Findings Of Fact HCAC, on March 14, 1986, filed with DHRS, a letter of intent giving notice of its forthcoming application for a 90 bed long term psychiatric hospital in Hillsborough County, Florida. DHRS is the state agency authorized to consider, and approve or deny, applications for CONs. The proposed location is within DHRS service district VI. On April 15, 1986, HCAC filed the CON application which DHRS designated as CON #4526. The facility, HCAC Psychiatric Hospital of Hillsborough County, was intended to provide treatment to chronically mentally disturbed patients, and was planned to contain a 74 bed adult/geriatric unit and a 16 bed adolescent unit. The application listed Anthony J. Estevez as the applicant and Francis A. Gomez as the authorized representative. Mr. Gomez is a consultant to Mr. Estevez. On May 15, 1986, DHRS requested additional information of the applicant. On June 23, 1986, HCAC provided the requested material. On June 29, 1986, DHRS deemed the application complete. The HCAC application was comparatively reviewed by DHRS with another CON application, subsequently denied, which is not at issue in this proceeding. On September 30, 1986, DHRS granted partial approval to HCAC for the construction of a 50 bed adult and geriatric long term psychiatric facility. DHRS is authorized to grant approval to an identifiable portion of an application for a CON. DHRS considers a single bed to be an identifiable portion. Notice of the agency's decision was published in Florida Administrative Weekly, Vol. 40, No. 24, at 3684. HCAC did not protest the denial of the remainder of the application. The Petitioners in the consolidated cases timely requested formal administrative hearing. On September 15, 1987, HCAC provided, to all parties, materials purporting to be updated information relating to the DHRS-mandated reduction in the scale of their proposal and changed economic circumstances. Charter moved at the hearing to exclude the material. The hearing officer denied the motion, but recognized a continuing objection to the use of such materials. In that HCAC has failed to establish that there is need for 50 long term psychiatric beds in district VI, the updated information is not relevant to this order and has been disregarded. HCAC, formally known as Health Care Advisors Corporation, Inc., was not incorporated until April 14, 1987, but - the name had been reserved prior to the incorporation. HCAC is wholly owned and controlled by Anthony J. Estevez. Following construction of the proposed facility, HCAC intends to operate as a general partnerships in which Mr. Estevez and his wife would be limited partners. Long term psychiatric services are hospital based inpatient services averaging a length of stay of 90 days. DHRS rules provide that such services may be provided in specifically designated beds in a general hospital, or in a specialty hospital setting. HCAC has failed to establish that there is a need for 50 additional long term psychiatric beds in district VI. The evidence does not indicate that there are persons within district VI who are unable to obtain long term psychiatric services, or whether there is need for any additional long term psychiatric beds in district VI. The HCAC application is inconsistent with the goals of both the district and state health plans, as well as other available needs assessment data. The district VI health plan indicates that additional long term psychiatric beds are unnecessary. The plan indicates that existing psychiatric hospital bed utilization must be at least 75%. The evidence indicates that for the three year period preceding the hearing, occupancy in existing psychiatric hospital beds was approximately 60%. Goal #1 of the state health plan indicates that mental health services should be made available to persons in need of such services in the least restrictive setting which offers treatment. Long term hospitalization does not generally offer the least restrictive setting for such treatment. Further, objective 1.3 of the state plan provides that additional long term beds in a particular district should not be approved unless the average annual occupancy rate for all existing long term beds in the district is at least 80%. The average annual occupancy rate for existing long term beds in district VI is less than 80%. The district VI alcohol, drug abuse and mental health plan also emphasizes the desirability of providing psychiatric care in a noninstitutional setting when possible, and suggests utilization of alternatives to institutionalization. Additional long term psychiatric beds are not identified as needed for the district. The plan does indicate that additional services for elderly persons are needed in the district, and that some elderly persons are inappropriately hospitalized due to lacking community resources. The evidence does not indicate that such persons would benefit from the HCAC project. DHRS approved the facility primarily based upon the premise that there was need for long term psychiatric beds in district VI. DHRS has not established a method of establishing numerical need for long term psychiatric beds. In the absence of such methodology, DHRS identified the "inaccessibility" of long-term beds in the eastern part of district VI as the most important consideration in their determination to award the HCAC certificate. The agency concluded in making the determination to grant the CON that "it is highly doubtful" that persons in need of services and residing in the eastern portion of the district would be within two hours driving time of facilities located within the district. However, the agency conducted no actual drive time study, instead relying on estimations based upon map distances and the agency analyst's perceptions of the time required to cover such distances. At least 90% of the district VI population is within two hours driving time to long term psychiatric beds. In determining that district VI residents were unable to obtain services, DHRS failed to consider existing long term psychiatric beds which are located within a two hour drive from, but outside of, district VI. Further, although it is normal for the agency to consider approved but unconstructed facilities in making CON determinations, the agency failed to consider such long term psychiatric beds located within a two hour drive from district VI for which CONs have been issued but which are not yet operating. The HCAC application did not suggest a detailed bed need assessment methodology. HCAC did not conduct a demographic study in district VI to assess or propose a numerical bed need for the district. Subsequent to the filing of the application and prior to the administrative hearing, a bed need analysis based upon the report of the Graduate Medical Educational National Advisory Committee (GMENAC) was prepared for HCAC. The GMENAC report was prepared in 1981 in order to predict the numbers of physicians (including psychiatrists) which would be needed in the United States by 1990. The study was not prepared for the purpose of predicting bed need, but was prepared for the purpose of predicting the need for educating new physicians. The GMENAC-based bed need projection results in a bed-to-population ratio of .61 beds per 1,000 residents. The accepted DHRS short term bed need methodology results in a bed-to-population ratio of .35 per 1,000 residents. However, according to the testimony of all witnesses including HCAC's and DHRS's, there is greater need for short term beds than for long term beds. The use of the GMENAC report as a basis for projection of long term psychiatric bed need overestimates the need for long term psychiatric beds. The resulting bed need projections are not supported by the weight of the evidence and have been disregarded. DHRS does not recognize numerical bed need projections which are projected pursuant to any methodology other than as specified in the agency rules. As stated previously, DHRS has not established a numerical bed need methodology applicable to long term psychiatric beds. In making the determining of need, DHRS did not consider the existence of long term beds in district VI which are designated for children and adolescents. The agency's rationale for failing to include all beds in ascertaining relevant occupancy levels in existing beds, is that children and adolescents are required by rule to be housed separately from adults in long term psychiatric hospitals. Although the rule relating to approval of short term psychiatric hospital beds requires that occupancy levels for short term adult beds and child/adolescent beds be counted separately, the long term rule states that need for additional beds will not be found unless the annual occupancy rate for all existing long term psychiatric beds in the district is at or in excess of 80%. The rule does not provide for DHRS to disregard some long term beds in determining that other long term beds are needed. There was no evidence to support the decision by DHRS to waive the 80% occupancy requirement as it relates to all existing long term beds in the district. The agency rule requires that all such beds be taken into account in determining whether there is need for a proposed facility. The evidence establishes that the annual occupancy rate for all existing long term psychiatric beds in district VI is less than 80%. The DHRS rule accordingly directs the finding that additional beds are not needed. HCAC proposes to offer a full range of high level, specialty long term psychiatric services, including diagnostics and evaluation, to chronically mentally disturbed patients. Such patients suffer from illnesses such as personality disorder, organic brain syndrome, and schizophrenia. Generally, long term patients may be differentiated from short term patients by the nature of the illnesses addressed through hospitalization and the type of care which is appropriate to particular patients. Long term patients are generally unserved or underserved, and require specialized treatment. However, many of the patients HCAC intends to serve are also appropriate for, and receive, short term treatment. The stated goal of the facility is to assure that the full continuum of psychiatric care is available to residents of district VI. The facility proposes to provide "milieu" therapy. Such therapy provides patients with a sense of community important where lengths of stay are extended. The facility proposes to offer educational programs designed to teach patients skills necessary for successful living outside an institution. The facility proposes to provide family counseling, and support for family members who are confronted with the chronic mental illness of a family member. Such services are generally currently available to residents of district VI. HCAC intends, as do other providers of similar services, to admit patients from a broad range of other facilities, private practitioners, and public and private agencies. HCAC states that it will establish relationships with other area mental health care providers in order to facilitate the cooperation between agencies conducive to providing appropriate treatment to persons needing mental health services. There was no evidence that such relationships or admission agreements have yet been entered into by HCAC. HCAC intends, as do other facilities, to closely monitor treatment plans for individual patients in order to provide a high level of care and to maintain therapeutic progress. A system of goal attainment will be utilized in evaluating appropriateness of treatment and planning further care. HCAC intends to ensure that patients receive services from existing community-based agencies following discharge so as to make subsequent readmission into a facility less likely. HCAC states that it intends to provide training to staff and other personnel, both from the HCAC facility and from other providers. However there was no evidence to establish that the facility will be specifically staffed by instructional personnel capable of providing such training. The HCAC facility is expected to draw patients primarily from within the district VI area, however, additional patient referrals from outside the service district are anticipated. The facility is planned to include 36 adult and 14 geriatric beds. Mr. Estevez is a developer and general contractor. Mr. Estevez's interest in long term psychiatric facilities is related to his personal inability to locate an acceptable instate long term psychiatric facility which could provide the level of care which Mr. Estevez believed would be appropriate for a family member in need of services. The facility would be managed by Flowers Management Corporation. Flowers' a for-profit entity, is 51% owned and controlled by Anthony J. Estevez. While Flowers manages several short term psychiatric and substance abuse facilities, Flowers has never operated or managed a long term psychiatric hospital. Nelson Rodney, Flowers, vice president for the Florida region, will be responsible for the management and programmatic operation of the proposed facility. Mr. Rodney has never managed, or been employed by, or had direct experience in, a long term psychiatric facility. The evidence does not indicate that Flowers Management Company is currently capable of managing and operating a long term psychiatric facility. The proposed HCAC facility will include a psychiatric inpatient unit, patient support services, diagnostic services, and ambulatory care services. The program to be utilized by the HCAC facility is based upon the "Flowers" model. The Flowers model is the Flowers designation for the type of services and care which are available at facilities managed by the Flowers Management Corporation. The Flowers model currently utilized by the company is constituted of numerous treatment modalities developed over a period of years and is essentially similar to treatment programs offered at short-term psychiatric hospitals. The Flowers model is applicable to both short term and long term treatment programs. None of the treatment modalities identified by HCAC as proposed for use at the facility are unavailable to residents of district VI. There are adequate, available and accessible alternatives to the proposed HCAC facility, both within and outside of district VI. In considering the HCAC application, DHRS disregarded beds in short term psychiatric facilities because agency rule distinguishes between long term and short term beds. However, DHRS has previously considered short term psychiatric services when evaluating the need for a long term psychiatric service provider. It is appropriate to consider existing short term facilities in determining whether alternatives to the proposed facility are adequate and available. Short term and long term facilities compete to some extent in providing services. Projecting an expected length of stay for a particular patient is an inexact process and is very difficult. Most psychiatric patients are considered to be in need of, intermediate care, extending beyond 30 days but less than 90 days. On occasion, some patients in short term facilities are hospitalized in excess of 90 days, and some patients hospitalized in long term facilities are discharged prior to 90 days. The average length of stay projected by HCAC was 90 days. HCAC chose the 90 day figure solely because DHRS defines a long term psychiatric facility as one with an average length of stay of 90 days, and HCAC proposes to construct a lone term facility. HCAC expects the average length of stay to be in excess of 90 days. In an attempt to screen out prospective patients with shorter lengths of stay, HCAC proposes to utilize an experimental method of projecting lengths of hospitalization, in order to eliminate patients with projected hospitalizations of less than 90 days. The experimental methodology, a "strain ratio analysis", enables psychiatric health care providers to assess a prospective patient's situation, develop an appropriate course of treatment, and determine the anticipated length of the hospitalization. However, such prototypical models are, by their nature, testing vehicles. The Flowers Management Corporation has never used the strain ratio analysis system. No facility was utilizing the strain ratio analysis system in other than an experimental capacity at the time of the administrative hearing. The strain ratio analysis system has been tested primarily in short term psychiatric facilities, rather than in long term facilities such as proposed by HCAC. While such methods hold great promise, and may be helpful in predicting the expected length of stay in individual cases, they are not sufficiently reliable to establish that HCAC's average length of stay will exceed 90 days. Some HCAC patients could be hospitalized for periods of time shorter than 90 days. Short term facilities, on occasion, provide treatment to patients hospitalized in excess of 90 days when such continued treatment is warranted. HCAC intends to take short term psychiatric facility charges into account when determining rate structure. HCAC used financial data from several short term psychiatric hospitals in preparing the information submitted to DHRS as part of the application for the CON. There are 654 licensed or approved short term psychiatric beds in service district VI, most of which may be utilized to treat adults in need of care. The annual average occupancy rate for these short term beds is less than 80%. The available beds are accessible, appropriate, underutilized and available. Additionally, there are beds in district VI residential treatment centers and nursing homes which to some extent may be used as alternatives to the HCAC proposal. UPC is a licensed short term psychiatric hospital located in Hillsborough County, approved in part as a teaching and research facility. The UPC facility contains 114 beds, including a 28 bed adult unit, a 20 bed geriatric unit, a 22 bed substance abuse unit, an 8 bed professorial unit, an 8 bed child unit, and a 28 bed-adolescent unit. The operation of the HCAC facility would negatively impact the operation of UPC through a reduction in patient days and related revenue. Charter is a short term psychiatric hospital located in Hillsborough County, containing 146 beds, 84 of which are designated as' adult or geriatric. Charter provides services to adult and geriatric patients. Although Charter is a short term facility, services to be provided by HCAC are essentially similar to services provided by Charter. Accordingly, the proposed HCAC facility would have a substantial impact on the operations of Charter. Because there is no need for additional psychiatric bed capacity, it is reasonable to assume that Charter would lose a significant number of patients, and revenue, to the HCAC facility, if the HCAC facility were operational. St. Francis is a 30 bed alcohol and drug treatment unit located in Hillsborough County. Although HCAC would not admit a patient with a primary diagnosis of substance abuse, HCAC would provide substance abuse treatment to persons receiving care for other illnesses. Patients in need of substance abuse treatment receive care at various types of facilities. At the hearing, an HCAC witness stated that some of the beds which the HCAC/GMENAC methodology indicated were needed could operate as residential substance abuse treatment beds. Accordingly, the HCAC facility could impact on the operation of St. Francis. UPC, Charter, and St. Francis provide services essentially similar to those which the HCAC facility would provide. There is a shortage Of personnel available to staff psychiatric hospitals. The HCAC facility would exacerbate the shortage, however, there are sufficient personnel to meet projected staffing levels, although it would make staff retention more difficult for existing providers. Theme was no evidence which would indicate that the HCAC facility would, through the operation of joint, cooperative, or shared health care resources, provide for probable economies or improvements in the delivery of psychiatric services. There was no evidence which would indicate that HCAC planned to participate in joint, cooperative, or shared health care service provision. There was no evidence which would indicate that there was need for special equipment or services which are not reasonably and economically accessible in district VI or in adjoining areas. There was no evidence which would indicate that there was need for research or educational facilities beyond what is currently available within and adjacent to district VI. The proposed HCAC facility is not specifically designated as a research or educational facility and would provide no opportunity for such, beyond what any additional long term psychiatric hospital would provide. The HCAC facility would be designed and constructed by Project Advisors Corporation (PAC). PAC is wholly owned and controlled by Anthony J. Estevez. Mr. Estevez has never designed or constructed a long term psychiatric hospital. Mr. Estevez has not purchased property in the district VI area. However, PAC and Mr. Estevez have been involved in constructing short term psychiatric facilities. Construction of short term and long-term psychiatric facilities are essentially similar. Mr. Estevez's background and knowledge indicate that, assuming the project were otherwise permitted, the proposed project could be constructed in a timely manner and at a reasonable cost. The projected costs of land acquisition, equipment and initial operating costs are based upon the establishment of need for the facility. Such need was not established, and accordingly the projections have not been considered. The evidence indicated that financing was available to Mr. Estevez at an annual rate of 13%. Mr. Estevez's has a continuing relationship with NCNB Bank which has indicated interest in providing financing for the project. The annual rate is reasonable. The projected construction cost is based on similar projects for which Mr. Estevez has been responsible and appears reasonable; however, such costs are related to need for the project, which was not established by the evidence, and accordingly such projections have been disregarded. Further Mr. Estevez has stated his intention to provide personal funds for capital, if necessary, and the evidence indicates that he is able to do so. The proposed staffing and salary levels are based upon the establishment of need for the proposed facility. Such need was not established, and accordingly the projections are irrelevant. HCAC states that the project will be accessible to all residents of district VI in need of services. However HCAC failed to establish that there is need for 50 additional long term psychiatric beds in district VI. In asserting that the proposed project was financially feasible, HCAC projected costs and revenue for the proposed facility. Such projections necessarily rely on the assumed need for the facility. However, the evidence has failed to establish that there is need in district VI for 50 additional long term psychiatric hospital beds. Accordingly, the financial information filed with the application, as well as the updated information provided subsequently, has not been considered to the extent based upon the assumption of need and resulting projected levels of occupancy. In that there is no demonstrable need for the project, the project is not financially feasible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order denying the application of HCAC for certificate of need #4526. DONE and ENTERED this 17th day of April, 1989, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1989. APPENDIX CASES NO. 86-4378, 86-4379, and 83-4380 The following constitute rulings on proposed findings of facts submitted by the parties. UPC UPC's proposed findings of fact are accepted as modified in the Recommended order except as follows: 15-26. Rejected. Unnecessary. 28. Rejected. Unnecessary. 48. Accepted insofar as relevant. 49-53. Rejected. Unnecessary. 58-70. Rejected. Unnecessary. 73. Rejected. Must be within service district. 80. Rejected. Conclusion of law. 87. Rejected. Unnecessary. Charter Charter's proposed findings of fact are accepted as modified in the Recommended Order except as follows: 32-35. Rejected. Statute directs consideration of beds within district. 40. Rejected. Restatement of testimony. 75. Rejected. Conclusion of law. 77-82. Rejected. Unnecessary. 