The Issue Whether Certificate of Need Application Number 9099, filed by Columbia/JFK Medical Center, L.P., d/b/a JFK Medical Center, to convert 20 skilled nursing beds to 20 acute care beds, meets the criteria for approval.
Findings Of Fact Columbia/JFK Medical Center, L.P., d/b/a JFK Medical Center (JFK) is the applicant for Certificate of Need (CON) Number 9099 to convert a 20-bed hospital-based skilled nursing unit (SNU) to 20 general acute care or medical/surgical beds. The construction cost is approximately $117,000, of the total project cost of $151,668. JFK is an affiliate of Columbia Hospital System (Columbia), the largest for-profit hospital chain in the United States. The Agency for Health Care Administration (AHCA) is the state agency which administers the CON program for health care services and facilities in Florida. JFK is a 343-bed hospital located in Atlantis, Florida, in Palm Beach County, AHCA District 9, Subdistrict 5. Pursuant to a previously approved CON, an additional 24 acute care beds are under construction at JFK, along with 12 CON-exempt observation beds, at a cost of approximately $4 million. In August 1998, JFK was allowed to convert 10 substance abuse beds to 10 acute care beds. Other acute care hospitals in District 9 include the Petitioners: St. Mary's Hospital, Inc. (St. Mary's), and Good Samaritan Hospital, Inc. (Good Samaritan), which are located in northern Palm Beach County, AHCA District 9, Subdistrict 4, approximately 11 and 9 miles, respectively, from JFK. The remaining hospitals in District 9, Subdistrict 5, in southern Palm Beach County, and their approximate distances from JFK are as follows: Wellington (8 miles), Bethesda (7 miles), West Boca (18 miles), Delray (12 miles), and Boca Raton Community (17 miles). JFK and Delray are both "cardiac" hospitals offering open heart surgery services, with active emergency rooms, and more elderly patients in their respective service areas. The parties stipulated to the following facts: JFK's CON application was submitted in the Agency for Health Care Administration ("AHCA") second hospital batching cycle in 1998, and was the only acute care bed application submitted from acute care bed District 9, Subdistrict 5. AHCA noticed its decision to approve JFK's CON 9099 by publication in Volume 25, Number 1, Florida Administrative Weekly, dated January 8, 1999. Good Samaritan and St. Mary's each timely filed a Petition for Formal Administrative Proceeding challenging approval of JFK's CON application. By Order dated March 17, 1999, the cases arising from those petitions were consolidated for the purposes of all future proceedings. JFK has the ability to provide quality care and has a record of providing quality of care. §408.035(1)((c), Fla. Stat. JFK's CON application, at Schedule 6 and otherwise, projects all necessary staff positions and adequate numbers of staff, and projects sufficient salary and related compensation. See, §408.035(1)(h). JFK has available the resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. See, §408.035(1)(h), Fla. Stat. JFK's CON application proposal is financially feasible in the immediate term. §408.035(1)(i), Fla. Stat. JFK's CON application proposal is financially feasible in the long term, except, Good Samaritan and St. Mary's contend as it relates to projected utilization. §408.035(1)(i), Fla. Stat. Schedules 9 and 10 and the architectural schematics in JFK's application are complete and satisfy all applicable CON application requirements. Schedule 1 in the application is complete, reasonable, and not at issue. JFK's proposed construction/renovation design, costs, and methods of construction/renovation are reasonable and satisfy all applicable requirements. See, §408.035(1)(m), Fla. Stat. JFK's CON application satisfies all minimum application content requirements in Section 408.037(1), Florida Statutes; except that Good Samaritan and St. Mary's contend that subsection (1)(a), is not satisfied. JFK certified that it will license and operate the facility if its CON proposal is approved. See, §408.037(2), Fla. Stat. JFK's Letter of Intent was timely filed and legally sufficient. See, §408.039(2)(a) and (c), Fla. Stat. Good Samaritan does not provide cardiac catheterization services, angioplasty, or open heart surgery. St. Mary's does not provide elective angioplasty or open heart surgery services. JFK is one of the hospitals to which Good Samaritan and St. Mary's transfer patients in need of inpatient cardiac catheterization services, angioplasty, and open heart surgery. Neither Good Samaritan nor St. Mary's have any present plans to apply for CON approval to add skilled nursing beds or acute care beds. The parties also stipulated that Subsections 408.035(1)(e), (f), (g), (h) - as related to training health professionals, (j), (k), and (2), Florida Statutes, are not at issue or not applicable to this proposal. For the batching cycle in which JFK applied for CON Number 9099, AHCA published a fixed need of zero for District 9, acute care subdistrict 5. In the absence of a numeric need for additional acute care beds in the subdistrict, JFK relied on not normal circumstances to support the need for its proposal, including the following: delays in admitting patients arriving through the emergency room to inpatient beds, delays in moving patients from surgery to recovery to acute care beds, and seasonal variations in occupancy exceeding optimal levels and, at times, exceeding 100%. Good Samaritan and St. Mary's oppose JFK's CON application. In general, these Petitioners claimed that other problems cause overcrowding in the emergency room at JFK, that the type of beds proposed will not be appropriate for the needs of most patients, that "seasonality" is not unique to or as extreme at JFK, and that a hospital-specific occupancy level below that set by rule cannot constitute a special or not normal circumstance. If JFK achieves the projected utilization, experts for Good Samaritan and St. Mary's also projected adverse financial consequences for those hospitals. Rule 59C-1.038(5) - special circumstances During the hearing, the parties stipulated that the numeric need for new acute care beds in the subdistrict is zero. The rule for determining numeric need also includes the following provision: (5) Approval Under Special Circumstances. Regardless of the subdistrict's average annual occupancy rate, need for additional acute care beds at an existing hospital is demonstrated if the hospital's average occupancy rate based on inpatient utilization of all licensed acute care beds is at or exceeds 80 percent. The determination of the average occupancy rate shall be made based on the average 12 months occupancy rate for the reporting period specified in section (4). Proposals for additional beds submitted by facilities qualifying under this subsection shall be reviewed in context with the applicable review criteria in section 408.035, F.S. The applicable time period for the special circumstances provision is calendar year 1997. JFK's reported acute care occupancy was 76.29% in 1997, and 79.7% in 1998, not 80%, as required by the rule. JFK and AHCA take the position that other special circumstances may, nevertheless, be and have been the basis for the approval of additional acute care beds. JFK also maintained that the reported average occupancy levels understated the demand for and actual use of its inpatient beds. Due to seasonal fluctuations caused by the influx of winter residents, JFK reached or exceeded 100% occupancy on 5 or 6 days, exceeded 80% occupancy on 20 days, and averaged 90.9% occupancy, in January 1999. In February 1999, the average was 96.5%, but was over 100% on 8 days, and over 90% on 25 days. In March 1999, the average occupancy was 90.1%, but exceeded 100% on one day, and 90% on 17 days. In recent years, the "season" also has extended into more months, from approximately Thanksgiving to Easter or Passover. It also includes flu season which disproportionately