenses. II-2, 71. The goal of MMHC is to break even or to have a small surplus. II-2, 5. Glen Oaks is currently operating in the black, VII-2, 60, but this is achieved by use of some revenues from other programs which are not dedicated funds. II-2, 72, 74. Currently at Glen Oaks, MMHC has resources to provide only chemotherapy and milieu therapy for psychiatric crisis stabilization, and does not have resources to provide individual, group, activity, or recreation therapies. I-2, 78. Involvement of the family in therapy is now not possible due to lack of resources. I-2, 99. Chemotherapy is drug therapy. Milieu therapy is the provision of a supportive, non-threatening environment. I-2, 78. The Glen Oaks facility is a replacement funded by the state for an earlier facility called Glen Ridge, a facility which provided CSU, detoxification, and 28-day substance abuse services also. II-2, 77. The funding was about $1.9 million. CT/CH Ex. 3, p. 45. The building was completed in May 1985. I-2, 63. The total cost of construction of the new facility has been $2,275,152. 1-2, 120. The Glen Oaks facility is built on land owned by Manatee County and MMHC has a 99 year lease from Manatee County. I-2, 71. The lease is dated September 1982. MMHC Ex. 2, p. 87. With respect to the building, MMHC entered into a lease with SIRS on April 24, 1986, for a term of forty years, leasing all title and interest that SIRS may claim. MMHC Ex. 3. At the time the Florida Legislature appropriated the funds for the new Glen Oaks facility, MMHC had not contemplated construction of a licensed hospital. II-2, 77. It was the understanding of the Executive Director of MMHC that the funds were appropriated to provide a new building in which to provide the services provided at Glen Ridge. II-2, 77. 22. A "clinic" generally is a treatment facility of some sort. A "hospital" is a facility licensed under Chapter 395, Florida Statutes. II-2, It was the opinion of Mr. More that a clinic is not a hospital. At the time that Chapter 82-215, Laws of Florida (1982), was enacted, appropriating funds for the new facility at Glen Ridge, MMHC did not have a "hospital" at Glen Ridge. The new facility at Glen Oaks was designed by MMHC for acute care hospital use. II-2, 86. As discussed above, MMHC applied for a certificate of need with respect to this new facility in August 1983, but has not yet received a certificate of need to operate the new facility as a licensed hospital. The Proposed Project The application of MMHC for certificate of need 2861, as amended, is to establish at Glen Oaks a specialty hospital consisting of 17 short term psychiatric hospital beds and 10 short term substance abuse hospital beds, all of which would be licensed as hospital beds pursuant to Chapter 395, Florida Statutes. If the proposed certificate of need were to be issued, and the beds granted by that certificate of need were licensed under Chapter 395, Florida Statutes, MMHC proposes potential allocations of the beds. The following is a display of the current bed types, the bed types under the first option, and the bed types under the second option: Bed Type License Type Current Option A Option B CSU Chapter 394 12 15 14 Detox Chapter 396 12 10 10 Substance Abuse Chapter 396 12 2 0 Substance Abuse Chapter 395 0 10 10 Psychiatric Chapter 395 0 17 17 Minimum Residential 18 0 0 TOTALS: 54 54 51 I-2, 75-76. Under option A, the substance abuse beds would be physically separated form the psychiatric beds, but otherwise all of the beds licensed under Chapter 395, Florida Statutes, would be spread throughout the facility. I-2, 108. Under option B, a two-hour fire wall would be built to separate all licensed beds from beds not licensed under Chapter 395, Florida Statutes, and substance abuse beds would continue to be separated from psychiatric beds. The separation of substance abuse beds in a wing of the building was demonstrated to the Hearing Officer on a chalk board by Mr. More. The sketch is not in evidence. Apparently the HRS Office of Licensure and Certification (OLC) does not usually allow the mixing of licensed and "unlicensed" beds, and if it does not, then the Petitioner will proceed under option B. Thus, option B appears to be the most probable option. I-2, 107. If the certificate of need at issue in this case is granted, MMHC proposes to always place patients having third party payors in a bed licensed under Chapter 395 (a hospital-licensed bed) if available. Those patients who are financially indigent will be placed in the other licensed beds along with some medically indigent patients. II-2, 35. Some medically indigent patients would also be served in the hospital-licensed beds. II-2, 35, VI-2, 20-21. However, if a bed is available, no one will be denied services because of an inability to pay. II-2, 23, VI-2, 82. If the certificate of need is granted, MMHC will continue to serve Manatee County, and will continue to serve the same groups of patients in the "other licensed" psychiatric (CSU) and detoxification beds; the only change will be the addition of the hospital licensed beds, which will serve patients having third party payer resources, as well as some medically patients. I-2, 82-83. MMHC is currently serving most of financially indigent persons in Manatee County, and thus does not expect to serve any more such persons if the certificate of need is granted, but does expect to be able to provide financially indigent persons in Manatee County with better and more comprehensive services. II-2, 51. MMHC will not reduce its current role in providing Baker Act and Myers Act services at the Glen Oaks facility if the certificate of need is granted. Id., I-2, 80, 83. MMHC proposes to serve those patients having third-party payor resources who are currently being served within the MMHC system, or who may come to MMHC in the future in MMHC's role as a "public receiving facility" for emergencies. I-2, 79. Almost all of such patients now are referred to MMH, and thus MMHC proposes to serve these patients who are now being served MMH. See finding of fact 17 above. It is expected that MMHC will serve insured patients from the middle and lower socioeconomic classes. I-2, 83. These are projected to be having annual incomes of between $20,000 to $40,000 annually. II-2, 43. Over 90 percent of the families and households in Manatee County have incomes less than $35,000 annually, so the great majority of potential insured patients in Manatee County are compatible with the current socioeconomic caseload of MMHC. II-2, 43. Issuance of the proposed certificate of need to MMHC will enable MMHC to add the following services for its inpatient beds at Glen Oaks, services which currently are not provided: individual therapy, group therapy, activity therapy, an recreation therapy. II-2, 78. These services would thus be expanded for all patients, including the financially indigent and medically indigent. Enhancement of services will enable MMHC to attempt to treat more than just the acute psychiatric episode. V-2, 12. The family of the patient will be more involved, staff will have more time to try to identify the underlying cause of the psychiatric illness, where possible, and more time will be available to provide education for the patient to assist in his or her own self-care. Id. The proposal would also result in more continuous care provided by the same staff within the MMHC system for patients having third-party payor resources who currently must be referred to facilities outside of the MMHC system. I-2, 78-79. Continuity of care is an important goal of a mental health system. IX-2, 96. Having the ability to track patients, assure continuity of treatment, and assure that the patient is treated at the appropriate level of treatment is what is meant by continuity of care. Id. With a continuum of services in the chance that the patient will be neglected is lessened, the patient should be treated at the proper level without the inefficiency of having to be transferred to another system having no familiarity with the patient. IX- 2, 94-97, IV-2, 136. Community mental health centers were created in part to continuity of care to the community. IX-2, 95. Issuance of the proposed certificate of need to MMHC would improve and foster competition among short term and substance abuse providers in Manatee County in the future. Currently, there are only 25 short term psychiatric hospital beds in the counties, all at MMH, and there are no hospital licensed short term substance abuse beds. See finding of fact 41D. The charges at MMHC will be lower than charges for similar services in the area. See finding of fact 111. If the proposed certificate of need is issued, MMHC would no longer rent 18 beds in what it now calls a "minimum residential" category of beds. Minimum residential treatment beds, providing a form of halfway residential setting between inpatient care and the community, are a very important service for a community mental health center to provide. IX-2, 103-4. MMHC plans to develop some form of minimum residential beds in the future. II-2, 85. Development of this service would involve additional costs. The 18 minimum residential beds provide a valuable housing service to those persons now renting these beds, and in that way provide a valuable service to Manatee County as well. But the beds are not treatment beds, and are not part of any treatment program as such. See finding of fact 12. Persons now using the 18 beds would probably benefit from having a more structured environment, but they also probably could function adequately on their own renting housing in the community IV-2, 155-59. The evidence indicates that these persons will find housing in the community. II-2, 84. There is no persuasive evidence in the record that the 18 minimum residential beds are necessary or essential to the persons now renting them, or that it would be impossible for them to rent or find other accommodations in the community. MMHC seeks the certificate of need in this case primarily to allow it to treat patients having third party payor resources at Glen Oaks so as to generate additional revenues so that improved mental health services may be provided to the financially and medically indigent of Manatee County. With the exception of the improvements to services caused by expansion of therapies available, discussed above, there are no significant differences between the psychiatric or substance abuse treatment services that MMHC provides now to persons occupying the other licensed beds and the services that will be provided if a certificate of need is granted. VI-2, 127-28. Moreover, will not be any significant differences between the treatment services that will be provided in the hospital-licensed beds, should a certificate of need be granted, and the beds licensed under other Florida Statutes. II-2, 21, 35. The quality of care currently provided by MMHC is very good, and meets all criteria set out by HRS, but the quality of services provided by MMHC could be enhanced and improved if resources were available. II-2, 28-29, V-2, 19, 21. Patients who currently are discharged from inpatient care do not have need for more inpatient care. V-2, 21. Need For the Proposed Project The "planning horizon year" is the year in which need for short term psychiatric or substance abuse beds will be calculated pursuant to HRS rules, and is July 1988 in this case, which is five years from the date of the application. See findings of fact 41 and 42, order of May 14, 1986, Appendix B. Despite the delay in this case in coming to final hearing, a planning horizon year of 1988 is still appropriate since MMHC can begin operations rather quickly because no major construction is needed. III-2, 45-46. Following the methodology of rules 10-5.11(25)(d) and 10-5.11(27)(f), Florida Administrative Code, there is projected to be a surplus of 154 short term psychiatric hospital beds and a surplus of 68 short term substance abuse hospital beds in District VI in the horizon year, 1988. VIII-2, 49. The amended application of MMHC identifies a bed need specified in the 1983 District VI local health plan, which is MMHC Ex. 1, and does not seek to satisfy a bed need identified in any later state or local plan. See findings of fact 29 through 36, Appendix B. The Community Medical Facilities Component of the District VI Local Health Council plan was adopted on August 1, 1983. MMHC Ex. 1. In 1983, HRS District VI consisted of Hillsborough and Manatee Counties only. MMHC Ex. 1. The 1983 District VI Health Plan showed a net surplus of short term psychiatric hospital beds by 1988 of 133 and a net need of 57 short term substance abuse hospital beds by the same year. Id., p. 52-53. The Community Medical Facilities Component of the District VI Local Health Council plan designates Manatee County as a distinct planning and service area for assessing bed need for psychiatric and substance abuse services. MMHC Ex. 1, p. 53. The plan designates Manatee County as a distinct area according to the plan, most Manatee County residents are beyond 45 minutes travel time to facilities located in Tampa. Id. It also treats Manatee County as a distinct area because the county has only one existing provider of short term psychiatric beds, MMH, which had a greater than 100 percent occupancy rate in 1982. HRS officials charged with the responsibility to review and recommend approval or disapproval of applications for certificates of need have concluded that Manatee County is a proper service and planning area for calculation of need in this case. See findings of fact 20 and 22, order of May 14, 1986, Appendix B; II-1, 188-91. Short term psychiatric care is a part of a continuum of care that is aimed at deinstitutionalization. II-1, 143-44. Short term psychiatric patients have a greater need to be in touch with their local communities. Id. Having all mental health services available in the local community, rather than at greater distances away, fosters the goal of continuity of care. Manatee County is designated as a "mental health catchment area" by the National Institute of Mental Health. III-2, 55, 63-64. This designation is intended to identify needs and resources within the designated geographical area. Id. Manatee County is designated by the United States Bureau of Census as a-metropolitan statistical area. III-2, 55. Other applicants for certificates of need for short term psychiatric or substance abuse services have considered Manatee County to be the proper area for planning and determining need, notably the application of Charter Medical-Southeast, Inc., d/b/a Charter Haven Hospital for certificate of need 4294, which contains an analysis of need from Fagin Advisory Services, Inc., dated December 22, 1985, pages 3-20. MMHC Ex. 6. It is therefore reasonable to consider Manatee County as a separate service and health planning area for assessment of need for short term psychiatric and substance abuse hospital beds. HRS has not by rule adopted Manatee County as a subdistrict for determining need for short term psychiatric or substance abuse services. It has done so in this case as a matter of incipient policy and that policy has been found in this case to be reasonable. See finding of fact 38. The 1983 Local Health Council plan, using the methodology contained in the state rules applied only to Manatee County, found a gross need in Manatee County by 1988 for 65 short term inpatient psychiatric hospital beds, and 11 short term inpatient substance abuse beds. MMHC Ex. 1, p. 53. The net need is 40 short term psychiatric hospital beds and 11 short term substance abuse hospital beds. III-2, 68. The conclusion that there is a net need for short term psychiatric and substance abuse beds contained in the preceding paragraph is corroborated and supported by the following additional findings: The historical use rate for short term psychiatric beds in District VI has been 88.4 patient days per 1,000 population, and the use rate for short term substance abuse beds in District IV has been 26.5 patient days per 1,000 population. III-2, 78-80. A district rate is more reliable since it tends to average out under-utilization that may be caused by lack of beds in a particular county. Id. Applying these use rates to 1988 populations, there would be a need for 31 to 35 short term psychiatric beds and 17 short term substance abuse beds in Manatee County by 1988. Id. Manatee County currently has only .14 short term psychiatric beds per 1,000, while District VI has 47 beds per 1,000. III-2, 79. Accepting the rate of .35 beds per 1,000 as a norm, that rate having been promulgated as a need rate in rule 10-5.11(25), Florida Administrative Code, then there is a shortage of these beds in Manatee County. Manatee County has only 25 short term psychiatric hospital beds currently and those are located at MMH. Manatee County has no hospital licensed short term substance abuse beds. III-2, 69, 150. The occupancy rate for the 25 short term psychiatric beds at MMH has been consistently very high since 1980: 82.9 percent in 1980, 87.0 percent in 1981, 102.0 percent in 1982, 112.0 percent in 1984, 88.0 percent in 1985, and 97.0 percent in the first four months of 1986. III-2, 66, 70, CH/CT Ex. 8, p. 154, MMHC Ex. 1, p. 30. It is preferable that MMH operate under 75 percent occupancy. XI-2, 124. Charter Tampa's parent corporation, Charter Medical-Southeast, Inc., presented in an application for a certificate of need an analysis showing a net bed need of 63 short term psychiatric beds for Manatee County in 1990. MMHC Ex. 6, p. 17-20. The method used was essentially the same as proposed by the Petitioner, except that 1990 populations were used, and was presented by the same consulting expert who testified for Charter Tampa during the hearing. Id. MMH has applied for a net increase of 17 short term psychiatric hospital beds and 11 substance abuse beds in a comprehensive application for certificate of need in a later batch in which Charter-Medical Southeast, Inc., has two pending applications. CH/CT Ex. 1, p. 2. The services proposed by the Petitioner are thus consistent with, and would partially satisfy, the need for short term psychiatric and substance abuse inpatient hospital beds as set forth in the 1983 local plan. The 1983 state health plan is not in evidence. As will be discussed in the conclusions of law, the 1985 versions of these plans are not legally relevant to Petitioner's application in view of recent case law. Alternatives The short term psychiatric beds at MMH have been running at a very high occupancy rate for the last five years. A significant number of psychiatric patients having insurance or other third party payors are currently referred for treatment to MMH by MMHC. I-2, 58, 60. If the certificate of need sought in this case were to be granted, MMHC would retain most of these patients for treatment, and would no longer refer them to MMH. See findings of fact 27 and 17 above. However, the local health plan identifies 40 short term psychiatric beds need by 1988, and MMHC proposes to serve only 17 beds of that need, or less than 50 percent. The total need is 65 beds, and 23 beds, or 35 percent of the gross need, would be unmet by the Petitioner or anyone else. This unmet need would be available to MMH as well as to other providers, such as Charter Tampa, and constitutes a very substantial additional source of patients. It must be concluded, therefore, that although MMH will lose patients now referred by MMHC, in the long term MMH will not suffer significant reduced occupancy. Given the level of need shown, and the higher occupancy rates shown at MMH, it must further be concluded that MMH does not provide an adequate alternative in the service area to satisfy all need for short term psychiatric inpatient hospital beds. MMH does not provide any certificate of need approved hospital licensed short term substance abuse beds, and thus there are no alternatives in the service area for this service proposed by the Petitioner. The 12 CSU beds at MMHC are not an adequate alternative to the 17 short term inpatient hospital psychiatric beds sought by MMHC in this case. If they were, the occupancy levels at MMH would be substantially lower. Moreover, the 12 CSU beds are not adequate to treat patients having third party reimbursement sources. See finding of fact 17. Finally, assuming hypothetically that CSU beds should be deemed to be an adequate equivalent of hospital licensed beds, the current 12 CSU beds at MMHC only would fulfill a portion of the net need in Manatee County for 40 inpatient hospital psychiatric beds. A net residual need of 28 beds would still exist to be served by the 17 short term beds proposed by MMHC. Quality of Staff and Care The parties stipulated that there was no issue in this case concerning the quality of staff that would be used if this certificate of need were granted. I-2, 14. Moreover, the number of full time equivalent positions (FTE's) proposed is not contested either. I-2, 15. The quality of care now provided by MMHC is good, and good quality of care would be provided if the certificate of need were granted. See finding of fact 33. Indigent Services Currently, the Glen Oaks facility operates 12 CSU (psychiatric) beds, 12 detoxification beds, and 12 substance abuse beds. It also rents 18 beds which it terms "minimal residential." See findings of fact 9 through 12. If the certificate of need in this case were granted, it would continue to operate essentially the same number of beds in each category with the exception of the minimal residential beds. See finding of fact 24. The only major change to existing services would be replacement of the 18 "minimum residential" beds with 17 hospital licensed short term psychiatric inpatients beds. The 18 rented beds are not associated with inpatient programs, and are not similar to the 17 short term psychiatric hospital beds. MMHC intends to continue to serve indigent patients and to expand these services as population grows. III-2, 89. Currently, MMHC uses a sliding or discounted fee system, charging patients according to ability to pay. I-2, 54-55. If the certificate of need is granted, MMHC will collect essentially the same total minimal level of revenues from these same indigent patients. II-2, 36-37, VI-2, 19-22. Although there will be no sliding fee schedule, the result will be the same: such indigents will receive care paying the same minimal total amount. VI-2, 77, II-2, 36-38. Thus, if the certificate