83-95. Rejected. Not supported by weight of evidence. 96-121. Rejected. Unnecessary. 122. Rejected. Not supported by weight of evidence. 123-127. Rejected. Unnecessary. 128-132. Rejected. Not supported by weight of evidence. 133-134. Rejected.. Unnecessary. 135-139. Rejected. Not supported by weight-of evidence. 146-153. Rejected. Unnecessary. St. Francis St. Francis' proposed findings of fact are accepted as modified in the Recommended Order except as follows: 18. Third sentence rejected. Irrelevant. 25. Rejected. Unnecessary. 32. Rejected. Irrelevant. 36-40. Rejected insofar as related to projects not at issue in this proceeding. 41. Rejected. Not required to provide firm loan commitment. 42-43. Rejected. Unnecessary. 54. Rejected. Subordinate. 55-64. Rejected. Unnecessary. 65. Rejected. Restatement of testimony. 76. Rejected. Conclusion of law. 91. Rejected. Testimony cited relates solely to occupancy requirement for existing beds, not other agency criteria. 113. Rejected. Not supported by weight of evidence. 114-147. Rejected. Unnecessary. Rejected. Implementation of staffing plan not required. Rejected. Unnecessary. Rejected. Restatement of testimony. Rejected. Irrelevant. 156. Rejected. Methodology not' supported by evidence. HCAC HCAC's proposed findings of fact are accepted as modified in the Recommended Order except as follows: Accepted, but irrelevant. Rejected. Irrelevant. 11. Rejected insofar as related to updated information not related to the DHRS-mandated reduction in scale of project or due to changed economic conditions. 19. First sentence rejected. Not supported by weight of evidence. 31. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. HCAC is not operator of facility. Flowers Is Operator and Flowers experience insufficient. 51-52. Rejected. Not supported by weight of evidence. 53. Rejected. Need not established. 63-68. Rejected. Unnecessary. 69. Rejected. Not supported by weight of evidence. 70-92. Rejected. Assumes need, not established. Rejected. Not supported by weight of evidence. Rejected. Assumes need, not established. Rejected. Inconsistent with HCAC-stated admission of non- local patients. Rejected. Service districts not necessarily related to accessibility. Rejected. Not supported by weight of evidence. Second sentence rejected. Rule does not authorize separate calculation of adult/geriatric and child/adolescent long term beds. 103-108. Rejected. Not supported by weight of evidence. 110. Rejected. Assumes need, not established. 111-112. Rejected. Not supported by weight of evidence. Rejected. Unnecessary. Rejected. Conclusion of law. 115-117. Rejected. Not supported by weight of evidence. Rejected. Unnecessary. Rejected. Not supported by weight of evidence. Rejected. Unnecessary. 121-129. Rejected. Methodology not supported by weight of evidence. 131-139. Rejected. Not supported by weight of evidence. DHRS DHRS's proposed findings of fact are accepted as modified in the Recommended Order except as follows: 6. Rejected. Need for project not established. COPIES FURNISHED: Christopher R. Haughee, Esq. Moffitt, Hart & Herron 216 South Monroe Street, Suite 300 Tallahassee, Florida 32301-1859 Susan Greco Tuttle, Esq. Moffitt, Hart & Herron 401 South Florida Avenue, Suite 200 Tampa, Florida 33602-5417 Lesley Mendelson, Esq. Assistant General Counsel Department of Health and Rehabilitative Services Regulation and Health Facilities Fort Knox Executive Center 2727 Mahan Drive, Suite 103 Tallahassee, Florida 32308 Gerald B. Sternstein, Esq. Darrell White, Esq. McFarlain, Sternstein, Wiley & Cassedy, P.A. Post Office Box 2174 Tallahassee, Florida 32316-2174 Michael D. Ross, Esq. J. Robert Williamson, Esq. King & Spalding 2500 Trust Company Tower Atlanta, Georgia 30303 George N. Meros, Jr., Esq. Rumberger, Kirk, Caldwell, Cabaniss & Burke 101 North Monroe Street, Suite 900 Tallahassee, Florida 32301 Judith S. Marber, Esq. Wood, Lucksinger & Epstein Southeast Financial Center Two South Biscayne Boulevard, 31st Floor Miami, Florida 33131-2359 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact The Application West Florida Regional Medical Center is a 400-bed acute care hospital in Pensacola, Escambia County, Florida. The hospital is located in a subdistrict which has the greatest population aged 65 and over who are living in poverty. That group constitutes the population qualified for Medicare. Some 17 percent of Escambia County's population falls into the medicare category. Prior to October, 1987, HRS had determined that there was a fixed pool need in the Escambia County area for 120 nursing home or extended care beds. Several hospitals in the Escambia County area applied for the 120 nursing home beds. Those beds were granted to Advocare (60 beds) and Baptist Manor (60 beds). The award of the 120 beds to Baptist Manor and Advocare is not being challenged in this action. West Florida, likewise, filed an application for an award of nursing home beds in the same batch as Advocare and Baptist Manor. However, Petitioner's application sought to convert 8 acute care beds to nursing home or extended care beds. West Florida's claim to these beds was not based on the 120 bed need established under the fixed need pool formula. West Florida's application was based on the unavailability of appropriately designated bed space for patients who no longer required acute care, but who continued to require a high skill level of care and/or medicare patients. The whole purpose behind West Florida's CON application stems from the fact that the federal Medicare system will not reimburse a hospital beyond the amount established for acute care needs as long as that bed space is designated as acute care. However, if the patient no longer requires acute care the patient may be re-designated to a skilled care category which includes nursing home or extended care beds. If the patient is appropriately reclassified to a skilled care category, the hospital can receive additional reimbursement from Medicare above its acute care reimbursement as long as a designated ECF bed is available for the patient. Designation or re-designation of beds in a facility requires a Certificate of Need. Petitioner's application for the 8 beds was denied. When the application at issue in this proceeding was filed Petitioner's 13-bed ECF unit had been approved but not yet opened. At the time the State Agency Action Report was written, the unit had just opened. Therefore, historical data on the 13 bed unit was not available at the time the application was filed. Reasons given for denying West Florida's application was that there was low occupancy at Baptist Hospital's ECF unit, that Sacred Heart Hospital had 10 approved ECF beds and that there was no historical utilization of West Florida 13 beds. At the hearing the HRS witness, Elizabeth Dudek stated that it was assumed that Baptist Hospital and Sacred Heart Hospital beds were available for West Florida patients. In 1985 West Florida applied for a CON to establish a 21-bed ECF unit. HRS granted West Florida 13 of those 21 beds. The 8 beds being sought by West Florida in CON 5319 are the remaining beds which were not granted to West Florida in its 1985 CON application. In order to support its 1985 CON application the hospital conducted a survey of its patient records to determine an estimate of the number of patients and patient days which were non acute but still occupied acute care beds. The hospital utilized its regularly kept records of Medicare patients whose length of stay or charges exceeded the Medicare averages by at least two standard deviations for reimbursement and records of Medicare patients whose charges exceed Medicare reimbursement by at least $5,000. These excess days or charges are known as cost outliers and, if the charge exceeds the Medicare reimbursement by $5000 or more, the excess charge is additionally known as a contractual adjustment. The survey conducted by the hospital consisted of the above records for the calendar year 1986. The hospital assumed that if the charges or length of stay for patients were excessive, then there was a probability that the patient was difficult to place. The above inference is reasonable since, under the Medicare system, a hospital's records are regularly reviewed by the Professional Review Organization to determine if appropriate care is rendered. If a patient does not meet criteria for acute care, but remains in the hospital, the hospital is required to document efforts to place the patient in a nursing home. Sanctions are imposed if a hospital misuses resources by keeping patients who did not need acute care in acute care bed spaces even if the amount of reimbursement is not at issue. The hospital, therefore goes to extraordinary lengths to place patients in nursing home facilities outside the hospital. Additionally, the inference is reasonable since the review of hospital records did not capture all non-acute patient days. Only Medicare records were used. Medicare only constitutes about half of all of West Florida's admissions. Therefore, it is likely that the number of excess patient days or charges was underestimated in 1986 for the 1985 CON application. The review of the hospital's records was completed in March, 1987, and showed that 485 patients experienced an average of 10.8 excess non-acute days at the hospital for a total of 5,259 patient days. The hospital was not receiving reimbursement from Medicare for those excess days. West Florida maintained that the above numbers demonstrated a "not normal need" for 21 additional ECF beds at West Florida. However as indicated earlier, HRS agreed to certify only 13 of those beds. The 13 beds were certified in 1987. The 13-bed unit opened in February, 1988. Since West Florida had planned for 21 beds, all renovations necessary to obtain the 8-bed certification were accomplished when the 13- bed unit was certified in 1987. Therefore, no capital expenditures will be required for the additional 8 beds under review here. The space and beds are already available. The same study was submitted with the application for the additional eight beds at issue in these proceedings. In the present application it was assumed that the average length of stay in the extended care unit would be 14 days. However, since the 13 bed unit opened, the average length of stay experienced by the 13-bed unit has been approximately 15 days and corroborates the data found in the earlier records survey. Such corroboration would indicate that the study's data and assumptions are still valid in reference to the problem placements. However, the 15- day figure reflects only those patients who were appropriately placed in West Florida's ECF unit. The 15-day figure does not shed any light on those patients who have not been appropriately placed and remain in acute care beds. That light comes from two additional factors: The problems West Florida experiences in placing sub-acute, high skill, medicare patients; and the fact that West Florida continues to have a waiting list for its 13 bed unit. Problem Placements Problem placements particularly occur with Medicare patients who require a high skill level of care but who no longer require an acute level of care. The problem is created by the fact that Medicare does not reimburse medical facilities based on the costs of a particular patients level of care. Generally, the higher the level of care a patient requires the more costs a facility will incur on behalf of that patient. The higher costs in and of themselves limit some facilities in the services that facility can or is willing to offer from a profitability standpoint. Medicare exacerbates the problem since its reimbursement does not cover the cost of care. The profitability of a facility is even more affected by the number of high skill Medicare patients resident at the facility. Therefore, availability of particular services at a facility and patient mix of Medicare to other private payors becomes important considerations on whether other facilities will accept West Florida' s patients. As indicated earlier, the hospital goes to extraordinary lengths to place non- acute patients in area nursing homes, including providing nurses and covering costs at area nursing homes. Discharge planning is thorough at West Florida and begins when the patient is admitted. Only area nursing homes are used as referrals. West Florida's has attempted to place patients at Bluff's and Bay Breeze nursing homes operated by Advocare. Patients have regularly been refused admission to those facilities due to acuity level or patient mix. West Florida also has attempted to place patients at Baptist Manor and Baptist Specialty Care operated by Baptist Hospital. Patients have also been refused admission to those facilities due to acuity level and patient mix. 16 The beds originally rented to Sacred Heart Hospital have been relinquished by that hospital and apparently will not come on line. Moreover the evidence showed that these screening practices would continue into the future in regard to the 120 beds granted to Advocare and Baptist Manor. The president of Advocare testified that his new facility would accept some acute patients. However, his policies on screening would not change. Moreover, Advocare's CON proposes an 85 percent medicaid level which will not allow for reimbursement of much skilled care. The staffing ratio and charges proposed by Advocare are not at levels at which more severe sub-acute care can be provided. Baptist Manor likewise screens for acuity and does not provide treatment for extensive decubitus ulcers, or new tracheostomies, or IV feeding or therapy seven days a week. Its policies would not change with the possible exception of ventilated patients, but then, only if additional funding can be obtained. There is no requirement imposed by HRS that these applicants accept the sub-acute-patients which West Florida is unable to place. These efforts have continued subsequent to the 13-bed unit's opening. However, the evidence showed that certain types of patients could not be placed in area nursing homes. The difficulty was with those who need central lines (subclavian) for hyperalimentation; whirlpool therapy such as a Hubbard tank; physical therapy dither twice a day or seven days a week; respiratory or ventilator care; frequent suctioning for a recent tracheostomy; skeletal traction; or a Clinitron bed, either due to severe dicubiti or a recent skin graft. The 13-bed unit was used only when a patient could not be placed outside the hospital. The skill or care level in the unit at West Florida is considerably higher than that found at a nursing home. This is reflected in the staffing level and cost of operating the unit. Finally, both Advocare and Baptist Manor involve new construction and will take approximately two years to open. West Florida's special need is current and will carry into the future. The Waiting List Because of such placement problems, West Florida currently has a waiting list of approximately five patients, who are no longer acute care but who cannot be placed in a community nursing home. The 13-bed unit has operated at full occupancy for the last several months and is the placement of last resort. The evidence showed that the patients on the waiting list are actually subacute patients awaiting an ECF bed. The historical screening for acuity and patient mix along with the waiting list demonstrates that currently at least five patients currently have needs which are unmet by other facilities even though those facilities may have empty beds. West Florida has therefore demonstrated a special unmet need for five ECF beds. Moreover, the appropriate designation and placement of patients as to care level is considered by HRS to be a desirable goal when considering CON applications because the level of care provided in an ECF unit is less intense than the level of care required in an acute care unit. Thus, theoretically, better skill level placement results in more efficient bed use which results in greater cost savings to the hospital. In this case, Petitioner offers a multi-disciplinary approach to care in its ECF unit. The approach concentrates on rehabilitation and independence which is more appropriate for patients at a sub-acute level of care. For the patients on the awaiting proper placement on the waiting list quality of care would be improved by the expansion of the ECF unit by five beds. Finally, there are no capital costs associated with the conversion of these five beds and no increase in licensed bed capacity. There are approximately five patients on any given day who could be better served in an ECF unit, but who are forced to remain in an acute care unit because no space is available for them. This misallocation of resources will cost nothing to correct.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services issue a CON to Petitioner for five ECF beds. DONE and ORDERED this 30th day of March, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 1989. APPENDIX The facts contained in paragraph 1-29 of Petitioner's proposed Findings of Fact are adopted in substance, insofar as material. The facts contained in paragraph 1, 2, 3, 4, 5, 6, 8, 12, 15, 16, 20, 27, 28, 29, 31 and 33 of Respondent's Proposed Findings of Fact are subordinate. The first sentence of paragraph 7 of Respondent's Proposed Findings of Fact was not shown to be the evidence. Strict compliance with the local health plan was not shown to be an absolute requirement for CON certification. The remainder of paragraph 7 is subordinate. The facts contained in paragraph 9, 10, 11 and 30 of Respondent's Proposed Findings of Fact were not shown by the evidence. The first part of the first sentence of paragraph 13 of Respondent's Proposed Findings of Fact before the semicolon is adopted. The remainder of the sentence and paragraph is rejected. The first sentence of paragraph 14 of Respondent's Proposed Findings of Fact was not shown by the evidence. The remainder of the paragraph is subordinate. The facts contained in paragraph 17, 26 and 32 of Respondent's Proposed Findings of Fact are adopted in substance, insofar as material. The acts contained in paragraph 18 are rejected as supportive of the conclusion contained therein. The first (4) sentences of paragraph 19 are subordinate. The remainder of the paragraph was not shown by the evidence. The first (2) sentences of paragraph 21 are adopted. The remainder of the paragraph is rejected. The facts contained in paragraph 22 of Respondent's Proposed Findings of Fact are irrelevant. The first sentence of paragraph 23 is adopted. The remainder of paragraph 23 is subordinate. The first sentence of paragraph 24 is rejected. The second, third, and fourth sentences are subordinate. The remainder of the paragraph is rejected. The first sentence of paragraph 25 is subordinate. The remainder of the paragraph is rejected. COPIES FURNISHED: Lesley Mendelson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Tallahassee, Florida 32308 Donna H. Stinson, Esquire MOYLE, FLANIGAN, KATZ, FITZGERALD & SHEEHAN, P.A. The Perkins House - Suite 100 118 North Gadsden Street Tallahassee, Florida 32301 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
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: Since 1976, Horizon Hospital or its predecessor has been licensed by HRS as a special psychiatric hospital with 200 beds. Its most current license, License No. 1316, authorizes Horizon to operate a special psychiatric hospital with 200 beds, and bears an expiration date of June 30, 1985. Horizon has never applied for a Certificate of Need for substance abuse beds. The 1983 session of the Legislature amended the hospital licensure law and the Certificate of Need law. Section 395.003(4), Florida Statutes, was amended, in pertinent part, to require that the number of beds for the rehabilitation or psychiatric service category for which HRS has adopted by rule a specialty bed need methodology must be specified on the face of the hospital license. Section 381.494(8)(g), Florida Statutes, was also amended to require that Certificates of Need include a statement of the number of beds approved for the rehabilitation or psychiatric service category for which HRS has adopted by rule a specialty bed need methodology. In April of 1983, HRS adopted Rules 10-5.11(25), (26) and (7), Florida Administrative Code, setting forth methodologies for determining the need for proposed new hospital beds for short-term psychiatric services, long-term psychiatric services and short- and long-term substance abuse services. The methodologies set forth in the rules for short-term psychiatric (Rule 10- 5.11(25)) and substance abuse (Rule 10-5.11(27) beds require, first, the application of a bed to population ratio to arrive at the total number of beds needed in a District, and then a subtraction of the number of existing and approved beds in that District to arrive at the number of additional beds needed at any particular time. Thus, in order to apply the methodologies and determine the actual number of beds needed in a District at any given time, the number of existing and approved beds in that District must be determined. HRS's Office of Comprehensive Health Planning therefore established an inventory of existing and approved short-term psychiatric and substance abuse beds for each of the HRS Districts. At the time of establishing its inventory, HRS hospital licenses did not distinguish between psychiatric and substance abuse beds in specialty hospitals. In order to determine the number of existing psychiatric and substance abuse beds in each District, HRS reviewed the Hospital Cost Containment Board (HCCB) reports filed on behalf of existing facilities, and also consulted a publication of the Florida Alcohol and Drug Abuse Association entitled "Alcohol and Drug Abuse Treatment-Prevention Programs in Florida, 1983 Directory." When a hospital was included in the Directory or when it reported on the HCCB form that the facility had a separately organized and staffed substance abuse program, HRS personnel called that facility to ascertain the number of beds devoted to such a program. No inquiry was made regarding the method of treating the substance abuse patient or the manner in which the substance abuse unit was staffed. The telephone conversation was then followed up with a confirmation letter. Utilizing these sources of information, as well as the definitions contained in Rules 10-5.11(25) and (27), Florida Administrative Code, HRS completed and published the results of its inventory process. The published inventory includes Horizon Hospital and categorizes its beds as 178 short term psychiatric and 22 substance abuse. The HCCB reports filed by Horizon for the years 1981, 1982 and 1983 indicate in the section entitled "Services Inventory" that Horizon's substance abuse unit bears a "Code" of "1." Code "1" is defined on the form as a "separately organized, staffed and equipped unit of hospital (discrete)." Code "2" on the HCCB form means "services maintained in hospital but not in separate unit (nondiscrete)." In its 1980 HCCB report, Horizon listed its "drug abuse care" and its "alcoholism care" as a Code "1." The 1983 Directory for "Alcohol and Drug Abuse Treatment -- Prevention Programs in Florida," published by the Florida Alcohol and Drug Abuse Association, lists Horizon Hospital as having an "alcohol and chemical abuse program," a "medical non-hospital detoxification program treatment center," "intensive/intermediate residential treatment;" and "drug abuse treatment" for all ages. The source of the information provided in this Directory was not established. Horizon Hospital has published and has distributed a pamphlet entitled "Alcohol and Chemical Abuse -- The Family Disease." This pamphlet describes the nature of alcoholism, how to recognize the symptoms, the family involvement and how Horizon can treat the total problem of alcoholism. The pamphlet describes the treatment team at Horizon to include a medical director, a psychiatrist, a nurse, nursing staff, allied therapist and a social worker. Horizon also has published and distributes a booklet advertising itself as "a private psychiatric hospital" with 200 beds, and as containing six programs -- one of which is the "addictive disease program." The program, noted as the "Horizon Hospital's Alcohol and Chemical Abuse Program of Treatment" is described as being unique in that "unlike most alcoholic rehabilitation centers, it is capable of treating the alcoholic who not only is in need of alcoholism counseling, but also has severe emotional conflicts that require psycho-therapy." Horizon Hospital does provide specialized programs for, what it describes as, subpopulations in psychiatry. These programs include an adult general psychiatric program, a crisis and intensive care program, an adolescent treatment program, an older adult treatment or geriatric program, a pain management program and an addictive disease program. Horizon emphasizes the psychiatric aspect in each program. Patients at Horizon are admitted only by psychiatrists and the bylaws of Horizon require that a psychiatrist visit a patient at least once every three days. The physical layout of Horizon's three-story facility is that two of the units, Unit 31 and Unit 32, are located on the third floor of the building. Unit 31 is known as the adolescent substance abuse unit and Unit 32 is known as the adult substance abuse unit. Each of the units at Horizon has its own staff. The Program Medical Director of Unit 32 is Dr. Vijaya Rivindran, a psychiatrist. Dr. Rivindran holds this position on a part-time basis, and is responsible for the administration of and program philosophy for patient care. As of the time of the hearing, Unit 32 had 26 beds, with a capacity for 30 beds, and Unit 31 had a capacity for 12 beds. The Program Coordinator and the Assistant Program Coordinator for Unit 32 are both psychologists. They control the day-to-day clinical activities of Unit 32 and are directly responsible for the staff supervision. The staff of Unit 32 includes mental health counselors, psychiatric nurses, a social worker and mental health technicians. Most, if not all, of the staff members of Unit 32 have special training in the area of substance abuse. The criterion for admission to Unit 32 is that the patient need psychiatric hospitalization and have some involvement with substance abuse. The average length of stay for a Unit 32 patient is 20 or 21 days. A sample of records from patients discharged from Unit 32 over a three-year period revealed that only 4.8 percent of the patients had a single diagnosis of substance abuse, and some 17 percent of the patients sampled had a primary diagnosis of substance abuse, with another secondary or tertiary diagnosis. The remainder of the patient records sampled illustrates that substance abuse was a secondary or tertiary diagnosis for the patients assigned to Unit 32. In arriving at its inventory of existing and/or approved substance abuse beds, HRS did not base its determinations upon the treatment modality provided patients. Instead, HRS counted beds as substance abuse beds only if they were located in a separately organized and staffed unit of at least ten beds, had specially trained staff and the patients had an average length of stay not exceeding 28 days.