affects the health of the elderly. JFK also demonstrated that occupancy varies based on the day of the week, generally highest on Mondays, Tuesdays, and Wednesdays and lowest on weekends. JFK's acute care beds were also occupied by patients who were not classified as 24-hour medical/surgical inpatients. Others included observation and 23-hour patients, covered by Medicare or health maintenance organizations (HMOs). Some of those patients were classified initially as outpatients to lower reimbursement rates, but routinely subsequently reclassified and admitted as inpatients. In fact, during the applicable time period for determining occupancy, Medicare allowed patients to be classified as outpatients for up to 72-hour hospital stays. Subsequently, Medicare reduced the allowable hospital stay to 48 hours for all "outpatients," according to AHCA's expert witness. When not classified as inpatients, patients are not counted in average occupancy rates which are based solely on the admitted inpatient census, counted each midnight. For example, in February 1999, the average daily census for 23-hour patients was 10.8 patients, which, when combined with 24-hour patients, results in an average occupancy of 99.7% for the month. Due to the Medicare classification system, some but not all of the so- called 23-hour patients affect the accuracy of the inpatient utilization data. According to AHCA's expert witness, however, numeric need cannot be determined because of JFK's failure to quantify the number of Medicare patients who actually affected the acute care bed utilization. The 23-hour or observation patients may use, but do not require CON-approved and licensed acute care beds. Instead, those patients may be held in either non-CON, non-licensed "observation" beds or in licensed acute care beds. As AHCA determined, to the extent that 23-hour patients in reality stayed longer, and adversely affected JFK's ability to accommodate acute care patients, their presence can be considered to determine if special circumstances exist. Combining 24-hour and 23-hour patients, JFK experienced an occupancy rate of 80% in 1996, and 85.7% in 1997. While some of the 23-hour patients were, in fact, outpatients who should not be considered and others stayed from 24 hours up to 3 days and should be considered, JFK's proportion of Medicare services is important to determining whether special circumstances based on acute care utilization exist. With 74% of all JFK patients in the Medicare category, but without having exact numbers, it is more reasonable than not to conclude that the occupancy level is between the range of 76.29% for acute care only and 85.7% for acute care and 23-hour patients. A reasonable inference is that JFK achieved at least 80% occupancy of patients who were in reality inpatients in its acute care beds in 1997. The expert health planner for the Petitioners conceded that bed availability declines, capacity is a constraint, and high occupancy becomes a barrier to service at some level between 80 and 83% occupancy. In a prior CON filed on behalf of Good Samaritan for a 4-bed addition to an 11-bed neonatal intensive care unit (NICU), the same expert asserted that 76% occupancy was a reasonable utilization standard. That occupancy level was based on the desire to maintain 95% bed availability. An exact comparison of the occupancy levels in this and the NICU case, however, is impossible due to the small size of the NICU unit and the fact that the applicant met the occupancy level in that rule for special circumstances. The statistical data on the number patients actually using acute care beds at JFK in excess of 24-hours despite their classification, supports its claim of overcrowding. Emergency Room Conditions JFK described overcrowding in its emergency department as another special circumstance creating a need for additional acute care beds. The emergency room at JFK has 37 bays each with a bed and another 15 to 17 spaces used for stretchers. Eighteen parking spaces are reserved for ambulances in front of the emergency department. It is not uncommon for a patient to wait in the JFK emergency room up to 24 hours after being admitted to the hospital, before being moved to an acute care bed. In February 1999, after having converted 10 substance abuse beds to acute care beds in October 1998, JFK still provided 234 patient days of acute care in the emergency department. The waiting time for patients to receive a bed after being admitted through the emergency department ranged from 10 hours to 5 days in the winter, and from an average of 6 hours up to 24 hours in the summer. While JFK claims that the quality of care is not adversely affected, it does note that patient privacy and comfort are compromised due to the noise, lights, activity, and lack of space for visitors in the emergency room. JFK's patients tend to be older and sicker than the average. As a result, more patients arriving at its emergency room are admitted to the hospital. In the winter of 1998, JFK was holding up to 35 acute care inpatients at a time in the emergency room. Nationally, from 15% to 20% of emergency room patients are admitted to hospitals. By contrast, almost twice that number, or one-third of JFK's emergency room patients become admitted inpatients. Emergency room admissions are also a substantial number of total admissions at JFK. In calendar year 1998, slightly more than 65% of all inpatient admissions to JFK arrived through the emergency room, most by ambulance. Ambulance arrivals at any particular hospital are often dictated by the patient's condition, with unstable patients directed to the nearest hospital. Once patients are stabilized in the emergency room at JFK, those requiring obstetric, pediatric, or psychiatric admissions are transferred from JFK which does not provide those inpatient services. Emergency room patients in need of acute care services provided at JFK, like the neonates at issue in the prior Good Samaritan application, are unlikely candidates for transfer The emergency room at JFK receives up to 50,000 patient visits a year, up from approximately 32,000 annual visits five years ago. JFK operates one of the largest and busiest emergency departments in Palm Beach County. Due to overcrowding in the emergency department at Delray Hospital, in southern Palm Beach County, patients have been diverted to other facilities, including JFK. In terms of square footage, JFK's emergency room does not meet the standards to accommodate the 52 to 54 bays and stretchers and related activities. JFK lacks adequate space for support services which should also be available in the emergency department. The Petitioners asserted that enlarging the emergency room will alleviate its problems. JFK demonstrated, however, that regardless of the physical size of the emergency room, optimal patient care requires more capacity to transfer patients faster to acute care beds outside the emergency department. Conditions in Other Departments Of 343 operational beds at JFK at the time of the final hearing, 290 were monitored or telemetry acute care beds, 30 were critical care beds, and 23 were non-monitored, non-critical care beds. Most of the monitored beds are in rooms equipped with antennae to transmit data from electrodes and monitors when attached to patients. When monitoring is not necessary, the same beds are used by regular acute care patients. The large number of monitored beds located throughout the hospital in various units reflects JFK's largely elderly population and specialization in cardiology. In 1998, 820 inpatient cardiac catheterizations (caths) were performed at JFK. Petitioners Good Samaritan and St. Mary's transferred 90 and 28 of those cath patients, respectively to JFK. In the first five months of 1999, 449 caths were performed, including procedures on 35 patients transferred from Good Samaritan and 16 from St. Mary's. Cath lab patients are held in the lab longer after their procedures when beds are not