of need at issue in this case were granted, MMHC would not eliminate any of its current inpatient psychiatric (crisis stabilization), detoxification, or substance abuse services for indigents. These inpatient services would still be available to the same extent at minimal or no cost to such persons, except that additional and enhanced therapies and services will be made available to indigents. See finding of fact 26. Geographical Accessibility Glen Oaks will be geographically accessible to all residents of Manatee County, though it will not provide any geographic accessibility advantage different from nearby MMH. Both MMHC and MMH are well located to be near a large portion of the population of Manatee County. Short Term Financial Feasibility There are adequate resources to complete the project proposed by the Petitioner. The building was funded by the Legislature and is essentially complete. Funds exist for any necessary modifications and for all equipment. I-2, 111, 116- 117. It was stipulated that adequate and qualified staffing has been proposed and will be obtained to operate the new beds as proposed at Glen Oaks. I-2, 14-15. The project proposed by MMHC is financially feasible in the short term. Long term Financial Feasibility Long term financial feasibility involves a number of sharply disputed issues of fact. Paragraphs 51 through 112 will address these issues. Deborah J. Krueger was accepted as an expert in health care facility financial feasibility and health care financial analysis. V-2, 56. Karen Wolchuck-Sher was accepted as an expert in health planning. III-2, 48. It was Ms. Wolchuck-Sher's expert opinion that there is a need for 17 short term inpatient hospital psychiatric beds and 10 short term inpatient hospital substance abuse beds in Manatee County as proposed by the Petitioner. III-2, It was Ms. Krueger's expert opinion that the proposed project would be financially feasible in the long term. VI-2, 6. Ms. Wolchuck-Sher testified primarily concerning need. Ms. Krueger testified primarily concerning financial feasibility. The projection of expected patient days for the 17 short term psychiatric beds and 10 short term substance abuse beds was prepared by Ms. Wolchuck-Sher and used by Ms. Krueger in her financial feasibility analysis. VI-2, 69. However, to produce a projection of payor mix, Ms. Krueger had to analyze the same data relied upon by Ms. Wolchuck-Sher to determine projected patient days. VI-2, 70. Projected Patient Days Based entirely upon patients estimated to already be within the MMHC system, but who are typically referred elsewhere because they have insurance or other third party payor resources, MMHC projects that on the first day of operation of the proposed 27 hospital licensed beds, occupancy will be 64 percent or an average daily census of 17 patients. III-2, 128-29, 154. It is further projected that this occupancy level will average 70 percent in the first year of operation, ending August 31, 1988. III-2, 129, The 17 patients estimated to be available on an average daily basis from the beginning were identified as patients that currently are seen and treated in MMHC programs and who could be referred for treatment to the hospital licensed beds if the certificate of need were granted. III-2, 131. These would include people with insurance and Medicare, but not Medicaid, or those who have a physical illness requiring hospitalization. Id. The 17 patients estimated above was based upon a study conducted by staff of MMHC, which was reviewed by both Ms. Wolchuck-Sher and Ms. Krueger. See finding of fact 52. III-2, 128-29, 132. The study included discharge records of patients from July 1985 to February 1986. The discharge records were reviewed to determine whether the patient had been referred for treatment to a hospital licensed bed elsewhere. A cross check of MMH records was performed to determine if MMH actually treated the referred patient. Ms. Wolchuck-Sher did not personally count the numbers, but she personally reviewed the census sheets prepared by MMHC staff, studied the methods used to tabulate the numbers, and concluded that the methods used were reasonable. III-2, 132-36, 146. Based upon the study, an initial average daily census of 17 was projected. III-2, 136. The 17 patients on an average daily census was projected by tabulating admissions, multiplying admissions by projected average lengths of stay by program, and converting this to a monthly rate. III-2, 137, 146-47. The average length of stay was based on actual current experience at MMHC, projected increase in average length of stay when MMHC at Glen Oaks adds new forms of treatment programs, and comparisons to current average lengths of stay at the 25 short term psychiatric beds at MMH. III-2, 139. By program, the following numbers of patients and projected average lengths of stay were identified in the study relied upon by Ms. Wolchuck-Sher and Ms. Krueger: about 7 patients per month from the geriatric residential treatment services (GRTS) program with an average length of stay of 20 days, IV- 2, 115, VI-2, 65, XII-2, 29-30; about 6 patients per month from the crisis stabilization unit (CSU) with an average length of stay of 10 days, IV-2, 72, XII-2, 29-30; about 2 patients per month from the employee assistance program (EAP) with an average length of stay of 10 days, VI-2, 73, XII-2, 29 30; about 2 patients per month from outpatient programs, with an average length of stay of 10 days, although outpatient programs, excluding GRTS, show on the census sheets about 7 admissions a month, VI-2, 73-74, XII-2, 32; and an average daily census of 9 patients in the 10 substance abuse beds, with an average length of stay of days, III-2, 155, 158, 159, 161. Currently, the 12 substance abuse beds have an average 75 percent occupancy, which is an average daily census of 9 patients. III-2, 161. MMHC simply projects that these patients will fill the 10 hospital licensed beds if the certificate of need is granted. III-2, 155, 159. Mathematically, the patients identified in finding of fact 57 results in the following: Average daily Program that Average Patient census (Patient is the source Monthly length days for days divided by of the referral Admissions of stay each month 30 days in mo.) GRTS 7 20 140 4.67 CSU 6 10 60 2.00 EAP 2 10 20 0.60 Outpatient 2 10 20 0.67 Subtotal: 8.01 Substance abuse 9.00 TOTAL: 17.01 From the foregoing, the average length of stay of patients from all programs except substance abuse programs would be 14.1 days. (240 patient days divided by 17 admissions.) This is consistent with testimony that the average length of stay for "psychiatric patients overall" would be 14 days, but that CSU patients would have an average length of stay of 10 days. III-2, 154. Ms. Wolchuck-Sher's testimony on this point is not clear, but the foregoing analysis is the only one that makes sense on this record. Apparently Ms. Wolchuck-Sher did not consider the substance abuse beds when she testified as to projected average length of stay since the substance abuse beds were, in her opinion, projected to have a 21 day average length of stay, and were simply to continue the same daily census of 9 patients. III-2, 158, 161. The reason for the "overall" 14 day average length of stay is that although many of the patients referred to the short term psychiatric beds will have an average length of stay of 10 days, those who are elderly and originate from the geriatric residential treatment service program will have an average length of stay of 20 days. The numbers of potential admissions identified in paragraph 57 above are reasonable. These numbers come from actual experience of MMHC, and the methods of collecting were found to be reasonable by an expert in health planning. The numbers of potential admissions come from patients already within the MMHC system and do not depend upon referrals from private physicians. III- 2, 92-93. Thus, even if one were to assume that patients of private physicians, and such physicians themselves, would prefer not to use short term hospital services at MMHC due to its role as provider for indigents, this does not alter the projected number of admissions. MMHC currently serves about 5,000 persons annually in its many programs. I-2, 89. It also serves as a public receiving facility for emergency psychiatric cases. Id. Thus, it is reasonable to expect that the existing MMHC mental health system will in fact be a source of the referrals estimated in paragraph 57 and 58 above. III-2, 82-83. Moreover, the estimated numbers of admissions are conservative in several respects. First, the outpatient programs were relied upon as a source of only 2 admissions per month, although the estimate could have run as high as 7 admissions per month. See paragraph 57. Also, the estimate does not consider potential admissions from private physicians, but the opportunity for such admissions will exist because MMHC will operate an open medical staff, and any qualified community physician may join. II-2, 7, 87-88. Undoubtedly some additional referrals would be made to MMHC because MMH is operating now at capacity and the numeric need estimates shows a need for 40 short term psychiatric beds by 1988. At an average daily census of 17, with 9 of this in substance abuse beds, MMHC is projecting that it will only attract a small portion of that need: enough to fill 8 of the 40 beds, leaving an unmet demand for 32 beds. It is not unreasonable for MMHC to project initially that it will 20 percent of the unmet need of Manatee County. The projected average length of stay of 20 days for patients in the geriatric residential treatment program is reasonable. It may be inferred that healing for the elderly may be slower, and that therefore the length of stay will be longer than for other short term psychiatric patients. IX-2, 88-89. The projected average length of stay for admissions to the 17 hospital licensed psychiatric beds from the CSU, EAP, and other outpatient programs of 10 days is reasonable. Manatee Memorial Hospital currently experiences an average length of stay in its 25 short term psychiatric beds of about 10 days, and there is no reason to believe that the same type bed at MMHC will not function the same. III-I, 148. Although the CSU at Glen Oaks currently has an average length of stay of 6.5 days, III-2, 147, this is based upon the current limited services which consists only of chemotherapy and milieu therapy (which is only a supportive, non-threatening atmosphere). I-2, 78. If the certificate of need is granted, MMHC will be able to provide more individualized therapies such as activity therapy, recreation therapy, group therapy, and individual therapy. I- 2, 78. It is reasonable to infer that provision of more staff, as will be discussed ahead, aimed at providing more individual attention, will result in longer inpatient stays, III-2, 147-148, at least until the average length of stay is similar to that currently at Manatee Memorial Hospital. The projection that there will be 9 patients on average occupying 9 of the 10 substance abuse beds each day is reasonable based upon current actual occupancy in the same beds at Glen Oaks. See finding of fact 57. This projection does not depend upon an average length of stay since the average daily census is known. However, it would appear that to the extent that Ms. Wolchuck-Sher assumed that the average length of stay in the substance abuse beds would be 21 days, III-2, 158, it appears this was too conservative. The current average length of stay in the substance abuse beds is actually 28 days. II-2, 12, V-2, 21. From findings of fact 54 through 62, it is concluded that the estimate that the proposed 17 short term psychiatric beds and 10 short term substance abuse beds will initially open with about a combined average daily census of 17 patients, or an occupancy rate of 64 percent, is reasonable and supported by the evidence. The projection that the 27 new beds would have an 80 percent occupancy rate in the second year effectively means that the 10 substance abuse beds will continue to be occupied by an average daily census of 9 patients, and that the occupancy of the 17 psychiatric beds would increase to an average daily census of 12.6 patients. (80 percent of 27 beds is a 21.6 average daily census. If 9 of these beds were occupied by substance abuse patients, the remainder of the 12.6 would be occupied by psychiatric patients.) At 64 percent occupancy, the substance abuse beds would have a daily average of 9 patients and the psychiatric beds would have a daily average of 8 patients. See finding of fact 58 above. Thus, the 80 percent occupancy projection is simply a projection that the average daily census in the 17 psychiatric beds will grow from 8 (47 percent occupancy) to 12.6 (74 percent) occupancy in two years. This is an entirely reasonable projection. In effect, it predicts that in two years, MMHC will service 12.6 beds of the 40 net short term psychiatric beds needed in Manatee County by that date. Given the fact that this leaves a shortfall of 17.4 short term psychiatric beds in Manatee County, there ought to be sufficient demand to achieve this projection. It is not unreasonable to project that at the end of two years, MMHC will capture only 31.5 percent of the projected net need for short term psychiatric beds in Manatee County. In summary, the expert opinion of Ms. Wolchuck-Sher that an 80 percent occupancy rate is a reasonable projection for the second year of operation is quite credible and is accepted. Moreover, there is no evidence in the record to believe that the 80 percent occupancy rate will not continue through the third year. Once established, the need projections (based upon a population which, on this record, cannot be concluded to be expected to diminish in 1989 or 1990) remain at least constant, and thus it is reasonable to infer that MMHC will retain and serve enough patients in the third year of operation to sustain a continued 80 percent occupancy rate The number of patient days projected in the second year for purposes of long term financial feasibility, 7905 patient days (see table 7, page 48, MMHC EX. 2) is based entirely upon the projection of 80 percent occupancy in the second year. III-2, 156. It is simply 27 beds times 80 percent times 366 (the number of days in leap year 1988). Id. Since the projection of 80 percent occupancy is reasonable, the projection of 7905 patient days in the second year is also reasonable. The reasonable nature of the projection of 7905 patient days in the second year of operation is further corroborated by the projection of patient days in the application of Charter Medical-Southeast, Inc., d/b/a Charter Haven Hospital for certificate of need 4294. MMHC Ex. 6. That application included a "bed need study" by Fagin Advisory Services, Inc., dated December 22, 1985. In that study, a net need of 63 short term inpatient hospital psychiatric beds was estimated in Manatee bounty by 1990. MMHC Ex. 6, p. 19. Further, the applicant estimated that in the 12 months from May 1987 to April 1988, its project would serve 9122 short term psychiatric hospital patient days. Id. at p. 31. This should be compared with the short term patient days contained in the estimate of 7905 patient days by MMHC, which includes short term substance abuse patient days as well. The annual short term substance abuse patient days were derived from an estimate of 9 beds occupied at all times, which would result in 9 times 366, or 3294 patient days devoted to short term substance abuse. See paragraph Thus, the MMHC projection of short term psychiatric patient days in this case is only 4611 in 1988, a number quite smaller than 9125 days estimated by Charter Medical-Southeast. Dr. Fagin, who testified for Charter Tampa, testified that he would not be surprised if there were 7905 patient days of demand in Manatee County. XI-2, 128-29. Patients having third party payor resources will to some substantial degree choose not to be served by a community mental health center like MMHC because MMHC serves a large number of indigent patients. IX-2. 102. Similarly, it is reasonable to expect that a number of private physicians in the community will continue to use MMH for inpatient mental health care, and will not be referring paying patients to MMHC. XI-2, 72-73. Nonetheless, the reasonableness of the projection of 7905 patient days is not significantly undermined by the expected reluctance and refusal of a substantial number of third party payor patients to use MMHC. There are several reasons for this conclusion in the record. First, as discussed above, the projection of 7905 patient days is not based upon referrals from private practice physicians; it is based primarily upon referrals of patients already within the MMHC system who, for one reason or another, have affirmatively chosen that system. Second, if MMHC upgrades its services by the addition of more therapies as planned, its inpatient hospital beds will be more attractive to patients. Moreover, it has a new physical facility, and thus the building itself should not be a deterrent to patients. Other mental health centers having hospital licensed inpatient short term psychiatric and substance abuse services have been able to attract a substantial number of patients having Medicare or other third party payor resources. The Brevard Mental Health Center operates a hospital with 48 hospital licensed beds, 20 of which are short term substance abuse beds and 24 of which are short term psychiatric beds. IX-2, 37-38. The Brevard Mental Health Center is a community mental health center responsible to provide community mental health services regardless of ability to pay. IX-2, 37-38. The services are generally the same type as provided by MMHC. IX-2, 37, 64-66. Approximately 41 of the 48 beds are normally occupied, and of these, about one half are normally occupied by patients having third party reimbursement or payor sources. IX-2, 44. These were more specifically distributed as follows: 15 percent of the psychiatric beds (15 percent of 28 or 4.2) were Medicare, 18 percent of the psychiatric beds (18 percent of 28 or 5) were insurance, and 80 percent of the substance abuse beds (80 percent of 20, or 16) were insurance IX- 2, 52. 53. Thus, a total of about 25 of the 48 beds were occupied by patients having third party reimbursement resources. For the past five and one-half years, the Brevard Mental Health Center has been able to achieve its budgeted goal of placing in hospital licensed beds patients having third party payor resources. IX-2, 45. There are about six other community mental health centers in Florida having hospital licensed short term psychiatric beds. VIII-2, 63. In 1984, the four community mental health centers then having hospital licensed beds were able to attract Medicare and other charged based patients. XII-2, 61. In addition to the success of other community mental health centers, Charter Tampa's own expert was of the opinion that Charter Tampa would lose from one-third to two-thirds of its current annual number of patients (14) from Manatee County if MMHC obtains a certificate of need as proposed in this case. See finding of fact 115. Obviously, then, Charter Tampa's expert was of the opinion that Manatee County patients would choose to be served by MMHC if that alternative were available to them, and would not be deterred by the fact that MMHC serves indigents. While the conclusion that Charter Tampa will lose patients has been rejected due to the large quantity of unmet need in Manatee County, Dr. Fagin's assumption that MMHC would be an attractive alternative to Charter Tampa is supported by other evidence in the record. Finally, the projections of 64 percent occupancy in the first year, and 80 percent occupancy in the second year, as discussed above, assume that MMHC will capture only a modest number of the total number of patients in 1988 in Manatee County needing short term psychiatric health care: 20 percent in the first year and 31.5 percent in the second year. See findings of fact 57, 58 and While some patients and their families may in fact be reluctant to use the services of a community mental health center, the projections of MMHC are well within any reasonable range of predicted loss of patients due to stigma associated with services to economically disadvantaged persons. Short term psychiatric patients in Manatee County have to go somewhere reasonably close by, and MMC is full. This fact alone will overcome some of the reluctance of patients or others to use MMHC. About one to two percent of all psychiatric and substance abuse patients also have a medical problem, and these patients would continue to be referred to MMH despite the existence of a mental health problem as well. V-2, 13-14. The evidence, however, is not sufficiently clear to categorically conclude that one or two percent of the persons needing inpatient psychiatric hospital care or inpatient hospital substance abuse care will also have a medical problem. The record cited above is from the testimony of Dr. Ravindrin, who thought that the percentage of "dually diagnosed" patients to be "very small," and that "it may be one or two percent of the people who might need actual medical intervention plus active Dsvchiatric treatment at that moment." Id. From this it is uncertain to what extent the percentage applies to those patients needing inpatient care, as opposed to other forms of "active psychiatric-treatment." The evidence does compel the conclusion that some small percentage of patients needing to be served in a hospital inpatient short term bed may also have need of medical treatment. However, this fact does not appear to be relevant since the projections of patient admissions were derived from studies that estimated the numbers of patients who in fact would be admitted to hospital licensed beds at Glen Oaks if a certificate of need were granted. See finding of fact 57. There is no evidence that any of these patients are expected to have a dual diagnosis, and given the nature of the purpose of the study, it would be expected that dually diagnosed patients would not have been counted. The foregoing findings of fact 34-69 concern only the 27 hospital licensed psychiatric and substance abuse beds. Under option A, see finding of fact 24, MMHC will continue to operate 15 crisis stabilization unit beds, 10 detoxification beds, and 2 substance abuse beds, and will continue to have these beds licensed pursuant to either chapter 394 or 396, Florida Statutes, as "other licensed" beds, but not hospital licensed. Under option B, which is more probable, MMHC will continue to operate 14 CSU beds and 10 detoxification beds, again as "other licensed" beds. The long term financial feasibility projections estimated that these "other licensed" beds would continue to serve the same indigent patients as currently served in the 12 CSU beds and 12 detoxification beds operated by MMHC. VI-2, 81-82. In future years, the financial feasibility projection simply assumes that the number of patient days in these "other licensed" beds will grow in proportion to the increase in population in Manatee County. Id.; III-2, 88-90. The occupancy rate generated by these estimates was 65 percent in the "other licensed" beds for both years since the population increase was quite small. III-2, 89. These projections are reasonable. Id. Projected Staffing Table 11, page 51, of the updated application for certificate of need, MMHC Ex. 2, contains the proposed staffing for the new hospital licensed beds. VI-2, 23. The parties have stipulated that the numbers of full time equivalents (FTE's) shown on Table II are adequate for the programs proposed by MMHC and the parties further stipulated that there is no dispute in the case concerning the ability of MMHC to hire and retain qualified persons to fill these positions. I-2, 12-15. MMHC currently operates with 37.7 FTE's. It proposes to add 35.2 full time equivalents if the certificate of need is granted for a total of 73.2 FTE's. Table 11, MMHC Ex. 2. Currently, MMHC operates with 0.8 FTE's for medical staff. It proposes to add 1.8 FTE's to make this 2.4 FTE's for the medical staff. If the certificate of need is granted, Dr. Ravindrin would fill one full time equivalent, and the remaining 1.4 FTE's would be provided by other physicians who currently have a relationship with MMHC. Table 11, MMHC Ex. 2; 11-2, 14-15. MMHC currently has only 4.0 FTE's for treatment staff, but proposes to add 6.0 FTE's if the certificate of need is granted. Table II, MMHC Ex. 2. These new staff positions will provide the enhanced psychiatric treatment therapies described in finding of fact 28. I-2, 99. MMHC currently has 21.1 FTE's of nursing staff, and would add 13.9 nursing FTE's if the certificate of need were granted. Table 11, MMHC Ex. 2. This would provide 0.65 nursing FTE'd per bed (35/54) compared to the existing ration of 0.59 (21.1/36). Id. II-2, 52. The administrative staff is proposed to increase from the current 2.0 FTE's to 4.0 FTE's, and this will enable MMHC at Glen Oaks to handle the reporting requirements and other administrative work associated with the facility. 