Findings Of Fact A. whether the "Grandfather" Issue Should Be Determined. The Petitioner, Mease Hospital and Clinic (Mease), operates a 278 bed hospital in Dunedin, a 100 bed hospital in Countryside, and a medical clinic. All are located in north Pinellas County, in the North Pinellas subdistrict of HRS District 5. In 1982, Mease applied for a certificate of need to equip and operate a cardiac catheterization laboratory (CCL). At the time, Mease was of the view that a CCL would be a new service and would therefore require a certificate of need. When Mease determined that approval would not be likely under then current rules, Mease withdrew its application because it understood that a final denial legally would preclude Mease from re-applying for three years. On July 11, 1986, the Respondent, HRS, entered a Final Order adopting a Recommended Order and acknowledging that Humana Hospital Northside, also located in Pinellas County, HRS District 5, continuously had been providing cardiac catheterization services since before July 1, 1977, the effective date of certificate of need regulation of CCLs, and therefore was not required to obtain a certificate of need for a CCL as a new service. Final Order, Humana Hospital Northside v. Department of Health, etc., 8 F.A.L.R. 3910 (DHRS July 11, 1986). When Mease reviewed the Humana Northside Final Order and final hearing transcript, it concluded that it, too, should be "grandfathered." Mease was doing the same type catheterization procedures as Humana Northside. Mease decided to re-apply for a certificate of need both on the basis of need for a CCL at Mease and on the basis of the "grandfather" claim. In October, 1986, Mease filed the pending certificate of need application. In addition to the more typical components of a CON application, the Mease application states in pertinent part: EQUIPMENT/SERVICE TYPE: Mease Hospital and Clinic maintains that the Cardiac Catheterization Program is not a new service, as procedures similar to those performed at Humana Northside, which was recently approved on a grandfathering basis for cardiac catheterization have been performed at Mease Hospital and Clinic in Dunedin for more than 20 years. * * * ADDITIONAL PROJECT DETAILS/REMARKS: Mease Hospital and Clinic believes its historic performance of procedures identical to those for which Humana Northside was grand fathered a cardiac catheterization lab is sufficient to justify similar action, resulting in approval of Mease' proposal. HRS' State Agency Action Report (SAAR) was completed in April, 1987. It evaluated the Mease proposal as a typical certificate of need application and denied it on the basis of lack of need. There was no direct mention of the "grandfather" claim, but the SAAR concludes in pertinent part: "Deny a certificate of need for [the Mease] project [among others] in its entirety... Reasons for decision: Insufficient need for an additional cardiac cath lab." Mease's petition for formal administrative proceedings on the denial does not specifically address the "grandfather" claim, either. During the pendency of this proceeding, Mease continued to seek a "grandfather" exemption apart from this proceeding. But Mease's prehearing proceedings in this case were conducted in a way that indicated its assumption that the "grandfather" issue would be determined by final agency action in this case, if not before by informal means. The other parties recognized this assumption and were not prejudiced by Mease's failure to formally specify the issue in its pending petition for formal administrative proceedings or by amendment to it. By letter dated November 23, 1987, HRS finally responded to Mease's continued efforts to obtain "grandfather" status and denied the request. Mease still did not amend its petition for formal administrative proceedings (nor did it file a new, separate petition in response to the November 23 letter.) But it continued to conduct prehearing procedures in a manner so as to have the "grandfather" claim heard as part of this case. HRS and the Intervenor, Morton Plant Hospital, Inc. (Morton Plant) first objected on the record to consideration of the "grandfather" issue in this case in the Prehearing Stipulation filed on January 6, 1988. The "grandfather" issue should be determined in this proceeding. Whether Mease Has A "Grandfathered" CCL. Before July 1, 1977, and continuously since, Mease has operated a special procedures room at its Dunedin hospital. The special procedures room is the largest room in the x-ray department, with adjoining rooms that contain sinks for sterile technique and housing computers. Equipment in the room includes an x-ray generator with a high MA capability to do moderately rapid sequence films and fluoroscope. There is a table of special design to allow movement in all directions to facilitate fluoroscopy. Three different film changers are used. The room contains a large array of catheters, wires and needles for use in the catheterization process. There is a defibrillator monitor, pressure monitors, and various physiologic monitors also in the room. Finally, there is a digital vascular imaging ("DVI") machine to facilitate the computerized processing of digital subtraction studies. The DVI machine has been used to perform coronary arteriographies. During the time the special procedures room has been operational, it has been staffed with persons specifically trained in critical care of patients, with special knowledge of cardiovascular medication and catheterization type equipment. There has always been ample support staff available for patient observation, handling blood samples, performing blood gas evaluations and monitoring physiological data. The catheterization team usually consists of the physician, a special procedures nurse (an R.N. with critical care training) and at least two dedicated radiographer technologists with special knowledge of the equipment. A special procedures log is maintained by physicians using the special procedures room. Procedures typical of those contained on the log prior to and consistently since 1977 include renal arteriograms, pulmonary arteriograms, cerebral arteriograms and femoral arteriograms. Pulmonary arteriograms involve passing a catheter through a right side chamber of the heart into the lungs; the other procedures do not involve passing a catheter into the heart. Pulmonary angiograms, right ventriculography and right atrial injections are all currently performed at Mease in the radiology laboratory. Right heart catheterization procedures are being performed in the CCU units and the special procedures lab at Mease. The special procedures room is not used by radiologists or cardiologists to do any therapeutic or diagnostic studies of the left chambers of the heart. Unlike procedures such as pulmonary arteriograms, in which the catheter is inserted into or through a chamber on the right side of the heart, fluoroscopy is required for insertion of a catheter into a chamber of the left side of the heart. With fluoroscopy, left heart catheterization procedures involve no significantly increased danger to the patient. Left heart catheterization procedures require faster film sequencing equipment for fluoroscopy because the left heart is a higher pressure (faster flow) system than the right heart chambers. Mease's cardiologists perform these procedures in a CCL at either Morton Plant or Largo Medical Center in Clearwater. The Mease special procedures room does not have, and has not had, the more sophisticated equipment needed to perform catheterization procedures in the left chambers of the heart. The sophisticated equipment needed for left heart catheterizations customarily is part of a CCL. It is commonly understood that a CCL is a laboratory which includes this equipment and uses this equipment for left heart catheterizations. Mease shared this understanding until it learned of the Final Order in Humana Hospital Northside. It never contested the omission of cardiac cath services from its hospital license, never reported cardiac cath procedures to the local health council and applied for a CON for a CCL in 1982. On review of the Humana final order and the record of the case, Mease correctly concluded that its special procedures room was being operated in the same way as Humana Northside's. Mease also concluded that it, too, was entitled to "grandfather" status. But the Humana final order points out: The respondent HRS offered no evidence to dispute the fact that petitioner has indeed been providing cardiac catheterization services on a regular and continuous basis from pre-July 1, 1977 to the present time. Instead, HRS takes the position that since petitioner never reported to the Local Health Council that it was performing such services, it is now somehow estopped from claiming a "grandfather" exemption from Certificate of Need review. There is competent and substantial evidence demonstrating that petitioner began performing cardiac catheterization procedures prior to July 1, 1977, at a time when Certificate of Need review was not required, and has continued to perform such services on a regular basis. Accordingly, petitioner was exempt from Certificate of Need review when it initiated such services and continues to maintain that exempt status so long as it regularly and continuously performs such services. In this case, there was persuasive evidence disputing that Mease has been operating a CCL. Mease's special procedures room had some, but not all, of the equipment customarily used in cardiac catheterization. Its special procedures room is not the kind of room customarily used to perform cardiac catheterization procedures. This is why Mease never before claimed entitlement to "grandfather" status but rather presumed that it did not have a CCL and would need a CON to open a CCL. Mease has not been operating a CCL continuously since July 1, 1977. Need For Mease's Proposed CCL. Mease filed the pending CON application in October, 1986. At the time, the local health council for District 5 was reporting an inventory of four CCLs: St. Anthony's; Morton Plant; Largo; and All Children's. Mease also knew that HRS had entered a final order in July, 1986, recognizing "grandfather status" for Humana Northside and allowing Humana Northside to upgrade its CCL by adding up-to-date equipment required for left heart catheterization procedures. At the time of the State Agency Action Report (SAAR) denying Mease's application in April, 1987, HRS was aware of, and also counted in the inventory at the time of the SAAR, a second CCL at Morton Plant which was added without CON review. The second Morton Plant CCL became operational in July, 1986, but was not reported to the local health council until early 1987, and was not reported by the local health council until September, 1987. A second CCL also opened without CON review at Largo Medical Center. But the evidence was not clear when the second Largo lab opened. It was not reported to, or by, the local health council before the SAAR either, and HRS did not count it in the inventory for purposes of the SAAR. Since the SAAR, two additional CCLs have been approved without CON review at Bayfront Hospital/All Children's Hospital in St. Petersburg. Finally, on November 24, 1987, the District Court of Appeal, First District, rendered an opinion reversing HRS' final order denying an application for a CON for a CCL at Bayonet Point Regional Medical Center in Pasco County in District 5. This CCL was approved for purposes of meeting the need existing as of 1986. The actual District 5 CCL use rate for the period July, 1985, through June, 1986, using local health council data, was 308.47 procedures per 100,000 population. The year in which the proposed CCL would initiate service, but not more than two years into the future, is July, 1988. The District 5 population in July, 1988, is projected to be 1,124,986. The number of procedures projected for District 5 in July, 1988, is 3470. Allocating 600 procedures per CCL, 3470 procedures would create a numerical need for 6 CCLs in District 5 in July, 1988. The local health council did not report any procedures done at the "grandfathered" CCL at Humana Northside, and none were included in the data for the time period July, 1985, to June, 1986. Counting the "grandfathered" Humana Northside CCL in the inventory at the time of the SAAR without attributing any procedures to it for purposes of calculating the use rate for July, 1985, to June, 1986, amounts to a recognition that Humana Northside, while given "grandfather" status based on the facts presented in DOAH Case No. 84-4070, was not in fact operating a CCL continuously since July, 1977. Refusal to attribute procedures to Humana Northside reflects a rational policy decision in this case not to perpetuate the error resulting from the apparently less-than-adequate HRS presentation of its case in the Humana Northside case. There was evidence officially recognized in this case without objection--namely, the Final Order, Bayonet Point Medical Center v. Department of Health and Rehabilitative Services, 8 F.A.L.R. 4342 (DHRS 1986)--that 1200 Pasco County (District 5) residents were being referred to Tampa for cardiac catheterization and open heart surgery in the year preceding June, 1986. (300 were open heart surgery patients.) But there was no evidence to prove how many of the 900 cardiac catheterization patients who were referred to Tampa in the period July, 1985, to June, 1986, would have had the procedure performed in District 5 if Bayonet Point had a CCL. It necessarily follows that there was no evidence to prove that any additional cardiac cath procedures for Pasco County patients performed in District 5 as a result of the Bayonet Pont CCL will not be absorbed by and performed at the Bayonet Point CCL. District 5 has the highest percentage of 65 and over population in the state (29.7 percent for calendar year 1986), but next to the lowest number of catheterizations per thousand of all the districts in the sate. District 5 also has a large cohort of population age 45 to 64. Over 50 percent of the population in District 5 is in the age cohort for which cardiac catheterization is most frequently needed as a diagnostic or therapeutic tool. Seasonal fluctuations increase the elderly winter population. Resident death rate from heart disease is almost 50 percent higher in District 5 than it is for the state of Florida. These factors combine to create an actual use rate in District 5 that, for the past two years (1986 and 1987) has exceeded (or, for 1987, was projected to exceed) the projected horizon year (July 1988) use rate derived from using the 1985 use rate data. The actual use rate for January through September 1987, when extrapolated for the entire calendar year of 1987, shows that the number of procedures expected to be actually performed in District 5 in 1987 is 46 percent (approximately 1,000 procedures) greater than the number of procedures projected to be needed in July 1988 using the 1985 use rate. The projection of procedures for July 1988 is 700 procedures less than actually occurred in District 5 in 1986. Use of July, 1985 to June, 1986, use rate in a demographic configuration like that found in District 5 underestimates projected procedures for July, 1988. Some trends in health care and area population growth do not support the addition of a cath lab at Mease. While the population of north Pinellas County, where Mease is located, is equal in age distribution to south Pinellas County, the new growth in north Pinellas and Pasco is younger than south Pinellas. Increased use of non-invasive diagnostic procedures, such as MRI and CAT scan, will reduce the growth of cardiac cath procedures in the future. The growth in the use rate in cardiac caths is in the number of therapeutic caths, which by rule are required to be done in a facility with open heart surgery and therefore cannot be done at Mease at this time. Indeed, the number of right heart caths being done at Mease has remained constant over the past several years. Also, death from heart disease is decreasing due to improvements in life style. All the cath labs in District 5 are within a two hour drive time of 90 percent of the population in District 5. Morton Plant is six miles from Mease Dunedin. Mease Countryside is twelve miles from Morton Plant and eight miles from Mease Dunedin. One-third of the Mease cardiologist's patients are at Mease Countryside and for catheterization these patients would have to be admitted at or transported to Mease Dunedin where the proposed lab would be located. There is sufficient capacity in the existing cath labs to serve growth in the near future. Approximately 600 more procedures could be done at Morton Plant. There is no problem scheduling caths at Morton Plant. There has been some difficulty getting beds for Mease patients before and after the procedure, but Morton Plant just opened new ICU beds with specially trained nurses to accommodate Dr. Gibbs' patients. The existing labs in District 5 are financially accessible. A significant number of the labs are located in not- for-profit hospitals that serve all types of patients. E.g., Morton Plant, which has an overlapping service district with Mease, offers twice the number of Medicaid days as Mease. In addition, as previously mentioned, new approved labs at Bayfront/ALL Children's (2) and Bayonet Point (1) will be coming on line to provide additional capacity (and bring the total number of CCLs in District 5 to ten.)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that HRS enter a final order: (1) denying Mease's request for recognition of a "grandfathered" CCL at its Dunedin hospital; and (2) denying its application for a CON for a CCL at its Dunedin hospital, CON Action No. 5108. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 1988.