available in cardiac or the post- anesthesia care units. The Petitioners suggested that cath lab patients could be placed in a 12-bed holding area added to the lab in July 1999; however, that space was expected to be filled by patients being prepared for caths. Open heart surgery is available in Palm Beach County at three hospitals, Delray, JFK and Palm Beach Gardens. Patients admitted to JFK for other primary diagnoses often require cardiac monitoring even though they are not in a cardiac unit. The additional 24 beds which were under construction at the time of the final hearing will also be monitored beds. The 20 beds at issue in this proceeding will not be monitored. The Petitioners questioned whether non-monitored beds will alleviate overcrowding at JFK where so many patients require monitoring. JFK physicians in various specialties testified concerning conditions in other areas of the hospital. A nephrologist, who consults primarily in intensive care units, described the backlog and delay in moving patients from intensive care into acute care beds. A cardiologist noted that patients are taking telemetry beds they do not need because there is no other place to put them. A general and vascular surgeon described the overcrowding as a problem with the ability to move patients from more to less intensive care when appropriate. Elective surgeries have been delayed to be sure that patients will have beds following surgery. The evidence presented by JFK supports the conclusion that the additional acute care beds will assist in alleviating overcrowding in other hospital units, including backlogs in the existing monitored beds. JFK has established as factual bases for special circumstances that its high occupancy exceeds the optimal much of the year, aggravated by seasonal fluctuations; that it has relatively large emergency room admissions over which it has no control; and that its intensive care and monitored beds are not available when needed. Number of Beds Needed With the conversion, in 1998, of 10 substance abuse beds to acute care beds and the 1999 construction of 24 of 40 additional beds requested by JFK, the number of licensed and approved beds at JFK increased to 367. In addition, with CON- exemption, JFK has added observation beds. As a result of AHCA's partial approval of the previous JFK request for new construction and due to unfavorable changes in Medicare reimbursement policies for hospital-based SNUs, JFK now seeks this 20-bed conversion. JFK ceased operating the SNU in October 1998, after Medicare reimbursement changed to a system based on resource utilization groups (RUGs). JFK was unable to operate the SNU without financial losses, that is, unable to cover its patient care costs under the RUGs system. The proposal to convert the beds back to acute care, as they were previously licensed will allow JFK to reconnect existing oxygen lines in the walls and to use the beds for acute care patients. Although Good Samaritan and St. Mary's suggested that JFK can profitably operate a SNU, there was no evidence presented other than its previous occupancy levels which were very high, and the fact that Columbia is not closing all of its SNUs. The Petitioners also question JFK's ability to use its SNU beds for acute care and/or observation patients. AHCA, however, took the position that acute care licensure is required for beds in which acute care patients are routinely treated. Otherwise, the agency would not have accurate data on utilization, bed inventory, and the projected need. In order to demonstrate the number of beds needed, JFK's expert used historical increases in admissions. Some admissions data was skewed because the parent corporation, Columbia, closed Palm Beach Regional in 1996, and consolidated its activities at JFK. Excluding from consideration the increase of 3,707 admissions from 1995 to 1996, JFK's expert considered approximately 800 as reasonable to assume as an average annual increase. That represents roughly the mid-point between the 1996 to 1997 increase of 605, and the 1997 to 1998 increase of 1,076 admissions. A projected increase of 800 admissions for an average 5-day length of stay would result in an increase of 4,000 patient days a year which, at 80% occupancy, justifies an increase of 14 beds a year. Considering the closing of Palm Beach Regional, the number of beds in the subdistrict will have been reduced by 170. At the hearing, JFK's expert also relied on 3.3% annual patient day increase to project the number of beds needed, having experienced an increase of 5.8% from 1997 to 1998. Using this methodology, JFK projected a need for 20 additional acute care beds by 2002, and over 40 more by 2004. That methodology assumed patient growth in the excess of population growth and, necessarily, an increase in market share. JFK's market share increased in its primary service area from approximately 19% in 1993 to 27% in 1997. But the market share also slightly declined from 1997 to 1998. AHCA's methodology for determining the number of beds needed was based on the entire population of Palm Beach County, not just the more elderly southern area. It also assumed that JFK's market share would remain constant. Using this more conservative approach than JFK, AHCA projected a need for 383 acute care beds, or 16 beds added to the current total of 367 licensed and approved beds, at an optimal 75% occupancy by the year 2004. AHCA relied on a projection of 104,959 total patient days in 2004. Using the same methodology, JFK's expert determined that total projected patient days for 1998 would have been 94,225, but the actual total was 98,126 patient days. AHCA's methodology underestimates the number of beds needed, but does confirm that more than 16 additional beds will be needed by 2004. AHCA's reliance on 75% as an optimal future occupancy level as compared to the hospital-specific historical level of 80% was criticized, as was the use of the year 2004 as a planning horizon. The rule requires 80% occupancy for a prior reporting period and does not establish any planning horizon. Good Samaritan and St. Mary's used 80% occupancy in their analysis of bed need. At 80% occupancy, Petitioners projected an average daily census of 265 patients in 331 beds in 2001, or 268 patients in 334 beds in 2002, and 270 patients in 358 beds in 2003, as compared to 367 existing and approved beds. The Petitioners' projection is an underestimate of bed-need based on the actual average daily census of 269 patients in 1998. The Petitioners' methodology erroneously projects a need for fewer licensed beds than JFK has currently, despite the special circumstances evincing overcrowding. At 80% occupancy, based on the special circumstances rule, a hospital exceeds the optimal level and needs more beds. But, according to the Petitioners, 80% is a future occupancy target for the appropriate planning horizon of 2002. As AHCA's expert noted, it is illogical to use 80% as both optimal and as an indication of the need for additional beds. Similarly, it is not reasonable to use a planning horizon which coincides with the time when more beds will be needed. Therefore, the use of 75% for the five-year planning horizon of 2004 is a reasonable optimal target, as contrasted to the need for additional beds when 80% occupancy is reached at some future time beyond the planning horizon. AHCA's underestimate of need at 16 more beds by 2004, and JFK's overestimate of need at 40 more beds by 2004, support the conclusion that the requested addition of 20 beds in this application is in a reasonably conservative range. Rule 59C-1.038(6)(a) and Subsection 408.035(l)(n) - service and commitment to medically indigent; and Rule 59C-1.038(6)(b) - conversion of beds Rule 59C-1.038(6), Florida Administrative Code, also includes the following criteria: Priority consideration for initiation of new acute care services of capital expenditures shall be given to applicants with documented history of providing services to