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petition challenging that portion of the HRS inventory of short-term psychiatric and substance abuse beds relating to Horizon Hospital be DISMISSED. Respectfully submitted and entered this 27th day of March, 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 27th day of March, 1985. COPIES FURNISHED: William B. Wiley McFarlain, Bobo, Sternstein, Wiley and Cassedy, P.A. P.O. Box 2174 Tallahassee, Florida 32316 Amy M. Jones Building 1 - Room 407 1323 Winewood Blvd. Tallahassee, Florida 32301 Alan C. Sundberg and Cynthia S. Tunnicliff Carlton, Fields, Ward, Emmanuel, and Cutler, P.A. P.O. Drawer 190 Tallahassee, Florida 32302 C. Gary Williams and Michael J. Glazer Ausley, McMullen, McGehee, Carothers and Proctor P.O. Box 391 Tallahassee, Florida 32302 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301
Findings Of Fact Petitioner, Hospital Management Associates, Inc. (HMA) filed an application in June, 1984, for a 60 bed adolescent long- term psychiatric hospital in Hillsborough County, Florida. Petitioner's Exhibit 1. A completed application was filed August 13, 1984. Petitioner's Exhibit 2. (P. PFF 1.) The proposed facility is patterned after a similar HMA facility in Arlington, Texas. The facility is proposed to be freestanding and is intended to conform to the state hospital code. The plan is to place the facility on a 10 or 15 acre tract of land. The facility will be divided into two 30 bed units, each having a 15 bed wing separated by a nursing station. T. 32- 37. Separation will be useful to separate patients by age, sex, functional levels, and treatment programs. T. 33. (The remainder of P. PFF 2 is rejected because irrelevant.) Staffing that is proposed is found on table 11, Petitioner's Exhibit 2. The staffing proposed is consistent with standards set by the Joint Commission on Accreditation of Hospitals and is similar to the Arlington, Texas, facility. T. 53. There is no evidence that this is not a reasonable level of staffing. The salary levels are reasonable. T.51. (The remainder of P. PFF 3 is rejected because not consistent with Petitioner's Exhibit 2 or T. 51-53, or irrelevant.) HMA operates hospitals, both psychiatric and acute care, in Texas and Florida. T. 25-26. (The transcript does not establish that HMA currently operates hospitals in any other states, and to this extent, P. PFF 4 is rejected.) HMA proposes to treat adolescents, ages 12 to 18. T. 35. (P. PFF 5 that HMA proposes to treat ages 10, 11, and 19, is rejected, based upon the testimony of Mr. Braeuning, and on the same basis, the proposed finding that the bulk of patients will be ages 13-17 is also rejected.) The proposed length of stay is 4 to 6 months. T. 36. The treatment program is aimed at the patient and the family unit, T. 41, and includes social work, family therapy, occupational therapy, recreational therapy, and education. T. 38, 39. Recreational facilities are proposed. T. 38. The proposed facility is planned to have three levels of security. T. 37. Treatment is planned on the behavior modification model, which uses a system of levels of reward and responsibility, and is used in both system and long term treatment. T. 37-40, 92. The length of stay is proposed to be an average of six months. T. 36. (The remainder of P. PFF 5 is rejected because not supported by the record in the form proposed.) Dr. Max Sugar is an expert in child and adolescent psychiatry. T. 84. Dr. Sugar has been asked to be a consultant for the HMA facility proposed, and may accept. T. 95. His consultation would involve program arrangement, milieu arrangements, in-service staff training, and recruitment of a clinical director. Id. (P. PFF 6.) Louis DeSonier is an expert in child and adolescent pyschology. T. 102-103. He received his doctorate in 1982. T. 101. Dr. DeSonier has been hired by HMA to develop the system proposed for this certificate of need, to implement development issues, and to evaluate the program on an ongoing basis. T. 104. He would be involved in hiring staff. T. 105. (The proposed finding that she will be involved in "setting up referral patterns within District VI" is rejected because not found in the transcript on the pages cited.) Dr. DeSonier envisioned attracting people from the adolescent psychology program at Florida State University to help develop a protocol for long term care for adolescents. T. 105. Dr. DeSonier envisioned attracting other persons to work on the project. T. 106-107. Dr. Desonier was familiar with the levels of treatment concept of treatment, T. 106-107, and this will be helpful to him in his work with this proposal. (P. PFF 7.) The Petitioner plans to monitor the quality of the programs at the proposed facility from its corporate offices, and will seek to use quality assurance programs as recommended by the Joint Commission on Accrediation of Hospitals (JCAH). T. 43. The Petitioner will seek JCAH accreditation accreditation by the National Association of Private Psychiatric Hospitals, and qualification for CHAMPUS reimbursement as a long term facility. Id. (P. PFF 9.) The Petitioner intends to locate its facility near the 1-4 and 1-75 interchange, which would provide good access from many parts of District VI. T. 58. All of District VI, and portions of adjacent Districts, are within a two hour driving time of the site proposed by the Petitioner. See finding of fact 38. The Petitioner proposes to obtain patients through contacts and marketing efforts with local practitioners, local religious counselors, and school counselors. T. 54. Free standing psychiatric hospitals are not eligible for Medicaid reimbursement, and thus Petitioner's proposed hospital will not do that type of work. T. 57. Petitioner's proposed facility is projected to do two to five percent indigent work. T. 70, 57. Petitioner expressed willingness to accept patients from the Children, Youth, and Family Program of HRS T. 54-55. The Petitioner proposes to accept up to 20 percent of state-funded patients. T. 57-58. (P. PFF 10, TH PFF 12.) 10. In a long term psychiatric facility, patients may stay six months or longer. T. 88. A short term facility deals with acute problems, and tries to discharge the patient in one to three months. T. 87. Long term facilities address long standing maladaptive behavior. T. 87. A patient requiring long term treatment can become isolated among patients in a short term facility. T. All of the ancillary services in a long term facility should be staffed and planned to provide long term continuity for the patient. T. 88-9. Over time, long term problems, which the patient may hide during short term treatment, become visible. T. 92. Progress on these problems then can be made. T. 92. An acute care general hospital is geared for acute care to a range of ages, and having a program for long-term adolescent care is potentially in conflict with these goals. T. 95 However, treatment is often the same for both long and short term patients. T. 90. Behavioral modification is used in both short and long term treatment. T. 37-40, 92. The physician. determines the length of stay, and the physician cannot tell precisely how long a patient may need to stay. T. 89-91. A patient may begin as identified for short term treatment, but may later have long term treatment needs identified. T. 90-91. The adolescent portion of the proposed psychiatric facility at University Psychiatric Center is expected to experience an average length of stay of from 45 to 60 days per patient, with the greater probability of longer lengths of stay. T. 432. The average length of stay for adolescents at Tampa Heights Hospital may be about 47 days. T. 253. Tampa Heights Hospital provides short term psychiatric services. Tampa Heights is not certified for long-term care under the CHAMPUS program. T. 253. But Dr. Rene Haney, a psychiatrist and the adolescent services chief at Tampa Heights Hospital, T. 246-247, has observed some patients staying longer than 90 days, and some of his patients have stayed more than 90 days, receiving essentially the same kind of care. T. 248-49, 255. One patient stayed over 1.4 months. T. 251. During the current fiscal year, Tampa Heights will earn approximately $4 million from adolescent Patients, and approximately 36.3 percent of that $4 million will[ be derived from adolescent patient days from patients that stay over 90 days (or $1.6 million). T. 334. (TH PFF 2.) (TH PFF 1, that Dr. Haney had a "substantial" number of patients is rejected for lack of quantifying evidence in the record.) Thus, while there are some differences between a facility devoted to short term psychiatric care and a facility intended for long term psychiatric care, there is a significant overlap with respect to the manner in which both types of facilities provide the same service for patients staying in the midrange of lengths of stay. For these patients, a short term inpatient psychiatric hospital provides a service that is the same as that provided by a long term inpatient psychiatric hospital. (P. PFF 6 and 8. the remainder of P. PFF 8 is rejected as cumulative.) A loss of as much as 10 percent of long term adolescent revenue would cause Tampa Heights to increase patient charges. T. 335. (Th PFF 2.) Given the ultimate finding that a substantial need exists for the facility proposed by the Petitioner, it cannot be concluded that Tampa Heights will in fact lose 25 percent of its adolescent patient days to Petitioner. For this reason, TH PFF 2 is rejected. Given the overlap in treatment, however, Tampa Heights would probably lose some patient days to Petitioner, but the degree of lost patient days cannot be determined on this record. Tampa Heights Hospital and University Psychiatric Center both have a substantial interest that could be affected by this proceeding. The Health Council for West Central Florida, Inc., is the local planning council for HRS District VI, which consists of Hardee, Highlands, Hillsborough, Polk, and Manatee Counties. Tampa Heights Exhibit 2. The local health council has adopted a health plan for the district, which is Tampa Heights Exhibit 2. The local health plan, as corrected, shows that there are expected to be 134 excess psychiatric beds in the District by 1990. Ibid. at page 119; T. 286. Additionally, the District has a number of non-hospital residential beds, some of which are exclusively for adolescents and children, and others of mixed ages. Tampa Heights Exhibit 2, page 113; T. 311. The local health plan adopted a policy to encourage use of the least restrictive, non- hospital facility wherever possible. Tampa Heights Exhibit 2, page 112-114; T. 303-305. Thus, in these respects, the proposal of the Petitioner is not consistent with the local health plan. (TH PFF 4 and 13.) The local health plan estimates of need are not consistent with actual need as will be discussed ahead. There is no direct evidence in the record of the occupancy levels of the one long term psychiatric facility in District VI, Northside Community Mental Health Center, which has 16 beds. (TH PFF 5.) An occupancy level for Northside may be inferred from the testimony of Ms. Marsha Lewis, Deputy Director of that facility. Ms. Lewis stated that the facility has 16 licensed long term beds, and ran an average length of stay of 349 days in 12 beds. This means that the facility had 4188 patient days (12 times 349) out of a possible 5840 (16 times 365), which converts to an occupancy level of 72 percent in 16 license beds. T. 320. The 1984 occupancy rates for some short term psychiatric facilities in District VI were below 80 percent, and were as follows: 66 percent, Tampa Heights Hospital; Memorial, 76 percent Lakeland Regional, 54 percent; Winter Haven, 71 percent; Palmview, 27 percent. T. 213-216, 117. (The occupancy rate for Hillsborough County Hospital Authority was not provided by the witness.) (TH PFF 6 and 39.) The relevance of these figures is not clear, since the evidence does not state whether these occupancy rates are for adult psychiatric patients, adolescents, or both. The Petitioner projects that it would reach 80.6 percent occupancy by March 1988, and would be at 72 percent occupancy in September of that year. Petitioner's Exhibit 2, table 10; T. 49- 50. In fact, the Petitioner predicted 80 percent occupancy in the second year of operation, based upon the analysis of Mr. Braeuning of Petitioner's needs analysis, the gross population, and the number of adolescents in the District, T. 50, as well as comparisons to the HMA Arlington Texas, facility, analysis of District competition, availability of physicians, and information provided by children, family, and youth of the Department of Health and Rehabilitative Services. T. 49. Mr. Braeuning had not previously staffed or administered an adolescent psychiatric center in Florida. T. 61. He had conducted a socioeconomic profile study of Hillsborough and Highlands Counties, but not for Polk, Manatee, or Hardee Counties. T. 63-64. Mr. Braeuning was not personally aware of whether District VI psychiatrists would use the program proposed by HMA, and was not aware in any great detail of the existing programs in the District. T. 64-66. The Petitioner does not currently operate an adolescent psychiatric facility in Florida. T. 61. Mr. Braeuning is an expert in health care administration and operations. T. 25. It is the further finding of the Hearing Officer that the projections of the Petitioner that an 80 percent occupancy rate will be achieved by this projected depend primarily upon the Petitioner's evidence as to need provided by other witnesses. Since, as will be discussed ahead, that evidence was sufficient to demonstrate need, the projection of an 80 percent occupancy rate is accepted as based upon sufficient evidence. (TH PFF 7 through 11.) Children ages 0-17 are reasonably expected to require long term inpatient psychiatric hospital care at a rate of 103 per 100,000 persons in that age group. T. 159-161, 461-464; Petitioner's exhibit 5, pp. 21-22, 35. The age group that the Petitioner proposes to serve is ages 12 to 18. T. 35-36. This is a medically appropriate age group to be served by the planned facility. T. 97, 397. No party presented evidence as to the precise rate of need for long term inpatient psychiatric hospital care for ages 12-18, the ages which Petitioner proposed to serve. The Petitioner relied upon the rate for ages 0-17 adjusted by 0.96. T. 160-161. Tampa Heights relied upon the rate for ages 0- 17, unadjusted. T. 465. The method employed by Tampa Heights was much less reliable than that used by the Petitioner, and is rejected. Within the group of persons ages 0-17, the need for long term psychiatric hospital care is greatly skewed toward older persons in the group. Persons in the first 9 ages, from 0-9, account for only 3.596 of the need; in the next 5 ages, 10-14, there is 31 percent of the need; and in the last 3 years, 15-17, there is 6596 of the need. T. 160. These statistics follow a curve of accelerating need as children increase in age. The composite rate of 103 per 100,000, which includes a very large number of persons in the 0-11 age group with very little need, thus is much too low to be used as a predictor of need for the 12-18 age group. T. 578-579, 582-583. Petitioner's method of adjustment also has a flaw, but the flaw is less unreasonable than that proposed by Tampa Heights. Petitioner proposes that the rate of 103 per 100,000 be adjusted so that it reflects that portion of the rate attributable to persons ages 10-17. This includes need of children ages 10 and 11, and thus includes need which Petitioner does not propose to serve. Second, it fails to include 18 year olds, and thus underestimates need in that regard. The net result, however, is probably to underestimate need slightly. As discussed above, the need for long term hospital care seems to increase at an accelerated rate. If, for ages 0-9, only 3.5 percent of the need is represented, it is unlikely that the need of 10 year olds or 11 year olds will be all that much, and thus, inclusion of those ages probably has not contributed greatly to an overstatement of need. On the other hand, the failure to include 18 year olds, given the fact that persons 15-17 represent 6596 of the total need in the 0-17 age group, probably results in an underestimation of need. In all probability, the overinclusion and underinclusion problems with Petitioner's method cancel out. At ,worst, if one assumed a completely linear distribution of need between the ages 10-18 (which, as discussed above, is contrary to the evidence), the 0.96 adjustment would be evenly distributed throughout all the ages from 10-17. Thus, since there are 8 ages in that group, each age would account for 0.12 of the need, assuming linear distribution. Subtracting ages 10 and 11, and adding age 18, would result in an adjustment factor of 0.84. The calculations which follow will use both the 0.96 and 0.84 factors, although it is the conclusion of the Hearing Officer that the 0.96 factor is most reasonable. District VI consists of Hillsborough, Manatee, Polk, Highlands, and Hardee Counties. Tampa Heights Exhibit 2. The population for 1990 in District VI of persons ages 12-18 is predicted to be 135,627. T. 456. The population for ages 0-17 is predicted to be 380,583. (This is derived by reversing the calculations on pages 157-158 of the transcript, i.e., dividing 392 by 103 and multiplying by 100,000.) As explained above, it would be statistically incorrect to multiply the rate for ages 0-17 times the population for ages 12-18, as proposed by Tampa Heights, since the rate of 103 per 100,000 is much lower due to the inclusion of ages 0-11 in calculating the rate. Petitioner's method is mathematically sound. It requires the multiplication of 103 times the projected population for District VI in 1990 for ages 0-17, which is 380, 583, divided by 100,000, and then adjusted by multiplying the adjustment factor discussed above, by 0.96. The result is 376, which represents the number of persons, ages 10-17, who are expected to require long term inpatient psychiatric hospital care in 1990, and on this record, represents also the best estimate of the number of such persons in age group 12-18 predicted for District VI in 1990. (Assuming that 0.84 is the correct adjustment factor, and performing the same mathematical computation, the number of such persons is 329.) Calculation of the gross bed need for these 376 patients depends entirely upon the choice of length-of stay estimated for such patients. The Petitioner proposes a length of stay at its facility of from 120 days to 180 days. T. 158; 36. Petitioner's expert, Mr. Britton, admitted that he used the range of 120 days to 180 days in his estimates of need because "they were the lengths of stay that were indicated for the Applicant's project as it related to specific program they intended to utilize . . . ." T. 265. Thus, to this extent, these length of stay are inappropriate for determining projected need for the District in 1990. As Mr. Brittion admitted, these lengths of stay are only those patients which Petitioner seeks to attract and serve. Mr. Britton testified that there is no definitive length of stay for adolescents in the expert literature, hut that one study reported a range from one month to nine months, with an average of 108 days. T. 242. Tampa Heights' expert, Howard E. Fagin, Ph.D., was of the opinion that an average length of stay of 90 to 120 days would be appropriate. T. 466. Tampa Heights thus used this range in its estimates. Tampa Heights Exhibit 8. Dr. Max Sugar felt that the length of stay could be six months or longer. T. 88. Northside Community Mental Health Center, the only facility (apparently) that has a certificate of need in District VI for long term adolescent inpatient hospital psychiatric beds, had an average length of stay of 349 days for 12 of 16 long term beds. T. 320. Finally, and most persuasive to the Hearing Officer, Tampa Heights presented the testimony of Peter Michael Kreis, Program Director, Children, Youth and Families Program Office, of the Department of Health and Rehabilitative Services. Mr. Kreis was the District Administrator of District VI for five and one-half years, T. 342, and was accepted as an expert on the issue of the availability and adequacy, from the perspective of the Children, Youth and Families Program, of facilities in District VI and the central Florida area for children and adolescents eligible for that program. T. 348-352. As will be discussed ahead, Mr. Hreis identified some 320 beds in District VI that could be categorized as residential beds (including hospital beds) available to provide long term mental health care to CYF adolescents, and his testimony has been accepted as fact in the paragraph ahead. Mr. Kries testified that the normal length of stay in these facilities is "probably closer to nine months," and that the majority of them are "90 days and beyond." T. 354. Thus, the best evidence of length of stay is the actual length of stay now experienced, as shown by Mr. Kreis and the experience of Northside Community Mental Health Center, the only long term adolescent facility in the District. A length of stay of 180 days as proposed by the Petitioner is probably conservative, and is accepted as a reasonable basis for calculating need. The gross bed need for District VI for adolescent long term inpatient psychiatric hospital beds is thus