Findings Of Fact Case Status On October 15, 1986, Petitioner, Holy Cross Hospital, Inc. (Holy Cross), filed an application with the Respondent, Department of Health and Rehabilitative Services (Department), for a certificate of need to establish an inpatient cardiac catheterization laboratory at its existent acute care hospital in Broward County, Florida. On June 12, 1987, the Department published notice in the Florida Administrative Weekly of its intent to deny Holy Cross' application, and Holy Cross timely petitioned for formal administrative review. Intervenors, Zachariah P. Zachariah (Zachariah), North Ridge Medical Center (North Ridge), Florida Medical Center (FMC), and North Broward Hospital District d/b/a North Broward Medical Center, and Broward General Medical Center (North Broward), current providers of cardiac catheterization services in Broward County, sought and were granted leave to intervene in this proceeding. The standing of these intervenors, with the exception of Zachariah, is not in dispute. Background Holy Cross is a private, not for profit, general acute care facility located at 4725 North Federal Highway, Fort Lauderdale, Broward County, Florida. Currently, Holy Cross operates 574 general acute care beds and 23 intensive rehabilitation beds. Holy Cross has, since 1974, operated an open-heart surgery program at its facility. In 1974, Holy Cross sought leave of the Department to establish a cardiac catheterization laboratory at its facility. That application was denied. As a consequence of that denial, Holy Cross actively solicited physicians to establish such a program within its hospital. In August 1976, Holy Cross negotiated a ten-year lease with Zachariah whereby it leased him 2,833 square feet of space on the third floor of the hospital for use as a cardiac catheterization laboratory. Zachariah purchased the necessary equipment, and has operated a cardiac catheterization laboratory at Holy Cross since 1976. In March 1985, following Zachariah's expansion of his laboratory facilities, he and Holy Cross executed a new lease agreement to continue the operation of his laboratory within the hospital. This lease was for 6,956 square feet of space on the third floor of the hospital and was for a five year term commencing October 15, 1985, with a five year renewal option. Currently, Zachariah has three cardiac catheterization laboratories within the space he leases at the hospital. The proposed facility Holy Cross proposes to renovate and dedicate, as a cardiac catheterization laboratory, 2,500 square feet of existing hospital space immediately adjoining Zachariah's existing catheterization laboratories. The physical renovations are estimated to cost $315,000 and equipment to cost $600,000 for a total capital expenditure of $915,000. The laboratory, as proposed, is capable of providing a range of angiographic studies and physiologic studies without the need to move patients to perform related procedures. Holy Cross currently has the capability of providing immediate endocardiac catheter pacemaking in cases of cardiac arrest, and the proposed laboratory will likewise have such capability available to it. Currently, approximately 13 physicians practicing at Holy Cross possess such skills. Holy Cross currently provides, and will continue to provide, a ranged of non-invasive cardiac or circulatory diagnostic services within its health care facility, including: hematology studies and coagulation studies; electrocardiography; chest x-ray; blood gas studies; clinical pathology studies and blood chemistry analysis; nuclear studies pertaining to cardiology; and echocardiography. Additionally, Holy Cross currently provides, and will continue to provide, the following services within its facility: pulmonary function testing; and microbiology studies. As sited, the proposed cardiac catheterization laboratory will be readily accessible to the population of Broward County. Accessibility does not, however, present a problem in Broward County since all approved facilities are located strategically throughout the county. The hours of operation for the proposed laboratory will typically be either 8:00 a.m. to 4:00 p.m. or 9:00 a.m. to 5:00 p.m., with the capability of rapid mobilization of the study team for emergency procedures 24 hours a day, 7 days a week. Holy Cross is fully accredited by the Joint Commission of Accreditation of Hospitals (JCAH) for special care units, as well as its intensive and cardiovascular intensive care unit. The parties have stipulated that the staffing requirements proposed by Holy Cross are reasonable, and that it will be able to recruit the necessary staff. Currently, Holy Cross maintains an ongoing program of staff education and skills upgrading. Additionally, Holy Cross maintains an ongoing educational program for the community whereby citizens Acre afforded the opportunity to learn what specialty services are provided by the hospital. These programs will continue to be provided by Holy Cross. The proof established that Holy Cross can be reasonably expected to perform a minimum of 300 cardiac catheterizations annually within three years following its initiation of service. The proof further established that the average number of catheterizations performed each year by existing and approved laboratories performing adult procedures in the service area was greater than 600 and that, if the Holy Cross application is approved, the average volume of procedures performed by those laboratories would not be reduced below 600 procedures each year. The service cost proposed by Holy Cross is comparable to similar institutions within the service area when patient mix, reimbursement mechanisms and cost accounting methods are taken into consideration. Need determination The Department has established by rule the methodology whereby the need for cardiac catheterization capacity in a service area shall be determined. Pertinent to this case, Rule 10-5.011(e) 12, Florida Administrative Code, provides: Need Determination. The need for cardiac catheterization capacity in a service area shall be determined by computing the protected number of cardiac catheterization procedures in the service area. The following formula shall be used in this determination...(Emphasis added). In the instant case, the proof established that between July 1985 and June 1986 7,017 cardiac catheterization procedures were performed in the service area. The population estimates from the Office of the Governor, dated January 1, 1986, demonstrate an adult population within the service area of 962,987 for January 1986, and 1,009,557 for July 1988. Utilization of this data in the methodology prescribed by the rule, calculates that 7,356.3 catheterization procedures will be performed in July 1988 (the horizon year). When divided by the 600 procedure standard, there is a need for 12.26 cardiac catheterization laboratories in the service area to support the projected number of adult procedures in July 1988. At the beginning of the review cycle for the Holy Cross application the inventory of cardiac catheterization laboratories in the service area (Broward County) was as follows: Zachariah-3, Florida Medical Center (FMC)-3, North Ridge Medical Center-2, North Broward Medical Center-1, Broward General Medical Center-1, Plantation General Hospital-1, and Memorial Hospital-1, for a total of 12 laboratories. However, one of Zachariah's laboratories and one of Florida Medical Center's laboratories are backup laboratories, and no more than two laboratories are ever utilized or capable of being utilized at those facilities simultaneously. Pertinent to this case, Rule 10-5.011(e)1, Florida Administrative Code, provides: A cardiac catheterization laboratory is defined as a room or suite of rooms in a hospital which has the equipment, staff and support services required to perform angiographic and physiologic cardiac catheterization procedures, and which is customarily used to perform cardiac catheterization procedures. The number of cardiac catheterization laboratories in a hospital is equal to the number of patients who can undergo the catheterization procedure simultaneously... (Emphasis added). Accordingly, the proof demonstrates that for purposes of calculating the need for cardiac catheterization capacity in Broward County under the rule methodology that there existed 10 cardiac catheterization laboratories in the service area for this review cycle. Therefore, there exists a numeric need for 2.26 additional cardiac catheterization laboratories in Broward County. Consistency with State and Local Health Plans Pertinent to this case, the local health plan, District X, provides, as its general policy number 3, that: Services provided by all proposed and existing facilities should be made available to all segments of the residential population regardless of the ability to pay. Priority #1 - Services and facilities should be designed to treat indigent patients to the greatest extent possible, with new project approval based in part on a documented history of provision of services to indigent patients. Priority #2 - Applicants should have documented a willingness to participate in appropriate community planning activities aimed at addressing the problem of financing for the medically indigent. With specific regard to cardiac catheterization, the local health plan contains the following pertinent recommendations: Applicants proposing to initiate or expand cardiac catheterization...must make those services available to all segments of the population regardless of the ability to pay. The provision of new cardiac catheterization surgery programs should not be approved unless they meet or exceed the standards and criteria set forth by HRS. Holy Cross currently holds a Medicaid contract with the state, and proposes that its cardiac catheterization laboratory will be available to all persons in need and independent of their ability to pay. Holy Cross is not, however, an historic provider of significant indigent care, nor does it propose significant indigent care at its proposed laboratory. According to its application, the patient day percentage breakdown at its laboratory will be as follows: medicare-59.6 percent, medicaid-1.0 percent, insurance-36.0 percent, private pay-1.7 percent, and indigent-1.7 percent The proof demonstrates that Holy Cross' basic policy is to serve in a Christian-like manner, and to serve the indigent with open arms, respect and caring. In application, however, Holy Cross' "approach" to indigent care is "if they show up, we treat them." Clearly, Holy Cross does not actively promote the availability of its services to the indigent, and it offered no proof that it participated in any community planning activities aimed at addressing the problem of financing for the medically indigent. There was no proof, however, that indigent patients in Broward County (District X) were being denied cardiac catheterization care, notwithstanding the fact that over one-half of the laboratories in the county, (Zachariah, FMC, and North Ridge) have provided little or no medicaid or indigent care within the past 2 years. Under the circumstances, Holy Cross' failure to dedicate more resources toward indigent care is less significant than it might otherwise be if such need existed. However, it must still be concluded that the Holy Cross application is not consistent with the local health plan since its proposal to provide the services regardless of ability to pay is, in view of its "approach" to serving that segment of society, an obligation that will rarely, if ever, be fulfilled. To the extent the Holy Cross application may fail to comply with statutory and rule criteria, as hereinafter discussed, it is also not consistent with the local health plan. The state health plan devotes a section to cardiac catheterization, and the Holy Cross application conforms to the recommended minimum annual average of catheterization procedures, and the recommended physical proximity between open-heart surgical capacity and cardiac catheterization laboratories. The plan also provides as a goal, to assure the appropriate availability of cardiac catheterization and open-heart surgery services at a reasonable cost. As previously noted, the costs proposed by Holy Cross are reasonable. However, in view of Zachariah's existing facilities, the proposal does little of significance to enhance availability. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the service district. The demand for cardiac catheterization services in the district has been increasing at a significant rate over the course of the past five years. Between 1982 and 1983 the number of cardiac catheterizations performed in the service area increased over 20 percent (from 4,162 to 5,009), between 1983 and 1984 there was an approximate decrease of 1 percent, between 1984 and 1985 there was an increase of 17.8 percent, between 1985 and 1986 there was an increase of 38.9 percent, and between 1986 and 1987 a projected increase of approximately 27 percent. Annualized data for 1987 demonstrates that 9,810 procedures will be performed in 1987. The historic demand for catheterization services within the district is a reliable proxy, and demonstrates that the demand for such services will increase by at least 20 percent in the year 1988. Such increase will result in the need to accommodate an additional 1,962 procedures in the year 1988, or 981 procedures by Holy Cross' planning horizon of July 1988. Accordingly, by July 1988 the district should experience a demand for approximately 10,791 procedures. During 1987, the existent facilities within the district were projected to perform the following number of procedures: Zachariah - 1,166, FMC - 2,134, North Ridge - 2,382, Broward General Medical Center - 1,430, Plantation General - 702, North Broward Medical Center - 532, and Memorial Hospital - 1,464. The maximum capacity of a cardiac catheterization laboratory is between 1,000 and 1,400 procedures annually, depending upon the mix of patients, the skills of the cardiologist, and the hours of operation of the laboratory. North Ridge's expert, Deborah Krueger, conducted a survey of existing facilities to discover what they considered to be the maximum number of procedures they could accommodate in each of their laboratories. While not wholly reliable, as hereinafter discussed, the responses regarding the maximum number of procedures that could be accommodated in each laboratory of the existing facilities was as follows: Zachariah - 1,000, FMC -1,250, North Ridge - 1,300, Broward General Medical Center - 1,040-1,248, Plantation General - 1,000, North Broward Medical Center - no response, and Memorial Hospital - no response. Comparing the number of procedures projected for existing facilities in 1987 with the results of Ms. Krueger's survey could lead one to conclude that there is an unused capacity within the district to accommodate up to 2,584 additional procedures in 1988. Such conclusion is not, however, supported by the proof. Notwithstanding Ms. Krueger's survey, the proof demonstrated that FMC is currently at capacity. North Ridge, which estimated it could perform 1,300 procedures per lab, is projecting 2,382 procedures in 1987, only 219 procedures less than its estimated maximum capacity. Yet, the North Ridge medical director is the only physician currently performing catheterizations at the hospital, and is sometimes doing up to 17 a day and working 12 hour shifts. Under the circumstances, to suggest that North Ridge is not currently at capacity is not credible. The only facilities with available capacity are Zachariah, Plantation General, and North Broward Medical Center. These facilities have the capacity to handle an additional 1,600 procedures in 1988: Zachariah (834), Plantation General (298), and North Broward Medical Center (468). Accordingly, there exists excess capacity within the district for the relevant time frame. As previously noted, there exists no accessibility problem within the district, and there is no proof that any patient has experienced any serious problem in obtaining catheterization services. There is, further, no dispute concerning the quality of care provided by existing facilities, and no issue raised concerning the efficiency and appropriateness of existing services. The ability of the applicant to provide quality of care and the applicant's record of providing quality of care Holy Cross has been a provider of a broad range of services within the district since 1959. The parties stipulated that the staffing requirements proposed by Holy Cross were reasonable, that it would be able to recruit the necessary staff, and that it had the necessary resources for project accomplishment and operation. Accordingly, no issue was raised concerning Holy Cross' ability to render quality care. Therefore, it is concluded that Holy Cross has provided, and will continue to provide quality care for its patients. Availability and adequacy of alternative services There was no evidence that any alternative service (a non-inpatient catheterization laboratory) is available within the district to satisfy the need for inpatient cardiac catheterization. Probable economies and improvements in service that may be derived from operation of joint, cooperative, or shared health care resources. Holy Cross and Zachariah have, since 1976, enjoyed a mutually beneficial arrangement, albeit one of landlord and tenant. At Holy Cross' request, Zachariah established a catheterization laboratory within the hospital's facility, and has since added two additional laboratories. But for a limited number of physicians, Zachariah's laboratory enjoys significant support from and is generally accepted by the physicians on the Holy Cross medical staff. Holy Cross has certainly benefited from this arrangement by being able to provide catheterization services for its patients within the facility, and as a referral base for its open-heart surgery program. Holy Cross does not contest the quality of care offered by Zachariah, nor does it point out any credible reason why their existing arrangement cannot continue to satisfy the needs of Holy Cross and the residents of the district as a whole. Holy Cross' rationalization for its need to initiate inpatient catheterization services is that Zachariah's service is a "closed" laboratory, and that if it were permitted to establish such services its laboratory would be "open." An open laboratory, Holy Cross asserts, would increase accessibility and improve quality of care. Holy Cross' contentions, and the proof it advanced to support them, are not credited. While the proof did establish that Zachariah's laboratory was closed, the proof also demonstrated that the laboratory proposed by Holy Cross would be closed. Further, quality of care, utilization, and accessibility are not favorably or unfavorably impacted within the district by virtue of whether a laboratory is classified as open or closed. Holy Cross' proposal is, essentially, a duplication of an existing program, sited within its own facility, that has the apparent capacity to meet the needs of Holy Cross and the community at large. Under the circumstances, the cooperative arrangement between Holy Cross and Zachariah offers a more economical alternative than Holy Cross' proposal. The need in the service district for special equipment and services not accessible in adjoining areas. There was no proof offered that any need existed in the service district for special equipment and services which are not reasonably and economically accessible in adjoining areas. The need for research and educational facilities. No proof was offered concerning the need for any research or educational facilities. Further, no proof was offered that Holy Cross proposed any such programs, or that its services would be available to health professionals for training purposes. Use of resources. The Department asserts that the proposed project is a waste of hospital space, a valuable resource, that could be more appropriately utilized in light of Zachariah's existing facility than through dedication as a catheterization laboratory. No proof was offered, however, to demonstrate what other health service would be a more appropriate use of such resource. The immediate and long-term financial feasibility of the project The immediate financial feasibility of the project is not at issue since the parties have stipulated that Holy Cross has the available resources for project accomplishment and operation. At issue, however, is the long-term financial feasibility of the project. Holy Cross premises its financial feasibility analysis on its projection that it will achieve 800 catheterization procedures in its first year of operation, and 850 procedures in its second year of operation. Holy Cross proposes a patient day percentage breakdown as follows: medicare - 59.6 percent, medicaid - 1.7 percent, insurance - 36.0 percent, private pay - 1.7 percent, and indigent - 1.7 percent. The rate per procedure advanced by Holy Cross is $1,000 during the first year of operation, and $1,050 during the second year of operation. Based on the foregoing assumptions, the Holy Cross pro forma statement of revenue and expenses projected a $57,700 net income at the conclusion of its second year of operation. That pro forma contains, however, several errors which must be considered. First, its bad debt assumption of $12,000 was understated by $24,000. Second, its overhead allocation of $183,600 was overstated by 50 percent ($91,800). Third, its expense line item for supplies failed to reflect a 5 percent inflation factor which results in a supply expense of $223,000 instead of the $213,000 projected by Holy Cross. Fourth, Holy Cross inappropriately adopted a 40 year depreciation schedule, as opposed to 20 years, for its renovations resulting in an understatement of depreciation by $8,000 per year. Adjusting the Holy Cross pro forma for the foregoing errors and omissions demonstrates that the proposed project will generate a net income of $107,000 at the conclusion of its second year of operation if it can attain its projected 850 procedures. Whether Holy Cross can attain such level of service is, however, problematic. By July 1988 there will be only 981 new cardiac catheterization procedures demanded within the district. Existing facilities with capacity will be competing for those procedures along with Holy Cross, and all facilities will be striving to maintain their share of the current market. Under the circumstances, it is not reasonable to conclude that Holy Cross can attain its projection solely from increased demand but, rather, that it must likewise compete with existing providers for a portion of their existing market share. Zachariah, whose existing laboratories are located on the same floor and adjacent to the facility proposed by Holy Cross has the capacity to accommodate up to 834 additional procedures. There is no dispute regarding the quality of care offered by Zachariah, and his service enjoys significant support from the physicians on the Holy Cross medical staff. To penetrate the catheterization market, Holy Cross must therefore not only disrupt physician referral patterns district wide, but must also disrupt such patterns within its own facility. Holy Cross did not, however, advance any plan to market its proposed service. To demonstrate its ability to attract referrals, Holy Cross undertook a physician survey which, if accepted, would demonstrate that it could capture 269 to 327 procedures. Such survey was not, however, independently verified and was otherwise not a reliable indicator of project utilization. At best, it demonstrated interest in an alternative facility, but its utilization projections were merely speculative. Holy Cross also pointed to the recent success of Plantation General as indicative of the reasonableness of its 850 procedure projection. Plantation General initiated its catheterization services in April 1985. Notwithstanding the fact that it was located in close proximity to FMC, had no open-heart surgery program, and had no referral base, Plantation General attained 759 procedures by the end of 1986. Juxtaposed with Plantation General, Holy Cross has a long-standing open-heart surgery program and broad physician referral base. While the Holy Cross analogy is inviting, it is unpersuasive. While Plantation General may have been at 795 procedures by the end of 1986, its 1987 performance dropped to 702. Additionally, North Broward Medical Center initiated service in January 1986, and it is projected to only reach 532 procedures by the end of 1987. On balance, the proof fails to demonstrate that Holy Cross can reasonably expect to attract the necessary referrals to reach its projection of 850 procedures, or any lesser number of procedures, that would render its project financially feasible in the long term. Needs of entities providing service to individuals not residing in the service district. There was no proof that Holy Cross provided a substantial portion of its services or resources to individuals not residing in the service district such as to demonstrate special needs and circumstances for its proposed project. The probable impact of the proposed project on the costs of providing cardiac catheterization services. Holy Cross stipulated that all intervenors, except Zachariah, have standing to participate in this proceeding. Accordingly, it is established, except for Zachariah, that the initiation of the proposed service will substantially adversely impact the existing cardiac catheterization programs at those facilities. There was, however, no reliable proof that such competition would adversely affect the supply of catheterization services. Likewise, there was no competent proof that such competition would improve the delivery of health services. Regarding Zachariah, the proof demonstrated that he would lose patients if the proposed service is initiated. While the magnitude of his loss could not be quantified because dependent on future events, it must be concluded that since Holy Cross would disrupt the existing referral patters he has established with Holy Cross' medical staff, Zachariah's program would be substantially adversely affected by the proposed project. Costs of Construction. The parties stipulated that the costs for construction and equipment are reasonable.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered denying Holy Cross' application for a certificate of need to initiate inpatient cardiac catheterization services. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1988.