1-2, 99; Table 11, MMHC Ex. 2. The current level for support staff (kitchen, janitorial, and so forth) is 9.8 FTE's and would be increased to 21.0 FTE's. Table 11, MMHC Ex. 2; II-2, 17, 53. The current level of consultant staff (pharmacy and dietary) is 0.3 FTE's and this would increase to a total of 0.6 FTE's if the certificate of need were granted; Table 11, MMHC Ex. 2 is in error on this point. I-97. Projected Revenues Long term financial feasibility is determined by comparing projected revenues with projected costs. MMHC Ex. 2, Appendix A. Projected revenues are determined by projected patient days (utilization forecasts) and a projected average charge per patient day. VI-2, 12-13. MMHC projected an average gross charge per patient day based upon the kind of operating margin MMHC wanted to have, the expected payor mix, and consideration of the charges of other facilities. VI-2, 13. The charges of all of the community mental health centers and all of the free standing psychiatric facilities in Florida as reported in the 1984 Hospital Cost Containment Board Report, and the charges of Charter Tampa and MMHC for 1986 were reviewed by MMHC's expert in determining the proposed average charge for the hospital licensed beds. VI-2, 14. The average daily charge proposed by MMHC is $295 per day in the first year of operation and $313 per day in the second year of operation. VI-2 37-38. If the certificate of need is granted, MMHC will hire a consultant to assist it in preparing a schedule of specific fees by service so as to achieve the average cost per day projected to be both competitive and to cover expenses. I-2, 126; VI-2, 53. The technique of projecting an average charge per patient day is commonly used by experts to forecast revenues and to establish actual charges, and is also commonly used in certificate of need proceedings, and is reasonable. VI-2, 53, 41; VIII-2, 9-14. Analysis of projected revenues must proceed by considering first the 27 inpatient hospital beds that are the subject of this application for certificate of need, the hospital licensed beds, and then considering the remaining beds to as "unlicensed" beds in the forecast statement of revenue and expense, Appendix A, MMHC Ex. 2. In the second year of operation, which is the most relevant for consideration of financial feasibility, the projected 7905 patient days will generate $2,474,265 in gross revenue at an average daily charge of $313. Table 7, p. 48, MMHC Ex. 2; VI-2, 12-14, 38-39. The mix of patients in the 27 hospital licensed beds in the second year is estimated to be 29.6 percent Medicare, 48.2 percent insurance, and 22.2 percent private pay. Table 7, p. 48, MMHC Ex. 2. The estimate of 29.6 percent Medicare is based upon the current 27 percent of admissions that currently are GRTS patients plus the increasing trend in Medicare utilization. VI-2, 66-67. From the study that identified the types of patients who were within the existing MMHC system and were candidates for referral to the hospital licensed beds it was estimated that about 30 percent of the total number of such persons were patients having insurance; it was further projected that once the enhanced therapies are added to MMHC, this percentage would increase to 48.2 percent. VI-2, 71-75. The remainder of the payor mix would be private pay patients, or 22.2 percent of the patient days. Table 7, p. 48, MMHC Ex. 2; VII-2. 72. The estimated mix of patient days for the 27 hospital licensed beds is reasonable. V1-2, 40. It is projected that in the second year of operation, MMHC will have $1,106,891 total deductions from the gross revenues of $2,474,265, leaving net revenues of $1,367,374. Appendix A, MMHC Ex. 2. There are three deductions projected: Medicare, bad debts, and indigent care. Id. Since no Medicaid patients can be treated in free standing psychiatric beds, there is no Medicaid deduction. A total of $343,906 is projected as a Medicare deduction. Appendix A, MMHC Ex. 2. The Medicare program reimburses for the lesser of charges or reasonable costs in a free standing inpatient psychiatric facility. VI-2, 16; XII-2, 49. The calculation of the Medicare deduction was based upon the assumption that Medicare would reimburse 100 percent of the average cost per patient day. The average cost per patient day was roughly $166 for the second year of operation, which is the total operating expenses divided by the total number of patient days. XII-2, 47-48. Thus the Medicare deduction is basically the gross average daily charge, $313, less the average daily cost, $166, which is $147, times the estimated number of Medicare patient days, 2,342. VI-2, 15- 16. It is reasonable to base the estimated total Medicare reimbursement upon the average cost per patient day. This technique does not necessarily assume that Medicare will not disallow some costs in actual practice. XI1-2, Rather, the estimate is based upon a set of estimated costs, which produce the average daily cost, which in and of themselves do not contain any costs which are typically disallowed by Medicare officials. XII-2, 49. Moreover, the average cost per day is not reported Medicare. XII-2, 80. The report is based, rather, upon cost center accounting. Id. Medicare patients may incur costs that are different from other patients. XII-2, 65. There is some degree of flexibility in cost accounting, and some facilities are able to obtain a medicare reimbursement greater than the average cost per day for the entire facility. XII-2, 49-50, 64, 85. Charter Tampa presented expert opinion that MMHC will receive 90 percent of its projected cost from Medicare. XII-2, 52. A loss of 10 percent of costs would result in a loss of about $39,000 in net revenue. XII-2, 56. It is unclear from Charter Tampa's expert's opinion, however, whether the 90 percent figure was 90 percent of what a free standing hospital would submit to Medicare, or 90 percent of average daily costs for the entire facility. If his opinion were the former, it may not be inconsistent with the opinion expressed by the expert for MMHC. MMHC's expert testified that although some costs submitted to Medicare may be disallowed, other costs may be approved, and the total approved cost still may be greater or the same as the average daily cost for the facility (and all patients) as a whole. See the preceding paragraph. The second estimated deduction from gross revenues associated with the 27 hospital licensed beds is a deduction of $268,038 for bad debt for the second year of operation. Appendix A, MMHC Ex. 2. The bad debt estimate concerns the insured patients, other than Medicare, and some private pay patients. The estimate of bad debt is based generally upon the assumption that a small portion of private paying patients will not pay part or all of what is billed, and a more substantial portion attributed to a failure of the patient to pay the co- payment or deductible after insurance has paid its portion of the bill. VI- 2, 19, 78. The bad debt estimate is about 10.8 percent of total gross revenues for the 27 hospital licensed beds in the second year of operation. VI-2, 78, 19. The 10.8 percent is about 20 percent of the revenues generated by the 48.2 percent of patients who have insurance. Table 7, MMHC Ex. 2; VI-2, 80. The assumption was not that all insured patients would fail to pay their 20 percent share, VI-2, 79, but rather that some private pay patients would fail to pay some portion of their charge, combined with a failure of insured patients generally, but not always, to pay their co-payments or deductible. VI-2, 79-80. There is credible expert opinion in the record supported by the analysis in the preceding paragraph that the estimate of bad debt is reasonable. VI-2, 80. That expert opinion is further corroborated by Charter Tampa Ex. 12, which is the Report of the Hospital Cost Containment Board for 1984. That report assigns to short term psychiatric hospitals the code "4C." The following hospitals thus are listed by the Hospital Cost Containment Board as short term psychiatric hospitals, and report for 1984 the following bad debt percentage of patient charges: Bad Debt Percentage 4C Hospital of Patient Charges Brevard MCH 21.5 Ft. Lauderdale Hospital 2.7 Hollywood Pavilion 11.5 Charlotte Medical Center 5.1 Highland Park Medical Center 2.2 P. L. Dodge Memorial Hospital 5.9 St. John's River Hospital 2.4 Fla. Alcoholism Treatment Center --- Northside Community Mental Health Center 6.8 Tampa Heights Hospital 6.5 Lake/Sumter CMHC --- Charter Glade Hospital 3.2 Lake Hospital of the Palm Beaches 3.1 45th Street CMHC 12.3 Camelot Care Center, Inc. 2.5 Horizon Hospital 10.5 Medfield Center 3.8 Indian River CMHC 10.0 Sarasota Palms Hospital 1.7 West Lake 4.1 It is concluded, therefore, that the estimate of bad debt in the second year of operation is reasonable. The final deduction estimated from gross revenue for the 27 hospital licensed beds is a deduction of $494,947 for indigent care. Appendix A, MMHC Ex. 2. The basis for this deduction is an expectation that MMHC will be able to collect only 10 percent of the $549,941 to be billed to private pay patients. Table 7, MMHC Ex. 2; VI-2, 77, 20-21, 22. MMHC plans to bill these private pay patients, II-2, 36, and the bill will not be on a sliding scale. VII-2, 40. Nonetheless MMHC considers most of such billings to be charity or indigent care and will not expect to collect 90 percent of such billings. II-2, 37. Since the gross revenues to be billed to private pay patients is based in the second year of operation upon an average charge per day of $313, the 10 percent collection estimate is an estimate that about $30 per day per patient will be collected. Currently in the other licensed CSU and detoxification beds MMHC is only able to collect at most about 20.5 percent of overall gross revenues. VI- 2, 76. The record does not contain precise evidence as to current fees in the other licensed beds, but it may be concluded that such current fees are very roughly $100 per day for the CSU, substance abuse, and detoxification beds. VII-2, 36, II-2, 12. Thus, it is inferred that currently MMHC collects very roughly $20 per patient day in these beds. If MMHC were able to collect only $20 per day from the 1757 patient days identified in Table 7, MMHC Ex. 2, as being the second year patient days attributable to private pay patients, it would collect approximately $17,000 less net revenue than is now shown in Appendix A, MMHC Ex. 2. It is difficult to tell, on this record, whether it is more likely that MMHC will continue to collect about $20 per patient day from these patients, or whether the enhanced services will attract a few more private pay patients who will pay proportionately more of their bills, thus making the $30 per patient day estimate more reasonable. To complete the estimate of revenues, it was estimated that the "other licensed" beds, crisis stabilization, detoxification, (and substance abuse, if option A is implemented) will generate $1,889,770 in gross revenues in the first year of operation, and $2,010,399 in gross revenues in the second year of operation. Appendix A, MMHC Ex. 2; V1-2, 12-13, 21-22, 82-83. The net revenues for the other licensed beds are based upon current use rates for current Manatee County population applied to the estimated future Manatee County populations in the first and second years of operation. VI-2, 81-82. The assumption is that the current indigent patients served in these other licensed beds will continue to be served and keep pace at the same rate as the population of Manatee County grows. Id. To reach net revenues for these beds, the current Baker Act and Myers Act funding for these beds was analyzed and used as the expected basis for revenues. These expected revenues were inflated forward at 5 percent a year. Id. Additionally, a few patients were estimated to continue to be served in these beds who did not qualify for Baker Act funding, and it was estimated that only 10 percent of the gross revenues would be collected from these patients. VI-2, 82-83. See also VI-2, 21-22. As a result of these deductions from gross revenues for indigent care, it is estimated that the other licensed beds will generate $1,052,636 in net revenues in the first year of operation, and $1,105,789 in net revenues in the second year of operation. Appendix A, MMHC Ex. 2. These estimates are reasonable. Projected Expenses The forecast statement of revenue and expenses contains estimates of expenses in several categories: salaries and wages, benefits, non-salary expenses, depreciation, and general and administrative expenses. MMHC Ex. 2. The projected annual salaries are found on Table 11, MMHC Ex. 2. These projected annual salaries are based upon and reflect current salaries, and are inflated by 6 percent for each year beyond the current year. VI-2, 91-94, 110, VII-2, 118-119, IX-2, 21-22, 27-28; MMHC Ex. 4. An inflation rate of 6 percent annually is reasonable. VII-2, 119. The salary levels, based upon current experience and retention, plus state classification plan salaries for positions which do not yet exist, and compared to mental health centers in the state by an expert, are reasonable. IX-2, 27-28, VI-2 95-110. It was stipulated that adequate and qualified staff will be obtained. Finding of fact 47. Salary expense is allocated on Appendix A, MMHC Ex. 2, between the hospital licensed beds and the other licensed beds based upon the ratio of total patient days projected for each group of beds. VI-2, 23-24. The total salary expense projected for the second year of operation is $1,229,871. The expense for benefits associated with salaries is reasonable. It is based upon current MMHC experience and is 24 percent of total salaries. VI- 2, 24. The benefit expense is $295,169 in the second year of operation. Appendix A, MMHC Ex. 2. Non-salary expense are projected to be $457,512 in the second year of operation. Appendix A, MMHC Ex. 2. This expense is projected to be 30 percent of the projected expense for salaries and benefits. VI-2, 25, 112. A ratio of 30 percent has been the actual experience of MMHC for the eight months from July 1985 through February 1986. VI-2, 117. Glen Oaks is currently providing three of the four services that it will provide if the certificate of need is granted: crisis stabilization beds, detoxification beds, and substance abuse beds. VI-2, 127-28. The non-salary expense for the new beds (which primarily will be the 17 hospital licensed psychiatric beds since substance abuse is already being provided) should be quite similar to the non-salary expenses currently being incurred for the crisis stabilization beds. VI-2, 115. The primary new expense with the addition of the new beds will be salary expenses. VI-2, 119. The addition of the new beds will result in the addition of more treatment therapies which are staff intensive, but does not generate non-salary expense to any unusual degree. VI-2, 122, 140. At the same time, the current non-salary expense contains certain substantial fixed expenses, such as utility costs, which will not increase with the increase of more staff, and in that sense the use of a 30 percent figure is conservative. VI-2, 118-119, III. Thus, the estimate that non-salary expenses will be 30 percent of the expenses for salaries and benefits is reasonable. VI-2, 127-128; XII-2, 42-43. The next projected expense is a depreciation expense of $89,280 for the first and second years of operation. This expense is based upon a 30 year straight line depreciation of the "total project costs" shown on page 57 MMHC Ex. 2. VI-2, 26 There is no evidence to suggest that this expense estimate is unreasonable. Since the building was funded not by borrowing and by revenues from charges but from a Legislative appropriation, is not altogether clear that MMHC would have to reserve $89,000 annually to replace the facility at the end of 30 years. Thus, addition of this expense is conservative. VI-2, 26. Finally, in the second year of operation it is estimated that general and administrative expenses will be $314,953. Appendix A, MMHC Ex. 2; VI-2, 27. These are expenses related to support functions provided by management. Id. The estimate is based upon current budget plus increase in staff projected in the project. Id. There is no evidence to suggest that this estimate is unreasonable, and thus it is found to be reasonable. Dr. Howard Fagin testified as an expert for Charter Tampa concerning ratios derived from data contained in reports to the Hospital Cost Containment Board. The data relied upon by Dr. Fagin was the actual financial experience of 16 free standing psychiatric facilities in Florida for 1984, which was the latest compilation of such data. XI-2, 41, 94. The Hospital Cost Containment Board category for "salary and wages" did not include "benefits." These were included under the "other" category. XI-2, 39. Thus, Dr. Fagin calculated a ratio of all expenses other than "salary and wages" divided by "salary and wages" for each of the 16 free standing psychiatric facilities. XI-2, 41. That average percentage was 132 percent. He made the same calculation for only the licensed beds portion of the estimated salaries and other expenses in Appendix A, MMHC Ex. 2, for the second year of operation and found that to be 94 percent. XI-2, 40. (Had he computed the ratio for the total for both licensed and so- called "unlicensed" beds, it would have been the same 94 percent.) Ms. Deborah Krueger testified as an expert for MMHC. Ms. Krueger testified that there were 18 free standing psychiatric hospitals in Florida in 1984, but that 4 of these were community mental health centers. XII-2, 45. Ms. Krueger then did the same calculation as was performed by Dr. Fagin, as discussed in finding of fact 104, but limited to the 4 community mental health centers. The average was 81.3 percent. Brevard was 96.5 percent; Palm Beach 45th Street was 78.4 percent; Hillsborough was 87.9 percent; and Lake Sumter Community Mental Health Center was 78.4 percent. XII-2, 46. Ms. Krueger also did the same calculation for the remaining 14 free standing psychiatric facilities that were not community mental health facilities and that ratio was 132 percent. The ratio used by Dr. Fagin and Ms. Krueger is one that increases as the "other expenses" category becomes greater in relationship to salaries and wages. Thus, the lower the ratio, the smaller the "other expenses" in comparison to salaries and wages. Comparisons such as those performed by Dr. Fagin and Ms. Krueger are useful as secondary modes of analysis, but are not as useful or reasonable as the actual recent experience of Glen Oaks facility itself. XII-2, 39, 43; VI-2, 143-144. Without more detailed information concerning the actual cost behavior and cost structure of the other existing facilities, it is difficult to draw conclusions from the comparisons offered above in finding of fact 104 and 105. However, of the two comparisons, the one done by Ms. Krueger is more relevant. It appears that the 132 percent ratio obtained by Dr. Fagin was either of all free standing facilities or of only the free standing psychiatric facilities that were not community mental health centers. Dr. Fagin did not state whether the 16 facilities chosen included community mental health centers. XI-2, 41. It is probable from the testimony of Ms. Krueger that Dr. Fagin's 16 facilities did not include community mental health centers, and thus his testimony, summarized in finding of fact 104, is irrelevant. Dr. Fagin's testimony is less reliable than Ms. Krueger's for the further reason-that it may be inferred that the cost structures and cost behaviors of the four community mental health centers in Ms. Krueger's analysis would be much more comparable to the facility proposed