calculated as follows. In 1990, 376 patients will stay an average of 180 days, resulting in 67,680 patient days. Divided by the number of days in the year, 365, this is 185 patient years, which is also the annual bed need. This figure is adjusted by dividing by 80 percent to assure that the 80 percent or less occupancy standard contained in the rule is met, which results in a gross bed need in 1990 of 231 beds. Performing the same calculation, but using the figure derived from using the 0.84 adjustment factor, the result is a gross bed need in 1990 of 202 beds. As will be seen ahead, the net bed need, insofar as the application of this Petitioner is concerned, is not materially affected, regardless whether the 0.96 (the factor chosen by the Hearing Officer) or a factor of 0.84 is used. It must be reiterated that the factor of 0.84 is rejected for the reasons stated in paragraph 22 above. Camelot Care Center is erroneously carried by HRS in the inventory of District VI long term child and adolescent psychiatric beds. T. 164, 536. Camelot Care Center is not in District VI, but is in Pasco County, which is not in District VI. T. 163-166. The only long term inpatient hospital psychiatric beds currently in District VI for children and adolescents are 16 beds located in Hillsborough County at Northside CMHC. Tampa Heights Exhibit 7. Thus, if only long term beds in District VI were to be considered, there would be a net need of 215 beds by 1990. As will be discussed ahead in the conclusions of law, both the statutes and the rules adopted by HRS require that the availability of short term inpatient psychiatric facilities to provide care for some of the long term inpatient psychiatric patients of the District must be considered in determining net bed need. This conclusion was reached, following the language used by the rules, without regard for asserted differences in treatment modalities. But even if treatment differences were relevant, the Petitioner has not proven that the short term Inpatient psychiatric hospital facilities in District VI do not provide, in part, services "like" those provided in a long term facility. It is true that the short term facility will tend to treat acute problems, and that a patient having deeply seated mental problems may not reveal such problems in a short treatment period. T. 92. But Petitioner's own expert noted that the psychiatric treatment itself is the same for short and long term patients, and that the physician sometimes needs a period of time of evaluation to determine the patient's longest term needs. T. 89-90, 92. The treatment program at Tampa Heights is very similar to that proposed by the Petitioner. T. 326. The treatment program at Palmview Hospital seems to be quite similar to that proposed by the Petitioner. T. 115. Moreover, short term facilities in fact provide treatment for those "long term" patients who experience the shorter stays. Rule 10-50.11(26)(a), Florida Administrative Code, defines long term services as those averaging a length of stay of 90 days. Thus, at least some of the need for long term services is a need for hospital care (in gross number of days) of less than 90 days, and these stays could just as easily be provided by short term facilities. In fact, such potential "long term" patients are, in part, being served by such facilities as Tampa Heights, which observed lengths of stay of 90 days and longer, one patient for 14 months, and 2 patients for 8 months at the time of the hearing in August. T. 248-249, 255, 334. For these reasons, as well as the findings in paragraph 10 above, it is the conclusion of the Hearing Officer that short term inpatient psychiatric hospital facilities in District VI have the capability of providing a portion of long term services to adolescents, and in fact do so to some extent, and thus must be considered as a "like and existing health care service" as defined by section 381.494(6)(c)2, Fla. Stat. The record does not contain high quality evidence as to what portion of existing and approved short term hospital inpatient psychiatric facilities for adolescents in District VI should be deemed to be "like" long term facility. The only attempt at quantification of this issue is found in the evidence presented by Tampa Heights that 36.3 percent of its revenues in the current fiscal year derived from adolescents were from adolescents who stayed longer than 90 days. There was no evidence as to the proportion of patient days represented by this revenue, and there was no evidence that this percentage holds for other short term facilities in the District. However, the percentage is conservative in one way: it includes only such stays that are more than 90 days, and does not include those who stayed less than 90 days. As discussed above, some of those adolescents who stay less than 90 days can be characterized as both a "long term" and a "short term" patients due to the definitions adopted by HRS in its rules. Rather than reject the only data available, it is concluded that approximately 36 percent of adolescent short term hospital inpatient psychiatric beds are available for the needs of "long term" adolescent patients. District VI currently has 124 licensed and approved free standing short term inpatient psychiatric hospital beds, and 19 licensed and approved beds in a general hospital, for a total of 143 short term inpatient psychiatric beds. T. 459; Tampa Heights Exhibit 7. Since 36 percent of these beds are available to serve the needs of some of the long term patients in the District, the short term beds in the District provide an additional 51 beds. Thus, the total number of psychiatric beds in District VI available to provide for the needs of long term adolescent psychiatric patients is 67, which includes 51 short term beds and 16 long term beds. (The 32 long term beds at Camelot Care Center have been excluded because not located in District VI.) Since 231 long term adolescent psychiatric beds are needed in District VI by 1990, and 67 such beds exist, there is a net long term psychiatric bed need of 164. Even if the lower bed need number is used (which was 202, derived from using the 0.84 adjustment factor), the net bed need shown by the Petitioner is at least 135 beds by 1990. The Respondent, the Department of Health and Rehabilitative Services, proposes to apply non-rule policy to the application of the Petitioner. The non-rule policy is that consideration should be given to the availability of like and existing services that are within two hours driving time of the site of the facility proposed by the applicant, even though some of those facilities are outside the District. T. 534. The Department justifies this policy to prevent overbuilding, T 535, to allow focus upon a standard metropolitan area, rather than upon a District, T. 536, and because patients for long term psychiatric hospital care cross county lines, T. 543, 550. The policy makes sense. Long term psychiatric care, in all probability, does not need to be located by District, but could be sited regionally, to serve larger numbers of people than those in just a District, since by definition, such care ought not involve acute emergencies. The policy is reasonable and has been justified by the Respondent. Intervenor Tampa Heights demonstrated that there are perhaps 270 long term psychiatric hospital beds within two hours drive of the site proposed by the Petitioner. T. 475-478; Tampa Height Exhibit 10. FIRS presented similar, if less precise, testimony. T. 535-536, 545-552. But neither the Respondent nor the Intervenors provided evidence as to how many of the beds outside District VI are actually available to serve the needs of persons in District VI. It is probable that facilities located in Orlando, Sarasota (Tampa Heights Exhibit 10) and St. Pet-ersburg (T. 536) are located in those cities to serve persons needing such services in those cities and Districts. There was no evidence that any of these out-of-District facilities were granted certificates of need to serve the needs of persons living in District VI. Moreover, without evidence to show to what extent these 270 out of District beds are needed to serve the needs of non-District VI patients, it is factually impossible to determine to what extent some of these 270 beds might be used to meet the needs of District VI. For this reason, the 270 beds identified as being within two hours of the site of the facility proposed by the Petitioner cannot be considered to be available to serve District VI needs. The Children, Youth, and Families (CYF) program of the Department of Health and Rehabilitative Services helps place eligible children and adolescents in psychiatric or other mental health programs. T. 346. Mental health programs exist in outpatient and residential facilities as well as licensed general and specialty hospitals. T. 346-347. The Department prefers not to use the more restrictive hospital setting for placement of these children. T. 353. The majority of facilities providing mental health care to children and adolescents in District VI provide such care on a long term basis, that is, for more than 90 days, and normally about nine months. T. 354. District VI has the following facilities which do provide or can provide such long term mental health care for CYF children and have the following approximate number of beds: (T. 355-357): Childrens' Home 68 Northside CMHC 24 (This is 8 more than TH. Ex. 7) FMHI 28 Childrens' Services Cen. 24 Tampa Heights 38 (This is 2 less than TH. Ex. 7) Hillsborough C. Hosp. 12 Memorial 10 University of S. Fla. 24 (Devoted to adolescents) Peach R. CMHC 34 Palmview 18 Winter Haven Hospital 30 Manatee Memorial 10 TOTAL 320 All of the above programs are residential programs, not outpatient programs. See T. 353-357. All, or a substantial portion, of these 320 beds are available in District VI to meet the need by 1990 in that District for long term psychiatric beds. T. 354. However, this inventory of 320 beds includes residential programs (such as perhaps the "Childrens' Home" listed above) that are not hospitals as characterized by Tampa Heights Exhibit 7. It should be remembered that the need for 231 long term psychiatric hospital beds was derived from data used by all parties from table 13, page 35, Petitioner's Exhibit 5. The rate of 103 per 100,000 was derived from that table by adding only the predicted number of psychoses and neuroses for the age group 0-17 needing "24-hour institution" care. Excluded from that rate were persons needing "acute hospital" care and "special programs." One cannot meaningfully assess the availability of the 320 beds listed above for long term care until the need for such beds for acute care and residential care has been calculated. Since there has been no expert testimony in this case to calculate the total need in District VI for adolescent mental health care (including long term 24 hour beds, acute care beds, and other types of residential beds), the testimony of the "availability" of the 320 beds is rejected as an irrelevant and statistically incorrect correlation of bed inventory with "need." It is possible, however, to test the meaningfulness of the testimony that 320 beds are "available" for long term care in District VI by reference to statistics contained in Petitioner's Exhibit 5. Since this exhibit and the date contained therein is heresy, the Hearing Officer cannot make a finding of fact by reference to the statistics contained in Petitioner's Exhibit 5, in the absence of expert opinion, which is lacking in this record. However, a relatively simple calculation can be made, using exactly the same method used by all the experts in this case. That calculation will be made in findings of fact 42-46, however, not as a finding of fact per se, but as explanation for why the 320 beds must be ignored absent some evidence that such beds are indeed available to serve long term patient needs (or, are unavailable because currently serving many other needs). Turning to Petitioner's Exhibit 5, table 13, the following predicted incidence of mental illness by treatment facility for the age group 0-17 is recorded therein: Special Programs Acute Hospital 24 Hour Psychoses 128 210 30 Neuroses 123 253 73 The total of these numbers is 817. Excluded from the above are "outpatient" statistics. "Outpatient" as used in table 13, Petitioner's Exhibit 5, is concluded to mean the same as "ambulatory" as described on pages 21 and 22 of the same exhibit, and "special programs" on table 13 are concluded to be "partial hospitalization" as described on the same pages. "Partial hospitalization" and "special programs" include halfway houses, group homes, day care centers, boarding homes, foster homes, and congregate care facilities. Id. at page 21. Thus, the commination of data with respect to "special programs," "acute hospital," and "24-hour institutions" much more reasonably approximates the types of facilities and care included in the 320 beds identified by Mr. Kreis. Adding these numbers, the total predicted incidence of psychoses and neuroses for persons ages 0-17 needing partial hospitalization, acute hospital care, and 24 hour hospital care, would be 817 per 100,000. This number should also be modified by the factor 0.96 to convert it to a better estimate of the rate per 100,000 for the age group 12-18, which is a rate of 784 per 100,000. Using this rate, it might thus be predicted that 2984 adolescents in District VI in 1990 (ages 12-18) will need special programs, acute hospital care, and 24 hour care, for psychoses and neuroses. This number is based upon the predicted 1990 population of the District of 380,583. Mr. Kreis testified that the majority of the 320 beds are used by adolescents staying longer than 90 days, and that the norm for these beds was about nine months. T. 354. Using a more conservative average length of stay for all of these beds of 180 days, and apply an 80 percent occupancy standard, the following calculation can be made, using the same need formula used above. The 2984 adolescents needing special programs, acute care, and 24 hour institutional care, will need 537,120 patient days of care per year at an average length of stay of 180 days. Dividing by 365, this converts to an annual bed need of 1472. Assuming the need to maintain 80 percent or less occupancy, the gross bed need is 1840 beds to provide special programs, acute care, and 24 hour institutional care. Subtracting the 320 beds now available, there would be a net need by 1990 of 1520 beds. Thus, the 320 beds identified by Mr. Kries would not adequate to fulfill the need identified in earlier parts of this order. While it is the conclusion of the Hearing Officer that a length of stay of 180 days for the combined 320 beds is appropriate, given the testimony of Mr. Kreis, it would be useful to recalculate the above figures assuming only a 60 day average length of stay for all of these beds. (This length of stay is far too low, given the probability that adolescents assigned to residential settings are, for reasons of continuity of care and for lack of parental availability to cope with the adolescent's problems, destined to spend far more than 60 days per year in such programs.) At a length of stay of 60 days, 2984 persons would generate 179,040 patient days annually, which converts to a bed need of 491 annually. At 80 percent occupancy, 614 beds would be needed by 1990, a net need (subtracting 320 beds) of 294 beds. This calculation is not correct, given the testimony of Mr. Kreis as to normal length of stay, and is not adopted by the Hearing Officer. It is performed, however, to show that even if Mr. Kries were wrong about the length of stay, the 320 beds he identified still do not meet predicted need, even if a 60 day average length of stay is used. Based upon all of the foregoing, there is a need for the 60 beds proposed by the Petitioner in District VI. George Britton, who testified on behalf of the Petitioner with respect to calculation of need, was tendered as an expert in health care planning. Mr. Britton received a master's degree in business administration in health care administration in 1979. During his master's work, Mr. Britton took a course in health economics. T. 139. In part that course concerned health care regulations at the national level. T. 140. The primary focus of his master's degree was hospital administration. T. 137. There were no courses available specifically dealing with planning for psychiatric services, and he took none. T. 137. He has had experience with various methodologies for determining bed need for a new health service both in his academic work and in practical experience. T. 140- 141. He also has attended seminars over the past five years concerning planning for new health services. T. 141. He worked as a health care administrator in a middle level position at George Washington University Medical Center between his undergraduate degree and his master's degree. T. 128. He served as assistant to the executive director, University of Florida Medical Center, Shands Teaching Hospital, from 1979 to 1982. T. 129. From 1982 to late 1984, Mr. Britton worked as vice president operations, University Community Hospital, in Tampa, Florida. Id. At Shands, Mr. Britton was also in charge of planning, and in that job, worked on several applications for certificates of need. T. 131. These certificates of need were quite substantial, one involving about $70 million for a proposed new hospital, and another for about $30 million in renovations. T. 132. Other certificates of need applications that he worked on included applications for neonatal services, radiology, and for helicopter service. T. 132. As vice president at University Community Hospital, Mr. Britton was similarly responsible for certificate of need applications, and worked on applications for cardiac catheterization, open heart surgery, and nuclear magnetic resonance imaging. T. 133. One of the applications for a certificate of need for which Mr. Britton was responsible concerned renovation of a children's mental health unit, but did not involve new beds. T. 138. All of his work with certificate of need applications involved work with need methodologies based upon the demographics of a service population. Id. Mr. Britton has been qualified on one prior occasion as an expert in emergency medical services or hospital administration. T. 135. He had not testified previously with respect to need for psychiatric services. T. 138. Mr. Britton's testimony covered areas well within his general expertise. First, Mr. Britton selected the same rate of incidence of psychoses and neuroses among persons ages 0-17 in need of 24 institutional care as selected by the Tampa Heights expert. Thus, there was no dispute as to that basic rate and its genesis from Petitioner's Exhibit 5. Second, Mr. Britton applied a factor of 0.96 to reduce that rate, deriving this factor from Petitioner's Exhibit 10. Dr. Fagin was less conservative, proposing to use the 103 per 100,000 prevalence rate without adjusting for ages 0-11. If Mr. Britton erred, the error is not in the favor of the Petitioner. Third, Mr. Britton used the same mathematical formula as used by Dr. Fagin, including use of the 80 percent occupancy standard. Fourth, there was no dispute as to the accuracy of the population figure used, and as discussed above, Dr. Fagin seriously erred in using a population figure for only ages 12-18. Fifth, the length of stay was primarily established by Mr. Kreis and testimony from Northside Community Mental Health Center, and Mr. Britton's expertise only corroborated that primary evidence. It is the conclusion of the Hearing Officer that Mr. Britton is as an expert in health planning for the testimony that he rendered in this case. TH PFF 30 is rejected for these reasons. and finding of fact 48. Mr. Britton was deposed on July 5, 1885. He was questioned about several methodologies, and thought that he had been asked about three methodologies. T. 216. But it is clear from the cross examination of Mr. Britton during the hearing that none of the deposition testimony amounted to his opinion on July 25, 1985, as to need, with the exception of one statement: on July 25, 1985, Mr. Britton apparently was of the opinion that there was a net need for 105 beds. T. 219-220. All of the other deposition testimony appears to have simply been Mr. Britton responding to questions by counsel as to the results if various other methodologies were used; at no point did Mr. Britton admit that any of the alternative methodologies were ones that he adopted. He said that he considered various age ranges, and ultimately refined his opinion as he gathered data from professional literature. T. 204. In the deposition, Mr. Britton reviewed one version of inventory of available beds, but he never stated that the 479 beds identified were in fact available to serve long term adolescent needs. He clearly stated that "there was a great deal of confusion about that at that particular time, which I indicated I was in the process of sorting out" with respect to "what constituted inventory." T. 207 He characterized the list of 479 beds as a "mixture of facilities," Id. He later said that these beds were in short term facilities. T. 213. It should be remembered that earlier Mr. Britton had stated that he considered 8 wide variety of facilities in the District, and that due to various statistical problems, it was not possible to develop a precise number of beds available for long term patients, T. 153-155. The second method explored in the deposition was based upon the District VI local health plan of 1985, and was simply something that Mr. Britton "took into consideration." T. 218. In the deposition, he went through the local health plan and verified the numbers, T. 218, and stated that there was other information not yet available on July 25, 1985, upon which he intended to rely. T. 219, 223-224. This second method was the method used to determine need for short term psychiatric facilities. T. 224. None of the foregoing detracts from the ultimate credibility of Mr. Britton. It only reflects that various types of methodologies that he considered and ultimately rejected. (TH PFF 31.) At a deposition on July 25, 1985, Mr. Britton testified that it was not possible to establish the number of beds available in District VI for long term adolescent care, and on cross examination, Mr. Britton explained that when he was asked that question, he had under consideration a wide variety of facilities throughout the District. He further explained that due to the practice of combining adult and adolescent beds and reporting irregularities, plus the inclusion of short term beds, it was not possible to develop a precise number of such beds as long term beds. T. 153-155. Rather than detract from the credibility of Mr. Britton as a witness, this answer adds to his credibility. As discussed above in other findings of fact, none of the parties presented evidence of high quality as to the availability of beds to provide long term adolescent care. Tampa Heights proposed to extrapolate from its own revenue experience to apply a 36.3 percent figure to all other facilities, and did so without any specific evidence to justify such as extrapolation. See findings of fact 11 and 32. HRS asked the Hearing Officer to consider the availability of beds within a two hour driving time without providing any evidence as to the actual availability of out-of-District beds to serve District VI needs. And Tampa Heights applied the prevalence rate of psychoses and neuroses for adolescents needing 24 hour institutional care to the bed inventory provided by Mr. Kreis, which included halfway houses and acute care hospitals. In sum, Mr. Britton's candor concerning the problems of precisely determining the availability of beds to serve the long term need of District VI adolescents adds to his credibility. (TH PFF 31.) As discussed above, Mr. Britton considered and rejected several age groups in arriving at his final opinion. T. 204. That he did so is normal for an expert in arriving at an opinion, and his testimony coupled with his deposition testimony ultimately does not detract from his credibility on this point. He admitted that he looked at various lengths of stay, including 45 days (when he was analyzing short term bed need, T. 241 and Tampa Heights Exhibit 1), and 87.2 days, T. 