The Issue The issues for determination are whether Petitioners should be awarded certificates of need authorizing the establishment of inpatient cardiac catheterization services at their respective facilities. As a result of stipulations of the parties, matters for consideration with regard to award of those certificates of need primarily involve a determination as to whether Petitioners' applications meet rule criteria relating to need (numeric and non-numeric), provision of a written protocol or transfer agreement, and utilization standards.
Findings Of Fact The legislature has deregulated the establishment of outpatient cardiac catheterization laboratories (cardiac cath labs), but a certificate of need (CON) is required before a hospital can operate an inpatient cardiac cath lab. The Department of Health and Rehabilitative Services (HRS) has not approved, as the result of initial agency action, a new cardiac cath lab CON in HRS' Service District Five since 1977. The Parties Palms Petitioner NME Hospitals, Inc., d/b/a Palms of Pasadena Hospital (Palms), is a 310 bed acute care hospital located in Pasadena, Florida. Pasadena is geographically located in the southern portion of Pinellas County, Florida. Pasadena, though geographically small, is one of the most densely populated cities in the United States. Within one half mile of Palms are 10,000 people of whom 60 percent are 65 years of age or older. Palms is a full service hospital with an extensive range of medical and surgical services, including a 24 hour emergency room; a coronary care intensive care unit; a surgical intensive care unit; and a respiratory intensive care unit. Palms also offers a full spectrum of non-invasive cardiology services including electrocardiography, echocardiagraphy, nuclear medicine, stress testing and 24 hour monitoring. Palms has five cardiologists, four of them invasive cardiologists, on its active staff and five cardiologists on its courtesy staff. The four invasive cardiologists would utilize a cardiac cath lab or program at Palms. Palms is situated on 13 acres with a main hospital complex that encompasses over 400,000 square feet. There are over 300 physicians on Palms' medical staff, representing virtually every medical specialty. The hospital is accredited by the Joint Commission on Accreditation of Healthcare Organizations. HRS Service District Number Five, which encompasses Palms location, is composed of Pinellas and Pasco Counties. The service district is heavily populated by persons age 65 and over; the persons who, nationally, have the highest rate of cardiac catheterization admissions per 1,000 persons. The rate for deaths resulting from major cardiovascular diseases and heart disease in Pinellas County is 150 percent above the rate for such deaths within the entire State of Florida. Notably, thirty percent of the approximately 200,000 persons within Palms' primary service area are age 65 or older. Further, sixty-eight percent of Palms' patients are medicare patients with an average age of 77 to 78 years. The average age of the medicare population at other hospitals in Pinellas County ranges from 72 to 73 years of age. During 1987 and 1988, 516 inpatients at Palms required cardiac cath services (238 in 1987 and 278 in 1988). A diagnostic cardiac catheterization (cardiac cath) is an invasive medical operation in which a catheter is passed via vascular access in the arm or leg into the heart for purposes of diagnosing cardiovascular diseases or measuring blood pressure flow. Significant advances in the technology of cardiac catheterization permits usage of cardiac caths in the emergency treatment of heart attacks through injection of thrombolytic agents directly into the blood clot causing the heart attack. While these medications can be given intravenously, such an option is not available in the case of elderly patients, who run a higher risk of internal bleeding as a side effect of the drug, and patients who delay seeking medical attention after the onset of a heart attack. Approximately 30 percent of the patients arriving at Palms' emergency room have a cardiac related problem. The number of these patients who are candidates for intravenous injection of thrombolytic agents is small. Approval of Palms' application would significantly improve the quality of care of these patients by permitting the injection of thrombolytic agents directly into the blood clot causing the heart attack, a permitted medical procedure in the process of administering a diagnostic cardiac cath. After the onset of a heart attack, there exists a six hour window during which potentially life-saving drugs can be administered. Due to the possible side effects of these drugs, cardiologists must often perform a cardiac cath to diagnose the ailment prior to administering the drugs. Consequently, patients who present themselves for treatment at Palms several hours after the onset of heart attack symptoms may be precluded from receiving these drugs in view of the lack of a cardiac cath lab or program at Palms. Mease Petitioner Mease Health Care, Inc., (Mease) owns and operates Mease Hospital Dunedin and Mease Hospital Countryside. Mease also operates clinics located in New Port Richey, Palm Harbor, Countryside and Dunedin, Florida. These clinics serve a combined 350,000 patients per year. Mease Hospital Dunedin is a 278 bed facility located in Dunedin, Florida. The Mease Dunedin Clinic houses approximately 60 physicians. Mease Countryside Hospital, opened in 1985, consists of 100 beds and is located approximately eight miles from Mease Hospital Dunedin. Approximately 30 physicians have offices at the Mease Countryside Clinic. Most physicians practicing in the clinics have hospital privileges only at the Mease facilities. Another 100 physicians on the staff of these two hospitals have practices in the surrounding area and admit patients to the Mease facilities. Physicians housed in the Mease Countryside and Dunedin Clinics provide a significant source of patient referrals for the two hospitals, since most physicians practicing in the two clinics have hospital privileges only at the Mease facilities. Ninety percent of patients hospitalized by physicians in the two clinics are hospitalized in Mease Dunedin or Mease Countryside hospital facilities. Mease currently operates a cardiac cath lab at its Mease Dunedin campus on an outpatient basis. This existing facility could be utilized by Mease for inpatient catheterization. The existing outpatient cath lab is outfitted with a Phillips Digital Cardiac Imaging System, the most medically advanced equipment of this type in Pinellas County. Mease's current outpatient cath lab meets all applicable standards for the operation of an inpatient cath lab and is adequately staffed to perform 600 cardiac caths per year. There is no difference in the physical layout of an inpatient cath lab versus an outpatient cath lab. Mease also provides diagnostic services such as echocardiography and nuclear cardiology. Growth in cardiology services experienced by Mease is consistent with the provision of these additional services. Morton Plant Morton F. Hospital, Inc., (Morton Plant) is a not-for-profit 740 bed general acute care hospital spread among twelve buildings on a 36 acre campus in Clearwater, Florida, approximately three or four miles from Mease. Morton Plant offers a wide range of health care services, including cardiac cath, open heart surgery, a cardiac rehabilitation program, post-cardiac surgery recovery areas and intensive coronary care units. HRS HRS is the state agency which is responsible for administering Sections 381.701 through 381.715, Florida Statutes, the "Health Facility and Services Development Act", under which applications for Certificates of Need (CON) are filed, reviewed, and either granted or denied by that department. Petitioners' Applications The applications of Mease and Palms, seeking a CON to implement inpatient cardiac cath services were filed with HRS on September 28, 1988. After initial review, HRS sent omissions letters to the applicants on October 13, 1988. Responses from Mease and Palms were made on November 11, 1988, and HRS denied both applications on January 12, 1989. Both Petitioners timely requested formal hearings regarding the denials. "Old Rule Versus New Rule" HRS has adopted procedures governing its review of applications, such as those of the petitioners, for CONs authorizing the establishment of inpatient cardiac catheterization programs. These procedures include HRS' numeric methodology for estimating need for cardiac cath labs or programs. This methodology has traditionally been found in Florida Administrative Code Rule 10- 5.011(1)(e). On April 22, 1988, HRS published a proposed "new" rule containing a new methodology for estimating cardiac cath program need. A key component of the new rule is the use of "admissions" to a cardiac cath program, as opposed to the old rule's use of "procedures", to determine numeric need for additional CONs. The new rule was timely challenged by two parties in proceedings before the Division Of Administrative Hearings. However, the matters in dispute between HRS and the challengers were resolved and the proceedings voluntarily dismissed. Subsequently, HRS filed the new rule as revised with the Secretary of State's office and published the new rule on July 29, 1988. The new revised rule was challenged within 21 days of publication pursuant to Section 120.54, Florida Statutes, by three new parties in Division Of Administrative Hearings Cases numbered 88-3970R, 88-4018R and 88-4019R. A Final Order eventually issued in those cases finding the rule challenges to have been timely brought pursuant to Section 120.54, Florida Statutes, and finding the revisions to be an invalid exercise of delegated legislative authority as a result of noncompliance by HRS with requirements of Section 120.54, Florida Statutes. Florida Medical Center v. DHRS, 11 FALR 3904 (Final Order issued June 29, 1989). The Final Order in Florida Medical Center has been appealed. The parties to this proceeding were permitted to present evidence of need for the respective applications under both the new and old versions of Rule 10- 5.011(1)(e) Florida Administrative Code, although all the parties were informed by order dated September 20, 1989, that the undersigned intended to apply those provisions of the administrative rule criteria in existence prior to the successful challenge to the proposed amendments treated in the Final Order issued in Florida Medical Center. Stipulations Palms and Mease stipulate that each other's application meets the quality of care criteria set forth in Section 381.705(1)(c), Florida Statutes. Morton Plant disputes only Mease's ability to insure quality of care through sufficient utilization. HRS stipulates that both applications meet quality of care criteria with the sole exception that neither applicant included a "written protocol" as noted on page II of the State Agency Action Report (SAAR). The parties stipulate that the requirement for a written protocol exists within the "new" version of the cardiac cath rule and not in the original version of the rule. The parties further stipulate that the terms "written protocol" and "transfer agreement" are not defined in either version of the cardiac cath rule. The parties stipulate that criteria contained in Section 381.705(1)(e), Florida Statutes, (relating to operation of joint, cooperative or shared health care resources) are not applicable to either of the applications in this case. HRS stipulates that criteria contained in Section 381.705(1)(f), Florida Statutes, (regarding the need within the service district of an applicant for special equipment and services not reasonably accessible within adjoining areas) are not applicable to either the Palms or Mease applications. Morton Plant contends these criteria are in issue with regard to Mease's application. All parties stipulate that criteria contained in Section 381.705(1)(g), Florida Statutes, (relating to need for research and educational facilities in conjunction with the applications) are not in issue. Criteria relating to manpower and resources contained in Section 381.705(1)(h), Florida Statutes, are not deemed applicable to the applications by HRS or the Petitioners. Morton Plant contends that these criteria are in issue with regard to the availability of necessary health manpower resources insofar as the Mease application is concerned. Petitioners agree that their applications meet immediate and long term financial feasibility requirements of Section 381.705(1)(i), Florida Statutes. HRS also joins in that agreement, provided costs associated with the cardiac cath lab director at the lab proposed by Palms does not affect the financial feasibility of Palms' project. Morton Plant contests the long term feasibility of Mease's project. All parties agree that criteria contained in Section 381.705(1)(m), Florida Statutes, relating to the costs and methods of proposed construction and equipment acquisition, are met by Palms' application and are not applicable to Mease's application. Criteria contained in Section 381.705(1)(n), Florida Statutes, relating to provision of services to Medicare and medically indigent patients, are met by the Petitioners according to HRS. The other parties contend these criteria are in issue. The parties agree that requirements of Section 381.705(2)(c) and (e), Florida Statutes, (relating to new construction alternatives and proposals for additional nursing bed capacity) are not applicable to the applications at issue in this case. The parties agree that the licensure and accreditation of the parties are not in issue and need not be proven. HRS stipulates that Palms' application and Mease's application satisfy all rule criteria under both the old and new versions of the cardiac cath rule with exception of those criteria relating to need (numeric and non-numeric), a written protocol or transfer agreement, and utilization standards set forth in the rule. Availability of existing services Palms Palms' patients requiring the services of a cardiac cath lab must be transferred by ambulance to other facilities where such service is available. Most of these transfers are made to All Children's Hospital (All Children's) in St. Petersburg, Florida, the nearest facility with cardiac cath services. Cath procedures are performed at that facility by cardiologists possessing staff privileges at Palms, as well as All Children's. On average, the transfer of a patient from Palms to All Children's takes an average of one and a half to two hours, although the actual automobile travel time is less than an hour. After a determination that a cardiac cath is needed, arrangements for the transfer involve negotiating an available time at All Children's and preparing the patient for transfer. Patient medical records are copied, consent forms signed, explanations given to patients and intravenous administration of fluids is begun. Because of their unstable condition, specialized nurses, capable of interpreting cardiac monitors and administering drugs associated with cardiac problems, must accompany these cardiac patients in the ambulance. All Children's ambulance is often not available for transfers from Palms. In those instances, Palms must provide an ambulance and nurse. If the need for such a transfer occurs in the middle of a nursing shift, Palms must pull a nurse from another unit in the hospital to accompany the patient. If plans for the transfer are known in advance of the beginning of a nursing shift, additional nursing staff is arranged for that shift. Some patients experience difficulties in the course of such a transfer. The number of intravenous applications (IVs) attached to a patient is limited during an ambulance transfer, consequently some patients must have some IVs removed. During transportation of the patient, IVs are often shaken loose, medications become unbalanced, other medical appliances become disconnected and some patients experience blood loss as well as a loss of blood pressure. Some patients have required blood transfusions upon arrival at the cardiac cath facilities. In view of the associated difficulties, some cardiovascular patients at Palms are simply too sick to undergo a transfer to another facility where cardiac cath services are available. If a cardiac cath lab or program existed at Palms, an estimated $68,000 in transportation charges would be saved in the first year alone. All Children's, a pediatric hospital, is the only hospital in the State of Florida that performs cardiac cath procedures on both adults and children in the same lab. Since All Children's is a tertiary, regional referral center, more than two thirds of the pediatric diagnostic cardiac caths are performed on nonresidents of the service district. Over 55 percent of all diagnostic cardiac caths at All Children's are performed on nonresidents of the district. Angioplasty is a therapeutic, as opposed to diagnostic, cardiac cath procedure. Such cardiac caths can only be performed at facilities providing open heart surgery services. All Children's is the only hospital in South Pinellas County able to perform angioplasty. All Children's has two cardiac cath labs. Both are heavily utilized. From July 1987 through June 1988, there were 1,268 cardiac admissions to the two labs. All Children's historic rate of 2.12 cardiac cath procedures per admission equates to 2,688 procedures performed on these patients. While this number of "procedures" is in excess of the minimum 600 "procedures" per lab standard applicable under the numeric need methodology used by HRS prior to publication of the proposed admission-based need determination formula, different definitions of the term "procedure" are ascribed to the term in accordance with the context of its usage. Under HRS' proposed admission-based need determination formula, there were 1,099 adult cardiac cath admissions to All Children's program from April 1987 through March 1988. This number of admissions is substantially in excess of the 300 admissions per program standard required for program operation under the proposed new rule policy. Currently 15 cardiologists normally use All Children's two labs on a regular basis. Three of these cardiologists deal with pediatric patients. A fourth pediatric cardiologist is being recruited by All Children's. This additional cardiologist will perform electrophysiology, a cardiac cath procedure involving use of multiple catheters. Electrophysiology studies are extremely time-consuming and this additional cardiologist's lab usage will contribute to present lab access difficulty. Presently, All Children's has a "block time" schedule for the different cardiologists on the active staff at the hospital. Each cardiologist has a scheduled block of time for usage of the cardiac cath labs. As a result, a cardiologist can not have a patient, admitted during the previous night, catheterized on a particular day unless that physician's block of time happens to fall on that day. This process effectively eliminates a majority of time during the week when a cardiologist may schedule catheterization for a patient. Pediatric cardiac caths require more lab time than adult cardiac caths and All Children's gives preference in scheduling caths to pediatric patients. Further, All Children's facilities are blocked all day on Mondays for pediatric patients. It is not unusual, in view of the preference given pediatric patients and emergency cath requirements, for adult cardiac cath patients to be "bumped" from the schedule after their arrival at All Children's. The length of hospitalization of adult cardiac cath patients therefore increases, along with a substantial increase in the patient's medical care costs. The decision of All Children's to block both of the hospital's labs for pediatric caths each Monday has resulted in the postponement of cardiac caths for Palms' patients until Monday night or Tuesday. The result is that weekend patients from Palms have a lengthened hospital stay, assuming the patients are stable and can endure the sometimes two or three days wait for a catheterization