medically indigent patients or a commitment to do so. When there are competing applications within a subdistrict, priority consideration shall be given to the applications which meet the need for additional acute care beds in a particular service through the conversion of existing underutilized beds. Subsection (a) of the Rule, overlaps with District 9 health plan allocation factor one, which must be considered pursuant to Subsection 408.035(1)(a), and with the explicit criterion of Subsection 408.035(1)(n), Florida Statutes. All three require a commitment to and record of service to Medicaid, indigent and/or handicapped patients. JFK agreed to have its CON conditioned on 5% of the care given in the 20 new beds to Medicaid and charity patients. The commitment for the 24 beds under construction is 3% for Medicaid and charity patients. If charity patients are defined as those with family incomes equal to or below 150% of federal poverty guidelines, JFK provided $2.9 million in charity care in calendar year 1998, and $720,000 as of April for 1999. JFK provided an additional 3% to 5% in Medicaid care. The Medicaid total includes Palm Beach County Health Care District patients, who are also called welfare patients. The charity care provided by JFK is equivalent to approximately 1% of its gross revenue. JFK explained its relatively low Medicaid care as a function of its relatively limited services for people covered by Medicaid, particularly, the young who utilize obstetrics and pediatrics. JFK pointed to the differing demographics in Palm Beach County with more elderly, who have Medicare coverage, located in its primary service area. Excluding pediatric and obstetric care, Medicaid covered 6.7% of patients in southern Palm Beach County as compared to 16.3% in northern Palm Beach County. Of the Medicaid patients, 2.9% in the southern area as compared to 6% in the northern area are adults. On this basis, JFK established the adequacy of its historical Medicaid and indigent care, and of its proposed commitment. Subsection (6)(b) of Rule 59C-1.038 is inapplicable when, as in this case, there are not competing applications to compare. Subsection 408.035(1)(a) - other local health plan factors and Subsection 408.035(1)(o) - continuum of care District 9 allocation factor 2, favoring cost containment practices, is enhanced by the proposed conversion rather than the new construction of beds. Within the Columbia group of hospitals, there is an effort to avoid unnecessary duplications of services. JFK caters to an elderly population and to providing cardiology, neurology, and oncology services. Columbia's Palms West provides pediatric and obstetric care. Another Columbia facility in Palm Beach County, Columbia Hospital, specializes in inpatient psychiatric services. The elimination of the hospital-based SNU at JFK does eliminate one level of care in the system, contrary to the criteria. District 9 health plan allocation factor 3 requires favorable consideration of plans, like JFK's, to convert unused or underutilized beds. In this case, the JFK SNU was highly utilized but unprofitable. There is no evidence that alternative placements in free-standing nursing homes are inappropriate or unavailable. Minor inefficiencies result from the time lag for transfers during which skilled nursing patients remain in acute care beds. To some extent, the inefficiencies were already occurring while JFK operated the SNU due to its high average census of 18 or 19 patients in a total of 20 SNU beds. Those inefficiencies are outweighed by the low cost conversion of 20 beds for $117,000, particularly as compared to its prior 24-bed construction for $4 million. In general, the applicable local health plan allocation factors support the approval of the JFK application. Rule 59C-1.030 - needs access for low income, minorities, handicapped, elderly, Medicaid, Medicare, indigent or other medically underserved In general, the proposal is intended to increase access to JFK's services by decreasing waiting times for admissions. The services are used by a large number of elderly patients, who are primarily covered by Medicare. JFK demonstrated that the population in its service area also tends to be wealthier than the population in northern Palm Beach County. Medicaid and indigent access to care at JFK is consistent and reasonable given the demographic data presented. Access for elderly Medicare patients will be enhanced by the proposal. Subsection 408.035(1)(b) - accessibility, availability, appropriateness, and adequacy of like and existing services Good Samaritan and St. Mary's argue that hospitals below 75% occupancy are available alternatives to JFK's patients. Yet, those facilities are not viable alternatives for unstable patients admitted through the emergency room. Neither is it appropriate to transfer patients who need services provided at JFK. JFK does not allege that any problems exist at other facilities, but only that it is affected by special circumstances. From January to June 1998, the closest hospitals to JFK experienced wide-ranging occupancy levels from 92% at Delray, the hospital with services most comparable to those at JFK, to 57% at Bethesda, and 47% at Wellington. The wide range in occupancy rate is further indication of uniqueness of the need for patients to access services available only at Delray and JFK. Subsection 408.035(1)(d) - outpatient care or other alternatives Admitted inpatients have no alternatives to their need for acute care beds. Subsection 408.035(1)(h) - alternative use of resources and accessibility for residents The continued use of the 20 beds as a SNU was suggested as an alternative. As noted, however, that proved to be financially unprofitable at JFK, in comparison to the low cost conversion to acute care beds. AHCA reasonably rejected the idea that of the beds being designated "observation" beds when used for acute care patients. In addition, in 1996, JFK estimated the cost of moving patients from bed to bed in the hospital due to the shortage of appropriate beds, when needed, at up to $1 million. This project is intended to meet a facility-specific need based on the demand for services at JFK from patients who cannot reasonably initially be sent or subsequently transferred to other hospitals. As such, JFK's additional beds do not meet the criterion for accessibility for all residents of the district. Subsection 408.035(1)(i) - utilization and long-term financial feasibility Good Samaritan and St. Mary's contend that JFK's proposal includes unrealistically high utilization projections for the additional 20 beds. Using 98,000 patient days in 1998, which excludes any days attributable to skilled nursing beds, total utilization projected in the second year is 78.4%. For the additional 20 beds, projected utilization is 77.4%. The expert for Good Samaritan and St. Mary's disagreed with the allocation of patient days between the existing and additional beds. If 80% utilization is assigned to existing 367 beds, as he suggested, then the average annual occupancy of the 20 new beds would be only 50%. The financial break-even point for the project, however, is 50 to 75 patient days, or 10 to 15 patients with average lengths of stay of 5 days. Therefore, even with the lower projected occupancy of 50%, or an average of 10 beds at any time, the project is financially feasible in the long-term. In reality, a separate allocation of patient days to the 20 new beds is somewhat arbitrary. It is also less important than total projected utilization, since the 20 beds do not represent a separate unit in which specialized services will be provided. The additional beds will become a part of the total medical/surgical inventory. By demonstrating that there will be sufficient total occupancy to exceed the financial break-even point in the newly converted beds regardless of the allocation of patient days to any particular bed, JFK demonstrated the long- term financial feasibility of the proposal