242, but, as found earlier, Mr. Britton testified that there is no one definitive length of stay in the professional literature. T. 242. Moreover, Tampa Heights' expert, Dr. Fagin, used two lengths of stay, without explaining a detailed basis for either. Finally, it is true that Tampa Heights Exhibit 1 contains an analysis performed by Mr. Britton as of August 9, 1985, which contains a prevalence rate of 1,010 per 100,000. T. 237. But that rate is correct for the analysis performed on Tampa Heights Exhibit 1, which shows an analysis of short term (acute hospital) bed need. As Mr. Britton stated, it was not "his" rate, it was the rate for such need derived form the GMENAC study, Petitioner's Exhibit 5. T. 238. Tampa Heights Exhibit 1 is marked "working - notes," and, as discussed in earlier parts of this recommended order, it would be appropriate to use a rate for acute care psychiatric hospitals to determine need for such hospitals as one step in an analysis of determining to what extent such short term hospitals might in fact be available to serve long term needs. That Mr. Britton performed such an analysis is to his credit. For these reasons, TH PFF 32 is rejected. The following are specific rulings upon the proposed findings of fact of the Petitioner which have not previously been identified in the above findings of fact, or which may contain sentences that have not specifically been addressed. The numbers which follow correspond to the numbers of Petitioner's proposed findings of fact: Rejected because not factual in nature. The facts proposed herein are dealt with in findings of fact 36- 38. All of the facts proposed by Petitioner in proposed finding of fact 13 are true, but irrelevant, since the methodology of Dr. Fagin, and his result, have been rejected for the reasons stated in findings of fact 18-35, and findings of fact 21 and 26 in particular. Petitioner's proposed finding of fact 14 is adopted by reference. Petitioner's proposed finding of fact 15 is adopted by reference. Petitioner's proposed finding of fact 16 is adopted by reference. Petitioner's proposed finding of fact 17 is a summary of Mr. Britton's calculations of need. The majority of these calculations were adopted, except that the average length of stay was found to be 180 days. Findings of fact 18-38 deal with Petitioner's proposed finding of fact 17. Adopted by findings of fact 29, 30 and 47. The following are specific rulings upon the proposed findings of fact of Tampa Heights which have not previously been identified in the above findings of fact, or which may contain sentences that have not specifically been addressed. The numbers which follow correspond to the numbers of Tampa Heights' proposed findings of fact: TH PFF 14 is adopted by reference, except the last sentence. The testimony of pages 529-530 of the transcript was that "the need for care is greater than those people who demand care" because people who need care sometimes do not receive it. It cannot be concluded that calculations of need based upon estimates of need are overstated, or that demand statistics are more suitable, since the point of calculating "need" is to estimate the number of people who are in need, and not to exclude those who need care but are unable to obtain it. Rejected for the reasons stated in findings of fact 18 through 38, and particularly 21 and 26. TH PFF 16 is adopted by reference. The first and last sentences were adopted in findings of fact 19 and 23. The second sentence was rejected by findings of fact 21 and 25. TH PFF 18 was adopted, except that the adjustment factor of 0.96 was also adopted; see findings of fact 18 and 22. Most of TH PFF 19 has be rejected in findings of fact 20 through The rate of 103 per 100,000 cannot be applied solely to the population ages 12-18 for the reasons stated in finding of fact 21 and 25. The average length of stay is not as low as 90 or 120 days for the reasons stated in finding of fact 26. TH PFF 20 uses a correct mathematical formula, but reaches an incorrect result for the reasons stated in the preceding paragraph. TH PFF 21 is rejected for the reasons stated with respect to TH PFF 19, except that the 80 percent occupancy standard was adopted. TH PFF 22, which concerns the correct inventory of beds available to serve the need, is rejected for the reasons stated in findings of fact 29 through 34. TH PFF 23 is rejected as stated in finding of fact 30 and findings of fact which precede that finding. TH PFF 24 has been adopted by findings of fact 31 through 34, to the extent that 36 percent of the short term beds identified by Tampa Heights were counted as available to serve long term needs. However, the resulting net bed need is rejected for the reasons stated above with respect to TH PFF 18-22. TH PFF 25 is rejected by finding of fact 29. TH PFF 26 is rejected due to differing calculations adopted above, see paragraphs dealing with TH PFF 18-22. and 37. TH PFF 27 is adopted to the extent stated in findings of fact 36 TH PFF 28 was adopted by finding of fact 38 to the extent that such facilities exist, but the conclusion reached, that these facilities were shown by evidence to be available to serve District VI needs, is rejected for the reasons stated in finding of fact 38. TH PFF 29 is rejected for the reasons stated in findings of fact 39 through 46. TH PFF 30 was rejected in findings of fact 48 and 49. TH PFF 31 was rejected in findings of fact 50 and 51. TH PFF 32 was rejected in finding of fact 52. TH PFF has been considered and ruled upon in findings of fact 20, 21, 25, and 31 through 34. 34-38. TH PFF 34, 35, 36, 37, and 38 are cumulative, and were completely contained in earlier proposed findings which have already been ruled upon. TH PFF 39 has been adopted and rejected for the reasons stated in finding of fact 16. TH PFF 40 has been adopted, in essence, in finding of fact 31. TH PFF 41 is adopted by reference to the extent that there is no evidence that there are access travel to and from) problems with existing psychiatric facilities in District VI. TH PFF 42 is adopted by reference. However, even with the addition of 22 long term beds, under any of the above calculations, there would still be a net need for the facility proposed by the Petitioner. Further, there was no evidence that Tampa Heights in fact intends to add 22 beds to its facility. Absent such evidence, the inference in TH PFF that 22 beds would be available to serve the needs of District VI is rejected. TH PFF 43 is rejected as irrelevant, given the calculations of need contained in earlier protions of this - recommended order. TH PFF 44 has been rejected for the reasons set forth in findings of fact 39 through 46. There was no evidence of need for additional teaching or research facilities to be served by Petitioner, nor was there evidence of the adequacy of existing teaching or research facilities. TH PFF 45 is rejected as worded, and the above sentence is adopted as an alternative. TH PFF 46 is rejected for the reasons stated in findings of fact 7 and 3. The testimony as to a national shortage of child psychiatrists was not sufficiently detailed to result in a finding that the Petitioner could not attract psychiatrists to provide treatment at its facility. In fact, the Petitioner showed consulting affiliation with one psychiatrist, Dr. Sugar, end a plan for attracting staff. The vast majority of staff shown in Petitioner's Exhibit 2 are not psychiatrists, in any event. There was no other evidence of a shortage of other types of staff. TH PFF 47, to the extent that it proposes that long term financial feasibility has not been shown, is rejected based upon the findings in finding of fact 17, since financial feasibility is largely determined by the existence of patients needing the service. Failure to present evidence from a financial expert does not cause a finding of a lack of financial feasibility where need is clearly demonstrated in the record. Although Mr. Jaffe questioned the amount that Petitioner stated it would receive per patient from the CYF" program, Mr. Jaffe did not correlate this with any evidence of the actual amount of CYF payments that should be substituted in place of Petitioner's estimates, and did not quantify the estimated revenue shortfall. Commitment from a bonding authority is not essential to show financial feasibility, since such commitment could not be expected until a certificate of need is granted. TH PFF 48 is rejected based upon finding of fact 12. TH PFF 49 is the same as proposed findings in TH PFF 37 and 42, which already have been ruled upon. TH PFF 50 is rejected due to the analysis of need contained in the findings of fact above, finding a need for an additional 151 long term adolescent inpatient psychiatric hospital beds by 1990 in District VI, and finding of fact 16.
Recommendation It is RECOMMENDED that the Department of Health and Rehabilitation approve the application of Petitioner and issue to it a certificate of need for the establishment and operation of a new 60 bed adolescent long term psychiatric hospital in Hillsborough County, Florida. RECOMMENDED this 20th day of January, 1986, in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. 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 20th day of January, 1986. COPIES FURNISHED: Robert S. Cohen, Esquire Haben, Parker, Skelding, Costingan, McVoy & Labasky P. O. Box 669 Tallahassee, Florida 32302 Jay Adams, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Building One, Suite 406 Tallahassee, Florida 32301 George N. Meros, Esquire Carlton, Field, Wars, Emanuel, Smith & Cutler, P.A. 410 Lewis State Bank Building Tallahassee, Florida 32301 Susan Greco Tuttle, Esquire Moffit, Hart & Miller 401 South Florida Avenue Tampa, Florida 33602 David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact Cirilo Alvarez, at all times pertinent to the allegations in the complaint, operated an adult congregate living facility in Lake City, Columbia County, Florida, Briar's Haven Adult Care Center, under license number 03-12- 0128-BPS, issued by the Florida Department of Health and Rehabilitative Services. In late July or early August, 1982, Respondent, who is a psychiatric nurse specialist and who works full time at North Florida State Mental Hospital (Hospital) at Macclenny, Florida, took Woodrow Harrison, an elderly patient at that institution, into his home, Briar's Haven Adult Care Center, on pass status from the Hospital for periodic short visits. Ultimately, on July 30, 1982, Harrison was released from Macclenny and began living full time at Respondent's facility. On August 3, 1982, Sharon Stucky, a registered nurse case manager for the North Florida Mental Health Center (Center) in Lake City, Florida, did an intake interview with Harrison, who had just been released from the Hospital and who was living at Respondent's facility. Mr. Harrison was brought into the Center by Respondent's wife. Records from the Hospital pertaining to Harrison, which came to the Center, reflected that he suffered from a seizure disorder and a diabetic condition. His medication consisted of 300 mg. of Dilantin daily and 30 mg. of phenobarbital daily, and he was to receive a daily insulin injection. At the time of his release from the Hospital, he was furnished with a thirty-day supply of these medications. On the afternoon of August 13, 1982, Mr. Alvarez went into the Center with Mr. Harrison and asked to see Ms. Stucky. Respondent indicated that Mr. Harrison was having many physical problems. Earlier in the day, he had taken Harrison back to Macclenny to have him readmitted for seizures, incontinence, etc., even though he was taking his medications, but officials at the Hospital refused to admit him. Mr. Alvarez wanted him admitted to some facility in Lake City. Stucky, indicating she would have to talk with Harrison before taking any action, did so and felt she could see no change in his condition since her first interview of him on August 3, and she decided she could not justify having him recommitted to the mental hospital. Since Stucky wanted to find out if the seizures were the result of a physical problem, and she could not do a physical herself, she requested that Respondent take Harrison to a doctor for an examination. The Respondent again demanded that Harrison be admitted and, when Ms. Stucky refused, stated he would take Harrison to the hospital and leave him. Ms. Stucky talked with her supervisor to see if there was any way that Harrison could be readmitted to Macclenny, and it was determined there was not. When the information was related to Mr. Alvarez, he departed with Mr. Harrison. Respondent then took Harrison to the emergency room at Lake City's Lake Shore Hospital. After a chart was prepared on Harrison, Alvarez departed, leaving Harrison there without his medications. When Alvarez first took Harrison in, he was told there would be an hour wait before Harrison could be seen. Alvarez asked if Harrison could sit there and wait, and the person on duty said, "Yes." Once that was arranged, Respondent left without Harrison. According to a report of the doctor on duty, Harrison was confused and incapable of giving a complaint or history. As a result, evaluation of him was difficult, and his well-being was compromised. Respondent subsequently made no effort to get Harrison's drugs to him by delivering them to Ms. Stuckv, nor did he inquire where Harrison was. Respondent's actions in dropping Mr. Harrison off at the Lake Shore Hospital unsupervised, and only calling to check on his status somewhat later, constitute an intentional abandonment which could have seriously affected Harrison's health, safety, and welfare. Somewhat later the same day, Respondent called Lake Shore Hospital to find out what Harrison's status was, but Harrison had already been placed in another adult care facility by Ms. Stucky when the hospital called her and told her of Harrison's situation. Respondent did not make any other calls. Ms. Stucky visited Harrison daily at this new facility and administered his insulin shot. He appeared to be doing well there and wanted to remain, but on August 17, 1982, he was readmitted to Macclenny, where he currently resides. Harrison is incapable of taking care of himself. He has a poor memory and is somewhat retarded and childlike, according to Stucky. He has no concept of time and could not administer his medicines to himself. He could not understand the need to take his medicine or remember to take it if he could. Since Mr. Harrison was dropped off at Lake Shore without either his medicines or a change of clothing, Stucky made several telephone calls to the Respondent to retrieve them. Mr. Alvarez was always out when she called, and Stucky talked with several different females who answered the phone and with whom she left messages requesting him to call her back. Alvarez did not return any of the calls, but he states he never received them. This is rossible since, he says, neither his mother nor his wife, two of the people at home who may have received the original calls from Stucky, speaks much English. Respondent provided Mr. Harrison with all the clothes he had except those he was wearing when he came from Macclenny. Upon the advice of individuals at Macclenny who he could not remember to identify, Respondent applied for Social Security benefits to support Harrison while he was at Respondent's facility. Because Harrison had no family, Respondent sought the counsel of the legal aid office in Lake City to see if he could be appointed Harrison's legal guardian and was told he could not. In late January or early February, 1983, Respondent received one Social Security check in the amount of $1,900 made out to Harrison and Mrs. Alvarez. This check was not cashed because Harrison was no longer with the Respondent, but was returned to the Social Security Office. Harrison's medicines that were in Respondent's possession when Harrison was taken to the hospital were discarded. Respondent worked with Harrison at Macclenny for about a year before taking him to his own facility. During that time to his knowledge, Harrison never had any seizures. Respondent gave him his medications at Macclenny and knew he needed drugs. When he took Harrison to his facility, he took Harrison's drugs as well.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Secretary of the Department of Health and Rehabilitative Services enter a final order revoking the Adult Congregate Living Facility License of Cirilo Alvarez, doing business as Briar's Haven Adult Care Center. RECOMMENDED this 1st day of April, 1983 in Tallahassee, Florida. ARNOLD H. POLLOCK 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 1st day of April, 1983. COPIES FURNISHED: James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 2002 NW 13th Street, 4th Floor Gainesville, Florida 32601 Mr. Cirilo Alvarez Post Office Box 2392 Lake City, Florida 32055 Mr. David H. Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact On October 15, 1985, Petitioner, Mercy Hospital, Inc. (Mercy), filed an application with Respondent, Department of Health and Rehabilitative Services (Department) for a certificate of need (CON) to convert 29 medical/surgical beds into 29 long-term substance abuse beds. On February 27, 1986, the Department denied Mercy's application, and Mercy timely petitioned for formal administrative review. Mercy is a 538-bed acute care hospital located in Miami, Dade County, Florida. Due to a declining patient census, Mercy is, however, operating only 360 of its 530 licensed beds. Mercy currently offers services in medicine, surgery, psychiatry, obstetrics, gynecology, emergency medical services and outpatient services. Need The predicate for the Department's denial of Mercy's application was a perceived lack of need for long-term substance abuse beds in District XI (Dade and Monroe Counties), and the impact such lack of need would exert on the other statutory and rule criteria. Resolution of the need issue is dispositive of Mercy's application. There currently exists no numeric need methodology for determining the need for long-term substance abuse beds. The Department has, however, adopted Rule 10-5.11(27)(h)1, Florida Administrative Code, which establishes the following occupancy standard: No additional or new hospital inpatient substance abuse beds shall normally be approved in a Department service district unless the average occupancy rate for all existing hospital based substance abuse impatient beds is at or exceeds 80 percent for the preceding 12 month period. District XI has 190 approved long-term hospital impatient substance abuse beds; however, only 30 of those beds are currently licensed. The licensed beds are located in Monroe County at Florida Keys Memorial Hospital (Florida Keys), and are operating well below the 80 percent occupancy standard established by rule. 1/ The remaining beds are to be located in Dade County where Intervenor, Management Advisory and Research Center, Inc., d/b/a Glenbeigh Hospital (Glenbeigh) holds a CON for a 100-bed unit and Mount Sinai Medical Center (Mount Sinai) holds a CON for a 60-bed unit. Glenbeigh's facility is currently under construction, and Mount Sinai is seeking licensure. While not licensed, Mount Sinai has operated its 60-bed unit under its acute care license, and for the first three quarters of 1985 reported occupancy rates of 49.7 percent, 62 percent, and 48.9 percent. While the beds approved for District XI do not demonstrate an 80 percent occupancy rate, only one unit, Florida Keys, is licensed and operational. That unit is located in Key West, serves the middle and lower keys, and is not accessible to Dade County residents. The remaining units are not licensed, and their occupancy figures are not representative of a functional substance abuse unit. Accordingly, a failure to demonstrate compliance with the 80 percent occupancy standard is not necessarily dispositive of the question of need. There currently exists, however, no recognized methodology to calculate need for long-term substance abuse services. Accordingly, to demonstrate a need in 1990 for such services, Mercy relied on a numeric need methodology devised by its health planning expert, Daniel Sullivan 2/ (Petitioner's exhibit 4). Sullivan's methodology was not, however, persuasive. The First Step in Sullivan's Methodology The first step in Sullivan's methodology was to derive an estimate of the number of substance abusers in District XI who would seek treatment in an inpatient setting. The figure he calculated (a,170) was derived-through a four- stage refinement process. Initially, Sullivan estimated the number of problem drinkers within the district for the horizon year by applying the Marden methodology. That methodology, routinely relied upon by health planners, identifies the number of problem drinkers in a given population by multiplying a probability factor to age and sex groupings. By applying the Marden methodology to the age and sex demographics of District XI, Sullivan calculated that an estimated 148,541 problem drinkers would reside within the district in 1998. Sullivan then strove to estimate the number of problem drinkers who would seek treatment in some formal setting (network treatment). To establish that estimate, Sullivan relied on a report prepared for the National Institute on Alcohol Abuse and Alcoholism (NIAAA) entitled "Current Practices in Alcoholism Treatment Needs Estimation: A State-of-the-Art Report". According to Sullivan, that report estimates the percentage of problem drinkers who will seek network treatment to be 20 percent. Therefore, he calculated that an estimated 29,788 problem drinkers in District XI would seek such treatment in 1990. Sullivan then strove to estimate the number of problem drinkers who would seek treatment in an inpatient setting. To establish that estimate, Sullivan relied on a survey conducted in 1982 by the NIAAA entitled National Drug and Alcoholism Treatment Utilization Survey". According to Sullivan, that survey indicated that approximately 78 percent of all problem drinkers who sought treatment did 50 on an outpatient basis. Therefore, using a factor of 22 percent, he calculated that an estimated 6,536 problem drinkers in District XI would seek such treatment in 1990. Sullivan's methodology, at stage two and three of his refinement process, was not persuasive. While Sullivan relied on the factors presented in the reports, there was no proof that health planning experts routinely relied on the reports. More importantly, there was no evidence of the type of survey conducted, the reliability of the percentage factors (i.e.: + 1 percent, 10 percent, 50 percent, etc.), or their statistical validity. In sum, Sullivan's conclusions are not credited. The final stage at step one of Sullivan's methodology, was to estimate the number of substance abusers (alcohol and drugs) who would seek treatment in an inpatient setting. To derive that estimate, Sullivan relied on a report prepared by the Department's Alcohol, Drug Abuse and Metal Health Office, contained in a draft of its 1987 state plan, which reported that 80 percent of substance abusers abuse alcohol and 20 percent abuse other drugs. Applying the assumption that 80 percent of substance abusers abuse alcohol, Sullivan estimated that 8,170 substance abusers in District XI would seek inpatient treatment in 1990. Sullivan's conclusion is again not persuasive. To credit Sullivan's methodology, one must assume that substance abusers (alcohol and drugs) seek treatments at the same rate as alcohol abusers. The record is devoid of such proof. Accordingly, for that reason and the reasons appearing in paragraph 12 supra, Sullivan's conclusions are not credited. The Second Step in Sullivan's Methodology. The second step in Sullivan's methodology was to estimate the number of hospital admissions, as opposed to other residential facility admissions, that would result from the need for substance abuse services. To quantify this number, Sullivan relied on one 1982 survey conducted by NIAAA. According to that survey, the distribution of inpatient substance abuse clients by treatment setting in 1982 was as follows: Facility Location Number Percent of Total Hospital 17,584 34.1 Quarterway House 1,410 2.7 Halfway Housed/ Recovery Home 14,648 28.4 Other Residential Facility 15,980 31.0 Correctional Facility 1,985 3.8 TOTAL 51,607 100.0 percent Therefore, using a factor of 34.1 percent, Sullivan estimated the number of substance abuse hospital admissions to be 2,784 for 1990. For the reasons set forth in paragraph 12 supra, Sullivan's conclusions are, again, not credited. The Third and Fourth Steps in Sullivan's Methodology. The third step in Sullivan's methodology was to estimate the number of substance abuse hospital admissions that would require long-term, as opposed to short-term, services. To derive this estimate, Sullivan calculated admissions to short-term beds by applying a 28-day length of stay and an 80 percent occupancy standard to the Department's short-term bed need methodology (.06 beds per 1,000 population) contained in Rule 10-5.11(27)(f)1, Florida Administrative Code. Sullivan then subtracted that number (1,182) from the estimated number of substance abuse hospital admissions for 1990 (2,784), and concluded that the estimated number of hospital admissions in 1990 that would result from the need for long-term substance abuse services would be 1,602. The final step in Sullivan's methodology was to calculate the need for long-term hospital substance abuse beds. To derive this estimate, Sullivan multiplied the estimated number of long-term substance abuse admissions (1,602) by an average length of stay of 37 days, and divided that total by an occupancy standard of 292 days (80 percent of 365 days). Under Sullivan's methodology, a gross need exists for 203 long-term substance abuse beds in District XI. To establish net need, Sullivan would reduce the 203 bed district need by the 160 beds approved for Dade County, but ignore the 30-bed unit at Florida Keys because of its geographic inaccessibility. By Sullivan's calculation, a net need exists for 43 beds in Dade County. Sullivan's analysis, at steps three and four of his methodology, is not credited. Throughout his methodology Sullivan utilized District XI population figures (Dade and Monroe Counties) to develop a bed need for Dade County. Although Monroe County accounts for only 4 percent of the district's population, the inclusion of that population inflated Dade County's bed need. More demonstrative of the lack of reliability in steps three and four of Sullivan's analysis are, however, the methodologies by which he chose to calculate short- term admissions and long-term substance abuse bed need. Sullivan calculated admissions to short-term beds by applying a 28-day length of stay and an 80 percent occupancy standard to the Department's short- term bed need methodology (.06 beds per 1,000 population) contained in Rule 10- 5.11(27)(f)1, Florida Administrative Code. 3/ By using a 28-day length of stay, the maximum average admission permitted for short-term beds, as opposed to the district's demonstrated average of 24-days, Sullivan inappropriately minimized the number of estimated short-term admissions and maximized the number of estimated long-term admissions. 