study. Palms' cardiologists also experience difficulty placing their patients after catheterization at All Children's. Since All Children's is a pediatric hospital, there are no adult beds with the exception of eight intensive care beds which are usually filled by open heart and other surgical patients. As a result of the lack of available beds at All Children's, alternatives are to transfer Palms' patients to Bayfront Medical Center, a facility adjoining All Children's, following catheterization, or return them by ambulance to Palms. This latter alternative is often followed since Bayfront Medical Center is frequently without available beds. Since a significant percentage of diagnostic cardiac cath patients must later undergo a therapeutic catheterization, Palms' patients, who are returned to Palms after diagnostic catheterization, must be transferred back to All Children's for additional cath work. In one instance, a Palms' inpatient was transferred a total of nine times. The difficulty of access to the cardiac cath labs at All Children's is particularly acute during the first quarter of each year when many elderly people come to the St. Petersburg area to enjoy the warmer climate. Significant health care risks to delaying diagnostic cardiac caths include instances at Palms where patients with unstable angina have suffered large myocardial infarctions before their transfer to another facility's cardiac cath lab. These risks are enhanced for Palms' cardiac inpatients, many of whom have multiple health problems. Palms' inpatients have a higher comorbidity index than all other hospitals in the service district. The approximately 30 primary care physicians on the active staff of Palms are not on the active staff of any other hospital. As a result, they are unable to follow their patients and continue treating their other ailments when those patients are transferred to another facility for cardiac catheterization work. If these primary care physicians could follow their patients, the quality of care would be improved. In addition to difficulty obtaining timely access to All Children's cath labs, the volume of work performed at the lab has resulted in cardiac cath technicians requesting, on at least one occasion, that a catheterization be stopped due to the fatigue of the technicians. Approval of additional inpatient diagnostic cath labs or programs in the area would reduce or eliminate the occasions of such stoppage in the future. Cardiac patients admitted to hospitals in the service district which do not have inpatient cardiac cath services wait, on the average, 1.5 days longer in the hospital before they receive catheterization than do those patients admitted to hospitals in the district providing such services. As a result, patients undergoing cardiac cath procedures and staying in a hospital without inpatient cardiac lab services average a stay which is 1.6 days longer than patients staying in a hospital with inpatient cath services. If Palms were able to provide inpatient cath services, an average additional charge of $1,800 per patient undergoing cardiac cath would be eliminated. This equates to a total savings of $200,000 to $300,000 in medical costs from the reduction of the average length of stay as the result of an inpatient program at Palms. Since hospitalized patients are at increased risk for developing nosocomial illness, diseases or infections contracted during a hospital stay, reducing the length of stay also lessens the patient's opportunity to develop such an illness. Approval of the Palms application, while temporarily lowering the number of diagnostic cardiac caths performed at All Children's, would eventually result in an increase in the number of cardiac caths performed at All Children's. This is particularly applicable to the increase in therapeutic caths that would occur at All Children's as the result of establishment of a diagnostic inpatient cardiac cath lab at Palms. The elderly and seasonal population which would be served by an inpatient cath lab at Palms would result in increased referrals from Palms to All Children's for therapeutic cath services. Two other hospitals in South Pinellas County operate inpatient diagnostic cardiac cath labs, St. Anthony's Hospital (St. Anthony's) and Humana Hospital Northside (Humana). Since neither hospital provides therapeutic cath services, a patient transferred there from Palms for the purpose of a diagnostic cath must later be transferred a second time to All Children's in the event therapeutic services are required. The diagnostic cardiac cath lab at St. Anthony's is owned and operated by the Rogers Heart Foundation, a private non- profit foundation. The emphasis at the Foundation on cardiac research has led to a very low use rate in its cath lab. Additionally, staff privileges are limited to those cardiologists willing to serve on rotation as an emergency room physician. As a result of the reluctance of cardiologists, who have limited their practice to cardiology, to meet the emergency room duty requirement, the staff of St. Anthony's is effectively a closed one. The cardiac cath equipment at St. Anthony's is out- dated and fails to produce quality images. Problems have been encountered by cardiologists with the quality of film developed by St. Anthony's cardiac cath lab. Consequently, the lack of growth and modernization of the St. Anthony's lab does not present a reasonable alternative to Palms' application. The alternative of Humana presents a shortage of intensive care and cardiac cath beds similar to that experience with All Children~s, especially during the winter months. Continued diagnostic catheterization of Palms patients at Humana will result in increased competition for an already insufficient number of beds. Humana is located even further from Palms than All Children's, worsening the current problems associated with transfer of Palms' patients to All Children's. Further, Humana, according to the rate of admissions to its cath lab in the second year of operation, will Substantially exceed the new proposed HRS policy of 300 admissions required to justify a program's operation. During 1988, Palms ranked fourth out of the 24 hospitals in the service district in the number of inpatients requiring diagnostic cardiac caths. If those hospitals operating cardiac cath labs are eliminated from the list, then Palms ranked first in the total number of inpatients requiring cath services at the remaining 17 hospitals. In 1988, Palms' 278 inpatients requiring diagnostic cardiac cath services was more than the 219 at St. Anthony's and the 174 for Humana's first year, even though those facilities had cath labs. Palms' total also exceeded the 201 patients requiring this service at both of the Mease hospital sites. The likelihood of discernable adverse impact on the cardiac cath programs at St. Anthony's and Humana as the result of establishing diagnostic cath services at Palms is small in view of the infrequent admission of Palms' patients to those programs. Serious problems will continue to be experienced by Palms' patients in obtaining inpatient diagnostic cardiac cath services if the Palms application is denied. In view of the demographics of the surrounding area and patient age composition at Palms, establishment of a diagnostic cardiac cath program in that hospital would result in an improvement of the standard of care received by inpatients there. The unique nature of All Children's primary mission as a pediatric hospital, and its inability to provide ready access to its cardiac cath labs by Palms' patients for the purpose of diagnostic cardiac cath services, coupled with other previously- noted access problems constitute exceptional and "not normal" circumstances sufficient to justify approval of a diagnostic cardiac cath lab at Palms without regard to numeric need requirements of either the "old" or "new" versions of Rule 10- 5.011(1)(e), Florida Administrative Code. Mease Accessibility to health services has two aspects; geographical accessibility and financial accessibility. The "old" rule policy of HRS has a two hour travel standard within which a cardiac cath lab must be available. The proposed rule has a one hour standard. Morton Plant is approximately three or four miles from the Mease Dunedin campus. Both hospitals provide services to the same population. The Mease Countryside Campus is approximately eight miles from the Mease Dunedin campus. The considerable testimony regarding the problem and inconvenience of transporting patients for cardiac cath presented by Palms is not appropriate to Mease. The cardiac cath labs at Morton Plant are not overcrowded, although alternatives to that possibility are being contemplated in the future through the addition of another cardiac cath lab. Based upon projections presented at the final hearing, an additional cath lab may be necessary by 1991. The present labs are not utilized on the weekends except for emergencies and difficulty in scheduling a diagnostic or therapeutic cath is rarely encountered. However, a scheduling suggestion was made by Morton Plant officials, requesting that cathing cardiologists not schedule elective cardiac caths on Mondays and Fridays. But, Morton Plant has not implemented any rule making the cath labs unavailable for elective procedures at those times. One of the Morton Plant labs has been in operation since 1985 and the equipment in that lab is scheduled to be replaced in the fall of 1990. This refurbishment should eliminate concerns regarding reliability of that lab's machinery, although all maintenance of the equipment in both labs is conducted at night to permit both labs to be functional during the day. Mease opened an outpatient cardiac cath lab in April, 1989. Mease expects to perform 160 to 175 outpatient diagnostic caths in the first year of operation. The lab is not presently profitable. However, transfer of inpatients to other facilities for purpose of inpatient caths does impact negatively on Mease. Mease loses approximately $133,000 per year as the result of inpatient transfers, exclusive of ambulance fees. These losses represent the difference between the medicare reimbursement to Mease and the charges that Mease must pay to the other facility for provisions of the inpatient cath services. From October 1, 1988 through September 30, 1989, between 250 and 260 Mease inpatients were transferred to other facilities to receive inpatient caths. Ambulance cost per patient varies depending upon the destination facility which is generally either Largo Medical Center in Largo, Florida, for a charge of $436 round trip or Morton Plant for a round trip charge of $378. An estimated one hour is needed to make the transfer of a patient from Mease to Morton Plant, although actual travel time to the nearby facility is obviously much less. The services of those Mease nurses who accompany each patient are unavailable to Mease for other services for approximately two hours. The transfer of any inpatient to another hospital constitutes less than optimal care and can compromise patient safety as illustrated by one instance of the transfer of a Mease patient who suffered a major heart attack en route to another facility and became a "cardiac cripple." However, such examples with regard to accessibility to other facilities by Mease patients are not sufficient to constitute exceptional or not normal circumstances for purpose of granting the Mease application. Need For The Proposed Projects Prior to publication of the new proposed rule, HRS recognized that multiple procedures may be performed on a single patient during one admission to a cardiac cath lab. However, in the course of application of the old rule methodology to determine need for additional cardiac cath CONs, HRs did not, as a matter of operational policy, ascribe that same meaning to the term "procedures" in formula computations made to determine numeric need for those labs. Typically, a patient undergoes more than one procedure in the course of a cardiac cath. To determine an actual number of procedures, in the generic sense of the word, performed by existing cardiac cath labs in the service district, Mease and Palms subpoenaed information from all those labs. As a result of that effort, Mease and Palms have shown that 7,507 cardiac cath procedures were performed in the service district during the period July 1987 through June 1988. Of this total, approximately 5,081 were diagnostic cardiac caths. Cardiac cath lab admissions for diagnostic and therapeutic cardiac caths during the July 1987 through June 1988 period totaled 4,057 patients in the service district, averaging 1.85 procedures per cath lab admission. Similarly, diagnostic cardiac caths averaged 1.47 procedures per admission. A Diagnosis Related Group (DRG) is a combination of variable diagnoses codes and procedure codes that are used by Medicare to assign a fixed level of reimbursement to the type of medical services rendered by a provider. The term ICD-9CM Code is an acronym for the Internal Classification of Diseases, 9th Revision, Clinical Modification. The ICD-9 coding system is a classification for morbidity and mortality statistics which are modified for use in the United States for statistical collection. There are five diagnosis codes which identity conditions treated and three procedure codes identifying the type of treatment provided. The federal government and the State of Florida's Health Care Cost Containment Board (HCCCB) require that Florida hospitals maintain and report ICD-9-CM Code information. The American Hospital Association, with input from the federal Health Care Financing Administration, the National Center for Health Statistics, and the American Medical Records Association, publishes standards and rules to ensure uniformity in the reporting of ICD-9 information. Further, the Peer Review Organization, as part of its contract with the Health Standards Quality Bureau, reviews the accuracy of ICD-9 coding by hospitals. Florida hospitals report ICD-9 information to the HCCCB by filling out a Uniform Hospital Discharge Data Sheet for each patient. The HCCCB requires Florida hospitals to report up to five diagnosis and three procedure codes. Different ICD-9 codes are assigned for different types of cardiac catheterization procedures. Hospitals are expected to Code each individual cardiac catheterization procedure performed on the patient in accordance with specific instructions published by the American Hospital Association. ICD-9 code information reported to the HCCCB by existing providers of cardiac cath services in the service district corroborates the findings derived by Petitioners from information obtained through subpoenas to those providers, and verifies there is generally some multiple of ICD-9 code procedures per patient in a single admission. While ICD-9 code information is the most reliable tool available for health care planning purposes, the counting of procedures by those codes is not an appropriate measuring tool or good indication of need for two reasons. First, certain procedures may be a component of each and every catheterization, such as pressure measurements and angiography. The same amount of time and resources per patient are utilized regardless of whether the event is recorded as one "admission" or two "procedures". Secondly, different hospitals do record or code the various procedures differently, thereby skewing the results of any attempt to average procedures district wide in order to develop a ratio of procedures to admissions. In this regard, it is noted that Mease and Morton Plant do not code angiography as a separate procedure, consequently they have a low ratio of procedures to admissions in comparison to Palms. In developing its proposed new rule policy, HRS considered methodical scenarios for converting prpcedures to admissions, including a conversion factor of 1.2 procedures per admission and a conversion factor of 1.9 procedures per admission. Neither of these conversion options are utilized in the proposed new rule. Further, the evidence presented at the final hearing fails to establish that HRS has in place any methodology for the conversion of cardiac cath lab procedures to admissions to cardiac cath programs. Petitioners contend that HRS relied in the past upon local health councils to gather the correct number of cardiac cath lab procedures performed by existing labs in a service district, and that hospitals with cardiac cath labs erroneously reported lab admissions to the District Five Local Health Council rather than the total number of procedures performed in the labs. Petitioners further contend that as a result of unwitting reliance upon the number of cardiac cath lab patient admissions instead of the number of procedures performed on patients admitted to those labs, HRS historically suppressed projections of cardiac cath lab need in the Service District Five when applying the "old" rule. The weight of the evidence presented at the final hearing supports a finding that actual need may be at some minor variance with that projected by HRS' need formula computation under the old rule. The extent that such need exceeds the projected amount, while not totally capable of discernment on the basis of the evidence presented, is probably in the neighborhood of 1.01 procedures per admission. It is found that HRS did not intentionally suppress need projections in the district and that the minor variance shown does not substantially affect numeric need determinations calculated under the old rule. As previously alluded to above, the term "procedure" in the rule methodology previously utilized by HRS historically meant the aggregate of what is performed on one admission to a cardiac cath lab. The old rule was based on federal guidelines providing that procedures were equal to an admission. At the time the old rule was written, the terms "cases", "cardiac catheterization", and "cardiac catherization procedures" were used interchangeably with the advent of DRGs for medicare reimbursement purposes, hospitals responded to local health councils' data collection requests by reporting "Procedures" used for reimbursement purposes. The resultant confusion spawned the motivation for HRS to propose the new rule methodology which uses the term "admission." HRS reviewed the applications at issue here pursuant to the proposed new rule and its "admissions" based numeric need methodology. That review, conducted on the basis of admissions, was consistent with the policy of HRS to interpret the term "procedure" to mean "admission." Further, in view of the equivalency accorded the those terms by HRS, the number of procedures for purposes of numeric need calculation under the "old" rule formula does not require inflation in order to apply the old rule's numeric need formula. HRS has candidly admitted that various providers reported the number of "admissions" rather than "procedures". The policy of HRS, although subject to a minor margin of error with the advent of DRGs, to count admissions as procedures is one that has been consistently and fairly applied without regard to whether the result led to the granting or denial of a particular application. From a health planning perspective, an admission or patient is the appropriate unit of measurement to determine future need for cardiac cath services. The goal of the CON program is to ensure an appropriate allocation of services while controlling capital expenditures. The Petitioners contend that cardiac catheterization admissions are not a good measure of resource consumption and that the type of catheterization, i.e., adult versus pediatric and therapeutic versus diagnostic, should be considered. To an extent, the position is well taken, but in the absence of an agency policy that measures numeric need in that fashion, the alternative proposed by the Petitioners is unpalatable. The Petitioners' overly broad proposal for consideration of "procedure" as a multiple of "admission" for purposes of need formula computation results in a proliferation of cardiac cath labs in derogation of the CON program goal previously mentioned. The use of 300 admissions as a minimum