by MMHC than the aggregate of facilities contained in Dr. Fagin's analysis. Ms. Krueger's testimony, summarized in finding of fact 105, is secondary and corroborative evidence that the projected expenses (other than salaries and wages) of MMHC for the second year of operation of the total project, as well as for the hospital licensed beds, is reasonable and conservative. This is especially true with respect to the comparison to the Brevard Community Mental Health facility, which had a ratio of other expenses to salaries of 96.5 percent, almost the same as that projected for MMHC. The Brevard facility operates inpatient programs in much the same setting and manner as proposed by MMHC. IX-2, 37-38, 43-45, 48, 64. See finding of fact 68. MMHC intends to contract with David Feldman and Peat, Marwick Co. Mr. Feldman will assist with reporting such things as Medicare matters, reports to the Hospital Cost Containment Board, and the like. I-2, 81. Mr. Feldman and Peat, Marwick Co. also would work on establishing charges for services. I-2, Peat, Marwick Co. also would be assisting in pricing, budgeting, and reporting. II-2, 50. Mr. Feldman's services might cost about $720 or less since he might donate some time. II-2, 11. The costs of Peat, Marwick Co. are not known. II-2, 50. Neither cost has specifically been made a part of the estimates of expenses in the first or second year of operation. Long Term Financial Feasibility Conclusions Although contrary findings of fact have been made in the preceding paragraphs concerning the issues which follow, it is useful to look at the effect of the possibility that estimating errors are contained in Appendix A, MMHC Ex. 2. If Dr. Fagin were correct that MMHC would obtain only 90 percent of costs for Medicare reimbursement, this would result in a loss of $39,000 in revenue. Finding of fact 88-90. If Ms. Krueger were wrong, and Appendix A in fact contained rounding errors, this would mean an increase in salary expenses of $6,369. If indigents in fact will pay less than 10 percent for services in the hospital licensed beds, this would result in a loss of $17,000 in revenue. Finding of fact 95. If 2 percent of all estimated patient days would be lost to a facility like MMH because of dual medical/psychiatric diagnosis, this would result in a loss of 158.1 patient days out of 7,905 in the second year of operation, or a loss of revenue of $49,485 at $313 average per patient day. And if accounting firm expenses are left out of the estimate of future expenses, perhaps this may be $5,000 annually. Adding these figures (since a loss of revenue or a gain in expenses is the same thing as far as net income is concerned), net income in the second year of operation would be less by $116,854, which would result in a net operating loss in the second year of operation of $30,476. To recoup this loss and break even, MMHC would need only to raises its average charge per patient day by $3.93. This is calculated by dividing the net operating loss, $30,476, by the number of patient days, which would be 7905 less 2 percent, or 7746.9 patient days. Even making the assumptions in finding of fact 109, MMHC might still have net revenue at the end of the second year of operation if the depreciation expense, finding of fact 102, is not needed. But assuming that the $89,000 depreciation expenses is needed, and making the hypothetical assumptions of finding of fact 109, MMHC would still break even if it simply increased its average daily charge per patient from $313 to $317. The projected average charges of MMHC of $295 and $313 per patient day are lower than charges for similar services available to patients in the service area of MMHC. VI-2, 147. In 1986, Charter Hospital of Tampa Bay's 1986 budget filed with the Hospital Cost Containment Board reported gross revenue per adjusted patient day of $433. VI-2, 43. In 1984, the average gross revenue per patient day for MMH's short term psychiatric beds was $304. VI-2, 42. A reasonable inflation rate for that statistic would be 5 percent annually. VI-2, Thus, it may be inferred that the average gross revenue per patient day at MMH for its 25 short term psychiatric beds will probably increase to about $370 by 1988, if not more. (The same figure at Charter Tampa increased 17 percent in only two years, 1984 to 1986. VI-2, 43.) Thus MMHC could raise its per patient average daily charge by $4 in 1988 and easily remain competitive. MMHC annually has the fiscal goal of breaking even, with perhaps some small surplus. See finding of fact 19. Thus, long term financial feasibility must be considered with that goal in mind. Upon consideration of findings of fact 34 through 111, the project proposed by MMHC is financially feasible in the long term. Long term financial feasibility exists whether MMHC chooses option A or option B. VI-2, 10. The hospital license beds, as well as the entire facility at Glen Oaks, should realize some net income both the first and second years of operation and thus at least operate without net loss. Standing of Intervenors Charter Hospital of Tampa Bay is a wholly owned subsidiary of Charter Medical-Southeast, Inc. X-2, 34. It was purchased in April 1985. X-2, 54. Charter Tampa has 146 hospital licensed short term psychiatric beds, and no hospital licensed substance abuse beds. X-2, 24, 62. Geriatric patients are treated in the adult unit of Charter Tampa. XI-2, 117. Charter Tampa is located in Hillsborough County, Tampa, Florida. X-2, 24. Charter Tampa considers Hillsborough County to be its primary service area. X-2, 55. In the ten months preceding July 1986, Charter Tampa's administrator estimated that Charter Tampa had served approximately ten patients from Manatee County. X-2, 29. Records of Charter Tampa reviewed by Charter Tampa's expert indicated that in a six month period Charter Tampa had served seven patients who were Manatee County residents. XI-2, 76. Charter Tampa's expert thus offered the opinion that 14 such patients were being served now by Charter Tampa annually, and that from 5 to 10 of these patients would be lost to MMHC if this certificate of need were to be granted. XI-2, 76. The expert stated that this loss would be a financial loss, but was not asked to give an opinion as to the amount of the loss. Id. Charter Tampa's administrator stated that he thought the loss would be $150,000 annually. X-2, 32. The record does not contain an explanation as to the estimate of a $150,000 loss was projected. The ages, sex, or types of treatment received by the patients that made up the ten patients served in that last ten months were not known. X-2, 50, 64. The origin of the patient was estimated by the origin of the person who guaranteed payment, but it was estimated that this was the same person as the patient in 90 percent of the instances. X-2, 60-61. Charter Tampa has had one psychiatrist for the last four months on temporary staff privileges who has an office or residence in Manatee County. X- 2, 51-52. That physician is involved in establishing an outpatient clinic for Charter Tampa in Manatee County. X-2, 81. Charter Tampa's formal list of physicians having staff privileges at Charter Tampa has four categories of staff privileges: active, courtesy, consulting, and affiliate. As of May 1986, Charter Tampa's physician staff in these four categories almost exclusively had offices in Tampa. None of the physicians having staff privileges at Charter Tampa had an office in Manatee County. MMHC Ex. 5; X-2, 53. Charter Tampa did not know any physicians, including the physician involved in setting up the outpatient clinic, who is residing in Manatee County and would admit patients to Charter Tampa in the future. X-2, 55, 81. Charter Tampa's administrator did not have any certain knowledge as to the numbers of patients from Manatee County that might be treated by Charter Tampa in the future. X-2, 51. The administrator of Charter Tampa had not reviewed the application materials of MMHC and did not know anything about the history of MMHC or the services it had been providing to the date of the final hearing. X-2, 61-62. Charter Tampa supported the effort of Charter Haven to obtain comparative review of a would-be competing application for the same services in Manatee County. I- 1, 58. The estimated impact of a loss of $150,000 in gross revenues annually is clearly overstated by Charter Tampa. The record in this case shows that the normal length of stay for short term inpatient hospital psychiatric patients is between 10 to 14 days. See findings of fact 59, 61-62. Since Charter Tampa serves geriatric patients such as MMHC proposes to serve from its GRTS program, it is reasonable to infer that the average length of stay of the 5 to 10 patients served now from Manatee County by Charter Tampa is about 14 days. Finding of fact 59. It is also reasonable to infer that the probable average gross revenue per patient day at Charter Tampa for these 5 to 10 patients is about $477. (This is the budgeted 1986 figure inflated twice at 5 percent. Finding of fact 111.) Thus, the estimated loss of 5 to 10 patients is an estimated loss of 70 to 140 patient days annually, or a projected loss of only $33,390 to $66,780 in gross revenues annually. If this loss were true, this would probably constitute substantial interest. The outpatient clinic that Charter Tampa intends to open in Manatee County will not serve inpatients. Moreover, it will serve mostly patients who will personally pay for services X-2, 62. Thus, it would not be serving patients that MMHC now serves. In sum, the intended outpatient clinic would not compete with or be substantially affected by the operation of inpatient hospital beds by MMHC as proposed in its application. XII-2, 28. Based upon findings of fact 113 through 120, it is further found that Charter Hospital of Tampa Bay will not be substantially affected by the grant of the certificate of need at issue in this case. The most that Charter Tampa estimates that it might lose is about 140 patient days annually. See finding of fact 120. But Manatee County will still have an unmet need of 27.4 short term psychiatric beds by the second year of the operation of MMHC's proposed beds. See finding of fact 65. On an annual basis (365 days) this is 10,001 patient days that will not be served by MMHC. Even if this residual unmet need were only 4,700 to 6,200 patient days as was thought by MMHC's expert, III-2 86-87, there is still a very substantial residual unmet need in Manatee County to be served by Charter Tampa. It is not believable that Charter Tampa will lose a mere 140 patient days with so many days of unmet need. This is especially true since Charter failed to persuasively identify the Manatee County patients that it would lose, or to identify the reasons that such patients would be lost. See findings of fact 113 through 118. It was stipulated between MMHC, MMH, and HRS, but not Charter Tampa, that MMH has standing (a substantial interest) to contest the issuance of the proposed 17 short term hospital psychiatric beds to MMHC as an existing provider of the same services. It was further stipulated by the same parties that MMH has no short term or long term substance abuse beds. X-2, 82-85. Charter Tampa put on no evidence contrary to these stipulations, and therefore the stipulations are accepted as fact in this record. Appendix A which follows contains specific rulings upon all proposed findings of fact which have been rejected. In some cases Appendix A contains discussions and further findings of fact. Those findings of fact in Appendix A are adopted by reference as findings of fact in this recommended order.
Recommendation Upon consideration of the foregoing, it is recommended that the Department of Health and Rehabilitative Services issue its final order: Dismissing the petitions for intervention of Manatee Memorial Hospital and Charter Hospital of Tampa Bay to the extent that such petitions seek to contest the grant of a certificate of need to the Petitioner for short term substance abuse beds. Granting certificate of need number 2681 to Manatee Mental Health Center, Inc., d/b/a Manatee Crisis Center to operate 17 short term inpatient hospital psychiatric beds and 10 short term inpatient hospital substance abuse beds. DONE and ORDERED this 3rd day of December 1986 in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. 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 3rd day of December 1986. APPENDIX A TO RECOMMENDED ORDER IN DOAH CASE NUMBER 84-0988 The following are rulings by number upon all proposed findings of fact which have been rejected. Findings of fact proposed by Manatee Mental Health Center, Inc., d/b/a Manatee Crisis Center: 7. The record cited, 11-2, 85, does not support the conclusion that the 18 residential beds are not a part of the "necessary" continuum of care offered by MMHC. A finding of fact has been made that these beds are not a part of the treatment program of MMHC. 16. The implication in the last sentence that the project would provide "necessary licensed hospital services at very little cost" is rejected as not supported by the evidence. Without evidence on the point, the "position" of HRS is irrelevant. The second sentence is irrelevant since it refers to the 1985 local health plan. See the conclusions of law and discussion with respect to finding of fact 14 proposed by MMH. 21.i. This proposed finding of fact seeks a finding that the "optimal" occupancy rate is 75 percent. The record does not contain sufficient evidence to make that conclusion. The remainder of this proposed finding of fact has been adopted. 21.k. This proposed finding of fact is accounted for by the numeric rule, which is based upon population, and thus is cumulative. 24. The reference to the 1985 local plan is irrelevant. See proposed finding of fact 14 by MMH. 27-28. These proposed findings rely upon SIRS Ex. 1. HRS Ex. 1 relies upon an average length of stay of 14.3 days to 14.5 days. (This is mathematically obvious by dividing the projected number of patient days in each of the three projections by the number of admissions projected in each case.) While it is reasonable for MMHC to project an average length of stay of 14 days, this is so due to the fact that MMHC will have a substantial number of GRTS patients in its short term psychiatric beds. See findings of fact 57-59 and 61. The record does not contain, however, enough evidence to conclude that the average length of stay for all short term psychiatric patients in Manatee County will be 14 days. See VIII-2, 49-52. Indeed, the witness seems to have believed that the calculation in HRS Ex. 1 used an average length of stay of 9 days, but as discussed above, the math in HRS Ex. 1 is to the contrary. For this reason, and finding based upon HRS Ex. 1 is rejected. 29. Rejected because not in the record cited as proposed in this proposed finding of fact. I-1, 58. The last sentence with respect to projected occupancy levels of 85 percent on the average for the third year is rejected because not supported by the evidence. The witness did not so testify, and the exhibit cited does not provide average occupancy for the third year. This proposed finding is rejected since the average occupancy level of 85 percent for the third year is rejected in the preceding paragraph. 43. The conclusion that private physician referrals will be a bonus is rejected since the projection of 80 percent occupancy requires an increase in occupancy in the short term psychiatric beds from 8 to 12.6 beds from the first to second years. See finding of fact 65. The projection of an average daily census of 8 short term psychiatric patients was based solely upon patients currently within the MMHC system. See findings of fact 57 and 60. Thus, the increase of an average daily census to 12.6 in the second year must come in part from new patients referred by private physicians. This is not a bonus, but a necessary part of the projections of MMHC to reach 80 percent occupancy. Sentences three through five are rejected as cumulative and unnecessary. The fourth sentence is rejected as not relevant and inconclusive for lack of evidence of context. 58. This proposed finding of fact is irrelevant since these issues have been the subject of a stipulation removing them from dispute in this case. 59-64. These miscellaneous operational and managerial proposed findings of fact are not relevant. The Department of Health and Rehabilitative Services does not propose to deny the certificate of need with respect to these issues, and the simultaneously filed proposed findings of fact of the two Intervenors do not propose any facts concerning these issues. Thus, these issues are not in dispute in this case. The second sentence is cumulative and not relevant. This proposed finding of fact, as stated in the first sentence, is not disputed and thus not relevant. Findings have been made concerning the two options as this might affect the proposed number of beds sought. 81-82. It is true that MMHC currently has a sliding fee scale for determining how much certain impecunious patients will have to pay. It is also true that the updated application erroneously states that a sliding scale will be used if the certificate of need is granted. But expert witnesses relied upon the existing sliding fee scale only to project the portion of a hypothetical gross revenues which is currently being collected from patients receiving charity care. VII-2, 79. Thus, the error did not affect the reliability of testimony. No party has raised any of the foregoing as an issue. For these reasons, the matter is not relevant. 90. All sentences beyond the first sentence are mathematically correct, but are cumulative and unnecessary. 95. This proposed finding of fact is rejected because the 1983 local health plan does not contain the matter stated, the updated application is hearsay, and all plans other than plans in existence when the application was filed are not relevant. 97-98. To the extent not already adopted, these proposed findings of fact are rejected as cumulative and unnecessary. 101. Opponents of the application of MMHC in proposed findings of fact have not proposed that an entirely new free standing psychiatric hospital would be a preferable alternative to the application of MMHC. Dr. Fagin testified that bed need in "the community . . . is best served by a new freestanding facility." XI-2, 74. He then contradicted that testimony by testifying that "I said that two of the best alternatives are approval of this project or disapproval of this project and maintenance of the existing programs at the Manatee Mental Health Center." XI-2, 116. Thus, the first sentence of this proposed finding is rejected for lack of support in the record. Finally, if the issue had been raised, at least facially it is true that the MMHC proposal appears to be less costly because it already has a building and a new project would have to pay for a new building by increased fees. But there is a cost to Florida taxpayers through public funding of the MMHC building which should be considered as well. The record is insufficient for such comparative review. The last sentence is rejected since about 90 percent of the time the guarantor and the patient are the same person. The fourth sentence is rejected because based upon a deposition taken earlier in time, and the deposition itself is not in evidence. The third sentence is irrelevant. 111. The second sentence is irrelevant. The second sentence is not supported by the record. The record shows that the parent company receives or would receive revenues from all subsidiaries, whether existing or proposed. The last sentence is rejected because not relevant: no party has argued that Charter Tampa is an adequate alternative to the proposal of MMHC. The corporate motives of the parent corporation are not relevant to the issue of the standing of Charter Tampa. The issue of standing of Charter Tampa must be considered upon evidence it presented concerning its substantial interest, as well as evidence submitted by other parties. Thus, this proposed finding is not relevant. Not relevant since the corporate motives of the parent are essentially not relevant. Not relevant as stated with respect to proposed finding of fact 117 and not supported by the record. The last two sentences are not relevant. Findings of fact proposed by Manatee Hospitals and Health Systems, Inc., d/b/a Manatee Memorial Hospital: The proposed findings that social setting detoxification would be eliminated are rejected because contrary to the testimony cited. 11-2, 18-19. Findings with respect to the minimum residential beds are found in findings of fact 12 and 31. A finding that the current rented minimum residential beds are a part of the MMHC treatment program is rejected as contrary to the evidence as discussed in those findings. This proposed finding is a statement of law and a procedural statement. The proposed finding that the 1983 local health plan found no need for psychiatric and substance abuse beds for District VI is rejected. The plan found a need for substance abuse beds by 1988 (57 such beds) but no need for short terms psychiatric beds. MMHC Ex. 1, p. 53, 53-55. Any reference in this case to any local plan other than the 1983 local health plan, MMHC Ex. I, is legally incorrect and irrelevant. The amended application of MMHC only refers to the 1983 local health plan. See findings of fact 29 and 30, order of May 14, 1986, Appendix B herein. SIRS can only review an application for certificate of need against the specific local health plan cited by the application. NME Hospitals, Inc., d/b/a Delray Community Hospital et al. v. Department of Health and Rehabilitative Services, 492 So.2d 379, 385- 386 (Fla. 1st DCA 1986). Thus, the proposed finding must be rejected as irrelevant. Rejected as argument of law. Rejected because this plan was not in existence when the applicant filed its application, the applicant has not upon this plan for its application, and therefore, as discussed with respect to proposed finding of fact 14, the proposed finding is legally irrelevant. It is also rejected because irrelevant to this application: the application is for short term inpatient hospital psychiatric and substance abuse services; the application does not result in the loss of existing ARTS or EGRT programs, nor does it result in the loss of a formal treatment program of residential beds. See proposed finding of fact II above. Rejected as legally irrelevant for the reasons cited with respect to proposed finding of fact 14. Rejected for the reasons stated with respect to proposed findings of fact 11, 14, 15, 16, and 17. Sentences 3, 4, and 5 are rejected for the reasons stated in response to proposed finding of fact 18. 