for CON 9099. Subsection 408.035(1)(l) - impact on costs; effects of competition If the JFK proposal is approved, Good Samaritan anticipates a loss of 255 patients, or 1,392 patient days, which is equivalent to a financial loss of over $1.5 million. St. Mary's anticipates losses of 158 patients or 973 patient days, and in excess of $1 million. Both hospitals were experiencing overall operating losses in 1999. But, the estimates of financial losses for both hospitals did not take into consideration all of the expense reductions associated with serving fewer patients. Excluding pediatrics and obstetrics, which are not available at JFK, JFK's overlapping service areas with Good Samaritan and St. Mary's are minimal. Good Samaritan's market share in JFK's primary service area is 4.8%, and St. Mary's is 9.3%. Pediatrics and obstetrics contribute 30.7% of total patients at Good Samaritan, and 49.5% at St. Mary's. Physician overlap among the hospitals is also limited. Although 357 doctors admitted patients to JFK and 464 to St. Mary's in the first two quarters of 1998, the number of overlapping doctors was 28. With a total of 379 admitting doctors at Good Samaritan for the same period of time, only 21 were included in JFK's 357 admitting physicians. In general, doctors in the northern Palm Beach County acute care subdistrict seldom admit patients to hospitals in the southern subdistrict, and vice versa. The absence of overlapping medical staff also reflected the differences in the services. Most of the top twenty doctors who admitted patients to Good Samaritan and St. Mary's were obstetricians and pediatricians. When obstetricians and pediatricians are excluded, the number of overlapping doctors for JFK and Good Samaritan is reduced to 15, and for JFK and St. Mary's to 22. In addition to providing different services, to different areas of the County, doctors who practice primarily in one or the other subdistrict served patients in different payor classification mixes. In 1997, JFK's patients were 74% Medicare, consistent with the fact that a larger percentage of elderly patients live in JFK's service area. By contrast, Medicare patients were approximately 48% of the total at Good Samaritan, and 32% of the total at St. Mary's. Historically, the addition of acute care beds at JFK has not affected other hospitals in the district or even the same acute care subdistrict. After the conversion of 10 substance abuse beds in the fall of 1998, the acute care patient days at every hospital in the same subdistrict increased in early 1999 over comparable periods of time in 1998. The assumption that additional beds at JFK will take patients from other hospitals includes the assumption that JFK will draw a larger share of an incremental increase of patients. The assumption is, in other words, that all patients will be new to JFK. The expert health planner for Good Samaritan and St. Mary's conceded that facility-specific overcrowding can justify projections that the additional beds will accommodate the existing census plus growth attributable to increasing population, and will not generate new patients. The expert assumed, nevertheless that from 1478 to 1486 new patients (depending on whether the length of stay is rounded off) would be associated with JFK's project. From that total, the proportional losses allocated were 255 patients from Good Samaritan and 158 patients from St. Mary's. Another underlying assumption increase is that all of the new patients would go to other hospitals if JFK does not add 20 acute care beds. That assumption suggests that all of the patients could receive the services they need at the other facilities, which is not supported by the facts or current utilization data. More likely, with the addition of beds due to overcrowding, some patients will come from the existing hospital census at JFK. It is not reasonable to assume that JFK will have all new patients, nor that all patients could be treated at other hospitals in the absence of JFK's expansion. The proportion of emergency room admissions at JFK is reasonably expected to continue. Patients who arrive at JFK requiring open heart surgery, angioplasties or invasive cardiac caths are reasonably expected to continue to receive those services at JFK, including patients who are transferred to JFK from Good Samaritan and St. Mary's. Based on the failure to support the assumptions, and the differences in service areas, medical staff, specialties, and patient demographics, Good Samaritan and St. Mary's have not shown any adverse impact from the JFK proposal. On balance, considering the statutory and rule criteria for reviewing CON applications, JFK established, as a matter of fact, that it meets the special circumstance criteria related to emergency room admissions, pre- and post-surgical and intensive care backlogs, and average annual occupancy projections in excess of optimal levels.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That a final order be entered issuing CON 9099 to convert 20 skilled nursing beds to 20 acute care beds at Columbia/JFK Medical Center, L.P., d/b/a JFK Medical Center, on condition that a minimum of 5% of new acute care patient days will be provided to Medicaid and charity patients. The file of the Division of Administrative Hearings, DOAH Case No. 99-0714 is hereby closed. DONE AND ENTERED this 7th day of April, 2000, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of April, 2000. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Julie Gallagher, General Counsel Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Richard A. Patterson, Esquire Agency for Health Care Administration Fort Knox Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Thomas A. Sheehan, III, Esquire Moyle, Flanigan, Katz, Kolins, Raymond & Sheehan, P.A. Post Office Box 3888 West Palm Beach, Florida 33402 Stephen A. Ecenia, Esquire Thomas W. Konrad, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. Post Office Box 551 Tallahassee, Florida 32302-0551 Robert D. Newell, Jr., Esquire Newell & Terry, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313
Conclusions Having reviewed the Administrative Complaints and the Notice of Intent to Deny, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Provider, Ana Home Care, Inc., pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaints and Election of Rights forms to the Provider. (Ex. 1-A; Ex. 1-B; 1-C; Ex. 1-D; and Ex. 1-E). The Agency issued the attached Notice of Intent to Deny and Election of Rights form (Ex. 1-F). The Election of Rights forms advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The assisted living facility license of Ana Home Care, Inc. is REVOKED. All residents shall be removed within 30 days from the entry of this Final Order. In accordance with Florida law, the Provider is responsible for retaining and appropriately distributing all client records within the timeframes prescribed in the authorizing statutes and applicable administrative code provisions. The Provider is advised of Section 408.810, Florida Statutes. In accordance with Florida law, the Provider is responsible for any refunds that may have to be made to the clients. The Provider is given notice of Florida law regarding unlicensed activity. The Provider is advised of Section 408.804 and Section 408.812, Florida Statutes. The Provider should also consult the applicable authorizing statutes and administrative code provisions. The Provider is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. 3. An administrative fine and survey fee in the total amount of $88,000.00 is imposed against the Provider, Ana Home Care, Inc., but the collection of the fine is STAYED unless the Provider applies for an assisted living facility license at which time the $88,000.00 will become due and owing. ORDERED at Tallahassee, Florida, on this _/ A day of Jane ‘i — , 2012.