number required for a new lab under the proposed "new" rule is not a recognition by HRS of any applicable conversion factor of procedures to admissions. Instead, the number of 300 admissions is a standard that must be met after all existing providers have their present patient volume protected, as opposed to a simple minimal admission number required to maintain skill proficiency of medical personnel. Under the old rule, a volume of only 600 patients per lab is protected in contrast to the new rule's proposal to protect uncapped patient volume in existing cardiac programs. To that extent, the old rule does not place the same emphasis on utilization of existing labs or programs as does the new rule. HRS' SAAR on the Petitioners' applications confirmed a total of 4,712 admissions to cardiac cath labs in the service district from April, 1987 until March, 1988. If the number of admissions is equated to mean the number of procedures, in accordance with HRS rule policy applied to the formula previously used to determine numeric need, then the result of that computation under the "old" rule is no numeric need for additional cardiac cath labs in the service district. Likewise, computations under the proposed "new" rule need formula utilizing reported admissions during the base period also results in a finding of no numeric need for additional cath labs in the district. Out-migration While it is conceded by the parties that strict application of the numeric need methodology of the proposed "new" rule results in a finding of no need for additional cardiac cath labs, Petitioners contend that HRS is required to factor into that new need methodology the number of residents in the service district who go outside the district to obtain cardiac cath services. While subsection h of the "new" rule requires that HRS consider such data in the determination of need, there is no requirement that the number of such residents be included within the need determination formula. As established at the final hearing, out-migration serves to establish need for a facility, in the absence of numeric need, where it is shown that residents are leaving the service district due to unavailability of the services within the district. While residents are leaving the service district in this instance to obtain cardiac cath services, the evidence fails to establish that this action is due to service unavailability. Quality Of Care The parties stipulated that both applicants partially meet the statutory requirement requiring proof of the ability to render quality care and the previous record of the applicant to render quality of care. HRS contends both applicants failed to a provide a "written protocol" for the transfer of emergency patients to open heart surgery providers in compliance with requirements of the "new" rule. HRS concedes that both applications meet quality of care requirements, including those relating to a "transfer agreement" if reviewed under the "old" rule. HRS has not formally defined the term "written protocol", but no evidence exists that either applicant would fail to provide quality of care with regard to transfer of patients in the event such became necessary. The purpose of a written protocol is to assure HRS that proper quality of care procedures would be used in transferring open heart patients. HRS professes confidence in the ability of the applicants to perform this service and therefore this requirement is considered fulfilled in the event approval of the applications is determined pursuant to provisions of the "new" rule. Availability Of Resources Morton Plant's concerns regarding Mease's ability to render quality of care are restricted to whether Mease has provided for sufficiently trained staff to handle the projected volume of cases in the event that Mease's application is approved. Availability of appropriately trained professionals is also a Morton Plant concern. The projections of Mease for salaries, number of employees, expenses, training or acquisition of employees, and overtime costs are reasonable and meet requirememts relating to availability of resources. Consistency With State And Local Plans The state health plan in effect when these applications were filed contains a goal that an average of 600 cardiac cath procedures per lab be maintained within the district. HRS found this provision of the state health plan to be inapplicable since these applications were not reviewed in conjunction with requirements of the "old" rule. Regardless of this omission, neither application meets this goal in view of the traditional interpretation accorded the term "procedures" by HRS. With regard to the district plan, all counties within Service District Five have existing or approved cardiac catheterization providers. With the exception of the access difficulties noted with regard to Palms, services are well distributed. Neither applicant is a major referral hospital, although both have traditionally served all patients without regard to the ability of the patient to pay. Adequacy And Availability Of Other Services There are other existing providers of diagnostic inpatient cardiac cath services available in service district five, whose capacity is not fully utilized. Mease, whose Dunedin campus is located only three to four miles from Morton Plant, proposes to provide services to the same patient population. As previously noted, the concerns about the adequacy of equipment in one of the Morton Plant cath labs is in the process of being addressed through the installation of new equipment in the fall of 1990. Although there are existing providers available, the instances of access difficulty recited by witnesses for Palms are likely to be compounded as more patients undergo cardiac catheterization at those alternative facilities in the future. The demographics of Palms' elderly and multiple illness-laden inpatient population increase the complications likely to be experienced by those inpatients during transfer for purposes of diagnostic catheterization. Likewise, outpatient cath lab establishment would not be a realistic alternative for these patients, or a cost effective measure. While many inpatients would invariably have to be transferred later for therapeutic cath services, the rigors of such a journey would be avoided initially for all inpatients and a considerable number of inpatients thereafter. Impact On Existing Costs No testimony presented at final hearing supports a finding of an adverse impact on any existing provider in the event that Palms' application is approved. Of the three other full service hospitals in Palms' primary service area, only one has a cardiac cath program. Palms projects savings from the elimination of ambulance transfers and reductions in the length of stay for Palms' inpatients receiving diagnostic cardiac caths at approximately $157,000 in the first year of operation. Cost per cardiac cath patient for this service would be approximately $2,200 on average, an amount comparable to other providers in the Palms area. One thrust of Mease's argument, in terms of impact of its program upon the costs of inpatient cardiac cath, is directed to the losses which Mease experiences through the transfer of inpatients to Morton Plant. While increased utilization of Mease's present outpatient cardiac cath lab by its inpatients would decrease or eliminate the present loss of income experienced by the hospital, the burden of that cost benefit to Mease falls upon Morton Plant. The number of inpatients projected by Mease would be derived primarily from individuals who would otherwise receive cardiac cath services at Morton Plant. Approximately 30 percent of the total procedures performed at Morton Plant would be lost if the Mease application is approved. Such a loss would not be detrimental to the Morton Plant program, other than to require Morton Plant to postpone future contemplated increases in the number of cardiac cath labs in the present program. Approval of the Mease application would increase competition to some degree among other providers of diagnostic cath services to inpatients in Mease's primary service area. As previously noted, the impact of competition would be primarily upon Morton Plant, whose cardiac cath facilities, while nearing capacity limits, are not over utilized at the present time. Mease estimates that an average cath charge to inpatients would be $1,500 if its CON is approved. The loss of revenue to Morton Plant will average $1,606 for each inpatient cath lost to another facility, or $511,000 if Mease's application is approved. This amount closely approximates the positive revenue impact of $563,785 estimated by Mease in the event of CON approval. Financial Feasibility All parties, except HRS, stipulated that Palms' application was financially feasible. HRS' position was that Palms' application met this criterion, provided costs of Palms' cardiac cath lab director did not affect financial feasibility. Palms presented evidence at the final hearing amplifying the information in its application and establishing that the cost of the lab director will not affect financial feasibility of the project. The directorship will be a voluntary, non-paying position rotated among the cardiologists with privileges to perform catheterizations. Palms' proposal is financially feasible. HRS stipulated that Mease's project is financially feasible. Morton Plant disputes the long term financial feasibility of Mease's project. Mease maintains that its provision of inpatient cath service will have no cost because the equipment has already been purchased and is being used to do outpatient caths. However, Mease also has an expense item on its inpatient pro forma for depreciation of that same equipment and maintains that the cost for providing the cath service will decrease as costs will be spread over more patients with the advent of inpatient cath services. The more reasonable assumption is that the cost of the equipment is a cost associated with the present CON application, particularly since Mease admits to the motivation of implementing outpatient service in an attempt to enhance the probability of obtaining an inpatient lab. Notwithstanding this cost discrepancy, Mease's application is financially feasible. Medicaid And Medically Indigent HRS has stipulated that the Petitioners' past and proposed provision of health care services to Medicaid patients and the medically indigent is not at issue. However, the parties contend that the matter is in issue between them. As a not-for-profit hospital, part of Mease's mission is to provide needed medical care, independently of the patient's ability to pay. Mease would apply this same philosophy to patients needing services in its inpatient cath lab. Mease provides its fair share of medicaid and charity services relative to the community in which it is located. Palms has made a commitment to serve all patients regardless of ability to pay. Palms does not have any policies which would discourage Medicaid patients. Comparative Review There is insufficient numeric need under either the new or old rule formula to approve either of the Petitioners' applications on that basis. However, Palms presented considerable evidence of exceptional and not normal circumstances justifying approval of its application. In particular, the overcrowding at All Children's, inpatient transfer problems, the severity of the scheduling difficulties at All Children's and other access problems provide an adequate basis for approval of the Palms application. Palms generates more inpatients requiring inpatient diagnostic cath services than does Mease. Notably, 4.76 percent of the total service district diagnostic cath inpatients originate from Palms as opposed to 3.37 percent for Mease. The average age of Palms' inpatients is higher than that of Mease's inpatients. Palms' inpatients have a higher comorbidity index than both Mease and the service district as a whole. Palms has had, historically, more inpatients in the 45-64 age cohort and the over age 65 cohort undergo cardiac cath than has Mease. Mease provides more Medicaid care than Palms, but Palms does not provide obstetrics and pediatric services, two areas of care traditionally high in Medicaid utilization. If the comparison is limited to Medicaid utilization for cardiology services, Palms ranks higher than Mease. Capital costs of Mease's construction of an outpatient lab capable of provision of inpatient services is not included in its application, although depreciation and amortization of the lab and equipment is included. Mease's outpatient lab was constructed in an effort to improve its application for a CON to provide inpatient services, therefore exclusion of that cost results in an unfair comparison of capital expenditure between the two applications. Discounting Mease's claim that its provision of inpatient cath service will have no cost because the equipment has already been purchased and is being used to do outpatient caths, the application of Palms is superior to that of Mease.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered approving the application of Palms for an inpatient cardiac catheterization lab or program Certificate of Need, and denying the application of Mease. DONE AND ENTERED this 22nd day of March, 1990, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 22nd day of March, 1990. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Mease's Proposed Findings. 1.-3. Adopted in substance. 4. Rejected as to cost, not supported by weight of the evidence. 5.-15. Adopted in substance. 16. Rejected, conclusion of law. 17.-20. Rejected, cumulative. 21.-25. Rejected, unnecessary. 26.-31. Adopted in substance, but qualified in some instances. Rejected, unnecessary. Adopted in substance. Rejected, unnecessary. Rejected, misrepresentative of HRS policy interpretation of "procedures" in the context of rule application. Rejected, not supported by the weight of the evidence. 37.-38. Adopted in substance. 39. Adopted. 40.-41. Rejected, not supported by weight of the evidence. 42.-43. Rejected, unnecessary. 44.-45. Rejected, not supported by weight of the evidence. Adopted. Rejected, not supported by weight of the evidence. 48.-51. Rejected, cumulative. 52.-58. Adopted by reference. Rejected, relevancy. Rejected as recitation of testimony, alternatively ultimate conclusion not supported by weight of the evidence. Adopted by reference. Rejected, relevancy. 63.-65. Adopted. Rejected, speculative. Adopted by reference. Rejected, not supported by weight of the evidence. Rejected, cumulative. 70.-72. Adopted in substance. Rejected, cumulative. Adopted in substance. 76. Rejected on basis of creditability. 77.-78. Adopted. 79.-81. Adopted in substance. 82.-84. Rejected, cumulative. 85.-86. Rejected, not supported by weight of the evidence. 87.-88. Adopted by reference. 89. Rejected, cumulative and speculative. 90.-91. Adopted in substance. 92. Rejected, not supported by weight of the evidence. 93.-94. Adopted in substance. 95.-97. Rejected, not supported by weight of the evidence. 98.-99. Adopted by reference. 100. Rejected, unnecessary. 101.-103. Adopted in substance. 104.-110. Rejected, not supported by weight of the evidence. 111. Adopted in substance. 112.-114. Rejected, not supported by weight of the evidence. 115.-116. Rejected on basis of creditability. 117.-122. Adopted by reference. Rejected, not supported by weight of the evidence. Adopted in substance. Rejected on basis of creditability. 126.-128. Rejected, cumulative. 129. Rejected, not supported by weight of the evidence. 130.-131. Adopted in substance. 132.-138. Adopted by reference, although cumulative. 139.-141. Rejected, relevancy. 142. Rejected, not supported by weight of the evidence. 143. Rejected, relevancy. 144. Adopted with modifications. 145. Rejected, not supported by weight of the evidence. Palms' Proposed Findings. 1.-10. Adopted in substance. 11. Rejected, unnecessary. 12.-25. Adopted in substance. 26. Rejected, unnecessary. 27.-41. Adopted in substance. 42. Rejected, not supported by the evidence. 43.-45. Adopted in substance. 46. Rejected, unnecessary. 47.-57. Adopted in substance, though not verbatim. 58. Rejected, conjecture unsupported by weight of the evidence. 59.-63. Adopted in substance. 64. Rejected, unnecessary. 65.-71. Adopted in substance. 72.-75. Rejected, unnecessary. 76. Adopted as to first sentence. Rejected as to second sentence as unsupported legal conclusion. 77.-79. Adopted in substance. Rejected, not supported by weight of the evidence. Adopted for recitation of factual background in recommended order. However, the term "procedure" refers to ICD-9 procedures and not to "procedures" as that term has been defined by agency policy for need formula calculation. Proposed finding's conclusion of additional lab numeric need is rejected as not supported by weight of the evidence. 82.-88. Adopted in substance, though not verbatim. 89.-92. Rejected, unnecessary. 93.-94. Rejected, unsupported by weight of the evidence. 95.-101. Rejected, unnecessary. 102. Rejected, not supported by weight of the evidence. 103.-105. Rejected as legal argument and conclusions unsupported by weight of the evidence to advance the theory that ICD- 9 procedures should govern over the agency's policy definition of procedures under the old rule, and that such other definition should control the determination of number of admissions used to calculate numeric need under the new rule. Rejected, unnecessary. First sentence adopted in substance, remainder of this proposed finding is rejected as argumentative legal conclusion not supported by weight of the evidence to the extent that subsection h data must be included in numeric need formula calculations. Rejected as to ultimate conclusion of this proposed finding as unsupported by weight of the evidence. 109.-114. Adopted in substance. 115.-117. Adopted by reference. 118.-119. Rejected, not supported by weight of the evidence. 120.-125. Adopted in substance. 126. Rejected, unnecessary. 127.-130. Adopted in substance. 131. Rejected, not supported by weight of the evidence. 132.-137. Adopted in substance, though not verbatim. Morton Plant's Proposed Findings. 1.-5. Adopted in substance. Adopted in substance with exception of last sentence which is not supported by weight of the evidence. Adopted by reference. Rejected as to ultimate conclusion as unsupported by the weight of the evidence. 9.-11. Adopted in substance. 12.-15. Adopted in substance. 16.-18. Rejected, unnecessary. First sentence reject, unsupported by evidence as to Palms. Adopted by reference as to remainder of this proposed finding. Adopted in substance. Rejected, unnecessary. Adopted in substance. Rejected, unnecessary. Rejected, except as to last sentence which is adopted in substance. Adopted by reference. 26-28. Adopted in substance. 29. Adopted in substance with exception of next to last sentence of this proposed finding which is rejected as unsupported by weight of the evidence. 30.-34. Adopted in substance. First sentence rejected as unsupported by the weight of the evidence. Remainder of this proposed finding is rejected as unnecessary. Rejected as unnecessary. 37.-38. Adopted in substance. 39.-40. Rejected, unnecessary. Ultimate conclusion of this proposed finding regarding accessibility of cardiac cath services to Mease inpatients is adopted in substance. This proposed finding is apparently directed only to the Mease application in view of the usage of the singular in the reference to denial of the "application" and as such the remainder is rejected as unnecessary. Adopted in substance. All aspects of this proposed finding are not supported by the weight of the evidence. Therefore, as a multiple proposed finding not susceptible to division, it is rejected for that reason. Adopted in substance. Rejected, not supported by the weight of the evidence. Rejected, not supported by the weight of the evidence. 47.-48. Rejected as unnecessary with exception of last sentence of proposed finding number 48 which is rejected as unsupported by the weight of the evidence. 49.-50. Rejected, not supported by the weight of the evidence. 51. Adopted in substance. 52.-56. Rejected, legal argument. 57. Adopted in substance. HRS' proposed findings. Adopted in substance, as to patients requiring angioplasty. Rejected, unnecessary. Rejected, not supported by weight of the evidence. Adopted in substance. Rejected, unnecessary. Adopted in substance. 7.-10. Adopted in substance. 11. Rejected, unnecessary. 12.-13. Adopted by reference. Rejected as unnecessary. First sentence adopted in substance, remainder rejected as speculative, not supported by weight of the evidence. Rejected, not supported by weight of the evidence. Adopted by reference. Adopted in substance. 19.-21. Adopted in substance. 22.-23. Rejected, unnecessary. 24.-25. Adopted in substance with exception of last sentence of proposed finding number 25 which is not supported by the weight of the evidence. 26.-27. Rejected, unnecessary. 28. Adopted by reference. 29.-30. Adopted in substance. Adopted in substance. Last sentence rejected as unsupported by the weight of the evidence. Adopted by reference. 34.-35. Adopted. Rejected, not supported by weight of the evidence. Adopted in substance. Not supported by the weight of the evidence. 39.-45. Adopted in substance. Rejected, unnecessary. Adopted in substance except as to last sentence which is rejected as unnecessary. Adopted. 49.-53. Rejected as unnecessary. 54. Adopted. 55.-56. Rejected, unnecessary. 57.-58. Adopted in substance. 59. Rejected, unnecessary. 60.-61. Adopted in substance. 62. Rejected, unnecessary. 63.-67. Adopted in substance. 68.-72. Rejected, unnecessary. 73.-77. Adopted in substance. 78.-79. Rejected as unnecessary. 80.-81. Rejected as legal conclusions. 82. Rejected as unnecessary. 83.-87. Rejected, legal conclusions and argument. 88.-89. Adopted in substance. 90.-92. Rejected, unnecessary. Adopted in substance. Rejected, unnecessary. Adopted in substance. 96.-98. Adopted by reference. 99. Rejected, unnecessary. 100.-101. Adopted in substance. Rejected, recitation of testimony. Rejected as to Palms, not supported by weight of the evidence. As to Mease, existing inpatient providers provide an alternative. 104.-105. Rejected, not supported by the weight of the evidence. 106. Rejected as cumulative. 107.-108. Rejected as unnecessary. Adopted by reference. Rejected, legal argument. Adopted in substance. Adopted by reference. 113.-114. Adopted in substance with modification. 115. Adopted in substance. COPIES FURNISHED: Edgar Lee Elzie, Jr., Esq. 215 South Monroe Street, Suite 804 Tallahassee, FL 32301 C. Gary Williams, Esq. Stephen C. Emmanuel, Esq. 227 South Calhoun St. P.O. Box 391 Tallahassee, FL 32302 Ken Hoffman, Esq. W. David Watkins, Esq. P.O. Box 6507 Tallahassee, FL 32314-6507 Cynthia S. Tunnicliff, Esq. Loula Fuller, Esq. P.O. Drawer 190 Tallahassee, FL 32302 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller, Esq. General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 =================================================================