21. The second sentence concerning average lengths of stay at MMH must be rejected because the Hearing Officer has been unable to find the proposed finding in the record cited. The 1985 local health plan, CH Ex. 8, provides that in 1984, MMH had an average length of stay for adults in psychiatric beds of 11.0 days and 8.0 days for children. P. 120. The plan also states that non- hospital licensed crisis stabilization units are used lieu of hospital beds for stays less than 7 days, but that licensed hospitals provide more intensive service and the average length of stay can average 14-16 days. It is probable that data in a post-application local or state health plan can be utilized by the parties at a formal administrative hearing, so long as such use does not conflict with rule or statute. If data were to be relied upon from the 1985 District VI Local Health Plan, the above data supports the findings in the recommended order (finding of fact 61) that the average length of stay projected for most patients in the 17 short term psychiatric beds will be 10 to 14 days once the more intensive individual therapies are added to the inpatient program at MMHC. The third sentence in this proposed finding of fact is rejected. The high occupancy rates at MMH only show that MMH is near lawful capacity; it does not show that need in Manatee County is being adequately served by MMH, and indeed, the inference is to the contrary. Finally, the drop to 88 percent must be considered in relation to the prior rates and the rise again in the first four months of 1986. It does not show a clear or reliable diminution of need. 23. Rejected by finding of fact 43. The first sentence is rejected. The existence of CSU beds at MMHC would not be argued by MMH to be an adequate alternative to its own application for expanded hospital licensed beds. Moreover, the proposed application does not diminish the current CSU program at MMHC. That program will continue. The proposed findings that charges will increase and that the sliding fee scale for those unable to pay will be eliminated have been rejected by finding of fact 46. The finding that the proposed project would not be financially feasible is rejected by finding of fact 112. Evidence was introduced that services would be improved through shared resources. Specifically, benefits would be achieved by providing continuous care for patients within the MMHC system and indigent patients in the other licensed beds at Glen Oaks would benefit from expanded therapies. See findings of fact 26, 28, 29, 30, and 33. Thus, this finding of fact is rejected. It is true that no evidence was introduced services existing in counties other than Manatee County were reasonably close and accessible for patients and families in Manatee County. Without such evidence, it cannot be concluded that "services are available in Hillsborough and Pinellas Counties" as proposed in this finding of fact. The proposed finding of fact is therefore rejected. The proposed finding is true and irrelevant. The fourth sentence is rejected as discussed with respect to proposed finding 27. See also findings of fact 2-26, 31, and 46. The eighth sentence is rejected since the applicant projects, reasonably, that its services to financially and medically indigent persons will continue in the non-hospital licensed beds and will increase as Manatee County population increases. The finding with respect to the sliding fee scale is rejected by finding of fact 46. The next sentence is rejected as discussed above in the first sentence of this paragraph. The last sentence is rejected by finding of fact 46. This second proposed finding is a narrative summary and is contained by separate issue in the findings of fact. The second sentence is rejected because MMHC records show that about 7 inpatient hospital admissions per month are made from MMHC outpatient programs, but it was estimated that only 2 of these per month would be retained by the MMHC hospital licensed beds. Finding of fact 57. The remainder of this proposed finding of fact is rejected for the reason stated in finding of fact 69. The fifth sentence is rejected because it is not the testimony of Ms. Wolchuck-Sher. It is only the hearsay statement from someone in a deposition characterized by Ms. Wolchuck-Sher without evidence of the context of the statement of the deponentor the reliability of Ms. Wolchuck-Sher's memory on the point. XII-2, 33. The remainder of this proposed finding of fact is rejected for the reasons discussed in finding of fact 68. The second sentence is rejected because the word calculated" in the question is unclear and the response is contrary to the record. Average lengths of stay were estimated based upon studies discussed in findings of fact 57 through 62. The third sentence is rejected because the testimony clearly indicates that the average lengths of stay were based upon a review of actual experience plus assumptions concerning an increase of average length of stay to about 10 days in the psychiatry beds to more closely approximate the average length of stay of MMH. See findings of fact 57 through 62. The sixth sentence is rejected for the reason discussed in findings of fact 57, 58, 59, and 62. The ninth and tenth sentences are rejected because there is no evidence to conclude that MMHC will not continue to serve an average daily census of 9 patients in its substance abuse beds. The remainder of the proposed finding of fact has been rejected in findings of fact 57 through 62. The first two sentences are rejected for the reasons stated in findings of fact 57 through 62. The third sentence is rejected because the financial projection of MHC estimate that the CSU beds will continue to operate as before, generating the same revenues. See finding of fact 96. This estimate implicitly assumes the same number of patients served and the same average length of stay of 6.5 days, not 10 days. VI-2, 81-82. The 10 day average length of stay only applies to the hospital licensed psychiatric patients, other than geriatric psychiatric patients. See findings of fact 57 through 62. The remainder of this proposed finding of fact is rejected because contrary to the underlying facts found in findings of fact 57 through 62 and 96. This proposed finding of fact has been rejected in findings of fact 88 through 90. The second sentence is rejected because the current collection rate is roughly 20.5 percent of gross revenues in the CSU and detoxification beds. VI- 2, 76. The estimate of 10 percent in the 27 hospital licensed beds was due to the fact that overall gross revenues for the hospital licensed beds would increase to about $300 per patient per day. Id. The remainder of the proposed finding of fact is partially adopted in findings of fact 109 through 112. The loss of $17,000 in gross revenues, considered by itself, would be within the projected net revenue for the second year of operation; the project still would end the year with positive net revenue. The fifth sentence in this proposed finding of fact is rejected. VI- 2, 112, 125. The sixth sentence is true but irrelevant. While it would be a better method to estimate non-salary costs by estimating each component thereof separately, the Petitioner need not present the best method. The method presented by the Petitioner, using actual historical data from MMHC, is reasonable. See finding of fact 100. MMH might have presented an estimate by each separate component, but it did not. All of the rest of this proposed finding of fact must be rejected. The reasons that Ms. Krueger gave for rejecting as unreliable non-salary to salary expense ratios in other MMHC programs were: that such programs were not the same as the inpatient programs contemplated in this application, VI-2, 126, and the programs operated at the Glen Ridge facility provide an inappropriate basis for comparison because the Glen Ridge facility in 1984 was a "dump" and not comparable to the new Glen Oaks facility, VI-2, 116. These are good reasons for not making these comparisons. Next, she did not testify that there "would be changes at Glen Oaks if it became licensed" as proposed by MMH. She testified that there would be future changes expected in "the mental health center." VI-2, 139. She then testified that a change in Glen Oaks should not be expected in the next few years, and therefore use of the most recent actual data from the current operation of the Glen Oaks facility was reasonable. VI-2, 139-140. Mr. More initially testified that the salaries on Table 11, MMHC Ex. 2, "reflect" the average salaries currently paid by MMHC. I-2, 97. On cross examination, Mr. More was asked "was it your testimony that those are your current salaries," and he replied "current average salaries, yes." 11-2, 15. In rebuttal, over objection that Mr. More was impeaching his own testimony, Mr. More testified that Table 11 contains current salaries blending with inflation. IX-2, 14-15. Mr. More was never asked on cross examination whether he was sure that Table 11 did not contain inflation factors. He was merely asked whether Table 11 figures "were" current salaries. They were. They were current salaries used as a base with an inflation factor. VI-2, 91-94. There is no confusion concerning whether Table 11 contains an inflation factor. Moreover, the rebuttal testimony of Mr. More was proper given the brevity and incompleteness of cross examination. The third sentence of this finding of fact is thus rejected. The remainder of the proposed finding of fact is also rejected. The proposed finding depends upon a finding that MMHC has had salary increases since February 1986 which have not been accounted for in Table 11, MMHC Ex. 2. The record does not support that proposed finding. First, the testimony of Ms. Radcliffe was insufficient to conclude that in fact there have been 3 percent raises in salaries since February 1986; she only said possible," and said "I have no knowledge of when any raises would come due." IX-2, 23. But more important, it appears that projected raises for fiscal year 1986 were contained in the figures of "current salaries" used. Ms. Radcliffe said that she used the figures that were in the budget revised in February, 1986, and that [w]hen 1 prepared the budgets, I used the current salaries as of when I prepared the budgets, and then 1 put in a small amount on the overall budget based on people getting raises at various times during the year." Id. In sum, the "current" salaries in fact contain all the budgeted-raises for fiscal year 1986. The first sentence is rejected because the estimate of expenses was based upon a percentage method (non-salary) and current statistics (general and administrative). No expenses items were "deleted" as such. The second and third sentences are not supported by enough record evidence to make it relevant. Mr. More testified that MMHC already was producing a "TV series" that was "coming up," and that MMHC would be "continuing this kind of effort once we become a licensed hospital." Thus, to some extent TV expenses must already be accounted for in current general and administrative expenses. The only other TV comment was in the next paragraph when Mr. More mentioned timing a "TV marketing effort in with the opening of the hospital." 1-2, 94. There is no-further evidence in the record concerning the cost of such TV marketing, whether such marketing would occur only at the opening or would be ongoing, and whether the cost is significant. The sixth and seventh sentences are rejected as not relevant. The depreciation expense is somewhat unusual in this case since MMHC does not own the building. See finding of fact 102. Moreover, even if the expense in this area should increase by $2500 per year, that is effectively only $0.31 per patient day out of 7905 patient days in the second year of operation. The issue is negligible. VI-2, 46. The eighth sentence is rejected because the rounding error is not in appendix A, MMHC Ex. 2; it is probably in Table 11, MMHC Ex. 2. VI-2, 87-88. The last sentence is rejected as not relevant. Dr. Ravindrin was evidently recruited by MMHC with current resources, coming to work in 1985. V-2, 6. Dr. Ravindrin further will be the only full time physician out of the 2.4 FTE's allocated for physicians in the new staffing pattern. Finding of fact 73. As discussed in the findings of fact, current "general and administrative" expenses were used as the basis for projecting future expenses Thus, should Dr. Ravindrin leave, it is reasonable to assume that the same level of budgeted general and administrative expenses will be sufficient to recruit a replacement. Finally, the remaining physicians will only be part-time, and thus should not involve moving expenses. Moreover, all of the physicians have been identified and thus there will not be any recruitment expenses in the first few years of operation. XII-2, 39. This proposed finding of fact is a summary of proposed findings of fact which have been rejected for the reasons stated above, and thus it also is rejected for the reasons stated above. This proposed finding is not relevant for the reasons stated in the proposed finding. The first six sentences are rejected by findings of fact 25, 26, 46, 93 and 96. The proposed finding in the eighth sentence that MMHC "may actually serve fewer indigents" is rejected as not credible. MMHC will continue to serve the same number of indigents in the other licensed beds as well as some other indigents in the hospital licensed beds. See the above findings of fact. The ninth sentence is rejected by findings of fact 18, 19, 20, 26, 28, 29, and 30. The last two sentences are rejected due to all the findings of fact listed in this paragraph. The second sentence is rejected because not true. MMHC currently does not serve patients served by MMH. See finding of fact 17. The third and fourth sentences are rejected by findings of fact 38 and 41 D. Findings of fact proposed by Charter-Medical Southeast, Inc., d/b/a Charter Hospital of Tampa Bay: 6. The fourth sentence is rejected because it is an argument of law. 9. The record does not contain sufficient evidence concerning the programs conducted at Glen Ridge to conclude that it was a "clinic" then. Moreover, the record does not contain a sufficiently clear definition of a "clinic" to make this proposed factual finding. Thus, the third sentence must be rejected. 11. The third through fifth sentences are rejected because evidence to support these proposed findings of fact is not found at the place in the record cited. 15, 16, and 17. To the extent these proposed findings reference health plans adopted after the application was filed, and not cited by the application as amended, the proposed findings are irrelevant. See discussion with respect to the proposed findings of fact 14-19 of MMH. The first three sentences are rejected because the 18 minimum residential beds currently rented by MMHC are not part of a MMHC treatment program. See findings of fact 12 and 31. The next two sentences are rejected as irrelevant for this reason, and also because the referenced plans are 1985 plans. The last two sentences are rejected because the cost to patients will continue to be based upon ability to pay; the cost will not increase for those patients financially unable to pay. See finding of fact 46. In the first sentence, the phrase "as a component of those programs" is rejected because contrary to the evidence. See finding of fact 12 and 31. The remainder of this proposed finding of fact has been essentially rejected due to the findings of fact 12 and 31. The majority of this finding of fact has not been adopted since it is a statement of law. The categorical statements contained in the last two sentences of this proposed finding of fact must be rejected. Although MMHC is currently providing good care, MMHC has experienced funding stresses and the quality and continued viability of all of its services would be enhanced by obtaining an additional funding source. See finding of fact 18. If the certificate of need were granted, indigent patients in the CSU would have the opportunity to receive expanded therapies not now available to them, see finding of fact 20, although presumably available to patients having third party payor sources at MMH (which has a longer average length of stay, see finding of fact 61). The second one-half of this proposed finding of fact proposes a finding that the proposed average length of stay for psychiatric beds will be unreasonable. This proposed finding has been rejected in findings of fact 57 and 58. The first sentence is rejected as irrelevant. An applicant for a certificate of need not be in "dire financial straits" to be entitled to seek expansion of its services. In fact, an unhealthy financial condition might mitigate against the award of a certificate of need. For the same reason, the last sentence is also rejected as irrelevant. Most of this proposed finding of fact has been rejected for the reasons stated with respect to MMH proposed finding of fact 40. The eighth sentence is rejected because there is no citation to the record and because the testimony of Ms. Krueger was to the effect that it was not proper to calculate ratios for outpatient programs or Glen Ridge programs at MMHC and because the audited financial statements at pages 36-42 of MMHC Ex. 2 required extensive accounting adjustment to result in a comparable comparison. The ninth sentence (which concerns the comparisons made by Dr. Fagin to 1984 Hospital Cost Containment Board actual data) is rejected for the reasons stated in findings of fact 104 through 107. The tenth sentence is rejected because the testimony of Mr. Hackett cited is actually evidence that estimated expenses of MMHC are reasonable. Mr. Hackett testified that the "salary expense" at Charter Hospital of Tampa Bay recently was 44 percent of the total operating budget. X-2, 26. This left 56 percent for all other expenses, not for "non-salary" expenses in the sense that that is used in Appendix A, MMHC Ex. 2. In the second year of operation, MMHC projects that its "salaries and wages" expense will be $1,229,871, and that its total operating expense will be $2,386,785. Thus, MMHC projects that its "salary expense" will be 51 percent of its total operating expenses. Assuming Mr. Hackett meant "operating expenses" when he responded to the question about "operating budget," it is apparent that the MMHC estimate is reasonably the same as that currently experienced by Charter Tampa. (If "operating budget" meant net revenues, the percentage is 50 percent.) Thus, MMHC projects that its expense other than salaries and wages will be about 50 percent of all expenses, and Charter Tampa currently operates with other expenses at 56 percent of all other expenses. Charter Tampa is not a community mental health center. There is clear evidence in the record that the ratio of expenses other than salaries to salaries is much lower for community mental health centers than to free standing psychiatric facilities. See finding of fact 104 to 107. Thus, the fact that MMHC estimates that expenses other than salaries will be 50 percent of the total expenses, compared to the 56 percent ratio of Charter Tampa, is entirely consistent with that evidence. If anything, MMHC has estimated expenses other than salaries too high, and much closer to a facility like Charter Tampa. This proposed finding of fact is essentially the same as proposed finding of fact 36 by MMH and is rejected for the reasons stated with respect to that proposed finding. The following additional comments are noted. The average length of stay was not assumed to increase in the CSU: it implicitly remained the same since estimated revenues remained the same. The average length of stay overall for the 17 hospital licensed psychiatric beds was 14 days, but this was a mix of 10 day average lengths of stay for some patients, and 20 day average lengths of stay for elderly patients. The average length of stay at MMH is established at about 10 days by testimony. VI-2, 72. See also discussion related to MMH proposed finding of fact 21. The assumed average length of stay in the hospital licensed substance abuse beds was never tied to patient days or fiscal projections; instead, MMHC simply estimated a continued average daily census of 9 patients, which is current experience and is reasonable. Improved treatment logically will lengthen the average length of stay since the improved treatment involves greater individual attention, education, and exploration of causes of the acute psychiatric episode. While improved treatment might shorten the length of stay for a long term patient, it surely will lengthen the average length of stay for a patient who has only been an inpatient for a few days to stabilize an acute crisis. Rejected because the underlying proposed finding of fact 32 concerning average length of stay has been rejected. Rejected for the reasons stated in rejection of MMH proposed finding of fact 39. Rejected for the reasons stated in findings of fact 68 and 69 and as discussed in rejection of MMH proposed findings of fact 34 and 35. The portion of the proposed finding concerning dually diagnosed patients also has been determined to be irrelevant in findings of fact 109 through 112. Rejected for the reasons discussed in rejection of MMH proposed finding of fact 41, and irrelevant for the reasons stated in findings of fact 109-112. Rejected by findings of fact 88 through 90. Rejected for the reasons discussed in response to proposed finding of fact 42 of MNH. Rejected by finding of fact 112. To the extent that the second sentence proposes a finding of fact that Charter Tampa "directly serves" Hernando and Pasco Counties, it is rejected for lack of a citation to the record. Service of these counties is also irrelevant. The last sentence has been rejected by findings of fact 113 through 121, and particularly 119 and 120. The first portion of the first sentence is rejected by findings of fact 18, 19, 26, 28, 29, and 30. The last two sentences are rejected by findings of fact 26, 28, 29, 30, 33, 46, 70, 93, and 96. This proposed finding of fact is rejected by findings of fact 26, 46, 70, 93, and 96. The first four sentences are rejected because not supported by record evidence. None of the questions asked concerning deposition responses significantly pertained to the witness's ultimate credibility, and her responses upon cross examination were believable. The fifth and sixth sentences are rejected because the error noted, III-2, 164, is relatively insignificant. The seventh sentence, which pertains to the lack of precise charges for services, has been rejected in finding of fact 84. The eighth and ninth sentences are rejected because there is no evidence to explain the relevance of the question asked by counsel. If the definition of "residential treatment beds" pursuant to the state health plan were important in this case, presumably an expert would have testified to the issue. An assumption cannot be made that the definition of "residential treatment beds" in the state health plan is relevant in this case without some evidence or explanation for the relevance. Moreover, the context of the question was with respect to the loss of the 18 "minimum residential beds" which in fact were not "treatment" beds. See findings of fact 12 and 31. Thus, the question had little relevance to the witness. The tenth sentence is true, but does not, in context, significantly detract from the credibility of the witness. The final sentence is rejected for the reasons stated in this paragraph. This proposed finding is rejected in findings of fact 113 through 121. This proposed finding is an argument of law, not fact, and thus is rejected as a finding of fact. This is a summary conclusion of fact that has been rejected throughout the findings of fact. This proposed finding of fact is rejected for the reasons stated with respect to MMH proposed finding of fact 27. This proposed finding of fact is rejected for the reasons stated with respect to MMH proposed finding of fact 27 and findings of fact 40, 41, and 43. Findings of fact proposed by the Department of Health and Rehabilitative Services: This proposed finding of fact is not supported by the record cited, and is irrelevant since the applicant has not sought approval of 39 short term psychiatric beds. The methodology upon which this proposed finding of fact is based is not contained in State rule 10-5.11(25), Florida Administrative Code, and is not a methodology contained in the relevant 1983 local health plan, MMHC Ex 1. If it is incipient policy applied to this case, HRS failed to clearly explicate the basis for the policy. Indeed, the record concerning the policy is quite unclear. VIII-2, 50-53. In particular, no explanation was given for using utilization rates, or the validity of the utilization rates. It appears that this proposed finding of seeks a finding of fact that the status quo utilization at the only provider of short term psychiatric care, and thus the only source of utilization data in Manatee County at present should be projected to 1988 populations. The utilization rates appear to be derived from use rates for 1984! 