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct sob of this Final Order was served on the below-named persons by the method designated on this_/7 “day of (eat Wa , 2012. Richard Shoop, Agency Cler Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Lourdes A. Naranjo, Senior Attorney Facilities Intake Unit Office of the General Counsel (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Finance & Accounting Shaddrick Haston, Unit Manager | Revenue Management Unit Assisted Living Unit (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Katrina Derico-Harris Arlene Mayo Davis, Field Office Manager Medicaid Accounts Receivable Areas 9, 10 and 11 Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Shawn McCauley Lawrence E. Besser, Esquire Medicaid Contract Management Samek & Besser Agency for Health Care Administration 1200 Brickell Avenue - Suite 1950 (Electronic Mail) Miami, Florida 33131 (U.S. Mail) John D. C. Newton, IT Administrative Law Judge Division of Administrative Hearings (Electronic Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, and Chapter 400, Part X, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The parties have since entered into the attached Settlement Agreement, (Ex. 2). Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The facility’s Certificate of Exemption is deemed surrendered and is cancelled and of no further effect. 3. Each party shall bear its own costs and attorney’s fees. Any requests for administrative hearings are dismissed and the above-styled case is hereby closed. 4. In accordance with Florida law, the Respondent is responsible for retaining and appropriately distributing all client records within the timeframes prescribed in the authorizing statutes and applicable administrative code provisions. The Respondent is advised of Section 408.810, Florida Statutes. 5. In accordance with Florida law, the Respondent is responsible for any refunds that may have to be made to the clients. Filed December 24, 2014 3:10 PM Division of Aadniinistrative Hearings 6. The Respondent is given notice of Florida law regarding unlicensed activity. The Respondent is advised of Section 408.804 and Section 408.812, Florida Statutes. The Respondent should also consult the applicable authorizing statutes and administrative code provisions. The Respondent is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. ORDERED at Tallahassee, Florida, on this 7D day of Le cop ple-en 2014. MOS where Elizabeth Dudek, Secretary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and core oes Final es was served on the below-named persons by the method designated on this LE lay of Z 2 Ly , 2014. Richard J. Sax Agency Cler Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Thomas Jones, Unit Manager Facilities Intake Unit Licensure Unit Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Katrina Derico-Harris Arlene Mayo—Davis, Field Office Manager Medicaid Accounts Receivable Local Field Office Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Shawn McCauley Daniel A. Johnson, Senior Attorney Medicaid Contract Management Office of the General Counsel Agency for Health Care Administration Agency for Health Care Administration (Electronic Mail) (Electronic Mail) Division of Administrative Hearings Dagmar Llaudy, Esquire (Electronic Mail) Law Office of Dagmar Llaudy, P.A. 814 Ponce De Leon Blvd, Suite 513 Coral Gables, Florida 33134 (U.S. Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency. STATE OF FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION, Petitioner, vs. AHCA No.: 2014008789 Exemption No.: HCC10956 MAGIC HANDS REHABILITATION CENTER, INC., Respondent. / ADMINISTRATIVE COMPLAINT COMES NOW, the Petitioner, State of Florida, Agency for Health Care Administration (“the Agency”), by and through its undersigned counsel, and files this Administrative Complaint ‘ against the Respondent, Magic Hands Rehabilitation Center, Inc. (“the Respondent”), pursuant to Section 120.569 and 120.57, Florida Statutes (2014), and alleges: NATURE OF THE ACTION This is an action to revoke the Respondent’s health care clinic Certificate of Exemption. PARTIES 1. The Agency is the state agency that oversees the licensure and regulation of _ health care clinics in Florida pursuant to Chapters 408, Part Il, and 400, Part X, Florida Statutes (2014); and Chapter 59A-33, Florida Administrative Code. “The Legislature finds that the regulation of health care clinics must be strengthened to prevent significant cost and harm to consumers. The purpose of this part is to provide for the licensure, establishment, and enforcement of basic standards for health care clinics and to provide administrative oversight by the Agency for Health Care Administration.” § 400.990(2), Fla. Stat. (2014). 2. The Respondent applied for and was issued a Certificate of Exemption to operate a health care clinic located at 7392 NW 35" Terrace, Unit 310, Miami, Florida 33122. FYHIRIT 1 Certificate of Exemption from Licensure for Health Care Clinics 3. Under Florida law, “clinic” means an entity where health care services are provided to individuals and which tenders charges for reimbursement for such services, including a mobile clinic and a portable equipment provider. Fla. Stat. § 400.9905(4) (2014). 4. Under Florida law, the term “clinic” does not apply to a sole proprietorship, group practice, partnership, or corporation that provides health care services by licensed health care practitioners under chapter 457, chapter 458, chapter 459, chapter 460, chapter 461, chapter 462, chapter 463, chapter 466, chapter 467, chapter 480, chapter 484, chapter 486, chapter 490, chapter 491, or part I, part III, part X, part XIII, or part XIV of chapter 468, or s. 464.012, and that is wholly owned by one or more licensed health care practitioners, or the licensed health care practitioners set forth in this paragraph and the spouse, parent, child, or sibling of a licensed health care practitioner if one of the owners who is a licensed health care practitioner is supervising the business activities and is legally responsible for the entity's compliance with all federal and state laws. However, a health care practitioner may not supervise services beyond the scope of the practitioner's license, except that, for the purposes of this part, a clinic owned bya licensee in s. 456.053(3)(b) which provides only services authorized pursuant to s. 456.053(3)(b) may be supervised by a licensee specified in s. 456.053(3)(b). Fla. Stat. § 400.9905(4)(g) (2014). Such an entity may claim to be exempt from licensure and may be eligible for a Certificate of Exemption from the Agency. 5. Under Florida law, a facility becomes a “clinic” when it does not qualify for an exemption, provides health care services to individuals and bills third party payers for those services. F.A.C. 59A-33.006(4). Facts 6. On December 19, 2013, Respondent was issued a Certificate of Exemption from licensure, number HCC10956, based upon Respondent identifying itself as solely owned by 2 Peter J. Maffetone, a licensed health care practitioner. 7. On August 22, 2014, Peter J. Maffetone gave testimony during a recorded sworn statement. 8. On that date, under oath, Peter J. Maffetone testified that he does not now, nor has he ever owned or had a financial interest in Respondent, Magic Hands Rehabilitation Center, Inc. 9. Respondent does not qualify for a Certificate of Exemption due to the fact that Peter J. Maffetone does not possess ownership. Sanction 10. Under Florida Law, any person or entity providing health care services which is not a clinic, as defined under Section 400.9905, may voluntarily apply for a certificate of exemption from licensure under its exempt status with the agency on a form that sets forth its name or names and addresses, a statement of the reasons why it cannot be defined as a clinic, and other information deemed necessary by the agency. § 400.9935(6), Fla. Stat. (2014). 