Findings Of Fact Petitioner, Osteopathic General Hospital, is a nonprofit osteopathic hospital in Dade County, Florida. It was established in 1953, and is currently licensed for 264 beds. It is one of two osteopathic hospitals located in the Dade-Monroe County area which is the service area of the Dade-Monroe Health System Agency. It is a full service community and teaching hospital providing care in all areas of osteopathic medicine including, but not limited to, radiology. It maintains an emergency room which is open twenty-four (24) hours a day, seven (7) days per week. At the November 30, 1976, meeting of the HSA Review Committee I, Petitioner's proposal for the acquisition of a total body CAT Scanner was recommended for approval by a vote of 6 to 1 with one abstention. At its December 21st meeting, the HSA Board of Directors voted to recommend denial on the basis that South Florida already had sufficient scanners to meet current demand. On January 19, 1977, Petitioner was notified by Respondent, HRS, that the Capital Expenditure proposal was not favorably recommended to the Department of Health, Education and Welfare. The ground for the unfavorable recommendation was that further installation of CAT scanning equipment would compound low utilization of existing facilities. At the time of the hearing in this case, Nine (9) scanners were in operation in Dade County. Of these nine (9) scanners, five (5) were full body scanners and the remaining four (4) head scanners. Eight of these scanners are hospital owned and one physician owned. An additional CAT Scanner is being installed at American Hospital but no evidence was introduced to establish its projected use. Two additional hospitals in Dade County have outstanding approvals under Section 1122 of the Social Security Act (42 U.S.C.A. 1320a-1) for the installation of CAT Scanning equipment. They are Parkway General and Veterans Administration Hospitals. Outstanding 1122 approval is valid for a period of one year and may be extended for a six months period. At the time of the hearing, three (3) scanners in Dade County were utilized at a rate less than 2,040 scans per year. They are Baptist Hospital, Miami International Hospital and North Shore Hospital. Baptist Hospital is located on the other end of town from Petitioner's facility and is not reasonably accessable to patients at Petitioner's facility. The scanner at Miami International Hospital is a first generation head scanner and not a full body scanner. Even so, the utilization of the scanner at Miami international Hospital is less than 100 scans from the OPA 85 percent criteria. The facility at North Shore Hospital was recently placed at that location. The volume of studies performed at CAT Scanner installations typically grows by more than 25 percent between the first and second years of scanner operation. Therefore, during its first year of operation, it should increase its present utilization rate of 1,220 scans per year to 1,525 scans per year. At that point it would be under utilized to the extent of 515 scans per year which far from accommodates the projected needs of Osteopathic General Hospital, the Petitioner. Figures for 1976, showing the actual use by the nine (9) machines range from a low yearly total of 1,220 to over 3,000. The average annual use per scanner is approximately 2,358 scans. The total number of scans in the area for the calendar year 1976, was approximately 18,864. As of the date of the hearing, Respondent had not developed a position as to guidelines for criteria against which CAT Scanner applications would be reviewed. However, a proposal for such guidelines issued from the office of Community Medical Facilities of the Respondent, Department of Health and Rehabilitative Services on February 21, 1977. The guidelines suggest that community need would be established by a demonstration that other existent CAT Scanners in the same HSA area are being utilized at a minimum of 70 percent level or 1,456 scans per year. A standard which the Respondent accepts is that each CAT Scanner in a particular health system agency area must operate at 85 percent of its capacity. Capacity is determined to be 2,400 patients per year which when multiplied by 85 percent equals a standard of 2,040 scans per year. The HSA uses as a part of its planning criteria the estimate that from 3 to 10 percent of the given population can expect to be scanned in a year. The Dade-Monroe population projected for 1980 is 1,650,000 which would generate an annual patient count between 49,000 and 165,000. Assuming a utilization rate of 2,500 scans per year, between 19 and 64 scanners would be required in the community to accommodate the demand. Petitioner's projected use of the CAT scanner is 2,094 procedures annually. This figure does not include additional procedures incurred by virtue of the participation of Westchester General Hospital, the other osteopathic facility in the Dade-Monroe area. Petitioner projects that the cost per scan to be charged by its facility will be $250.00, which includes both the hospital and physician fee. Frequently, the use of the CAT Scanner will obviate the requirement of one or more alternative procedures which may entail more cost to the patient and higher morbidity. There is a waiting time of at least one to two days for ambulatory or inpatient referral from another hospital to one in which scanners are currently located, Inpatient delay, however, is either nonexistent or significantly less in those same institutions. Petitioner does not refer its patients to those facilities having a utilization rate of below 2,040 per year. The installation of a CAT Scanner in Petitioner's facility would result in a substantial saving in cost in many cases by reducing the length of hospital stay, the number of diagnostic procedures employed and elimination of transportation costs to other facilities. The Department of Health, Education and Welfare has established as a guideline for the development of health systems plans that a consumer demand for osteopathic services should be considered by the HSA in light of availability of osteopathic facilities to osteopathic physicians and patients. The Bureau of Health Planning and Resources Development of HEW is sensitive to the possibility of osteopathic concern being either slighted or ignored in many health care settings. The Secretary of HEW, because of his concern about discrimination against populations who wish to be served by osteopathic services and facilities in their communities, strongly encourages State agencies and HSA's to incorporate consideration of the needs of the population being served by such services and to their health plans. There is a definite segment of the population in the Dade-Monroe County area which uses exclusively osteopathic physicians for their medical needs. However, there is no CAT Scanner within the Dade-Monroe area which is either owned or operated by an osteopathic facility. All CAT Scanners within the area are operated by allopathic physicians or facilities.
Recommendation Based upon these findings of fact and conclusions of law, it is recommended that Respondent's unfavorable recommendation to the Department of Health, Education and Welfare be reversed. DONE and ENTERED this 19 day of August, 1977, in Tallahassee, Florida. MICHAEL R.N. McDONNELL Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Eric Haugdahl, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Sheldon M. Simons, Esquire Professional Building 3661 South Miami Avenue Miami, Florida 33133
Findings Of Fact The initial application for a CON to operate an adult cardiac catheterization laboratory by Metropolitan General Hospital was denied by DHRS in the State Agency Action Report dated June 28, 1983 (Exhibit 2). This denial was based upon a projected use of 2,704 cardiac catheterization procedures in 1985 and four cardiac catheterization facilities in operation in District V, the service area which comprises Pinellas and Pasco Counties. The need methodology rule provides that an additional cardiac catheterization laboratory will not be approved if it reduces the average volume of procedures per lab performed in the district below 600 adult procedures based on the projected need in the service area. With a projected need of 2,704, an additional cardiac catheterization lab would reduce the average below the 600 figure. The four hospitals which have approved cardiac catheterization facilities in this district are: All Children's, Medical Center, Morton F. Plant, and St. Anthony's. All Children's is a pediatric hospital adjacent to Bayfront Medical Center Hospital. All Children's is authorized a pediatric cath lab in which adult patients are treated. Most of these patients come from Bayfront and the cardiac cath procedures are done on an out-patient basis. The number of cardiac cath procedures being performed at All Children's Hospital has increased every year since 1980 and the increase has been due primarily to the increase in the number of adult cardiac cath procedures performed. Adult procedures at this lab outnumber children's cardiac cath procedures by approximately three to one. In 1983, 536 adult cardiac cath procedures were performed at All Children' s Hospital. St. Anthony's Hospital has a cardiac cath lab in which 301, 327, and 300 adult cardiac caths were performed in the years 1981, 1982, and 1983, respectively. In Medical Center Hospital's cardiac cath unit more than 900 cardiac caths were performed in 1984 and the number has increased annually since the lab was installed. In disapproving Metropolitan General's application DHRS counted All Children's cardiac cath lab as an adult cardiac cath lab. When it was pointed out that All Children's cardiac cath lab is approved as a pediatric cardiac cath lab and that is the only cardiac cath lab at All Children's Hospital, DHRS recounted the number of existing cardiac cath labs in the district, did not include the cardiac cath lab at All Children's, found that a need for a total of four units exists in this district, and approved the CON for Metropolitan General. Medical Center protested and this hearing followed. Prior to the granting of this CON to Metropolitan General for a cardiac cath lab, correspondence between DHRS and Morton F. Plant Hospital culminated in DHRS advising Morton F. Plant that it could establish a second cardiac cath lab without going through the CON process if the total cost of the project did not exceed $695,285 (Exhibit 20). Pursuant to this "authorization" Morton F. Plant is proceeding to equip and operate a second cardiac cath lab. In awarding the CON to Metropolitan General, this "second" cardiac cath lab at Morton F. Plant was not counted by DHRS. Counting two labs at Morton F. Plant and not counting All Children's lab' leaves four adult cardiac cath labs in the district. DHRS' witnesses testified that an inspection of the facility at All Children's Hospital revealed only one cardiac cath lab. Because this hospital is a pediatric hospital, because the cardiac cath lab was "grandfathered in" without having to go through the CON process, and because the hospital administrators stated that priority would be given to children over adults in the cardiac cath lab, DHRS concluded not to count All Children's as having an adult cardiac cath lab. Metropolitan General Hospital is an osteopathic hospital. David Dietrick, D.O., is a cardiologist on the staff of Metropolitan General and of Medical Center. He presently performs 125-150 cardiac cath procedures per year and all are now performed at Medical Center Hospital. If a CON to operate a cardiac cath lab is granted to Metropolitan General, Dietrick will move all of the cardiac cath procedures he now does at Medical Center to Metropolitan General. The procedures performed by Dr. Dietrick at Medical Center represent about four percent of the hospital's 350 million gross revenues per year. Medical Center recently completed renovation of its cardiac cath lab and the installation of the latest state of the art equipment. This lab is located in the vicinity of the radiology department in which equipment is provided to do angiographic procedures. These procedures are similar to cardiac cath procedures but are done in the arms, legs, abdomen, etc., rather than in the heart. Because of the similarity of equipment and procedures and the heavy demand for cardiac cath procedures at Medical Center Hospital, the early appointments in the radiology lab are reserved for cardiac cath procedures and on average one such procedure per day is performed in the radiology lab. A total of 926 cardiac cath procedures were performed at Medical Center in 1984. If the current rate for 1985 of 90 per month continues throughout the year, a total of almost 1,100 cardiac cath procedures will be performed at Medical Center Hospital in calendar 1985.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioners and intervenors each own and operate hospitals in Broward or Dade Counties. Each facility has applied to the respondent for a Certificate of Need for approval to construct and operate a cardiac catheterization service at their respective bSopitals. Each application was denied on the ground that the challenged Rule 10-5.11(15), Florida Administrative Code, did not reveal a need for further cardiac catheterization laboratories in the respective service districts. A cardiac catbeterization laboratory is a specialized x-ray room designed for taking pictures of the heart or doing procedures referrable to the heart. Cardiac catheterization encompasses both diagnostic and, more recently, therapeutic procedures or maneuvers. As a diagnostic procedure, cardiac catheterization is the most reliable test for determining the presence of coronary disease. Within the last 3 to 5 years, cardiac catheterization labs have been used to perform therapeutic procedures, such as the installation of an enzyme to dissolve a clot, the use of PTCA (percutaneous transluminal coronary angioplasty) to open up blockages and the placement of permanent and temporary pacemakers. With wider acceptance of bypass surgery and new advances in anpioplasty, the use of cardiac catheterization has increased in recent years. At this point in time, the effect of other emerging technologies, such as NMR (nuclear magnetic resonance), upon the use of the cardiac catheterization technique cannot be determined. Prior to the adoption of the current challenged rule, HRS's predecessor rule reguired denial of an application for a Certificate of Need for a proposed new cardiac catheterization laboratory unless all existing labs in the service area were performing more than 500 catheterizations per year. The prior rule also reguired the existence of or approval for an open heart surgery service at the applicant's facility. In August or September of 1982, HRS started a review of this rule which ultimately led to the adoption of the oresent challenged rule. As pertinent to the issues raised in this proceeding, the challenged Rule 10-5.11(15) contains a formula methodology for determining the need for new cardiac catheterization laboratories in a service area. The formula requires the utilization of a base year use rate (the number of procedures per hundred thousand population in the service area) to be multiplied by the projected population in the service area in the year in which the proposed lab would initiate service, said year not to be more than two vears into the future. Such multiplication results in the number of catheterization procedures projected to be delivered at the time of initiation of the proposed new service. The rule further provides that no additional cardiac catheterization laboratories may be established in a service area unless the average number of catheterizations performed per year by existing and approved labs performing adult procedures in the service area is greater than 600. The challenged rule specifically states that HRS will consider applications in context with applicable statutory and rule criteria, and will not normally approve new labs unless additional need is indicated by the above formula and unless the 600 average procedures per lab reguirement is met. Rule 10-5.11(15)(f). The current rule deletes the requirement for open heart surgical potential at the applicant's facility. During the rule-making process which spanned from July or August of 1982 through January, 1983, the HRS Office of Health Planning and Development held informal meetings with representatives of the medical community and health planners, and considered the criteria and standards included in the national guidelines, in other states and in various health systems plans. Medical journals were consulted and numerous written comments were received from interested perSons. Several variations of the rule evolved, and a public hearing was held on December 10, 1982. Based on the manv public comments received, changes in the rule were made. These changes were published, the final rule was filed with the Secretary of State on January 24, 1983 and Rule 10-5.11(15) became effective on February 14, 1983. Throughout the rule-making process, HRS weighed and considered different methodologies for predicting