1985, and 1986 populations. Which one is right? Why does this health planning method predict more net need in 1984 based upon fewer people living in Manatee County, and less net need in 1986, based upon more people living in Manatee County? HRS Ex. 1. Moreover, how can the needs of the mentally ill in Manatee County be predicted from use data derived by Manatee Memorial Hospital (the county's only resource) which for the relevant years has been running at full capacity? How can the unmet need be measured by such a method? The record does not answer these questions. It contains no explanation for the Source of the utilization rates except that it came from "the local health council." VIII-2, 50. Thus, this proposed finding of fact must be rejected for lack of explication in the record. Because this proposed finding of fact appears to rely on proposed finding of fact 7, it too must be rejected. A net need for the 17 beds does exist independently of proposed finding of fact 7. 11. To the extent that this proposed finding implies that currently the 18 minimum residential beds are mental health treatment beds, that proposed finding has been rejected by finding of fact 12. COPIES FURNISHED: Michael J. Cherniga, Esquire Fred W. Baggett, Esquire Roberts, Baggett, LaFace & Richard 110 East College Avenue Tallahassee, Florida 32301 Chris H. Bentley, Esquire Fuller & Johnson, P.A. Ill North Calhoun Street Post Office Box 1739 Tallahassee, Florida 32302 William E. Hoffman, Jr., Esquire James A. Dyer, Esquire King & Spalding 2500 Trust Company Tower 25 Park Place Atlanta, Georgia 30303 Theodore E. Mack, Esquire State of Florida, Department of Health and Rehabilitative Services Room 407 - Building One 1-323 Winewood Boulevard Tallahassee, Florida 32301 Jay Adams, Esquire 215 E. Virginia St., Suite 200 Tallahassee, Florida 32301 John P. Harllee, III, Esquire Harllee, Porges, Bailey & Durkin, P.A. 1205 Manatee Avenue Post Office Box 9320 Bradenton, Florida 33506 Wallace Pope, Jr., Esquire Johnson, Blakely, Pope, Bokor & Ruppel, P. A. P. O. Box 1368 Clearwater, Florida 33517 William Page, Jr. Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue Whether or not Halifax' Second Amended Petition has alleged sufficient standing to initiate a Section 120.57(1) F.S. formal hearing, pursuant to Subsection 381.709(5)(b) F.S., in challenge of HRS' modification of ATC's CON.
Findings Of Fact ATC is an existing 50-bed specialty psychiatric hospital with 25 short- term psychiatric beds for children or adolescents, five beds for short-term substance abuse by children or adolescents, and 20 long-term psychiatric beds for children or adolescents. ATC has operated under CON 2331 since 1984. By correspondence dated March 7, 1990, HRS issued to ATC Amended CON 2331 authorizing ATC to convert 15 of its 20 long-term psychiatric beds for children and adolescents into long-term psychiatric beds for adults in a secure unit. Petitioner Halifax is an existing 545 bed acute care hospital with adult patients in its 50-bed secure psychiatric unit. Its existing hospital license 2700 is for a short-term psychiatric program which does not specify use of the beds for either adults or for children and adolescents. Halifax does not have a CON for a long-term psychiatric program. Halifax' Second Amended Petition alleges its standing in the following terms: . . . Halifax is a 545 bed acute care hospital, licensed pursuant to Chapter 395, Florida Statutes, and located within HRS District IV. Halifax provides psychiatric services to adult patients in its 50 bed psychiatric unit. Due to the nature of the patients served, Halifax operates it (sic) psychiatric services in a secured unit. Halifax's psychiatric unit has been in operation since December 7, 1951 and is an "established program" under Section 381.709(5)(b) Fla. Stat. * * * 5. Halifax is a substantially affected party, and its substantial interest is subject to a determination in this proceeding in that: Halifax is an existing provider of acute care hospital services, located in Volusia County, Florida, and within HRS District IV. Halifax has an established program which provides psychiatric services to adult patients within HRS District IV. If the issuance of Amended CON 2331 were upheld, ATC would offer the same adult psychiatric services presently offered at Halifax' established psychiatric program. Therefore, Halifax is entitled to initiate this proceeding pursuant to Section 381.709(5)(b) F.S. (1989). The issuance of Amended CON 2331 will result in an unnecessary duplication of the same adult psychiatric services provided by Halifax in HRS District IV. Such duplication of services will result in decreased utilization of Halifax' psychiatric program, increased costs to consumers of such psychiatric health care services, and the decreased financial viability of Halifax' established psychiatric program. Additionally, the Second Amended Petition asserts that ATC's requested amendment of CON 2331 would represent a substantial change in the inpatient institutional health services offered by ATC and, thus, is subject to CON review pursuant to Section 381.706(1)(h) F.S. (1989). Further, Halifax alleges that, if approved, the amendment to CON 2331 will authorize ATC to serve an entirely new patient population that it is not authorized to serve pursuant to the original CON.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order dismissing Halifax' Second Amended Petition and affirming the agency action modifying ATC's CON 2331. DONE and ENTERED this 26th day of October, 1990, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 26th day of October, 1990. Copies furnished to: Harold C. Hubka, Esquire Black, Crotty, Sims, Hubka, Burnett, Bartlett and Samuels 501 North Grandview Avenue Post Office Box 5488 Daytona Beach, Florida 32118 Robert A. Weiss, Esquire Parker, Hudson, Rainer & Dobbs The Perkins House 118 North Gadsden Street Tallahassee, Florida 32301 Lesley Mendelson, Senior Attorney Department of Health and Rehabilitative Services 2727 Mahan Drive, Suite 103 Tallahassee, Florida 32308 Robert D. Newell, Jr., Esquire Newell & Stahl, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: In November of 1983, HMA filed its application for a Certificate of Need to construct and operate a 60-bed adolescent treatment center in Orlando, Florida. An omissions response was filed by HMA in January of 1984. Thereafter, HRS issued its initial intent to grant the application and PIO requested an administrative hearing. HMA is a privately held corporation which owns or manages twelve or thirteen acute care hospitals in the States of Kentucky, West Virginia, Pennsylvania, Missouri, Texas and Florida, several of which are psychiatric hospitals. The proposed long-term psychiatric treatment facility for adolescents is patterned after a 55-bed program currently operated by HMA in Arlington, Texas. The proposed facility will be a freestanding campus-like setting located on ten to fifteen acres of land in the southern portion of Orlando. The precise site has not yet been selected. The single-story facility will have a total size of approximately 45,000 to 50,000 square feet and will be divided into two separate units which connect into a core area containing various support services, such as offices, a gymnasium, a swimming pool, a media center, and an occupational therapy area. While the location finally selected for the facility will have a bearing on the site costs of the project, the estimated construction costs of approximately 3.1 billion do contain a contingency factor and are reasonable at this stage of the project. Each unit will be served by two interdisciplinary treatment teams headed by a physician or a psychiatrist. Key personnel for the facility, such as department heads and program directors, will most likely be recruited from outside the Orlando area in order to obtain persons with experience in long-term care for adolescents. The treatment program is designed to serve adolescents between the ages of 10 and 19, though the bulk of patients will be middle school and high school individuals between the ages of 13 and 17. While the primary service area will be adolescents in District 7, the remainder of the central Florida region is identified as a secondary service area. A full educational program at the facility is proposed. The concept of the hospital will be to treat the whole person, not just his psychiatric problems, and the treatment program will include and involve family members and other factors which may have a bearing on the adolescent's ability to fit into society. The form of treatment is based upon a "levels" approach -- a form of behavior modification wherein privileges are granted for appropriate behavior and the patient is allowed to move up to the next succeeding level of privileges. It is contemplated that the average length of stay for a patient will be approximately six months -- the average time anticipated for a patient to move from the admission level to the level of discharge. HMA intends to seek accreditation of its proposed facility from the Joint Commission on Accreditation of Hospitals. The total estimated project cost for the proposed facility is $6,307,310.00. Financing is to be obtained either through a local bond issue or by a private lending institution. Based upon an evaluation of HMA's audit reports for the past three years, an expert in bond financing of health care facilities was of the opinion that HMA would be eligible either for a private placement or a bond issue to finance the proposed project. HMA intends to charge patients $325.00 per day, and projects an occupancy rate of 80 percent at the end of its second year of operation. This projection is based upon a lack of similar long-term psychiatric facilities for adolescents in the area, the anticipated, experience at the Arlington, Texas adolescent facility and the anticipated serving of clients from CYF (Children Youth and Families -- a state program which; serves adolescents with psychiatric and mental problems). Although no established indigent care policy is now in existence, HMA estimates that its indigency caseload will be between 3 and 5 percent. It is anticipated that the proposed facility will become a contract provider for CYF for the care and treatment of their clients and that this will comprise 20 percent of HMA's patient population. HRS's Rule 10-5.11(26), Florida Administrative Code, relating to long- term psychiatric beds, does not specify a numerical methodology for quantifying bed need. However, the Graduate Medical Education National Advisory Committee (GMFNAC) methodology for determining the need for these beds is generally accepted among health care planners. The GMENAC study was initially performed in order to assess the need for psychiatrists in the year 1990. It is a "needs- based" methodology, as opposed to a "demand-based" methodology, and attempts to predict the number of patients who will theoretically need a particular service, as opposed to the number who will actually utilize or demand such a service. Particularly with child and adolescent individuals who may need psychiatric hospitalization, there are many reasons why they will not seek or obtain such care. Barriers which prevent individuals from seeking psychiatric care include social stigma, the cost of care, concerns about the effectiveness of care, the availability of services and facilities and other problems within the family. Thus, some form of "demand adjustment" is necessary to compensate for the GMENAC formula's overstatement of the need for beds. The GMENAC formula calculates gross bed need by utilizing the following factors: a specific geographic area's population base for a given age group, a prevalency rate in certain diagnostic categories, an appropriate length of stay and an appropriate occupancy factor. In reaching their conclusions regarding the number of long-term adolescent psychiatric beds needed in District 7, the experts presented by HMA and PIO each utilized the GMENAC formula and each utilized the same prevalency rate for that component of the formula. Each appropriately used a five-year planning horizon. However, each expert reached a different result due to a different opinion as to the appropriate age group to be considered, the appropriate length of stay, the appropriate occupancy factor and the factoring in of a "demand adjustment." In calculating the long-term adolescent psychiatric bed need for District 7 in the year 1989, HMA's expert used a population base of ages 0 to 17, lengths of stay of 150 and 180 days, an occupancy level of 80 percent and an admissions factor of 96 percent. Utilizing those figures, the calculation demonstrates a 1989 need for 158 beds if the average length of stay is 150 days, and 189 beds if the average length of stay is 180 days. If the population base is limited to the 10 to 19 age bracket, the need for long-term psychiatric beds is reduced to between 70 and 90, depending upon the length of stay. From these calculations, HMA's expert concludes that there is a significant unmet need for long-term adolescent psychiatric beds in District 7. This expert recognizes that the numbers derived from the GMENAC formula simply depict a statistical representation or indication of need. In order to derive a more exact number of beds which will actually be utilized in an area, one would wish to consider historical utilization in the area and/or perform community surveys and examine other site-specific needs assessment data. Believing that no similar services or facilities exist in the area, HMA's need expert concluded that there is a need for a 60-bed facility in District 7. In applying the GMENAC methodology, PIO's need expert felt it appropriate to utilize a base population of ages 10 through 17, an average length of stay of 90 days and an occupancy rate of 90 percent. Her calculations resulted in a bed need of 37 for the year 1990. Utilizing a length of stay of 120, 150 and 180 days and a 90 percent occupancy rate, a need of 50, 62 and 75 beds is derived. If an occupancy rate of 80 percent is utilized, as well as a population of ages 10 - 17, the need for beds is 42, 56, 70 and 84, respectively, for a 90, 120, 150 and 180 day average length of stay. The need expert for PIO would adjust each of these bed need numbers by 50 percent in order to account for the barriers which affect the actual demand for such beds. Since the HMA proposed facility intends to provide service only to those patients between the ages of 10 and 19, use of the 0 - 17 population would inflate the need for long-term adolescent psychiatric beds. Likewise, PIO's non-inclusion of 18 and 19 year olds understates the need. PIO's use of a 90-day average length of stay would tend to understate the actual need in light of HMA's proposed treatment program which is intended to last approximately six months. While some demand adjustment is required to properly reflect the barriers which exist to the seeking of long-term adolescent psychiatric care, the rationale of reducing by one-half the number derived from the GMENAC methodology was not sufficiently supported or justified. Even if HMA's calculations were reduced by one-half, a figure of between 79 and 94 beds would be derived. The existence of other long-term adolescent psychiatric beds in District 7 was the subject of conflicting evidence. West Lake Hospital in Longwood, Seminole County, holds a Certificate of Need and a license as a special Psychiatric hospital with 80 long-term beds. However, the Certificate of Need was issued prior to the adoption of Rules 10-5.11(25) and (26), Florida Administrative Code, when anything in excess of 28-days was considered long- term. The West Lake application for a Certificate of Need referred to a four- to-six week length of stay -- or a 28 to 42 day period --for adults, and a ten week, or 70 day length of stay for children and adolescents. In preparing inventories for planning purposes, HRS considers the 40 child and adolescent psychiatric beds at West Lake Hospital to be acute or short-term beds. The West Lake facility is not included in HRS's official inventory of licensed and approved long-term care beds as of October 1, 1984. In fact, the only long-term care beds listed for District 7, in addition to HMA's proposed psychiatric facility, are beds devoted to the treatment of substance abuse. PI0 is the holder of a Certificate of Need to construct and operate a 60-bed short-term adolescent psychiatric hospital in Southwest Orange County, and is currently planning the actual development and construction of the facility. If PIO is not able to reach the census projections contained in its Certificate of Need application, its ability to generate earnings could be adversely impacted. Even a five percent decrease in PIO's census projections would require PIO to either raise its rates or make reductions in direct costs. This could include a decrease in staffing, thus affecting a reduction in the available programs, problems in attracting quality staff and ultimately a reduction in the quality of care offered at the PIO facility. In a batch subsequent to the HMA application, PIO requested the addition of 15 long-term adolescent psychiatric beds and 15 substance abuse beds. When an adolescent psychiatric patient is evaluated for placement in a hospital setting, it is generally not possible to determine how long that patient will require hospitalization. The adolescent psychiatric patient is often very guarded, distrusting both parents and other adults, and it is difficult to obtain full and necessary information from both the patient and the parents. Several weeks of both observation and the gathering of data, such as school records, are necessary in order to access the adolescent patient's degree of disturbance. With respect to treatment programs, there is no sharp medical demarcation between a 60-day period and a 90 day period. Patients in short-term facilities often stay longer than 60 days and patients in long term facilities often stay less than 90 days. The length of stay is very often determined by the parents, in spite of the treatment period prescribed by the physician. The treatment programs in both short-term and long-term psychiatric facilities are very similar, and short- and long-term patients are often treated in the same unit. Staffing for the two types of facilities would be basically the same, with the exception, perhaps, of the educational staff.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that HMA grant HMA's application for a Certificate of Need to construct and operate a 60-bed long-term adolescent psychiatric facility in Orlando, Florida. Respectfully submitted and entered this 9th day of July, 1985, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1985. COPIES FURNISHED: C. Gary Williams and Michael J. Glazer P. O. Box 391 Tallahassee, Florida 32302 John M. Carlson Assistant General Counsel 1323 Winewood Blvd. Building One, Suite 407 Tallahassee, Florida 32301 Robert S. Cohen O. Box 669 Tallahassee, Florida 32301 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301 =================================================================
The Issue Whether disciplinary action should be taken against Respondent's license to practice as an osteopathic physician's assistant and/or a physician's assistant, based on alleged violations of Section 459.015(1)(n), (x), and (cc) and 458.331(1)(s), (v), and (x), Florida Statutes.