4/ Sullivan sought to justify his use of a 28-day standard by reference to testimony he overheard in a separate proceeding. According to Sullivan, a Department representative testified that the 28-day standard was used in developing the Department's .06 short-term beds per 1,000 population rule. Sullivan's rationalization is not, however, persuasive. First, Sullivan's recitation of testimony he overheard in a separate proceeding was not competent proof of the truth of those matters in this case. Second, Sullivan offered no rational explanation of how a 28-day standard was used in developing the rule. Finally, the proof demonstrated that the average short-term length of stay in District XI is 24 days, not 28 days. The difference between a 24-day and 28-day average short-term length of stay is dramatic. Application of Sullivan's methodology to the population of Dade County, and utilizing a 24-day average, would demonstrate a need for 170 long-term beds, as opposed to Sullivan's calculated need of 203 beds. In addition to the average short-term length of stay factor, long-term bed need is also dependent on an average length of long-term admissions factor. Under Sullivan's approach, the higher the average, the higher the bed need. Accordingly, to derive a meaningful bed need requires that a reliable average length of stay be established. The data chosen by Sullivan to calculate such an average was not, however, reliable. Sullivan used a 37-day average length of stay to develop his long-term bed need. This average was developed from the CON applications of Mercy, Glenbeigh and Mount Sinai. In the applications, Mercy estimated an expected length of stay of 30-37 days, Glenbeigh 36-38 days, and Mount Sinai 28-49 days. Use of a simple average, of the expected lengths of stay contained in Mercy's, Glenbeigh's and Mount Sinai's applications, to develop an average long- term length of stay is not persuasive. The figures contained in the applications are "expected length of stay", a minimum/maximum figure. Mercy failed to demonstrate that a simple average of those figures was a reliable indicator of average length of stay. Indeed, Mercy presented evidence at hearing that its average length of stay would be 30-31 days; a figure that is clearly not a simple average of the 30-37 day expected length of stay contained in its application. Mercy's failure to demonstrate a meaningful average length of stay renders its calculated bed need unreliable. Sullivan's Methodology - An Overview Each step of Sullivan's methodology was inextricably linked to the other. Consequently, a failure of any step in his analysis would invalidate his ultimata conclusion. Notwithstanding this fundamental fact Mercy, with the exception of the Marden methodology, failed to present a reasonable evidentiary basis to demonstrate the reliability and validity of Sullivan's methodology or any of its parts. Since his methodology was not validated, or each of its inextricably linked parts validated, Sullivan's conclusions are not persuasive or credited. Other Considerations If Mercy receives a CON, it will enter into a management contract with Comprehensive Care Corporation (CompCare) to operate the substance abuse unit. The parties anticipate that Mercy will provide its existing physical plant, custodial services, support services, dietary services, complimentary medical services, medical records and pharmacy services, and that CompCare will provide the treatment team, quality assurance, public information, promotion and operational management. Under its proposed agreement with CompCare, Mercy would pay CompCare on a per patient day basis. This fee was not, however, disclosed at hearing nor were the other expenses for patient care established. 5/ Consequently, Mercy failed to establish that its proposal was financially feasible on either a short or long term basis. Mercy also proposes to provide bilingual staff, and dedicate a portion of its patient days to indigent and Medicaid patients. There was no competent proof to establish, however, that such needs were not met, or would not be met, by the existing facilities.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the application of Mercy for a certificate of need to convert 29 medical/surgical beds to 29 long-term substance abuse beds be DENIED. DONE AND ORDERED this 4th day of February, 1987, in Tallahassee, Florida. WILLIAM J. KENDRICK 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 4th day of February, 1987.
The Issue Whether a certificate of need to construct a 60-bed short-term inpatient psychiatric hospital should be granted to CPC and whether a certificate of need to construct a 24-bed short-term inpatient psychiatric hospital should be granted to Apalachee?
Findings Of Fact Introduction. CPC. Community Psychiatric Centers, Inc., a proprietary corporation, was formed in 1968 by the merger of 2 existing psychiatric hospitals. It now consists of 24 psychiatric hospitals, two of which are located in Florida, and two subsidiary corporations. On December 16, 1983, CPC submitted to the Department an application for a certificate of need to construct and operate a 60-bed inpatient psychiatric hospital. The 60-beds are to consist of 15 beds for adolescents, 20 beds for adults in an open unit, 10 beds for adults in an intensive care unit and 15 beds for geriatric patients. Apalachee. Apalachee is a not-for-profit corporation. It began approximately 30 years ago as a small clinic. It was incorporated as the Leon County Mental Health Clinic in the 1960's and later changed its name to Apalachee Community Mental Health Services, Inc. Apalachee presently serves over 7,000 clients a year, has a $6,500,000.00 budget and 300 employees. It provides services to 8 north Florida counties: Gadsden, Liberty, Franklin, Leon, Wakulla, Madison, Jefferson and Taylor. Apalachee provides specialized continuums of care for substance abuse, children and geriatrics and basic generic services, including a 24-hour, 365 days-a-year emergency telephone and/or face-to-face evaluations. It also provides a full range of case management, day treatment and residential care primarily aimed at the acute and chronically mentally ill and specific programs for children, such as an adolescent day treatment program and an adolescent residential facility. Apalachee's residential programs include a program called Positive Alternatives to Hospitalization (hereinafter referred to as "PATH"). Apalachee also operates an 8-bed non-hospital medical detoxification program in conjunction with PATH. This program is operated in the same building as PATH. It also operates 3 group homes (an adult, an alcohol abuse and an adolescent half-way house) with 10 clients each (these houses will be expanded to 16 clients each), a geriatric residential facility with 60 to 70 beds and cater Oaks, a long-term residential treatment facility for adolescents. On November 15, 1983, Apalachee applied to the Department for a certificate of need for 24 short-term inpatient psychiatric beds. In its application filed during the final hearing of these cases, Apalachee proposed to construct a facility to house the 24-beds adjacent to its current "Eastside" facility. Its Eastside facility currently houses Emergency Services, PATH and its non-hospital medical detoxification programs. All adult mental health programs of Apalachee will also be located on the site in order to consolidate the full continuum of adult psychiatric care provided by Apalachee. Statutory Criteria. The following findings of fact are made as they pertain to the criteria included in Section 381.494(6)(c) and (d), Florida Statutes (1983), and Section 10-5.11(25), F.A.C. The Need for Psychiatric Services Florida State Health Plan and the District 2 Health Plan. General. The Florida State Health Plan is outdated and the District 2 Health Plan does not contain specific goals as to the need for short-term psychiatric care for District 2, the District the facilities would be constructed in. CPC and Apalachee did, however, address both plans, to the extent applicable, in their applications. The relationship of "need" to these plans, as agreed to by the Department, is not relevant to this proceeding, however. CPC also indicated that it evaluated local bed need by studying socioeconomic, population and employment data and by interviewing local practicing psychiatrists. CPC concluded that additional services were needed and filed its application. Although the Florida State Health Plan and the District 2 Health Plan do not address the question of need, need as determined under the Department's rules is crucial. Section 10-5.11(25), F.A.C., provides that a favorable need determination will "not normally" be given on applications for short-term psychiatric care facilities unless bed need exists under paragraph (25)(d). Under Section 10-5.11(25)(d)(3), F.A.C., bed need is to be determined 5 years into the future by subtracting the number of existing and approved beds in the District from the number of beds for the planning year based upon a ratio of .35 beds per 1,000 population projected for the planning year. The population projection is to be based on the latest mid-range projections published by the Bureau of Economic and Business Research at the University of Florida. The Department has projected a need for 185 total short-term psychiatric beds for District 2 for 1989. There are 82 currently licensed and 35 approved short-term psychiatric beds in District 2. Therefore, for 1989 there is a net short-term psychiatric bed need projected of 68 beds. Based upon the projected population of District 2 for 1990 (537, 567), which is 5 years from 1985, the total bed need is 188 beds. The net bed need for 1990 is 71 beds (188 total beds less 117 licensed and approved beds). The Department did not use this figure because the calculation for bed need for 1990 will not be made by the Department until July of 1985. Pursuant to Section 10-17.003, F.A.C., the total projected short-term psychiatric bed need for District 2 is allocated among 2 subdistricts. Subdistrict 2 consist of Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor and Wakulla Counties. CPC's and Apalachee's proposed facility will be located in Subdistrict 2. Subdistrict 2 is the same area designated by CPC as its "primary" service area. This rule, which is to be "used in conjunction with Rule 10-5.11(25)(c)(d)(e)" allocates the 1988 short-term inpatient psychiatric and substance abuse projected bed need as follows: Subdistrict 1: 75 Subdistrict 2: 104 Total 179 Because the projected bed need for Subdistrict 2 under this rule is based upon 1988 projections, it is clearly in conflict with the requirement of Section 10-5.11(25)(d)(3), F.A.C., that bed need is to be projected 5 years into the future. The total bed need projected for the District for 1988 is 179 beds; for 1990, the total is 188 beds. Based upon the allocation of total bed need in Section 10- 17.003, F.A.C., the net bed need for Subdistrict 2 for 1988 is 44 beds: 104 total beds less 60 licensed and approved beds in Subdistrict 2. If it is assumed that the 9 additional total beds projected for 1990 should be allocated to Subdistrict 2, the net bed need for 1990 in Subdistrict 2 would be 53 beds (100 beds less 50 licensed and approved beds). No evidence was presented, however, to support the assumption that all 9 additional total beds will be allocated to Subdistrict 2. It is more likely that only 1 or 2 additional beds will be allocated to Subdistrict 2. Based upon the foregoing, the total net bed need for District 2 projected to 1990 is 71 beds and for Subdistrict 2 it is between 44 and 53 beds. CPC. CPC attempted at the hearing to show that its proposal is consistent with the bed need for District 2 as determined under Section 10-5.11(25)(d)(3), F.A.C. In the alternative, CPC has attempted to prove that there is a sufficient need in District 2 for additional short-term psychiatric beds based upon other methodologies and the state of psychiatric care currently being provided in Subdistrict 2. Sources of referral to the proposed CPC facility, according to Mr. John Mercer, will include physicians, the judiciary and legal system, the school system, employers and law enforcement. Referrals are inspected by Mr. Mercer based upon his conversations with physicians (Mr. Mercer did not interview persons from the other referral sources) , his personal experience and the fact that there will be a community relations or marketing position at the proposed facility. Local psychiatrists did testify that they would refer patients to CPC if its facility is approved. They did not, however, testify that they would refer all of their patients to CPC. They also testified that the CPC facility is needed. The local psychiatrists did not, however, indicate that they were aware of all of the facts as established during the proceeding. CPC, in its application, projected, based upon conversations with local physicians, that the facility will serve most of the area designated by the Department as District 2. District 2 is subdivided by CPC into a primary service area, consisting of Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor and Wakulla Counties, and a secondary service area, consisting of Clay, Calhoun, Gulf and Jackson Counties in Florida and several counties located in extreme southwest Georgia. In Mr. Mercer's opinion, the proposed facility will serve persons from southwest Georgia; specifically, Brook, Decatur, Grady, Seminole and Thomas Counties. Mr. Mercer's opinion was based upon the availability of services in Georgia and conversations he had with Tallahassee physicians. Mr. Mercer's opinion, however, has been given little weight in determining the need for additional short-term psychiatric beds in District 2 based upon the testimony of Jay D. Cushman, an expert in health planning and development. Mr. Mercer's opinion that southwest Georgia residents will use the proposed CPC facility implies that there may be a need for additional short-term psychiatric beds. Mr. Mercer, however, failed to consider travel time and barriers to travel, patient origins or the effect, if any, of outmigration--the number of persons in District 2 who may leave the District for treatment outside the District. Although Mr. Mercer's conversations with local physicians are relevant and of some supportive weight, the local physicians' opinions should have been supported with other evidence. They were not. CPC, in its exhibit 3, projected a bed need of 14.67 beds attributable to southwest Georgia. This figure was arrived at by first assuming a bed need in the area of .35 beds per 1,000 population (119,051). This results in a gross bed need in southwest Georgia of 41.67 beds. From the gross number of beds, 27 existing beds were subtracted to arrive at a net bed need in District 2 attributable to southwest Georgia residents of 14.67 beds. No evidence supporting a conclusion that such a bed need exists in District 2 was presented at the hearing other than Mr. Mercer's opinion that the proposed facility will serve residents from southwest Georgia. It is therefore concluded that there is not a need for 14.67 beds in District 2 attributable to southwest Georgia residents. In its application, CPC projected a need for an additional 195 short- term psychiatric inpatient beds for District 2. This figure was based upon an average of bed need projected by using three different bed need methodologies. The three different methods resulted in a projected bed need of 64 beds, 266 beds and 255 beds. Application of the method which resulted in a bed need of 266 was modified during the hearing. The modification resulted in a bed need of 75.8 beds. Therefore, the bed need based upon the average of all 3 methodologies, as amended would be 131.6 beds. The three methods used by CPC in its application are different than the method used by the Department. None of the methods, based upon Mr. Cushman's testimony, are sound; they are structurally unsound, applied in an unsound manner or both. Under Method I, CPC starts with a projected short-term psychiatric bed need of 1988 of 44 beds, the net bed need as determined in Section 10-17.003, F.A.C. This figure is then increased by 9.44 beds for in-migration and 11 beds attributable to an adjustment for "desired occupancy level." As clearly established by Mr. Cushman's testimony, neither of the adjustments are sound. The projected bed need of 64 beds for 1988 pursuant to method I is therefore not a reliable figure. Pursuant to Method II, as modified during the hearing, CPC projected a bed need of 75.8 beds. Method III resulted in a projected net bed need of 255 beds. These projections are based upon a projected average length of stay of 30 days. No evidence was presented to support this projection; in fact, it is unrealistic when compared with the average length of stay of 16 days at similar facilities in Florida. CPC's Florida facilities have also not been able to achieve an average length of stay of 30 days. These formulas are also unrealistic because population figures used were for all of District 2. But existing beds taken into account only included the beds in Subdistrict 2. Finally, occupancy was not taken into account in either of the methods. CPC's Methods II and III are not sound, based upon the foregoing. Apalachee. Apalachee's application is for only 24 inpatient psychiatric beds, which is well below the bed need projected under the Department's methodologies for the District and the Subdistrict. Apalachee has projected that its proposed facilities will serve persons in the 8 counties it currently serves. These counties are the same counties which make up Subdistrict 2. Apalachee has not assumed that any patients will come from outside of the Subdistrict. Apalachee has shown that the patients who will use its facility are clients within its own present system, based upon historical data. This historical data establishes that an average of 10 to 12 Baker Act patients have been admitted to Tallahassee Memorial's psychiatric facility during past years. These persons would be admitted to Apalachee's new facility. Additional patients would consist of Apalachee clients which Tallahassee Memorial's facility will not admit and clients currently going into other Apalachee programs. Accessibility to Underserved Groups. CPC is willing to provide care for Baker Act patients. It has been projected that 5 percent of the proposed facility's patient days will be attributable to Baker Act patients. CPC is also willing to treat Medicaid patients and has again projected that 5 percent of the facility's days will be attributable to Medicaid patients. In addition, CPC has projected that 5 percent of its gross revenue will be set aside for the care of indigent patients which consist of those persons who are unable, at the time of admission, to pay all or a part of the charges attributable to their care. Indigent care may not be provided, however, if the facility is losing money. The provision of indigent care is based upon a CPC policy which was recently agreed upon and applies to new CPC facilities. The policy does not apply at the two existing CPC Florida psychiatric hospitals since they were established before the policy was adopted. Pursuant to the Florida Mental Health Act, Chapter 394, Part II, Florida Statutes, the Department's district administrator designates a facility in the district as the public receiving facility for Baker Act patients. In Subdistrict 2 of District 2, Apalachee has been designated as the public receiving facility. Apalachee is therefore responsible for ensuring that emergency care, temporary detention for diagnosis and evaluation and community inpatient care is available to Baker Act clients. As the public receiving facility in Subdistrict 2, Apalachee will clearly serve Baker Act patients. It has projected that in the first year of operation 40 percent (39.7 percent in the second year) of its patients at the new facility will be indigent and that the indigent patients will be primarily Baker Act patients. Seventy percent of Apalachee's clients are persons who need some type of financial assistance; Medicare, Medicaid and Baker Act. Apalachee has proposed to continue to serve these persons in the new facility. Apalachee's purpose in requesting a certificate of need is to allow Apalachee to provide a continuum of care for more Apalachee clients. In the past, Apalachee has experienced difficulty in obtaining inpatient care for certain Baker Act clients. Additionally, even though those problems have been minimal in the past year, there are some Baker Act clients who need inpatient care who are not appropriate patients for Tallahassee Memorial's psychiatric hospital. These patients are sometimes violent and "acting out." Although Tallahassee Memorial is providing adequate care for most Baker Act patients, some Baker Act patients are not admitted. Additionally, removal of Baker Act patients who are admitted by Tallahassee Memorial from Tallahassee Memorial's facility, as discussed infra, will improve the quality of care at Tallahassee Memorial. The cost of providing inpatient care to Baker Act patients will be less if Apalachee is granted a certificate of need for the requested 24 beds. At present, because of limited Baker Act funds, some Baker Act clients who need inpatient care are placed in other programs. With reduced cost for inpatient care, these clients will be able to receive the inpatient