the future need for cardiac catheterization services. The use of an historical base year as opposed to the most current or recent year use rate was considered and was the subject of considerable public comment. It was finally determined that a 1981 base year use rate figure would be adopted, and a one time data collection effort was under taken by HRS for this purpose. This effort was not completed until after the challenged rule was adopted. Although recognizing that the use of a current or most recent year use rate would be preferable to and more accurate than the use of a static use rate, HRS was hampered by the fact that it no longer had the data gathering mechanism or manpower to obtain ongoing current information regarding cardiac catheterization utilization. Therefore, 1991 is the latest and most current year for which a complete data base of utilization is available. There is some support for the proposition that the continued increase in the utilization of cardiac catheterization procedures may tend to level off or even decrease as a result of emerging technologies and a decline in the rate of coronary disease. Balanced against this are the factors of increasing population, increased aging of the population and a wider acceptance of catheterization procedures, both diagnostic and therapeutic, on the part of physicians and patients. It is therefore difficult to predict with any degree of certainty whether utilization in the future will increase or decrease. It was the intent of HRS to design a need determination methodology which would pace the approval of new cardiac catheterization labs while observing what is occurring in that area of medicine. The actual experience in Broward and Dade Counties has been a steady increase in the use rate of catheterization procedures performed from 1977 through 1983. The rate of increase for the United States as a whole, while present in each year between 1977 and 1981, with the exception of 1978, has not been as great as that experienced in Broward County. The application of the rule's need determination formula to Broward County, while permitting one additional lab, appears to under-estimate the need for cardiac catheterization services in that area. By employing the 1981 use rate, the formula projects fewer procedures for Broward County in 1984 than actually occurred in the year 1982. The estimated number of procedures for 1983, based upon the actual procedures performed during the first eight or nine months of 1983, exceeds the 1982 number by almost 1,000. Broward County's rate of increase in the utilization of cardiac catheterization procedures is much greater than the rate of increase either for the United States or for the State of Florida. This may be at least partially explained by the fact that the neighboring Palm Beach area has only one cardiac catheterization lab and there is a need in that area, even under the rule's methodology, for as many as five labs. There was no evidence presented that the existing labs in Broward County are overcrowded or unavailable to area residents. A cardiac catheterization procedure takes, on the average, one to one- and-a-half hours. Therefore, the actual capacity of any particular laboratory is well in excess of 1,000 procedures per year. In 1981, the statewide average for annual number of procedures performed per lab was 581. For quality of care reasons, a minimum of 300 procedures per year per lab is necessary. Studies regarding the cost effectiveness of labs at different levels of usage indicate that the main economies of scale accrue up to the number 400 and additional, less pronounced economies of scale continue to accrue to as high as about 700. Any consideration of costs must also include the costs of trans-porting a patient from a facility without a lab to an existing lab and the costs of increased lengths of hospital stay if delays occur because a lab is not available. As long as the cost of instituting a new lab does not exceed the capital expenditure threshold of Section 381.494(1)(c) Florida Statutes, (presently $600,000.00), an existing facility which presently offers cardiac catheterization capabilities could open a second laboratory without going through the Certificate of Need process and thus be exempt from the challenged rule and its method for determining need. This, of course, would allow an existing facility to have an advantage over new competitors who seek to enter the market to fill a demonstrated need. As a practical matter, such a situation would only occur when an existing facility already has a special procedures room and is willing to forfeit that room for the purpose of performing cardiac catheterization. Such a "loophole" is not a result of the challenged rule. The Certificate of Need thresholds are set by statute and the rule comes into effect only when a Certificate of Need is required. The Economic Impact Statement (EIS) prepared for the challenged rule, (as well as for Rule 10-5.11(16) pertaining to open heart surgery programs) does not attempt or purport to analyze the overall financial impact upon providers, prospective providers or consumers of regulating the number of cardiac catheterization labs in a service area. Instead, it attempts to give an estimate of the economic impact which the amended rule will have in comparison to the prior rule on the subject. Given the fact that the prior rule reguired a facility to have existing or approved open heart surgical capabilities and required every existing lab in the service area to perform at least 500 procedures per year before a new lab could be approved, it can be concluded that the new rule actually liberalizes the need demonstration requirements for a Certificate of Need. The EIS concludes that, other than the printing and distribution costs of the rule to the agency, no economic impact is anticipated as a result of this amendment. The EIS states that "Though the full extent of the economic impact is indeterminable, the rule is expected to contain health care costs by assuring optimal utilization of existing cardiac catheterization . . ., and by avoiding large capital outlay expendi- tures for unnecessary, duplicative services." The effect on competition and the open market is estimated as follows: "Consistent with the purpose of the Certificate of Need law, the proposed rules will restrain the development of costly excess cardiac catbeterization and open heart surgery capacity. The proposed rules permit the development of competitive new services among area cardiac catbeterization laboratories and open heart surgery programs when need for additional capacity is indicated by the need formula and the level of utilization of existing capacity." Absent from the EIS is a detailed statement of the data and method used in making the estimates of costs and benefits to persons directly affected and the estimate of impact on competition and the open market. However, the record of the rule-making proceeding clearly reveals that cost and benefit considerations were reviewed by those responsible for promulgating the challenged rule. It is clear from the testimony adduced in this hearing, as well as the documents received into evidence pertaining to the public comments and letters received by HRS in the rule-promulgation process, that factors involving cost efficiency, increased patient costs, optimal and actual utilization, lab capacity and guality of care were considered by HRS. Such considerations led to numerous changes in the language utilized in the rule. While the EIS perhaps could have been more explicit in specifying the possible economic impacts of these considerations, the fact that actual dollar amounts are not assigned to these considerations does not render the EIS inadeguate. The challengers to the rule offered no more specifics than that contained in the EIS as to the economic impact resulting from the rule. The impacts enumerated by the economic expert presented by the challengers in this proceeding result more from the fact of regulation itself than from the operation of the challenged rule.
The Issue The issue in these cases is whether certain rules proposed by the Agency for Health Care Administration (AHCA) related to adult interventional cardiovascular services are an invalid exercise of delegated legislative authority.
Findings Of Fact By stipulation of the parties, all Petitioners and Intervenors in these cases are acute care hospitals licensed in Florida pursuant to Chapter 395, Florida Statutes; are substantially affected by the proposed rules at issue in these cases; and have standing to participate in this proceeding. AHCA is the state agency responsible for licensure of hospitals pursuant to Chapter 395, Florida Statutes, and responsible for promulgation of the proposed rules at issue in these cases. This dispute specifically involves proposed rules related to the licensure of adult cardiovascular services in Florida hospitals. Such services include percutaneous cardiac intervention (PCI), also referred to as percutaneous transluminal coronary angioplasty (PCTA). PCI involves the insertion of a device placed into an artery and directed to the site of a coronary artery blockage. The device is used to compress or remove the blockage material and restore arterial blood flow to heart tissue. A mechanism called a "stent" may be left in place at the site of the former blockage to reduce the potential for re-blockage ("restenosis") of the artery. The procedure is performed in a cardiac catheterization laboratory ("cath lab"). PCI that is performed on an emergency basis to open an arterial blockage causing myocardial infarction (heart attack) is referred to as "primary" or "emergent" PCI. PCI performed to resolve symptoms of coronary artery disease manifesting in presentations other than through myocardial infarction is referred to as "elective" PCI. Previous law restricted PCI services to those hospitals with onsite cardiac surgery (commonly referred to as "open heart" surgery). Hospitals are required to obtain a Certificate of Need (CON) from AHCA to operate a cardiac surgery program. Accordingly, in order to offer PCI services, a hospital was required to obtain a cardiac surgery program CON from AHCA. As cardiac catheterization procedures have become more widely available and physician training and experience have increased, the relative safety of the procedures has improved. The volume of open heart cardiac surgery has declined as the patient outcomes for non-surgical coronary artery disease treatments have improved, yet Florida hospitals seeking to provide PCI were still operating under the CON-based restrictions. There is an ongoing debate within the medical community related to the issue of whether non-emergent patients should receive PCI services at hospitals which lack cardiac surgery programs. The historic rationale for restricting the availability of elective PCI procedures to hospitals where onsite cardiac surgery was also available was related to the possibility that an unsuccessful PCI would require immediate resolution through surgery. The evidence establishes that PCI-related events requiring immediate access to onsite cardiac surgery have become less frequent, at least in part due to increased training and experience of practitioners, as well as an increased technical ability to resolve some events, such as arterial ruptures or perforations, within the cath lab. Nonetheless, there is also evidence that the outcomes of cardiac catheterization procedures performed in hospitals with onsite cardiac surgery may be superior to those performed in hospitals where onsite cardiac surgery is not available. In 2004, the Florida Legislature adopted two bills that, insofar as are relevant to this proceeding, had an impact on the regulatory process related to adult interventional cardiovascular services. The effect of the legislation was to shift the regulation of PCI programs away from CON-based restrictions and towards a licensing process. Both bills established a two-level classification of hospitals providing adult interventional cardiology services. House Bill 329 limited the provision of PCI at hospitals without onsite cardiac surgery to emergent patients and provided, in relevant part, as follows: In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult primary percutaneous cardiac intervention for emergent patients without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. (Emphasis supplied) Senate Bill 182 did not limit PCI services on the basis of onsite cardiac surgery availability and provided, in relevant part, as follows: Section 2. Notwithstanding conflicting provisions in House Bill 329, Section 408.0361, Florida Statutes, is amended to read: * * * In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. (Emphasis added) Both the House Bill and the Senate Bill were signed into law. The legislation was codified as Section 408.0361, Florida Statutes (2004), which provided, in relevant part, as follows: 408.0361 Cardiology services and burn unit licensure.-- * * * In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. Extensive evidence was offered at the hearing to support both sides of the debate regarding the appropriateness of performing elective PCI in hospitals without onsite cardiac surgery, and it is clear that the debate continues. However, the evidence establishes that the Florida Legislature specifically chose not to restrict non-emergent PCI to Florida hospitals with onsite cardiac surgery units and has determined that properly-licensed Florida hospitals may provide PCI services without regard to the availability of on-site cardiac surgery. It is reasonable to assume that had the Legislature intended to restrict provision of adult PCI in hospitals without cardiac surgery programs to emergent patients, the "notwithstanding" language contained in Senate Bill 182 would not have been adopted. There is no credible evidence that the Legislature was unaware of the continuing debate within the cardiology community at the time the legislation was adopted in 2004. The Legislature has acknowledged the distinction between emergent and elective PCI as indicated by Subsection 408.036(3)(o), Florida Statutes (2008), which provides under certain circumstances that a hospital without an approved "open heart surgery program" can obtain an exemption from CON requirements and provide emergent PCI services to "patients presenting with emergency myocardial infarctions." It is reasonable to assume that had the codification of the 2004 legislation been incorrect, the Florida Legislature would have subsequently amended the statute to reinstate the restriction. In fact, the Legislature has revised the referenced statute without substantively altering the relevant language establishing the two-level licensure designation. Section 408.0361, Florida Statutes (2008), the current statute directing AHCA to adopt the rules at issue in this proceeding, provides, in relevant part, as follows: 408.0361 Cardiovascular services and burn unit licensure.-- Each provider of diagnostic cardiac catheterization services shall comply with rules adopted by the agency that establish licensure standards governing the operation of adult inpatient diagnostic cardiac catheterization programs. The rules shall ensure that such programs: Comply with the most recent guidelines of the American College of Cardiology and American Heart Association Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories. Perform only adult inpatient diagnostic cardiac catheterization services and will not provide therapeutic cardiac catheterization or any other cardiology services. Maintain sufficient appropriate equipment and health care personnel to ensure quality and safety. Maintain appropriate times of operation and protocols to ensure availability and appropriate referrals in the event of emergencies. Demonstrate a plan to provide services to Medicaid and charity care patients. Each provider of adult cardiovascular services or operator of a burn unit shall comply with rules adopted by the agency that establish licensure standards that govern the provision of adult cardiovascular services or the operation of a burn unit. Such rules shall consider, at a minimum, staffing, equipment, physical plant, operating protocols, the provision of services to Medicaid and charity care patients, accreditation, licensure period and fees, and enforcement of minimum standards. The certificate-of-need rules for adult cardiovascular services and burn units in effect on June 30, 2004, are authorized pursuant to this subsection and shall remain in effect and shall be enforceable by the agency until the licensure rules are adopted. Existing providers and any provider with a notice of intent to grant a certificate of need or a final order of the agency granting a certificate of need for adult cardiovascular services or burn units shall be considered grandfathered and receive a license for their programs effective on the effective date of this act. The grandfathered licensure shall be for at least 3 years or until July 1, 2008, whichever is longer, but shall be required to meet licensure standards applicable to existing programs for every subsequent licensure period. In establishing rules for adult cardiovascular services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. For a hospital seeking a Level I program, demonstration that, for the most recent 12-month period as reported to the agency, it has provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations or, for the most recent 12-month period, has discharged or transferred at least 300 inpatients with the principal diagnosis of ischemic heart disease and that it has a formalized, written transfer agreement with a hospital that has a Level II program, including written transport protocols to ensure safe and efficient transfer of a patient within 60 minutes. For a hospital seeking a Level II program, demonstration that, for the most recent 12-month period as reported to the agency, it has performed a minimum of 1,100 adult inpatient and outpatient cardiac catheterizations, of which at least 400 must be therapeutic catheterizations, or, for the most recent 12-month period, has discharged at least 800 patients with the principal diagnosis of ischemic heart disease. Compliance with the most recent guidelines of the American College of Cardiology and American Heart Association guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Establishment of appropriate hours of operation and protocols to ensure availability and timely referral in the event of emergencies. Demonstration of a plan to provide services to Medicaid and charity care patients. In order to ensure continuity of available services, the holder of a certificate of need for a newly licensed hospital that meets the requirements of this subsection may apply for and shall be granted Level I program status regardless of whether rules relating to Level I programs have been adopted. To qualify for a Level I program under this subsection, a hospital seeking a Level I program must be a newly licensed hospital established pursuant to a certificate of need in a physical location previously licensed and operated as a hospital, the former hospital must have provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations for the most recent 12- month period as reported to the agency, and the newly licensed hospital must have a formalized, written transfer agreement with a hospital that has a Level II program, including written transport protocols to ensure safe and efficient transfer of a patient within 60 minutes. A hospital meeting the requirements of this subsection may apply for certification of Level I program status before taking possession of the physical location of the former hospital, and the effective date of Level I program status shall be concurrent with the effective date of the newly issued hospital license. (5)(a) The agency shall establish a technical advisory panel to develop procedures and standards for measuring outcomes of adult cardiovascular services. Members of the panel shall include representatives of the Florida Hospital Association, the