Findings Of Fact Respondent, William Dana Holton, is a licensed osteopathic physician's assistant in Florida, holding license numbers OA 0000027 and OA 0000097. Additionally, Respondent is a licensed physician's assistant in Florida, holding license number PA 0001538. For several years, Respondent has been experiencing a great deal of chronic pain associated with his back. Because of this pain, Respondent obtained a number of prescriptions for pain killers and muscle relaxers from various physicians. From May, 1989, through October, 1989, Respondent obtained a variety of medicinal drugs, in various amounts and dosages from two different pharmacies. The majority of these prescriptions were for pain killers. The Respondent represented to each pharmacist that the prescriptions had been authorized by a certain physician. The type of drug, quantity obtained, dosage, date obtained, pharmacist involved, and physician represented as the prescribing physician are as follows: Substance Amount Dosage Date Pharmacist Physician Anexsia 30 7.5 mg 5-18-89 Lanier Velasco Anexsia 30 7.5 mg 5-29-89 Lanier Velasco Anexsia 30 7.5 mg 6-08-89 Lanier Velasco Anexsia 30 7.5 mg 6-13-89 Lanier Velasco Diazepam 20 5.0 mg 5-18-89 Lanier Velasco Diazepam 20 5.0 mg 5-29-89 Lanier Velasco Diazepam 20 5.0 mg 6-13-89 Lanier Velasco Anexsia 50 7.5 mg 6-27-89 Lanier Noblejas Anexsia 50 7.5 mg 7-05-89 Lanier Noblejas Anexsia 50 7.5 mg 7-14-89 Lanier Noblejas Anexsia 50 7.5 mg 7-24-89 Lanier Noblejas Anexsia 50 7.5 mg 7-31-89 Lanier Noblejas Anexsia 50 7.5 mg 8-07-89 Lanier Noblejas Anexsia 50 7.5 mg 8-14-89 Lanier Noblejas Donnatal Elixer 4 oz. 8-07-89 Lanier Noblejas Anexsia 50 7.5 mg 8-21-89 Lanier Noblejas Anexsia 50 7.5 mg 8-29-89 Lanier Noblejas Anexsia 50 7.5 mg 9-02-89 Lanier Noblejas Anexsia 50 7.5 mg 9-08-89 Lanier Noblejas Anexsia 50 7.5 mg 9-14-89 Lanier Noblejas Anexsia 50 7.5 mg 9-23-89 Lanier Noblejas Diazepam 20 5.0 mg 8-21-89 Lanier Velasco Diazepam 20 5.0 mg 9-02-89 Lanier Velasco Diazepam 20 5.0 mg 9-14-89 Lanier Velasco Diazepam 20 5.0 mg 9-23-89 Lanier Velasco Anexsia 50 7.5 mg 9-28-89 Lanier Levinson Anexsia 50 7.5 mg 10-05-89 Lanier Levinson Anexsia 50 7.5 mg 10-16-89 Lanier Levinson Anexsia 30 7.5 mg 12-28-89 Hill Serrebutra Anexsia 30 7.5 mg 01-12-89 Hill Serrebutra Anexsia 15 7.5 mg 03-01-90 Hill Serrebutra Anexsia 30 7.5 mg 03-09-90 Hill Velasco Anexsia 30 7.5 mg 03-29-90 Hill Velasco Diazepam 30 5.0 mg 03-29-90 Hill Velasco Zydone 30 7.5 mg 05-02-90 Hill Velasco Zydone 31 7.5 mg 05-31-90 Hill Velasco Anexsia 30 7.5 mg 06-06-90 Hill Velasco Zydone 31 7.5 mg 06-30-90 Hill Velasco Vicodin 50 5.0 mg 07-01-90 Hill Noblejas Anexsia is a pain killer. Diazepam is the generic name for Valium. Donnatal Elixer is a muscle relaxant. Zydone is chemically equivalent to Anexsia and is a pain killer. Vicodin is similar to Anexsia and is a pain killer. All of the drugs are controlled substances. Except for Dr. Levinson, the evidence demonstrated that the listed physicians prescribed the relevant medications to Respondent and that these prescriptions were filled pursuant to those physician's prescriptions. However, the evidence clearly demonstrated that Dr. Levinson did not authorize any of the prescriptions listed in paragraph 3. Respondent believed that Dr. Levinson had authorized the prescriptions listed by his name via a general protocol for such treatment. However, such a belief does not equal an express prescription of a controlled substance by a physician and should not have been used by Respondent to obtain the drugs listed above. In essence, Respondent was prescribing medications for himself in violation of Section 459.015(1)(cc) and Rule 21R- 6.005(b) Florida Administration Code, and Section 458.331(1)(v), Florida Statutes. Sometime between September 26, 1989, and October 19, 1989, Dr. Dana Levinson saw Respondent at the Wellsprings Clinic in Carrabelle, Florida. The visit occurred on a weekend after Respondent had seen several patients during the day. Dr. Levinson observed that Respondent's speech was slurred, his hands were trembling and his pupils were small. Dr. Levinson, an osteopathic physician was of the opinion that the Respondent was under the influence of a narcotic or depressant drug. On October 21, 1989, Respondent was unable to have his prescription for Anexsia from Dr. Velasco filled at the pharmacy which had the prescription on file. The pharmacy was closed for the evening. Because Respondent felt he needed the pain killer for his pain and was unable to think clearly because of the excessive amounts of medications he was taking, 1/ he devised a scheme for obtaining the drug from another pharmacy. On October 21, 1989, the Respondent phoned in a prescription for Anexsia in the name of Emily Dinkins to the Eckerds Pharmacy located at 2526 South Monroe Street, Tallahassee, Florida. The Respondent told the pharmacist that the prescription had been authorized by Dr. Levinson. Dr. Levinson had not authorized the prescription. The prescription was intended by Respondent to be for his own use. Respondent instructed Emily Dinkins to go into Eckerds and pick up the prescription that he had ordered. He did not tell her that the prescription was in her name. Respondent was arrested on October 21, 1989, at the pharmacy for fraudulently trying to obtain a prescription. The charges were later dismissed. The incident on October 21, 1989 and Dr. Levinson's observation of Respondent clearly demonstrate that Respondent was taking enough medication to impair his ability to practice his profession and think clearly. Because Respondent was impaired, his continuing to practice during September and October, 1989, constituted a very serious violation of Section 459.015(1)(x), Florida Statutes, and Section 458.331(1)(s), Florida Statutes. Additionally, there is no doubt that Respondent attempted to utilize a trick or scheme in the practice of his profession and in pursuit of that scheme, on October 21, 1989, made a false statement to the Eckerd's pharmacist. It is immaterial that the criminal charges were dismissed. Such activity on Respondent's part is a serious violation of Section 459.015(1)(n), Florida Statutes, and Section 458.331(1)(v) and (x), Florida Statutes. After his arrest on October 21, 1989, the Respondent entered an inpatient drug treatment program. Against medical advice, Respondent left the program after only four weeks. However, Respondent continued out patient drug treatment. The outpatient treatment was telephonically approved by Dr. Goetz, the physician who oversees the impaired practitioners program. Respondent has not since entered any other inpatient drug treatment program, but has ceased taking the medication referenced above. Respondent now controls his back pain with aspirin and appears to again be in control of his life. To practice as a physician's assistant a licensee is required to have a supervising physician or osteopathic physician. From August 1, 1988 to January 19, 1989, the Respondent's supervising physician was Dr. Chai Serrebutra, M.D.. Between April 20, 1989, and June, 1989, the Respondent's supervising physician was Dr. Maximo Velasco, M.D.. The evidence, and in particular the insurance claim forms, does not support Respondent's contention that Dr. Velasco began supervising Respondent earlier than April 20, 1989. Dr. Velasco signed these claim forms for the Wellsprings Clinic. The earliest signature date for Dr. Velasco was April 20, 1989. On that date, Dr. Velasco signed several forms for treatment which had been rendered to various patients prior to April 20, 1989. However, the treatment given these patients occurred during a time when Dr. Serrebutra was Respondent's supervising physician and in fact had both directly and indirectly supervised Respondent. Therefore, the evidence did not demonstrate that Respondent had treated any patients while he was unsupervised during this interim period. Between May 1, 1989 and May 12, 1989, Dr. Velasco was in Omaha, Nebraska. During the time that Dr. Velasco was in Omaha, Nebraska, Respondent treated several patients at the Wellsprings Clinic in Carrabelle, Florida. The patients and the dates they were treated by Respondent are as follows: Patient's Initials Date E.M. 5-2-89 J.S. 5-2-89 J.M. 5-2-89 J.E. 5-4-89 F.M. 5-4-89 S.B. 5-4-89 A.B. 5-4-89 N.N. 5-4-89 M.B. 5-4-89 L.M. 5-4-89 S.S. 5-4-89 A.J. 5-4-89 L.W. 5-4-89 L.W. 5-4-89 T.T. 5-5-89 D.B. 5-6-89 D.H. 5-6-89 W.B. 5-6-89 V.M. 5-6-89 P.W. 5-6-89 A.C. 5-8-89 L.L. 5-8-89 L.T. 5-8-89 W.J. 5-8-89 L.T. 5-8-89 J.T. 5-8-89 R.P. 5-8-89 E.H. 5-9-89 M.W. 5-9-89 D.T. 5-9-89 M.R. 5-11-89 T.T. 5-11-89 C.B. 5-11-89 G.E. 5-11-89 M.R. 5-11-89 M.W. 5-11-89 T.R. 5-11-89 R.H. 5-11-89 L.M. 5-11-89 J.J. 5-12-89 C.S. 5-12-89 R.M. 5-12-89 R.L. 5-12-89 T.R. 5-12-89 C.B. 5-12-89 C.J. 5-12-89 S.C. 5-12-89 W.J. 5-12-89 While Dr. Velasco was in Omaha, Nebraska, the Respondent talked to him for five minutes or less by telephone. The Respondent and Dr. Velasco did not discuss specific cases during this telephone conversation. In each case, a preliminary final diagnosis was made by Respondent. The diagnoses were made by the Respondent without direct supervision by Dr. Velasco, Respondent's supervising physician. The preliminary final diagnoses were made pursuant to general unwritten protocols established by Dr. Velasco and were well within Respondent's training, competence and skill. The evidence did not demonstrate tht any treatment of these patients required any direct intervention from the doctor or that such direct supervision was requried. To that extent the preliminary final diagnoses were made at the direction of Respondent's supervising physician and were within the parameters of Chapter 458 and 459, Florida Statutes and Rules 21M-17.001(6), 21M-17.012 and 21R-6, Florida Administrative Code. Between September 26, 1989, and October 19, 1989, Dr. Dana Levinson was the Respondent's supervising osteopathic physician. In early October, 1989, Respondent phoned K-Mart Pharmacy in Apalachicola and placed prescription orders for various medicinal drugs with the pharmacist, Beverly Kelley, for several different patients. The patients involved, drugs prescribed, and the dates of the prescriptions, were as follows: Patient's Initials Drug Date J.T. Tigan 10-11-89 J.T. Halcion 10-11-89 J.T. Anexsia 10-11-89 J.T. Valium 10-11-89 V.M. Flexeril 10-11-89 V.M. Anexsia 10-11-89 L.T. Halcion 10-11-89 L.T. Duricef 10-11-89 L.T. Valium 10-11-89 L.T. Phrenilin Forte 10-11-89 L.T. Nucofed 10-11-89 L.H. Valium 10-11-89 L.H. Ionamin 10-11-89 T.T. Valium 10-14-89 T.S. Valium 10-14-89 The Respondent represented to Kelley that these prescriptions were authorized by Dr. Levinson. Dr. Levinson did not expressly authorize any of the prescriptions listed above and did not directly oversee the treatment and diagnosis of the patients. Again, Respondent performed these patient services pursuant to unwritten general protocols everyone involved, including the supervising physician, seemed to take for granted that everybody had knowledge of. To Respondent's credit, neither Dr. Serrebutra, Velasco nor Levinson had problems with Respondent's treatment of any of the patients treated by Respondent and Respondent was generally viewed as a competent physician's assistant, able to handle routine matters through general protocols and without the immediate supervision or direction of a physician. The lack of immediate supervision or direction does not violate Chapter 458 or 459, Florida Statutes, or the rules promulgated thereto. What does constitute a violation of Chapter 458 and 459 is that, during Dr. Levinson's supervisory time period, Respondent's services included the prescription of controlled substances which had not been specifically ordered or requested by Dr. Levinson. Respondent's actions were due in part to the lack of any written protocols and a very vague and ill- defined understanding of Respondent's duties between Respondent and Dr. Levinson. 2/ Since a physician's assistant has no authority and is prohibited by Rule from prescribing medication to patients, Respondent's actions, violated Section 459.015(1)(cc), Florida Statutes and Section 458.331(1)(v) and (x), Florida Statutes. See Rule 21M-17.012(2)(a)(7)b., Florida Administrative Code and Rule 21R-6.010(7), Florida Administrative Code. Petitioner has demonstrated by clear and convincing evidence that Respondent committed four violations in regards to his physician's assistant license and the same four violations in regards to his osteopathic physician's assistant license. The evidence did not demonstrate that an aggravated penalty should be imposed for any one of the violations. However, because of the number of violations, one composite penalty should be imposed for all the violations for each license. The composite penalty should not exceed the highest penalty which could be imposed for the most seriously penalized infraction under each Board's rules.
Recommendation It is accordingly, recommended that the Board of Medicine and the Board of Osteopathic Medicine each enter a Final Order finding the Respondent guilty of violating Section 458.331(1)(s), (v) and (x) and 459.015(1)(n), (x) and (cc), Florida Statutes and as punishment therefore: Respondent's license to practice as a physician's assistant in the State of Florida, number 0001538, should be suspended for two years beginning with the date of his temporary suspension on January 12, 1990, after which Respondent should be placed on a 2 year period of probation with direct supervision during which Respondent shall demonstrate to the Board his ability to practice with reasonable skill and safety. Additionally, Respondent should be required to successfully complete coursework involving the scope and practice of his profession and be assessed a $1,000 fine to be paid over the course of his suspension and probation. Respondent's license to practice as an osteopathic physician's assistant in the State of Florida, numbered 0000027 and 0000097, should be suspended for 2 years beginning with the date of his temporary suspension on January 12, 1990, after which Respondent should be placed on a 2 year period of probation with direct supervision during which Respondent shall demonstrate to the Board his ability to practice with reasonable skill and safety. Additionally, Respondent should be required to successfully complete coursework involving the scope and practice of his profession and be assessed a $1,000 fine against Respondent to be paid over the course of his suspension and probation. RECOMMENDED this 2nd day of May, 1991, in Tallahassee, Florida. DIANE CLEAVINGER 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 2nd day of May, 1991.
The Issue The issues are: (1) Whether Respondent exercised influence within a physician-patient relationship for the purpose of engaging a patient in sexual activity in violation of Subsection 459.015 (1)(l), Florida Statutes; (2) Whether Respondent engaged a patient in sexual activity outside the scope of practice or the scope of generally accepted examination and treatment of the patient in violation of Section 459.0141, Florida Statutes; and (3) If so, what disciplinary action should be taken against his license to practice as an osteopathic physician.