care they need. Additionally, Apalachee will serve forensic clients -- those mental health clients with criminal charges. A full-time forensic psychologist has been provided by Apalachee at the Leon County jail to facilitate this type service. The psychologist also evaluates for Baker Act qualification. According to the Director of the Leon County jail, persons in the jail with psychiatric problems are placed in a single "bull pen." Apalachee's work with forensics has been helpful. Like and Existing Psychiatric Services. The only "like and existing" psychiatric health care services in Subdistrict 2 are provided by Tallahassee Memorial. Tallahassee Memorial is a not-for-profit corporation. It currently owns an existing 60-bed short-term inpatient psychiatric facility located in Subdistrict 2. The facility is operated as a separate department of Tallahassee Memorial. Tallahassee Memorial's psychiatric facility has been continuously operated by or for Tallahassee Memorial since 1979. It was initially known as Goodwood Manor. In 1983, however, the management of the facility was taken over by, and its name was changed to, Behavioral Medical Care (Tallahassee Memorial's facility will be hereinafter referred to as "BMC"). From 1977 to 1979, the facility was owned and operated by Tallahassee Psychiatric Center, Inc., which failed for financial reasons. Prior to 1977 Tallahassee Memorial operated a small psychiatric unit as pert of its hospital. The occupancy rate at BMC for the 12-month period ending September, 1984, was 37 percent. The occupancy rate since 1979 has been consistently low and is low at the present time. There are a number of reasons for the low occupancy rate: a) The physical location and physical plant of BMC. BMC is located in a 2-story building near Tallahassee Memorial. BMC occupies the top floor of the building and a nursing home is located on the first floor. In order to get to BMC, it is necessary to travel through the nursing home. Also, the building is surrounded by a parking lot so there is inadequate outdoor and recreational space around the facility. The facility, which was originally designed as a nursing home, presently consists of one closed unit and one open unit. Patients of all ages and with various problems have to be housed in these 2 units together. Because of the physical plant, patients cannot be separated into adult, adolescent and geriatric units. There also is not enough space for therapy rooms and common areas. b) The reputation of the facility. The reputation in the community of Goodwood Manor has carried over to BMC. The facility is perceived by some as a "crazies place," a place "where violent people go." This reputation is partly attributable to the lack of credibility that psychiatry as a discipline enjoys. It is also partly attributable to the operation of BMC as Goodwood Manor prior to 1982 when Behavioral Medical Care took over management of BMC. c) The type of programs offered. To date, no program has been separately offered and provided or adolescents, children, substance, alcohol and drug abuse patients, or geriatrics. Basically only one structured program has been provided which has been more suited to adult psychotic patients. Closely related to this problem is the fact that BMC has had a poor patient mix. This has been caused in part by the physical plant and in part by the type of patients BMC has had to take in. Some of those patients have been suffering from problems other than psychiatric problems, i.e., persons suffering from DT's, which is a medical disorder, and persons suffering from organic problems which cause behavioral difficulties. d) Marketing. There has been a lack of an effort to market the availability of the facility. e) Training. The programs offered are not as advanced because of the lack of necessary training. f) Practice patterns. Practice patterns of psychiatrists in the community have contributed to the low occupancy. Because there are only a few psychiatrists in the area and the fact that the Tallahassee Memorial facility has primarily been involved in crisis intervention, the average length of stay (6 to 7 days) is much lower than the average length of stay in other parts of the country. This average length of stay has also, however, been caused by the shortage of Baker Act funds. Closely related to this problem is the fact that there are a large number of nonphysicians providing mental health services in Tallahassee who do not admit patients to the hospital and a large number of health maintenance organizations. g) Communication. The low occupancy rate has also been caused, at least in the minds of Drs. Speer, Sebastian and Moore, by the lack of solicitation of their input into the operation of the facility. At least partly because of the problems at BMC, a few patients have been referred to facilities outside of District 2 for care. Tallahassee Memorial has committed itself to eliminating the low occupancy rate at BMC. In 1982, the administration of Tallahassee Memorial felt it had to decide whether it was going to make a commitment to the facility or get out of psychiatric care. It opted for the former. After making the commitment, 2 primary actions were taken. One was to contract for the services of Behavioral Medical Care; the other was to apply for a certificate of need to replace its 60-bed facility with a new one. Behavioral Medical Care is a joint venture formed by 2 corporations, Comprehensive Health Corporation and Voluntary Health Enterprises. Comprehensive Health Corporation is the largest private provider of chemical dependency rehabilitation services in the country. Voluntary Health Enterprises is an affiliate of Voluntary Hospitals of America which services 70 of the nation's largest not-for-profit hospitals, including Tallahassee Memorial. Behavioral Medical Care was formed to provide the highest quality, lowest cost psychiatric and chemical dependency rehabilitation programs possible. Behavioral Medical Care provides consultation services and/or actually carries out programs and is now providing 20 different programs at 16 different facilities. Of these 20 programs, 5 to 8 are psychiatric programs. The first consultation concerning the psychiatric program at Tallahassee Memorial began in the late winter or early spring of 1983. This consultation was provided by Dr. Russell J. Ricci, now chairman of the board and medical director of Behavioral Medical Care. Dr. Ricci reviewed the status of Tallahassee Memorial's program at that time and recommended significant changes be made in 2 phases: one phase to begin immediately and the second to begin after construction of a new psychiatric hospital. Tallahassee Memorial agreed with Dr. Ricci's proposal and contracted with Behavioral Medical Care to carry out the proposal. Behavioral Medical Care began BMC with an orientation period during which time the existing staff was analyzed, new staff members were hired and the entire staff was trained to implement the new program. During this period, admitting physicians were invited to participate in the implementation program. A new inpatient psychiatric program at BMC was then begun. The program was established to achieve the following goals: to restore patients to their optimum mental health; to make patients as comfortable as possible; to maintain the patients' sense of dignity and self worth; to maintain modern and efficient treatment modalities through research and education; to provide maximum freedom of patients to interact with family and community; and to educate the community. The program was established along interdisciplinary lines and is basically an adult program. It includes individual and group therapy, lectures and seminars, social and nursing assessments, physical examination and psychological testing. The ultimate program provided for a patient, however, depends upon the treatment plan prescribed by the attending physician. The program is, however, limited because of the type of patients at BMC and especially because of the physical plant, which consists of only an open unit and a locked unit. Separation of patients for specialized treatment based upon other factors, such as age, is not achievable in the existing facility. The program at BMC is an adequate program but can be improved. The program is, however, intended only as an interim type program. Treatment of geriatrics and adolescents is available but specialized programs for these groups are not available. Dr. Sebastian agreed that since Behavioral Medical Care had begun managing BMC, the programs had improved. Dr. Moore testified that BMC had attempted to change. As part of the interim program, BMC has established more restrictive admission guidelines; not based upon ability to pay but upon clinical needs. Attempts have been made to eliminate psychotics, geriatrics and persons with significant medical problems. These restrictions on admission are designed to limit admission to persons who will benefit from the new program and are consistent with the existing physical plant. The existing staff, established by Behavioral Medical Care, is adequate. Training of the staff began during the orientation period at BMC and continues today. Educational activities have also been directed toward the medical profession in the community in order to gain more credibility for the discipline of psychiatry. Other steps to improve BMC which have been or will soon be taken include the reclassification of BMC as a department of Tallahassee Memorial and the initiation of a crisis intervention and liaison service in the emergency room of Tallahassee Memorial's main hospital. This new service in the emergency room is designed to identify persons being admitted to the hospital with a need for psychiatric services. As a department, BMC conducts formal monthly meetings of physicians at which input into the operation of BMC may be made. Input by psychiatrists is therefore possible at BMC. The second phase of the changes recommended by Dr. Ricci will begin after completion of the second action to be taken by Tallahassee Memorial as part of its commitment to a psychiatric program: the construction of a new 60- bed facility. Tallahassee Memorial filed an application to replace its present facility with a new 64-bed facility. That application was ultimately granted but for only 60 beds. An application to build another facility considered at the same time was denied. As a result of the issuance of the certificate of need to Tallahassee Memorial, construction of a new psychiatric facility has begun and should be completed in the summer of 1985. The total cost of this new facility is $7,225,000.00. This amount, plus the cost of new programs and staff, has been committed by Tallahassee Memorial to BMC. The facility, a two-level structure, is being constructed on a wooded, sloping site next to the present building BMC is located in. Each level will have 30 beds. It will be a state-of-the-art facility and was designed by architects who specialize in the design of psychiatric facilities. The building was designed with input from the medical staff and Behavioral Medical Care. It is being constructed to accommodate separate psychiatric programs and allows flexibility to accommodate changes in the type of programs offered. Once the new facility is completed, BMC will initiate the second phase of Dr. Ricci's proposal. This phase will consist of the implementation of separate specialized psychiatric programs not available at BMC today. Dr. Ricci has recommended the offering of adult, adolescent, geriatric and chemical dependency programs. Tallahassee Memorial has decided to add an adult program, an adolescent program and will probably add a geriatric program. Other programs, such as a chemical dependency program will be considered. The geriatric program will be added if there are a sufficient number of patients in need of such a program admitted to BMC. Based upon the testimony of Dr. Sebastian, there are a sufficient number of patients who need a geriatric program. Assuming that Dr. Sebastian is correct, a geriatric program should be added to BMC. Even if a separate program is not added, geriatric psychiatric services will be available at the new facility. The construction of the new facility will not eliminate all of the problems which have contributed to the low occupancy at BMC. Phase 2 of Dr. Ricci's proposal to Tallahassee Memorial and the other actions which Tallahassee Memorial has indicated they plan to take should, however, eliminate or at least reduce most of the problems. Dr. Sebastian testified that there will not be enough open space around the new facility The new facility will, however, have 2 open court yards, woods on 3 sides of the building and a greenhouse. The reputation of BMC as being a "crazies place" should be improved with the opening of the new facility and the providing of new, more advanced programs. Efforts to educate the medical community will also help. Also, if Apalachee is granted its certificate of need, the elimination of some of the Baker Act patients cared for by BMC who will be cared for by Apalachee should help improve the reputation of BMC. Finally, BMC has already taken some steps to improve its reputation by initiating an interim program, hiring new staff and limiting its admissions. Instituting specialized programs will also help alleviate the low occupancy problem at BMC. The new facility will allow BMC to establish programs which are needed by allowing the separation of patients which could not be accomplished in the existing facility. Again, eliminating some Baker Act patients will help reduce the problems created by the poor patient mix at BMC. Efforts are being made to market BMC's services. Establishing a liaison in Tallahassee Memorial's emergency room, which is planned, should contribute to increasing occupancy. Tallahassee Memorial projected that sizeable numbers of patients in the general hospital need psychiatric services. This program could reach those patients. BMC, however, needs to institute marketing efforts to reach the general public. Formal training of the staff at BMC was started with Behavioral Medical Care's orientation phase and has continued since that time. Not much can be done directly by BMC to improve the practice patterns of psychiatrists in the community. The new facility and improved programs may help. Transfering Baker Act patients to a new facility operated by Apalachee should allow for more economical treatment of those patients and thus allow for longer lengths of stay. Providing specialized programs also should promote longer lengths of stay. Converting BMC to department status and the holding of monthly meetings of admitting physicians has improved the ability of psychiatrists in the community to have a voice in the operation of BMC. Not enough of an effort is being made in this area, however. Three psychiatrists testified about the lack of solicitation of their input. They are obviously dissatisfied. Despite this fact, Dr. Brodsky, the Medical Director of BMC, testified that BMC was working cooperatively with psychiatrists in the community. In the undersigned's opinion, BMC, Tallahassee Memorial and the psychiatrists in the community need to continue to work toward resolving their differences and to work together to improve the occupancy and the psychiatric care provided at BMC. The perceived effect of CPC's proposal and Apalachee's proposal of the various witnesses was mixed. Drs. Speer, Sebastian and Moore all testified that they supported the CPC proposal. Dr. Speer indicated that she supported CPC's proposal over that of Apalachee and that she thought there was a need for CPC. Dr. Speer's opinion was based almost exclusively on a brochure provided to her by CPC. She did not have any familiarity with existing CPC hospitals. She also had only "some familiarity" with Apalachee's programs. The only reason Dr. Speer specifically gave for supporting CPC was the amount of effort CPC had exerted to solicit physician input and the need for cohesiveness among psychiatrists which she felt was promoted by support of the CPC proposal. Dr. Sebastian testified that he supported the CPC proposal because a new hospital would promote competition which would in turn improve the quality of care. Dr. Moore testified that he was familiar with CPC's and Apalachee's proposals and that he supported CPC's. He also stated that the addition of another psychiatric hospital would improve the availability of medical care because of competition. Dr. Moore also testified that a new facility was needed to provide care for the "private segment" which he described as "those people who choose not to go to the local mental health center for treatment, those people who choose to go to psychiatrists for treatment. " Dr. Brodsky testified that the addition of a new facility to the community might improve BMC because of the added competition. Mr. Honaman and Dr. Ricci both agreed that, if CPC's proposal was approved, a new facility could have an adverse impact on BMC which has been operating at a loss of $300,000.00 a year. Dr. Ricci explained that in order to have specialized programs a hospital must have a sufficient number of patients who need the specialized program. Because of the low occupancy rate at BMC, there is concern as to whether a sufficient number of patients will be available to warrant the specialized programs BMC plans to start if the CPC proposal is approved. Apalachee's proposal will not adversely effect BMC. In fact, Mr. Honaman and Ms. Pamela McDowell, both of whom testified on behalf of Tallahassee Memorial, indicated that if Apalachee's facility was approved BMC's ability to provide quality care would be enhanced. Tom Porter, testifying on behalf on the Department, indicated that CPC's and Apalachee's proposals should both be denied because of the low occupancy at BMC and the adverse effect approval of either proposal would have on BMC. Mr. Porter's opinion, however, was based only upon his review of the Petitioners' applications. Mr. Porter made no independent studies as to the impact of the proposals on BMC and was not aware of most of the evidence presented at the hearing. The Ability of the Applicant to Provide Quality of Care. CPC. The services to be available at or provided by the proposed CPC facility include psycho-physiological diagnosis and evaluation, emergency service, milieu therapy (immersion into the clinical environment for structured daily treatment), individual and group therapy, family therapy, occupational therapy, an adolescent school program, a partial hospitalization program, aftercare, community education and related medical services (which will be provided by contracting with other area health care providers). Actual programs to be provided at the facility are to be developed by the physicians who join the medical staff of the facility with the assistance of CPC which has developed model programs which may be used. The staffing projections for the facility are adequate. The manpower projected can provide quality of care and will comply with the standards of the Joint Commission on Accreditation of Hospitals. CPC's experience in operating its 24 existing psychiatric facilities and its philosophy that it will provide quality of care support a finding that CPC does have the ability to provide quality of care. 1/ CPC's proposed physical facility is designed to provide quality of care. The facility will be located in northeast Tallahassee. It will be constructed on a little less than one acre of a 10-acre parcel of land which CPC has a contract to purchase for $400,000.00. Part of the remaining 9-plus acres will be used for parking and recreational space and a substantial portion will be left in its natural state as a buffer. The hospital building itself will consist of a one-story structure with a separate section for each category of proposed beds, a lobby, business and general offices and storage rooms. One section will be used as a 20-bed open adult unit. Another section will be used as a 10-bed adult intensive care unit. This section will be locked. A nursing station will separate the adult intensive care unit and the open adult unit and is designed for visibility down the halls of both units. Two seclusion rooms will be located at the nursing station also to allow for observation from the nursing station. The location of the nursing station will reduce staff responsibility thus reducing the cost of operating the facility. The other two units will consist of a 15-bed adolescent open unit and a 15-bed geriatric unit. These units will be separated by a nursing station designed in the same manner as the nursing station separating the adult units. These units will also be separated by a locked door. There will also be a support structure built next to the hospital which will contain a kitchen, dining hall for all patients, 4 classrooms, 4 multi-purpose rooms, an occupational therapy room and a half-court gymnasium. There is no covered access from the main building to the support structure. The floor plan for the facility is similar to the floor plans used for other CPC hospitals. Therefore, the design costs of the facility will be less than for a new one-of-a-kind facility. Apalachee. In order to ensure quality of care, Apalachee has established a Quality Assurance Committee. Additionally, Apalachee is inspected by the Department and is accredited by the Joint Committee on Accreditation of Hospitals. No evidence was submitted which raises any question as to Apalachee's ability to provide quality of care. The existing building to which Apalachee's proposed facility will be added is located at Apalachee's Eastside facility. Eastside is located on 10 acres of land in northeast Tallahassee. Eastside presently consists of a building in which PATH, the detoxification program and emergency services is located. The building has 12 semi-private rooms and 24 beds. The new facility will be added to the existing building. A total of 13,000 square feet will be added. It will consist of an 18-bed open unit and a 6-bed closed unit. Also to be located at the Eastside facility is a 16-bed long-term adolescent psychiatric hospital which the Department has indicated it will approve. If this facility and the proposed 24-bed facility are built, Apalachee will have a total of 96 beds providing a variety of services. The Availability and Adequacy of Other Psychiatric Services. Apalachee currently provides a wide range of psychiatric health services in Subdistrict 2, including a crisis stabilization unit and short-term residential treatment programs. These services have been used as an alternative to inpatient care in some cases. CPC gave no consideration to these programs in its application. Apalachee did consider these programs and showed that its proposal would compliment its existing programs. As suggested by CPC in its proposed recommended order, Apalachee's existing programs are not a substitute for acute inpatient psychiatric services. Joint, Cooperative and Shared Psychiatric Services. CPC. CPC's operation of 24 psychiatric hospitals provides the potential for joint, cooperative or shared health resources in the operation of its proposed facility. Very little evidence was presented, however, that such potential would be realized if CPC's proposed facility is approved. Evidence was presented that model programs will be "available" for use in developing programs for the proposed facility. CPC also showed that standardized equipment selection and purchasing, and standardized floor plans would be used in establishing the facility. This will effect the short-term financial feasibility of the proposal. Apalachee. By placing the facility at the same location of other Apalachee programs, Apalachee will be able to share some services among programs and thereby reduce costs. For example, kitchen and dining services, staffing, security, purchasing, and maintenance and administrative services will be shared. The integration of Apalachee's existing programs with the proposed facility will promote a continuum of care and thus improve the quality of care. The Need for Research and Education Facilities. 