11, Under Florida Law, the applicant for a certificate of exemption must affirm, without reservation, the exemption sought pursuant to Section 400.9905(4), F.S., and the qualifying requirements for obtaining and maintaining an exempt status; the current existence of applicable exemption-qualifying health care practitioner licenses; qualified ownership, qualified certifications or registration of the facility or owners; federal employer identification number; services provided; proof of legal existence and fictitious name, when the entity and name are required to be filed with the Division of Corporations, Department of State; plus other satisfactory proof required by form adopted by this rule. F.A.C. 59A-33.006(6). 12. Under Florida Law, facilities that claim an exemption, either by filing an application for a certificate of exemption with the Agency and receiving a certificate of exemption, or self-determining, must maintain an exempt status at all times the facility is in operation. F.A.C. 59A-33.006(2). 13. Under Florida Law, when a change to the exempt status occurs to an exempt facility or entity that causes it to no longer qualify for an exemption, any exempt status claimed or reflected in a certificate of exemption ceases on the date the facility or entity no longer qualifies for a certificate of exemption. In such case, the health care clinic must file with the Agency a license application under the Act within 5 days of becoming a health care clinic and shall be subject to all provisions of the Act applicable to unlicensed health care clinics. Failure to timely file an application for licensure within 5 days of becoming a health care clinic will render the health care clinic unlicensed and subject the owners, medical or clinic directors and the health care clinic to sanctions under the Act. F.A.C. 59A-33.006(3). 14. As demonstrated by the facts outlined herein, Respondent no longer qualifies for a Certificate of Exemption pursuant to § 400.9905(4)(g), Fla. Stat. (2014). 15. Therefore, Respondent is now required to be licensed as a clinic pursuant to F.A.C. 59A-33.006 and Chapters 408, Part II, and 400, Part X, Fla. Stat, 16. Under Section 400.995, Florida Statutes, in addition to the requirements of Part II of Chapter 408, the Agency may deny the application for a license renewal, revoke and suspend the license, and impose administrative fines of up to $5,000 per violation for violations of the requirements of this part or rules of the agency. § 400.995(1), Fla. Stat. (2014). Each day of continuing violation after the date fixed for termination of the violation, as ordered by the agency, constitutes an additional, separate, and distinct violation. § 400.995(2), Fla. Stat. (2014). 17. Under Section 400.9915(2), Florida Statutes, in addition to any administrative fines imposed pursuant to this part or Part IT of Chapter 408, the Agency may assess a fee equal to the cost of conducting a complaint investigation. § 400.9915(2), Fla. Stat. (2014). WHEREFORE, the Agency seeks to revoke the Respondent's health care clinic Certificate of Exemption. CLAIM FOR RELIEF The Petitioner, State of Florida, Agency for Health Care Administration, respectfully seeks a final order that: A. Makes findings of fact and conclusions of law in favor of the Agency as set forth above. B. Imposing the sanctions and relief as set forth above. Gj RESPECTFULLY SUBMITTED on this / / day of September, 2014. Florida Bar No. 0091175 Office pt the General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 Telephone: (850) 412-3658 Facsimile: (850) 922-6484 Daniel. Johnson@ahca.myflorida.com
Findings Of Fact Based upon the evidence adduced at hearing, the parties' prehearing stipulation, and the record as a whole, the following Findings of Fact are made: Respondent is now, and has been for approximately the past 15 years, a physician licensed to practice medicine in the State of Florida. He specializes in internal medicine and cardiology and is board certified in these specialities. He currently is the Chief of Cardiology and head of the Coronary Care Unit at North Ridge Hospital and has staff privileges at approximately five other hospitals in the Broward County area. At all times material to the instant case, Health Imaging, Inc., (Health) was in the business of providing ultrasound imaging services in the State of Florida at the request of physicians, hospitals and members of the community at large. The tests performed by Health were non-invasive studies that involved no health risks. They included echocardiograms, carotid ultrasounds and other studies of the heart and vascular system done with ultrasound equipment. Unlicensed technicians operated the equipment and administered the tests. Florida-licensed physicians interpreted the test results. In August of 1987, Warren Green and his wife, the owners of Health, contacted Respondent and asked him if he would be interested in contracting with Health to provide such interpretive and diagnostic services. After looking into the matter and satisfying himself that Health's equipment was of good quality and that its technicians were well qualified, Respondent entered into a written agreement (Agreement) with Health, the body of which provided as follows: This agreement made and entered into this 18 day of August 1987 by and between Health Imaging, having its principal business address at 6278 North Federal Highway, Suite 372, Ft. Lauderdale, Florida, hereinafter referred to as "HEALTH" and Jorge Flores, M.D., having his principal business address at 5700 N. Federal Highway, Ft. Lauderdale, Florida, hereinafter referred to as "DOCTOR" is made with reference to the following: WHEREAS, HEALTH is engaged in business throughout the Florida area providing ultrasound and vascular services to hospitals, physician offices and the community. DOCTOR is engaged in the business of providing medical services to his patients and patients of other doctors and hospitals in the Ft. Lauderdale, Florida area. Health desires to contract from DOCTOR for certain diagnostic interpretation services for its own patients and patients of other doctors and hospitals in the Florida area. NOW THEREFORE, HEALTH AND DOCTOR AGREE AS FOLLOWS: Equipment. HEALTH agrees to provide all necessary equipment and supplies to perform the services according to the schedule set forth on Exhibit A, attached hereto. Personnel. Health shall provide qualified technologists to operate the equipment for the services set forth on Schedule A, attached hereto. Solicitation of Employees. DOCTOR shall not during the term of this agreement nor a period of One (1) year after its termination, solicit for employment or employ, whether as employee or independent contractor, any person who is or has been employed by HEALTH during the term of this agreement without the prior written consent of HEALTH. Physician Interpretation Personnel. DOCTOR agrees to provide necessary qualified physicians for interpretations. Payment. For and in consideration of the services and promises contained herein by DOCTOR, HEALTH agrees to pay DOCTOR in accordance with the fee schedule set forth on Schedule A, attached hereto. All fees are to be paid in advance or at time of interpretation. Default. In the event of the default of any payment this contract may be terminated by DOCTOR. Term, Termination. The term of this agreement is for one (1) year. After Thirty (30) days either party may terminate this agreement, without cause, by giving Thirty (30) days written notice provided that in no event may HEALTH terminate this agreement unless all monies owing to DOCTOR under the terms hereof are paid in full. Compliance with Law. Both parties agree to comply with all municipal, state and federal laws and regulations. Governing Law. This agreement shall be construed under the laws of the State of Florida. Independent Contractor. DOCTOR is performing the service and duties required hereunder as an independent contractor and not as an employee, agent, partner, or joint venturer with HEALTH. Entire Agreement. This instrument shall be deemed to contain the entire agreement between HEALTH and DOCTOR and supercedes [sic] any prior or existing agreements, understandings, arrangements, terms, conditions, negotiations, or representations, oral or written, made by either party concerning or affecting the subject matter hereof. No modification of this agreement may be made except in writing, signed by HEALTH and DOCTOR. Schedule A, which was referenced in and appended to the Agreement, read as follows: INTERPRETATION FEE SCHEDULE Community, Corporate, Club and Association Screening Program Fee Schedule. EXAM: Echocardiography only FEE: One thousand dollars (1,000.00) per month for 400 studies in any thirty (30) day period. Five dollars ($5.00) per study for all studies exceeding four Hundred (400) studies in any given thirty (30) day period. Community, Corporate, Club and Association Screening Program Fee Schedule. EXAMS: (Any combination of the following) Carotid Ultrasound with Doppler and Periorbital Doppler Echocardiography Upper and Lower Extremity Doppler Study FEE: Three thousand dollars ($3,000.00) per month for any combination of the above studies, not to exceed 1,500 studies in any thirty (30) day period. Any combination of the above studies will be at a rate of Five Dollars ($5.00) per study in any given thirty (30) day period. Hospital and Physician offices fee Schedule: (Any studies performed in a hospital or Physician office, ordered by a physician) EXAMS Carotid ultrasound with doppler $65.00 Echocardiography $65.00 Abdominal ultrasound $65.00 Holter monitoring $65.00 Peripheral arterial examination $35.00 Peripheral venous examination $35.00 The Agreement and Schedule A were drafted by the Greens without the assistance of an attorney. Respondent furnished Health with interpretive and diagnostic services under the Agreement for approximately 18 months. He provided Health with no other services. Respondent was compensated $1,000 per month the first four months and $3,000 per month the remaining 14 months for his services. Most of the individuals whose test results Respondent interpreted during his 18-month association with Health were self-referred. The remainder of the test takers were referred by physicians. None had any prior professional relationship with Respondent. 1/ Respondent prepared a signed, written report of his findings for each test taker. 2/ He sent the report, along with the materials that he had reviewed in making his findings, to Health, which in turn provided the report to the test taker or to the referring physician, if there was one. 3/ Respondent did not consider the test takers to be his patients. He therefore did not keep copies of the reports he had prepared and sent to Health or the test materials upon which these reports had been based. 4/ The Greens had assured Respondent at the outset, however, that they would maintain these records and make them available to Respondent upon his request should he need them for some reason. The Greens were true to their word. Whenever Respondent asked to see a copy of a report or test materials, 5/ the Greens complied with his request. The Greens still have in their possession copies of the reports Respondent had prepared and transmitted, as well as the related test materials. While Respondent was aware that Health advertised to generate business, he was not asked to assist in any way, either as a consultant or otherwise, in the preparation or placement of any of Health's advertisements. Indeed, the first time he saw one of these advertisements was approximately five or six months after he began his association with Health. The advertisement was in a local newspaper that he happened to be reading. Some months later he saw another advertisement in the same newspaper. He found the contents of this particular advertisement to be "totally unacceptable." He therefore telephoned the Greens and complained about the advertisement. The Greens responded to Respondent's complaint by discontinuing the advertisement. A short time thereafter, upon the suggestion of a Department investigator who warned Respondent "to stay away from these people," Respondent severed his relationship with Health. He did so, not because he believed that he had done anything wrong, but because the Department, through its investigator, had expressed its concerns regarding the matter.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Board of Medicine enter a final order dismissing the Amended Administrative Complaint in its entirety. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of January, 1993. STUART M. LERNER 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 15th day of January, 1993.
Conclusions Having reviewed the Administrative Complaint and Notice of Intent to Deny, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the Provider, Hillcrest Residential ALF, Inc. d/b/a Hillcrest Retirement Residence (“the Provider”), pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Notice of Intent to Deny (Composite Ex. 1) with an Election of Rights form to the provider. The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2). Based upon the foregoing, it is ORDERED: Filed December 7, 2011 2:51 PM pibision of Administrative Hearings 1. The attached Settlement Agreement is adopted and incorporated by reference into this Final Order. 2. The Provider’s license to operate this assisted living facility (License Number 5389) is UNCONDITIONALLY SURRENDERED. 3. The Agency’s Notice of Intent to Deny is upheld and the Provider’s license renewal application is DENIED. 4, An administrative fine in the amount of $29,500.00 is imposed against the Provider and is STAYED in accordance with the terms of the Settlement Agreement. 5. The Provider is responsible for any refunds that may be due to any clients. 6. The Provider shall remain responsible for retaining and appropriately distributing client records as prescribed by Florida law. The Provider is advised of Section 408.810, Florida Statutes. The Provider should also consult the applicable authorizing statutes and administrative code provisions as well as any other statute that may apply to health care practitioners regarding client records. 7. The Provider is given notice of Florida law regarding unlicensed activity. The Provider is advised of Section 408.804 and Section 408.812, Florida Statutes. The Provider should also consult the applicable authorizing statutes and administrative code provisions. The Provider is notified that the cancellation of an Agency license may have ramifications potentially affecting accrediting, third party billing including but not limited to the Florida Medicaid program, and private contracts. ORDERED at Tallahassee, Florida, on this ? day of Decee bey » 2011. es ded Elizabeth/Dudek, Secr Agency for Health q ary g Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below-named persons by the method designated on this 7o— tay of » 2011. aN Richard Shoop, Agency Cl Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Copies: Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Katrina Derico-Harris Shaddrick Haston, Unit Manager Medicaid Accounts Receivable Assisted Living Unit Agency for Health Care Administration Agency for Health Care Administration (nteroffice Mail) (Electronic Mail) Shawn McCauley Patricia Caufman, Field Office Manager Medicaid Contract Management Areas 5 and 6 Agency for Health Care Administration Agency for Health Care Administration (Interoffice Mail) (Electronic Mail) Thomas J. Walsh II, Senior Attorney Monica Strickland, Esquire Office of the General Counsel 402 East 7th Avenue Agency for Health Care Administration Tampa, Florida 33602 (Electronic Mail) (U.S. Mail) Thomas M. Hoeler, Chief Facilities Counsel R. Bruce McKibben Office of the General Counsel Administrative Law Judge Agency for Health Care Administration Division of Administrative Hearings (Electronic Mail) (Electronic Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity.-- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2} The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