Findings Of Fact Petitioner, the Department of Health, Board of Osteopathic Medicine, is the state agency charged with regulating the practice of osteopathic medicine pursuant to Chapters 455 and 459, Florida Statutes. Respondent is and has been at all times material hereto a licensed osteopathic physician in the state of Florida, having been issued License No. OS-004450. Respondent has a bachelor’s degree and a master’s degree in clinical psychology and experimental psychology from Temple University, was an assistant professor of psychology at a community college before studying osteopathic medicine, and taught as an assistant professor of psychiatry in family practice at Southeastern Osteopathic Medical School. Respondent completed a residency program at Southeastern Osteopathic Hospital in North Hollywood, Florida, and also completed a three-year family practice residency program. After completing his residency programs, Respondent moved to Sarasota, Florida, and began as a family practice physician. In December 1998, Patient K.C. (K.C.) was 33 years old, married, and the mother of two children, six and two years old. Before getting married, K.C. had lived with her parents. She had attended community college for two years but did not obtain a degree. K.C. had been employed as a sales clerk and clerical staff person. On or about December 29, 1998, K.C. first presented to Respondent suffering from migraine headaches and neck pain, chronic conditions she had suffered for approximately ten years. From December 29, 1998, through or about October 1, 1999, Respondent provided osteopathic medical treatment for pain to K.C. During this period of time, Respondent treated K.C.'s migraine headaches and neck pain with heat, osteopathic manipulation, and prescription medication. Respondent also diagnosed anxiety and depression for K.C. and prescribed medication, Ativan, for this condition. Throughout the time Respondent saw K.C., he also prescribed up to six tablets per day of a sedative, Fioricet. During the time that Respondent was treating K.C., he saw K.C. once or twice a month, except for April, August, and September 1999. Respondent's records reflect that he saw K.C. four times in April, three times in August, and six times in September. There are several manipulation techniques used by Respondent in treating patients. One manipulation technique used by Respondent involves traction of the neck and movement of the patient’s head while the patient is lying down on her back. Another technique, while the patient is lying on her back, involves Respondent’s using his chest to exert pressure down on the patient’s crossed arms and body through the spine to Respondent’s hands located behind her neck and thoracic spine. Another technique has the patient roll over to the side with the leg up to the side while Respondent adjusts her pelvic bone. During this procedure, Respondent’s hand and forearm arm are placed on the buttocks to effect a pushing or pulling of the pelvic bone. The last technique Respondent provides is for the upper thoracic and lower neck area. For this, the patient places her hands on top of her head. Respondent then brings his hands around the torso from behind, placing them at the back of her neck. While the hands provide traction to the neck, Respondent pushes his chest against the spine of the patient to lift the thoracic vertebrae. It is not uncommon during this procedure for Respondent to brush his hands on the patient’s breast. Respondent’s normal office procedure is to do manipulations on patients in his treatment room with the door closed and no other persons present for 10 to 15 minutes. From December 1998 until August 12, 1999, Respondent provided adjustments to K.C. and prescribed medication and did not engage in any sexual activity or relationship with K.C. Prior to August 12, 1999, during his treatments of K.C., Respondent sometimes engaged in "random conversations." For example, during one treatment Respondent asked what kind of car she drove and when she told him, Respondent asked K.C, if her husband cared about her. Respondent told K.C. that a sports utility vehicle (SUV) was a safe vehicle, especially for someone with her condition and indicated that his wife drove an SUV. Respondent then insinuated that if K.C.'s husband cared about her, he should or would buy her an SUV. During another treatment, Respondent told K.C. that she had a good body and asked if she had been a cheerleader. During another treatment, Respondent, while engaging in conversation with K.C., made an unrelated statement about how many times per week the average married couple has sex. At another time, while treating K.C. at his office, Respondent mentioned that the sex life of people with chronic pain may be affected by their condition and asked if her sex life was so affected. Still, during another treatment, Respondent asked K.C. about her relationship with her husband, specifically inquiring as to how they related to one another. In the summer of 1999, K.C. traveled by car to Canada to visit her husband's family. For K.C., the trip to Canada was stressful and while there, she was in a lot pain. Because of the pain she was experiencing, K.C. called Respondent's office while she was still out-of-town to schedule an appointment for an adjustment upon her return to Sarasota and to request that one of her prescriptions be refilled. After K.C. returned from the trip to Canada, on the morning of August 13, 1999, she went to Respondent's office for her scheduled appointment for an adjustment. When K.C. arrived at Respondent's office, she was in a lot of pain and began to cry. K.C. told the nurse or medical assistant that she was in a lot of pain and had had a "bad trip to Canada." The nurse then escorted K.C. to an examination room. When Respondent came into to examination room, K.C. was sobbing and could hardly talk. Respondent asked K.C. to explain why she was so upset. Respondent proceeded to do an adjustment and, again, asked K.C. why she was so upset. K.C. described her feelings to Respondent, who then told K.C. that he used to counsel with patients, that he had helped a girl just like her, and that he could help her if she were willing to come back to the office and talk with him. After K.C. agreed to come back and talk to Respondent, he asked K.C. how he could reach her. In response, K.C. gave Respondent her pager number. After K.C.'s morning appointment on August 13, 1999, Respondent contacted K.C. on her pager and asked if she had made arrangements for her sons to be taken care of so that she could come back to the office to talk with him. K.C. told Respondent that she had made arrangements for her sons and agreed to return to Respondent's office that afternoon. When K.C. returned to Respondent's office on the afternoon of August 13, 1999, Beverly Carrington (Beverly), a medical assistant in Respondent's office, was vacuuming the office. At Respondent's direction, Beverly took K.C. to an examination room. Several minutes later Respondent came into the examination room and told K.C. that he had to make some calls and that he would be back in a few minutes. Respondent gave K.C. a sandwich that he said he had left over from lunch. After Respondent gave K.C. the sandwich, he left the examination room, closing the door behind him. Respondent eventually returned to the examination room and sat in a chair next to the chair in which K.C. was sitting. Respondent began asking K.C. questions about herself, similar to questions that she had been asked by counselors or psychologists. While Respondent was talking to K.C., Beverly knocked on the door of the examination room and told Respondent that she had finished vacuuming the office. Respondent indicated to Beverly that she could go home and soon thereafter, Petitioner heard Beverly leave the building.1 After Beverly left the office, Respondent continued to ask K.C. questions for the next 15 or 20 minutes. Respondent then asked K.C. to get up from her chair, face the mirror in the room, and look in the mirror. K.C. felt uncomfortable looking in the mirror, so she kept her head down. Respondent then put his hands on K.C.'s face and held her face up so that she was looking in the mirror. While doing this, Respondent asked K.C., "Don't you know you're beautiful?" Respondent placed his hands on K.C.'s shoulders and brushed his lips against her neck. Respondent began rubbing or massaging K.C.'s neck and while doing so told K.C. that she was "real tight in [her] neck" and that he would like to work on her neck again and see if he could loosen it up and help her relax. Respondent then led her to the examination table and "proceeded to rub [her] neck and then he started to take off [her] clothes." While on the examination table, Respondent helped K.C. take off her shirt, shorts, bra, and shoes and the only remaining clothing that she had on was her underwear. After her clothes were removed, K.C. presumed Respondent would cover her with a towel or give her a robe, but he did not provide K.C. with any covering. Instead, Respondent sat behind K.C., massaged her neck, and talked to her "soothingly" for about ten minutes. Respondent then took his hands and rubbed her arms and then moved his hands to her breasts, and then down to her waist and towards her panties. When Respondent moved toward K.C.'s panties, she would "tense up" and then Respondent would "start rubbing up the top part of her again." Respondent's hands again went toward her underwear and he "put his hand to go under [K.C's] underwear." K.C. was nervous about what was going on and told Respondent that she was uncomfortable. After K.C. told Respondent that she was uncomfortable, he acknowledged that she seemed uncomfortable. Respondent then handed K.C. her clothes, assisted her in sitting up on the examination table, and sat on the table while K.C. dressed herself. After talking to Respondent for about five minutes, K.C. left the doctor's office with a worse headache, feeling distraught. K.C. next saw Respondent a few days later, on a Monday or Tuesday, for an adjustment for a headache and pain. Respondent performed an adjustment on K.C. that day. During this appointment, Respondent, again, told K.C. that he wanted to help and counsel her. He told K.C. about an upcoming gun show and stated that they could talk while driving to the gun show. Later that week, Respondent paged K.C. and asked her to come to his office. In response to Respondent's request, K.C. went to Respondent's office. Once there, Respondent took K.C. to an examination room and talked to her again about the gun show. Respondent again told her that he would like for her to go to the gun show with him so that they could have time to talk. K.C. was in Respondent's office that day about ten minutes and did not receive a treatment. A few days later, on Saturday, K.C. met Respondent at his office to go the gun show. When she got there, Respondent recommended that she leave her car at the office and ride in his Toyota 4-Runner so that they could talk. Respondent stated that he and K.C. were going somewhere in Palmetto, Florida, but they actually ended up at the Manatee Civic Center. While Respondent was driving to the gun show, he told K.C. that he hoped that he was not mistaken as to the dates of the gun show. In fact, when Respondent and K.C. arrived at the Manatee Civic Center, there was no one there. Nevertheless, Respondent pulled his car into a space in the parking lot on the side of the building. Respondent left the car running and took off his seat belt as he talked to K.C. At some point, Respondent kicked his shoes off and loosened his pants and/or pulled them down, reached over toward K.C., took off her seat belt, told K.C. to get more comfortable, and adjusted her power seat in his Toyota 4-Runner to lean back more. Respondent then touched K.C.'s genitals and proceeded to get on top of her and have intercourse. While on top of her, Respondent pointed out that there were police cars in the back of the parking lot. Once Respondent pointed out the police cars, K.C. observed two or four police cars in the parking lot. Even though there were no policemen in the cars, K.C. expressed concern about the police cars to Respondent. Respondent told K.C. that she should not worry because the windows in his vehicle were tinted. Respondent and K.C. were in the parking lot about 20 minutes, although the intercourse was only three to five minutes. After the intercourse, Respondent put his clothes back on or pulled his pants up and drove back to his office. This was the first time that Respondent and K.C. had intercourse. A few days later, K.C. and Respondent engaged in sexual activity in Respondent’s vehicle during lunch while they drove to Marina Jack’s. Respondent picked up lunch at the hospital and then returned to the parking lot of his office, where K.C. met him. K.C. left her car in the parking lot and got in Respondent's Toyota 4-Runner. Respondent gave K.C. her lunch and then "fingered" her while she ate her lunch as he drove to Marina Jack's. During the period between August and October 1999, K.C. went to Respondent's house on Siesta Key. The house was in a gated community, and in order to gain entry, K.C. told the guard at the gate that she was going to Respondent's house and would give the guard her name or another name that Respondent had told her to use. At other times, K.C. would follow Respondent through the gate in her car. Some of these visits were on weekdays during Respondent's lunch break. During some of those visits, K.C. and Respondent would talk and have intercourse. K.C. and Respondent had intercourse at Respondent's house about ten times. One Saturday between August and October 1999, K.C. went to Respondent's house after he invited her to come out and talk to him and go to the beach. That day Respondent met K.C. somewhere in town and drove her to his house. When they arrived at Respondent's house, K.C. took out a bathing suit and went upstairs to change. It is unclear whether K.C. and Respondent had intercourse or engaged in any sexual activity on this day. K.C. contemporaneously reported the sexual relationship with Respondent to her husband and to a minister who had known and counseled her before she met Respondent. K.C. told her minister that the sexual activities with Respondent had occurred in Respondent's office, vehicle, and home. K.C. and Respondent had intercourse a couple of times at the home of a friend of Respondent's, Carole, that was on Tangerine Street and at the home of one of Respondent's friends, Jack Kentish. One Sunday morning in late September, K.C. went to Respondent’s office.2 While there, she went into an examination room to change clothes so that she would have attire appropriate to accompany Respondent to a gun show. About that time, K.C.'s husband showed up at Respondent's office, knocked on the office door, expressed his displeasure at the fact K.C. was there, and had a verbal confrontation with Respondent. K.C.'s husband stopped at Respondent's office after he saw his wife's car parked there. The incident described in paragraph 29, led to Respondent sending a letter dated September 28, 1999, to K.C., advising her that his professional relationship with her would terminate within 30 days. The reason for the 30 days was to allow K.C. time to find another physician. In October 2000, K.C. was admitted to Sarasota Memorial Hospital suffering from major depression, Fioricet dependence, and chronic pain. At or near the time of her admission and at this proceeding, K.C. acknowledged that she had some loss of memory surrounding the events related to the three-month period in which Respondent engaged in improper sexual conduct with her.3
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Health, Board of Osteopathic Medicine, enter a final order finding that Respondent violated Subsection 450.015(1)(l) and Section 459.0141, Florida Statutes, and Subsection 459.015(1)(bb), Florida Statutes (1999), now 459.015(1)(pp), Florida Statutes, and suspending his license to practice osteopathic medicine in the State of Florida for one year and imposing an administrative fine of $2,000.00. DONE AND ENTERED this 5th day of August, 2003, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 5th day of August, 2003.
The Issue The issue is whether Respondent discriminated against Petitioner based on his race and/or disability by terminating his employment in violation of Section 760.10, Florida Statutes.
Findings Of Fact Respondent manufactures rubber hoses for the automotive industry. Petitioner is a black male who began working for Respondent on February 17, 1999. Petitioner's job as a molder required him to work with his hands and arms pinning rubber hoses onto metal pins and removing the hoses from the pins after they cooled down. The job was dangerous and physically stressful to Petitioner's hands and wrists. After working for Respondent for approximately three months, Petitioner suffered a job-related injury. Respondent sent Petitioner to a physician who diagnosed Petitioner as having sprained hand and wrist muscles. The physician prescribed anti-inflammatory medicine for Petitioner and recommended that he return to work on light duty. For the next several months, Petitioner worked as a molder in an area of Respondent's plant that caused less physical stress on the muscles and ligaments in Petitioner's hands and wrists. Petitioner had no problems working in that area. In time, Respondent began to experience a decrease in the number and type of orders that it received from its customers. The change in demand for Respondent's products resulted in a reorganization of the production line, a smaller number of available positions, and in some cases, layoffs of employees. Eventually, Respondent moved Petitioner's work station back to his original position which was physically more stressful. After a couple of months, Petitioner suffered another work-related injury. Respondent told Petitioner that he would have to continue working as assigned because there was no other work or lighter duty available. Petitioner continued to work in the more physically stressful area of Respondent's plant. On one occasion, Respondent took Petitioner to the hospital because he was experiencing pain. Petitioner did not go back to work until he saw a physician who specialized in treating Petitioner's type of injury. Petitioner eventually was diagnosed as having bi- lateral carpel tunnel syndrome. The doctor recommended that Petitioner work on light duty until he could have surgery. Respondent accommodated Petitioner's needs by allowing him to work on light duty pending the proposed surgery. Respondent has a substance abuse policy to maintain a work place that is free from the use of illegal drugs and the use of alcohol. The policy provides for assistance for employees who develop an addiction to drugs or alcohol and who voluntarily seek assistance before the company has knowledge of the problem. If an employee tests positive for illegal drugs or alcohol use while on the job, the employee is subject to immediate termination. Respondent's substance abuse policy provides for drug and alcohol screening under the following circumstances: after any injury that requires outside medical attention; after any incident that results in damage to other associates, company property, or a pattern of personal injuries; upon observance of abnormal or erratic behavior while at work or a significant deterioration in work performance; upon reasonable suspicion due to observable phenomena, direct observation of use, or a report of use by a reliable and credible source; and (e) pursuant to random drug screening. Petitioner never tested positive for illegal drugs or alcohol use while he was working for Respondent. He never even went to work under the influence of illegal drugs or alcohol. However, on August 22, 2000, Petitioner voluntarily advised Respondent that that he had a substance abuse problem and that he desired to participate in the assistance referral program. On August 23, 2000, Petitioner met with Respondent's human resource manager and occupational nurse. The nurse reviewed the company's substance abuse policy and assistance referral program with Petitioner. Additionally. the nurse advised Petitioner as follows: (a) he would have to enroll in a treatment program; (b) he would have to provide Respondent with weekly letters from the treatment program, furnishing information about Petitioner's progress in the program; and (c) he would be subject to random drug screens for two years. The human resource manager advised Petitioner that he would be discharged if he failed to comply with and successfully complete the treatment program. Petitioner indicated that he understood Respondent's requirements for participation in the assistance referral program. Petitioner elected to enroll in an outpatient substance abuse treatment program sponsored by Marion Citrus Mental Health. Petitioner missed his first appointment at the treatment center because he lacked transportation. Petitioner eventually began attending the treatment program three nights a week. He continued to work light duty at Respondent's plant during the day. Petitioner did not furnish Respondent with documentation showing that he had enrolled in the substance abuse treatment program. Instead, Petitioner advised Respondent's occupational nurse that he had signed a release at Marion Citrus Mental Health so that she could call his mental health counselor to verify his attendance in the program. Meanwhile, Respondent continued to reorganize and downsize its operations. When there were more employees restricted to light duty than light duty positions available, Respondent assisted the employees in filing workers' compensation claims and allowed them to stay at home on medical leave for up to 12 weeks. In time, Respondent could no longer accommodate Petitioner's physical injury with a light duty position. Petitioner filed a workers' compensation claim and began staying at home on medical leave on September 11, 2000. On September 11, 2000, Respondent's occupational nurse called Petitioner's mental health counselor at Marion Citrus Mental Health. The nurse learned that Petitioner had kept an appointment at the mental health facility on September 7, 2000. The nurse also learned that Petitioner had not signed a release of information form that would allow the counselor to share any other information about Petitioner's treatment program. On September 12, 2000, Respondent's occupational nurse sent Petitioner a letter. The purpose of the letter was to remind Petitioner that he was required to furnish Respondent with a written statement from the substance abuse treatment facility each week. According to the letter, the written statement was supposed to include Petitioner's treatment plan schedule. The letter advised Petitioner that to remain employed, he would have to keep Respondent fully informed about his progress in and completion of the treatment program. On September 14, 2000, Petitioner called Respondent's occupational nurse to advise her that he could not keep his appointment at Marion Citrus Mental Health that week. Petitioner advised the nurse that he was taking medication that made him dizzy and that he had transportation problems, which made it difficult for him to attend the treatment program. On September 15, Petitioner went to Respondent's plant to see the occupational nurse. Because he claimed that he had not received the letter dated September 12, 2000, the nurse read the letter to him and gave him a copy of it. Once again the nurse explained Respondent's assistance referral program to Petitioner, advising him that Respondent would not tolerate future missed appointments at Marion Citrus Mental Health. The nurse also gave Petitioner a rapid drug screen, the result of which was negative. On November 15, 2000, Respondent sent Petitioner another letter regarding his failure to furnish Respondent with evidence of his attendance at and completion of a treatment program. The letter advised Petitioner that he had to furnish the information on or before November 27, 2000, or risk having his employment terminated. Petitioner received Respondent's November 15, 2000, letter but did not furnish Respondent with the requested information. Petitioner did not call Respondent to explain his failure to do so. In a letter dated November 27, 2000, Respondent advised Petitioner that he was discharged. Petitioner furnished Respondent with a letter dated December 4, 2000, from Marion Citrus Mental Health. The letter states that Petitioner had been enrolled in substance abuse outpatient counseling beginning August 31, 2000, and that he was progressing well. There is no evidence that Respondent applied its substance abuse policy to non-minority employees differently than it did to Petitioner or other minority employees. Additionally, there is no evidence that Respondent treated non-minority employees who had workers' compensation claims differently than it treated Petitioner or other minority employees who were home on medical leave due to a workers' compensation injury. In fact, Petitioner admitted during the hearing that he had no proof that Respondent discriminated against him based on his race. During the relevant time period, Respondent had approximately 52 employees (half black and half white) that suffered a workers' compensation injury. Employees with workers' compensation injuries were allowed to remain on family medical leave for 12 weeks. Employees who returned to work within the 12-week period were guaranteed a job. Subsequent to the 12-week period, employees with workers' compensation injuries were not officially terminated unless they were unable to return to work after 12 months.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That FCHR enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 10th day of October, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD 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 10th day of October, 2002. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Ray Mayo 708 Southwest Second Street Ocala, Florida 34471 Kade Spencer Dayco Products, Inc. 3100 Southeast Maricamp Road Ocala, Florida 34471 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