106. Apalachee currently provides training to practitioners pursuant to an agreement with the School of Social Welfare at Florida State University. It also provides internship programs for psychology majors at Florida State University and nursing students at Florida State University and Florida A&M University. It is probable, therefore, that the new facility will be available for training purposes. No proof was offered, however, that indicates there is a need for training programs not being currently met which will be met if either of the proposed facilities is approved. Availability of Resources. 107. Health manpower and management personnel are available to staff the CPC or the Apalachee proposal. CPC and Apalachee also have adequate funds to build the proposed facilities. The adequacy of funds to build and operate the facilities is discussed further, infra. The Immediate and Long-Term Financial Feasibility of the Proposal. CPC. The projected cost of CPC's facility was $5,086,000.00. This amount will be increased for inflation if the facility is delayed another year. CPC will contribute 20 percent of the projected cost of the facility in the form of cash and liquid assets CPC has on hand. Eighty percent of the projected cost will constitute debt of the facility to CPC payable at a 12 percent interest rate over a 20-year period. The immediate financial feasibility of CPC's proposal has clearly been shown. In its application, CPC projected that its facility would generate a net income after taxes in each of the first 2 years of its operation. In its proforma, patient revenues were based upon the following charges per patient day: Adolescent $225.00 Adult, I.C.U. 215.00 Adult Open Unit 210.00 Geriatric 200.00 These projected rates were based upon a 1985 opening date. The rates will therefore be higher if the facility opens in 1987, but, according to Mr. Mercer, the bottom line profitability of the facility will not change. The projected rates, according to Mr. Mercer, are based upon rates charged at other CPC hospitals in Atlanta, New Orleans, Jacksonville and Ft. Lauderdale and interviews with Tallahassee physicians. According to Alton Scott, an expert in health care finance and financial feasibility, the proposed rates are considerably lower than the average rate at CPC's Jacksonville and Ft. Lauderdale hospitals, which was $240.00 for their fiscal year ending in 1984. Mr. Scott did not indicate that he considered the rate at CPC's Atlanta or New Orleans facility, however, which Mr. Mercer also considered in projecting rates for the proposed facility. Mr. Scott's testimony, however, raises a question as to the reasonableness of the proposed facility's rates. CPC's projected gross patient revenue is based upon an occupancy rate of 53 percent in the first year of operation and 75 percent in the second year. CPC projects $2,476,160.00 of gross patient revenue in the first year (an average $212.00 per day rate x 11,680 patient days) and $3,597,075.00 of gross patient revenue in the second year (an average $219.00 per day rate x 16,425 patient days). CPC's average occupancy rates are directly related to the number of admissions and the average length of stay of a patient. In support of the number of admissions projected by CPC, CPC offered the 3 need methodologies discussed, supra. Those methodologies have, however, been rejected as unsound. CPC's admission rates are based only on an assumed census. The assumed census is based upon conversations with physicians and the corporate experience of CPC. Although conversations with physicians and the corporate experience of CPC should be considered, these factors should be considered as support for other evidence as to possible admissions which has not been presented by CPC. What physicians have told Mr. Mercer is not alone sufficient to support assumed admissions. There is no guarantee that local physicians will refer clients only to CPC's facility or that their case load will remain the same. CPC's corporate experience as to length of stay does not add much support since the overall corporate experience of CPC's facilities for the year ending November 20, 1983, shows that the overall occupancy (excluding its Valley Vista facility) was 56.3 percent. This rate of occupancy is well below CPC's projected second year occupancy rate for the Tallahassee facility. The occupancy rate of CPC's Ft. Lauderdale and Jacksonville hospitals was 50.6 percent and 60 percent respectively, which is low for the State. Of all of CPC's psychiatric hospitals only 1 has an occupancy rate over 80 percent. Another problem with CPC's projected occupancy rate is that CPC has projected that 5 percent of its patient days will be attributable to Baker Act patients and 5 percent will be attributable to Medicaid Patients. In order for the proposed facility to receive Baker Act patients it will be necessary that it enter into a contract with Apalachee. No evidence was presented that such a contract could be obtained from Apalachee. As to the percentage of Medicaid patients, it is clear that CPC would not be entitled to receive reimbursement from Medicaid for these patients since its facility will be a free-standing facility and Medicaid does not reimburse for inpatient psychiatric services at free-standing hospitals. Based upon these facts, it appears that the assumption of CPC that a total of 10 percent of its patient days will be attributable to Baker Act and Medicaid patients is of questionable validity. Mr. Mercer's testimony that, even without the Baker Act and Medicaid patients, the projected occupancy could be met is illogical. If the projected revenue attributable to Baker Act and Medicaid patients is eliminated along with the projected expenses attributable thereto, CPC still projected a net after tax profit for its first two years of operation. CPC offered no evidence, however, sufficient to conclude that its projections as to occupancy of other types of patients can be achieved. CPC's projected average length of stay of 30 days is also suspect. It is not consistent with the average length of stay locally, in Florida, nationwide or in CPC's experience. Based upon the foregoing, CPC's projected occupancy levels are not realistic. This directly effects the projected revenues for the proposed facility. Salary and other expenses projected for the facility are also questionable. Nonsalary expenses are significantly lower than CPC's existing Florida facilities which are the lowest in Florida. Salary expenses, projected 2 years in the future, are also lower than present salary levels at CPC's Florida facilities. Again, the salary levels at CPC's 2 Florida hospitals are among the lowest for the 10 Florida facilities providing similar services. These low salaries are also based upon projections for a project which will not open for 2 more years. Despite this fact, they are lower than current salaries at CPC's existing Florida facilities and salaries being paid locally. Apalachee. The projected cost of the addition of the 24-bed facility to Apalachee's existing PATH and detoxification facility is $1,114,339.00. Apalachee will provide $114,339.00 of the necessary funds from its operating fund and the remaining $1,000,000.00 will be obtained from the sale of industrial revenue bonds. The bonds will be 15-year bonds, with a 7 year balloon and were projected at a 10.75 percent annual interest rate (75 percent of the Chase Manhattan Bank prime interest rate). First National Bank has committed to purchase $3,000,000.00 of industrial revenue bonds, which includes the $1,000,000.00 for this project. The immediate financial feasibility of Apalachee's proposal has clearly been shown. In projecting its gross charges for the first 2 years of operation, Apalachee has predicted an occupancy rate of 62.5 percent in the first month of operation increasing to 87.4 percent in the last month of operation of the second year. Gross charges are projected at $1,557,940.00 the first year (6,385 patient days x $244.00 per day rate) and $1,883,648.00 the second year (7,358 patient days x $256.00 per day rate). Apalachee' s projections are reasonable. Although it will be a free-standing psychiatric facility, Apalachee will be able to receive some Medicaid funding under the Department's "centers and clinics" option. Apalachee's projections as to gross charges, deductions from gross charges, and operating expenses are reasonable. Based upon its projections, Apalachee will realize a profit from the new facility in each of its first 2 years of operation. Competition. CPC. The addition of CPC's facility will promote competition in Subdistrict 2, as testified to by Dr. Brodsky, the Medical Director of BMC, among others. Because of the low occupancy at BMC, however, such competition at this time would be harmful. Apalachee. Apalachee's proposed facility will not compete with BMC. Although Apalachee's facility will initially reduce BMC's occupancy, removing the patients Apalachee will serve from BMC will improve the quality of care provided at BMC. Construction. CPC Construction and related costs of the CPC facility will consist of the following: Parking $27,500.00 Project development costs 22,000.00 Architectural/engineering fees 135,000.00 Site survey and soil investigation report 25,000.00 Construction supervision 10,000.00 Construction manager 4,000.00 Site preparation 100,000.00 Construction 3,000,000.00 Contingency 100,000.00 Inflation 270,000.00 These costs are all adequate to cover the cost of these items. These amounts will also be adequate even if construction does not begin until the end of 1985. The projected cost of equipment and furnishings was $500,000.00. This amount is adequate to equip the facility properly. In fact, the projected cost is probably substantially overstated. 2/ Although CPC failed to list in its application all of the equipment and furnishings (only major movable equipment was listed) necessary to equip the facility, adequate equipment and furnishings will be provided. Apalachee. The projected cost of constructing Apalachee's facility consists of the following: Architectural/engineering fees Site survey and soil investigation $75,740.00 report 2,000.00 Construction 876,620.00 Contingency 43,831.00 Inflation 26,298.00 These amounts are sufficient to construct the facility. The cost per square foot of the construction will be $60.00. The cost of equipment needed to equip the new facility is projected at $53,850.00. This amount is adequate for the purchase of the equipment listed in Apalachee's application.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the certificate of need application filed by CPC, case number 84-1614, be denied. It is further RECOMMENDED: That the certificate of need application, as amended, filed by Apalachee, case number 84-1820, be approved. DONE and ENTERED this 10th day of April, 1985, in Tallahassee, Florida. LARRY J. SARTIN 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 10th day of April, 1985.
Findings Of Fact 14. The third sentence is not relevant. 20. Irrelevant. The second sentence concerns admissions to general hospitals, and thus is only of marginal relevance. Absent further evidence concerning medical ethical standards, and given the gravity of ethical issues, a finding as to ethical propriety cannot he made. 32-33. Evidence does exist that the programs will still be able adequately to function in the smaller space proposed for a single building, although inevitably some of the more desirable features of having more space will be lost with a single building. 36. The testimony cited compares staffing of a psychiatric hospital, with 45 attending psychiatrists, to the staffing of a substance abuse facility, where patients presumably do not have acute medical problems. It is illogical to conclude from such a comparison that one medical director is not enough for the few medical problems that substance abuse patients may have. 40. The testimony cited was not from a representative of Glenbeigh. 45. A matter of law. The second sentence must be rejected because it appears that HRS does consider the statewide average of .076 long term beds per 1,000 persons to be an appropriate ratio. (HRS failed to substantiate the basis of the policy on this record.) Rejected because although the witness testified that less than a majority of such patients could he treated in a speciality hospital, he also testified that he could not tell what percentage could he treated in a residential treatment facility, and limited his testimony to "some." T. 666. There is no testimony at the record cited. Not supported by the record cited. Rejected. The testimony of Ms. Ramage was accepted on this point. Rejected as worded. The witness was referring only to epidemiological analysis, which was only one of several methods he identified to determine need. T. 1330-33. 58-60. Bed inventory in District V is irrelevant as discussed in the findings of fact, and the evidence is inextricably commingled. 78-86. Rejected in the findings of fact concerning short term financial feasibility. If there were need, Glenbeigh has the capacity to finance all of the projects. 87. It is not clear from the testimony that the witness understood the question cited as the basis for the second sentence for this proposed finding of fact. Previous testimony had made it clear that the planned length of stay was to be longer than 28 days for adults. The answer "right" to the question that preceded it, T. 403, is inexplicably inconsistent, evidencing a misunderstanding by the witness. The witness's inability to testify as to the exact amount of expected insurance coverage for adults, however, has been made a part of the findings of fact concerning length of stay. 89. With the exception of site preparation, which is already a part of the findings of fact, this proposed finding is not relevant. The witness testified that Tampa would get a water retention pond if needed. T. 455. Absent evidence that sewage or other utilities would he needed in Tampa (which is unlikely, given the urban nature of Tampa), the remainder of the proposed finding is not relevant. Irrelevant, given the testimony as to total project cost and square footage. Marginally relevant. See discussion above with respect to the proposed finding of Charter Hospital. COPIES FURNISHED: Ivan Wood, Esquire The Park in Houston Center Suite 1400 1221 Lamar Street Houston, TX 77010 Douglas L. Mannheimer, Esquire Post Office Drawer 11300 Tallahassee, Florida 32301 Kenneth F. Hoffman, Esquire W. David Watkins, Esquire Post Office Box 6507 Tallahassee, Florida 32301 William F. Hoffman, Jr., Esquire Ross Silverman, Esquire King and Spalding 2500 Trust Company Tower 25 Park Place Atlanta, GA 30303 Chris Bentley, Esquire 2544 Blairstone Pines Drive Tallahassee, Florida 32301 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, Esquire Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, HRS Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32388-0700 =================================================================
Recommendation For these reasons, it is recommended that the Department of Health and Rehabilitative Services enter its final order denying certificate of need number 3215 to Management Advisory & Research enter, Inc. d/b/a Glenbeigh Hospital. DONE and RECOMMENDED this 9 day of April, 1987, 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 21st day of April, 1987. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 84-2918 The following are rulings upon proposed findings of fact which have been rejected. The numbers correspond to the. paragraph numbers used by the parties. Glenbeigh's proposed findings of fact have no numbers, and thus have been numbered by page number, by paragraph number on the page (beginning with the first full paragraph on that page, and assigning the last paragraph on a page to that page, even though it continues to the following page), and by sentence number within the paragraph. FINDINGS OF FACT PROPOSED BY GLENBEIGH: 1.2. Law, not fact. 1.4. Law Law Law 2.3.1-6. Law 3.2-5. Law 4.1. Law 4.4.2-3. Law 6.2. Irrelevant 7.1. Unpersuasive. There is not enough evidence of advertisement of the character intended by Ms. Ramage, and Ms. Ramage's testimony as to advertisement is unpersuasive as well. 9.1.2. Irrelevant. 9.3-4. through 11.1. This legal point has not been addressed since standing has been conferred by the "affected person" rule as interpreted by the First District Court of Appeal. 11.2-13.3. This section is a mixture of facts relevant to the argument that St. Francis has not proven standing and to the argument that the Glenbeigh project is needed. To the extent that the facts are relevant to the first argument, that argument has not been addressed due to the fact that standing is conferred h5 the "affected person" rule. With respect to the second reason for the proposed facts, portions have been rejected for the reasons which follow. 11.2 Some of this has been adopted. It is all true, but cumulative. 11.3.1-4. Only marginally relevant, since the application was for short term substance abuse beds. 11.3.5-8. Rejected as not persuasive. The record in this case demonstrates that residential treatment beds and psychiatric beds do, in part, serve as alternatives to short and long term substance abuse beds. Irrelevant. Irrelevant. The short term substance abuse bed rule demands that approach. It explicitly states what should he subtracted from gross need to obtain a net bed need figure. This would have been relevant had Glenbeigh's four methods for projecting need proven to have been reliable. But since those methods failed, this supportive evidence is now irrelevant. Without a context, this statement is suspect. Further, it is insufficient to tie in with other evidence to show a quantitative need. Irrelevant 12.5 Irrelevant, since short term beds are at issue. 13.1. It is probably true that Mr. McMurray believes that short term substance abuse beds are needed for St. Anthony's Hospital, and at the same time, believes that the St. Francis Careunit is needed and partially serves the need for both short and long terms substance abuse care. It is also undoubtedly true that St. Anthony's group of associated health care corporations is in direct competition with Glenbeigh, and seeks to open services in all phases of the potential market. To this extent, Mr. McMurray's testimony has been considered in the context of the competitive forces at work. Nonetheless, the totality of the evidence present indicates that residential treatment facilities do partially serve the needs of all types of substance abuse patients. The remainder of the needs of such patients appears to he served by short term substance abuse beds, psychiatric hospital beds, and general hospital beds. Thus, ultimately the credibility of Mr. McMurray is not of great importance. 14.1. Law. 14.2.5. 94 percent occupancy is the mathematical result. 14.1 through 16.1. These proposed findings of fact are irrelevant since Charter Hospital proved that it was an "affected person" pursuant to HRS's rule. Moreover, testimony that assignment of primary diagnosis was accepted. Thus, the distinctions drawn in the proposed findings of fact on page 15 have no application to what in fact occurs. Charter Hospital has sufficiently proven that it treats some patients that have both a psychiatric and substance abuse problem, patients who also could be treated by Glenbeigh in its proposed facility, with psychiatric care provided by outside contract and referral. 17.6.2. Absent credible evidence as to the numbers of adolescents that need long term substance abuse services, a finding cannot be made that "the adolescent program would create an average for the hospital far in excess of 28 days." If need for adolescent services had been credibly identified, then it is true that the average length of stay of such patients would drive the total average length of stay for the Glenbeigh facility upward. 19.2. The average length of stay at Glenbeigh's Ohio hospital (at 28-32 days) does not help much to determine whether District VI has a substantial number of persons needing to stay longer than 28 days. Dr. Wheeler's testimony is too general to be applied in this case. The record does not contain adequate evidence of the specifics of the program to he offered at Glenbeigh from which one might conclude that the kind of education alluded to by Dr. Wheeler might either he offered, or be warranted or really needed. There is no evidence of a proposal to serve geriatric substance abusers in significant numbers, and thus this irrelevant. 20.4. Mr. Jaffe did not testify that editorial comments did not carry any weight, but only that such comments were of much less importance ("does not carry nearly as much weight"). The testimony cited is not sufficiently clear to allow a finding as stated. Moreover, the issue is primarily one of law. Irrelevant. Applications for certificates of need must show need of patients, not need to simply put beds where none exist. Ultimately, this reasoning has been rejected in this Recommended Order because it appears that short term substance abuse facilities-can (and probably do) treat a certain number of patients who stay for longer than 28 days, and can nonetheless maintain an average length of stay for all patients of 28 days or less. 21.1.1-2. Irrelevant. It is not illegal for a short term substance abuse hospital to admit a patient who will stay for more than 28 days. It is only illegal if the pattern of such admissions causes the facility to no longer fit the definition of short term substance abuse, that is "short-term services not exceeding an average length of stay of 28 days." Rule 10- 5.011(1)(q)2., Fla. Admin. Code. That is what Mr. Jaffe said. The record contains no evidence that any such pattern exists in District VI, and in fact, the average length of stay is only 23.6 days, well below the 28 day limit. 21.1.3. Irrelevant. Irrelevant. There is no evidence that single diagnosis substance abuse patients are being admitted to psychiatric hospitals. Accessibility to residents in District V is not relevant absent evidence of need in District V. The testimony as to access across Tampa Bay is so cursory as to he only marginally relevant, even if District V need had been shown. 22.3.2. Irrelevant. 22.4 Not persuasive. 23.1-2. No evidence presented to support an incipient policy that District VI should have the same ratio of long term substance abuse beds to population as the ratio in the state at large, and that ratio has not been adopted as a rule. 23.3. Rejected for the same reason as in 21.3 above. 25.1. Rejected because the evidence showed that short term substance abuse hospitals, short term psychiatric hospitals, and residential treatment facilities provide similar services to the patients that Glenbeigh would have available to it to serve. 27.3. Rejected due to lack of need. 27.5.2. Rejected due to lack of need. 30.6. Rejected as discussed elsewhere because alternatives are available. 30.6.3. Rejected because these patients can be served in short term substance abuse hospital beds, which are not at 100 percent capacity. 31.1. Rejected for reasons discussed above. Alternatives exist. Rejected for lack of evidence that any patients will experience serious problems in obtaining inpatient care of the type proposed, since short term substance abuse beds exist. Law, not fact. 31.6.2 The testimony cited (T.690, 909) is not sufficiently credible or detailed to conclude that the proposal is consistent with the local health plan. The local health plan is not in evidence. 32.1.5. Rejected for lack of need. True, but not an issue in the case at this point. A question of law. 34.1 and 2. Rejected as explained with respect to proposed findings of fact 23.1-2. 34.3. Rejected as explained with respect to proposed finding of fact 21.3 34.4.2. The result of the Marden method in this case indicate that the method is not reliable. 34.6. While this proposed finding is true, it is not needed since no contrary finding has been made. 35.2. Some of the assumptions were correct, as found in the findings of fact. Rejected because contrary to the record cited. True, but of marginal importance in determining quantitative need because no other evidence exists to tie this fact into a reliable projection of bed need. 35.6. This proposed finding of fact is true, but not necessary since contrary findings of fact have not been adopted. 36.1.2-3. Rejected in findings of fact discussing the Marden methodology. 36.2. Rejected in findings of fact discussing the Marden methodology.