Florida Society of Thoracic and Cardiovascular Surgeons, the Florida Chapter of the American College of Cardiology, and the Florida Chapter of the American Heart Association and others with experience in statistics and outcome measurement. Based on recommendations from the panel, the agency shall develop and adopt rules for the adult cardiovascular services that include at least the following: A risk adjustment procedure that accounts for the variations in severity and case mix found in hospitals in this state. Outcome standards specifying expected levels of performance in Level I and Level II adult cardiovascular services. Such standards may include, but shall not be limited to, in-hospital mortality, infection rates, nonfatal myocardial infarctions, length of stay, postoperative bleeds, and returns to surgery. Specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans. Hospitals licensed for Level I or Level II adult cardiovascular services shall participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society for Thoracic Surgeons. As required by Subsection 408.0361(5), Florida Statutes (2004), AHCA created the TAP, which convened and met over the course of two years at a series of public hearings. The TAP also received written materials and comments from interested parties. Thereafter, AHCA convened rule development workshops to formulate the proposed rules at issue in this proceeding. The proposed rules were initially noticed in the September 28, 2007, Florida Administrative Weekly (Vol. 33, No. 39). Subsequent Notices of Changes to the proposed rules were published in the Florida Administrative Weeklies of November 16, 2007 (Vol. 33, No. 46); March 28, 2008 (Vol. 34, No. 13); and May 9, 2008 (Vol. 34, No. 19). There is no evidence that AHCA failed to comply with statutory requirements related to the rule adoption process. As required by Subsection 408.0361(3)(a), Florida Statutes (2008), the proposed rules set forth the procedures by which a hospital may apply for licensure as a Level I or Level II provider of adult cardiovascular services without differentiation based on the availability of on-site cardiac surgery. The proposed rules applicable to a hospital seeking licensure as a Level I provider of adult cardiovascular services are set forth at Proposed Rule 59A-3.2085(16). The proposed rules applicable to a hospital seeking licensure as a Level II provider of adult cardiovascular services are set forth at Proposed Rule 59A-3.2085(17). Subsection 408.0361(3)(b), Florida Statutes (2008), establishes minimum volume reporting requirements for licensure as a Level I program. Accordingly, Proposed Rule 59A- 3.2085(16)(a) provides, in relevant part, as follows: 1. A hospital seeking a license for a Level I adult cardiovascular services program shall submit an application on a form provided by the Agency (See Form 1: Level I Adult Cardiovascular Services License Application Attestation; AHCA Form, Section 18(a) of this rule ), signed by the chief executive officer of the hospital, attesting that, for the most recent 12-month period, the hospital has provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations or, for the most recent 12-month period, has discharged or transferred at least 300 inpatients with the principal diagnosis of ischemic heart disease (defined by ICD-9-CM codes 410.0 through 414.9). Reportable cardiac catheterization procedures are defined as single sessions with a patient in the hospital’s cardiac catheterization procedure room(s), irrespective of the number of specific procedures performed during the session. Reportable cardiac catheterization procedures shall be limited to those provided and billed for by the Level I licensure applicant and shall not include procedures performed at the hospital by physicians who have entered into block leases or joint venture agreements with the applicant. (Emphasis supplied) Subsection 408.0361(3)(c), Florida Statutes (2008), establishes minimum volume reporting requirements for licensure as a Level II program. Accordingly, Proposed Rule 59A- 3.2085(17)(a) provides in relevant part as follows: 1. A hospital seeking a license for a Level II adult cardiovascular services program shall submit an application on a form provided by the Agency (See Form 2: Level II Adult Cardiovascular Services License Application Attestation; AHCA Form , Section 18(b) of this rule ) to the Agency, signed by the chief executive officer of the hospital, attesting that, for the most recent 12-month period, the hospital has provided a minimum of a minimum of 1,100 adult inpatient and outpatient cardiac catheterizations, of which at least 400 must be therapeutic cardiac catheterizations, or, for the most recent 12-month period, has discharged at least 800 patients with the principal diagnosis of ischemic heart disease (defined by ICD-9-CM codes 410.0 through 414.9). a. Reportable cardiac catheterization procedures shall be limited to those provided and billed for by the Level II licensure applicant and shall not include procedures performed at the hospital by physicians who have entered into block leases or joint venture agreements with the applicant. (Emphasis supplied) St. Anthony's asserts that the proposed rule is invalid on the grounds that it fails to provide a clear and reasonable methodology for assessing and verifying the number of diagnostic catheterization procedures performed. St. Anthony's asserts that the exclusion of cardiac catheterization procedures performed within the hospital's cardiac cath lab but not billed by the hospital is arbitrary and capricious, modifies, enlarges, or contravenes the specific provisions of the statute implemented, fails to establish adequate standards for agency decision making, and vests unbridled discretion in the agency. The evidence fails to support these assertions. Although the phrase "block lease" is undefined by statute or rule, the evidence establishes that insofar as relevant to this proceeding, the term refers to a practice by which a group of cardiologists lease blocks of time from a hospital for exclusive use of a hospital's cardiac cath lab. St. Anthony's has a leasing arrangement with a group of cardiologists identified as the "Heart and Vascular Institute South" ("HAVI South") whereby St. Anthony's leases blocks of time in a cardiac cath lab to HAVI South cardiologists. The facility is located in a privately-owned medical office building physically attached to St. Anthony's hospital building. St. Anthony's leases the medical office building from a developer. HAVI South cardiologists perform cardiac catheterization procedures at the St. Anthony's facility during both leased and non-leased time. St. Anthony's provides personnel to staff the cardiac cath lab regardless of whether the procedure is performed during leased or non-leased time. The HAVI South cardiology group develops the schedule of cardiac catheterization procedures to be performed during the leased time and notifies St. Anthony's of the schedule. The HAVI South cardiology group bills for both their professional fees and the facility charges (referred to as the "technical component") for the cardiac catheterization procedures performed during leased time. St. Anthony's does not bill for cardiac catheterization procedures performed during the leased time. For the cardiac catheterization procedures performed during non-leased time, the HAVI South cardiology group bills for professional fees, and St. Anthony's bills for the technical component. Patricia Sizemore, vice-president for patient services at St. Anthony's, acknowledged that other hospitals could have block-leasing arrangements different from those existing between St. Anthony's and the HAVI South group. The proposed rules would preclude St. Anthony's from including the outpatient cardiac catheterization procedures done by HAVI South during the block-leased time within those procedures available to meet the numeric threshold requirements identified in the statute. The evidence fails to establish that the proposed rule fails to provide a clear and reasonable methodology for assessing and verifying the number of diagnostic catheterization procedures performed. The relevant language of Subsection 408.0361(3), Florida Statutes (2008), identifies the hospital as the applicant and requires that the applicant "provide" the procedures or discharges being reported to meet the specified volume thresholds. The applicable definition of hospital is set forth at Subsection 408.032(11), Florida Statutes (2008), which defines a hospital as a health care facility licensed under Chapter 395, Florida Statutes. Subsection 395.002(12), Florida Statutes (2008), sets forth the following definition: (12) "Hospital" means any establishment that: Offers services more intensive than those required for room, board, personal services, and general nursing care, and offers facilities and beds for use beyond 24 hours by individuals requiring diagnosis, treatment, or care for illness, injury, deformity, infirmity, abnormality, disease, or pregnancy; and Regularly makes available at least clinical laboratory services, diagnostic X- ray services, and treatment facilities for surgery or obstetrical care, or other definitive medical treatment of similar extent, except that a critical access hospital, as defined in s. 408.07, shall not be required to make available treatment facilities for surgery, obstetrical care, or similar services as long as it maintains its critical access hospital designation and shall be required to make such facilities available only if it ceases to be designated as a critical access hospital. Physicians are not "hospitals" and are not licensed or regulated by Chapter 395, Florida Statutes. Physicians are not authorized to apply for licensure under the provisions of the statute and proposed rules at issue in this proceeding. Nothing in the statute suggests that entities other than hospitals may apply for licensure of a Level I or Level II adult cardiovascular services program. The rationale underlying the restriction of reportable procedures to those for which the applicant hospital issues bills for payment is based upon AHCA's reasonable intention to validate the procedure volume data submitted by applicant hospitals. Jeffrey Gregg, chief of AHCA's Bureau of Health Facility Regulation and CON Unit, testified that "the only practical, realistic way" for AHCA to routinely verify the accuracy of the procedure volume identified by a hospital's licensure application is through AHCA's ambulatory patient database. The reporting requirements for the ambulatory patient database are set forth at Florida Administrative Code Chapter 59B-9 and include elements such as demographic information, diagnosis codes, and charges. The database provides AHCA with access to patient record documentation and directly allows AHCA to verify the procedure volume identified in the licensure application. Because St. Anthony's has no charges related to the procedures performed by HAVI South cardiologists during the leased time, St. Anthony's has not reported procedures performed during leased time to the ambulatory patient database. St. Anthony's reports far more cardiac catheterization procedures to the local Suncoast Health Council than it does to AHCA's ambulatory patient database and asserts that AHCA could rely on health council data. AHCA has no organizational relationship with the local health council, and the evidence fails to establish that such data is as reliable as that collected by the ambulatory patient database. AHCA asserts that an additional basis to exclude procedures performed by entities other than the applicant hospital is that AHCA has no direct regulatory authority over the non-hospital entity. St. Anthony's asserts that AHCA would have its customary authority over the hospital and, by extension, over the third-party leasing the cardiac cath lab from the hospital. At best, AHCA's authority to obtain records from the non-hospital operator of the hospital's cardiac cath lab is unclear. St. Anthony's position effectively would permit a third-party operator to lease all of the time in a hospital's cardiac cath lab, yet allow the hospital to apply for and receive an adult cardiovascular service license. Nothing in Section 408.0361, Florida Statutes (2008), suggests that the Legislature intended to provide such an option. The proposed rule designating the reportable cardiac catheterization procedures is logical and rational, is not arbitrary or capricious, and does not modify, enlarge or contravene the specific provisions of the statute implemented. The evidence fails to establish that the designation of appropriately reportable cardiac catheterization procedures constitutes a failure to establish adequate standards for agency decision making or vests unbridled discretion in the agency. Subsection 408.0361(3)(d), Florida Statutes (2008), requires that the proposed rules include provisions "that allow for" compliance with the most recent guidelines of the American College of Cardiology and AHA guidelines for "staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety." Subsection 408.0361(5), Florida Statutes (2008), requires that the TAP "develop procedures and standards for measuring outcomes" and that, based thereon, AHCA adopt rules that include a risk adjustment procedure that accounts for variations in severity and case mix, outcome standards specifying expected levels of performance, and "specific steps to be taken by the agency and the licensed hospitals" that fail to meet outcome standards. The statute also requires that licensed hospitals participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society of Thoracic Surgeons. The TAP determined that the appropriate method of measuring outcome was to utilize the data available through the clinical outcome reporting systems referenced in the statute. Accordingly, Proposed Rule 59A-3.2085(16)(a) identifies the guidelines applicable to Level I adult cardiovascular services; identifies the specific provisions of the guidelines with which a Level I hospital must comply; requires that the Level I hospital participate in the statutorily-identified data reporting system; and requires that Level I hospitals document a quality improvement plan to meet performance measures set forth by the data reporting system. The proposed rule provides, in relevant part, as follows: All providers of Level I adult cardiovascular services programs shall operate in compliance with subsection 59A- 3.2085(13), F.A.C., the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) guidelines regarding the operation of adult diagnostic cardiac catheterization laboratories and the provision of percutaneous coronary intervention. The applicable guidelines, herein incorporated by reference, are the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention). Aspects of the guideline related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. Aspects of the guideline related to the provision of elective percutaneous coronary intervention only in hospitals authorized to provide open heart surgery are not applicable to this rule. Hospitals are considered to be in compliance with the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) guidelines when they adhere to standards regarding staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Hospitals must also document an ongoing quality improvement plan to ensure that the cardiac catheterization program and the percutaneous coronary intervention program meet or exceed national quality and outcome benchmarks reported by the American College of Cardiology-National Cardiovascular Data Registry. Level I adult cardiovascular service providers shall report to the American College of Cardiology-National Cardiovascular Data Registry in accordance with the timetables and procedures established by the Registry. All data shall be reported using the specific data elements, definitions and transmission format as set forth by the American College of Cardiology-National Cardiovascular Data Registry. Proposed Rule 59A-3.2085(17)(a) identifies the guidelines applicable to Level II adult cardiovascular services; identifies the specific provisions of the guidelines with which a Level II hospital must comply; requires that the Level II hospital participate in the statutorily-identified data reporting system; and requires that Level II hospitals document a quality improvement plan to meet performance measures set forth by the data reporting system. The proposed rule provides in relevant part as follows: All providers of Level II adult cardiovascular services programs shall operate in compliance with subsections 59A-3.2085(13) and 59A-3.2085(16), F.A.C. and the applicable guidelines of the American College of Cardiology/American Heart Association regarding the operation of diagnostic cardiac catheterization laboratories, the provision of percutaneous coronary intervention and the provision of coronary artery bypass graft surgery. The applicable guidelines, herein incorporated by reference, are the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention; and ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons. Aspects of the guidelines related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. Hospitals are considered to be in compliance with the guidelines in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention; and in the ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons when they adhere to standards regarding staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Hospitals must also document an ongoing quality improvement plan to ensure that the cardiac catheterization program, the percutaneous coronary intervention program and the cardiac surgical program meet or exceed national quality and outcome benchmarks reported by the American College of Cardiology-National Cardiovascular Data Registry and the Society of Thoracic Surgeons. In addition to the requirements set forth in subparagraph (16)(a)7. of this rule, each hospital licensed to provide Level II adult cardiovascular services programs shall participate in the Society of Thoracic Surgeons National Database. The Petitioners generally assert that the proposed rules insufficiently identify or establish the minimum standards identified as "guidelines" and "benchmarks" in the rule. The evidence fails to support the assertion. The guidelines are specifically identified and incorporated by reference within the rule. There is no evidence that the documents identified do not constitute the "most recent guidelines of the American College of Cardiology and the American Heart Association" as required by the statute. Hospitals are not obligated to meet all of the requirements set forth in the guidelines. A licensed hospital is deemed to be in compliance when, as specified in the statute, the hospital adheres to the standards related to staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. The Petitioners generally assert that such distinctions between the various compliance elements are unclear. The evidence fails to support the assertion. There is no credible evidence that the guidelines, albeit technical and complex, are not commonly understood by appropriate medical practitioners and hospital administrators. Martin Memorial asserts that the Proposed Rule 59A-3.2085(16)(a)5. is vague on grounds that it requires Level I hospitals to operate in compliance with the referenced guidelines while Proposed Rule 59A-3.2085(16)(a)9. authorizes provision of elective PCI at Level I hospitals. Martin Memorial further asserts that because the proposed rules provide for elective PCI in hospitals without onsite cardiac surgical programs, the proposed rules enlarge, modify or contravene the enacting statute. Subsection 408.0361(3)(d), Florida Statutes (2008), requires that AHCA include "provisions that allow for" the following: Compliance with the most recent guidelines of the American College of Cardiology and American Heart Association guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. (Emphasis supplied) Proposed Rule 59A-3.2085(16)(a)9. provides as follows: Notwithstanding guidelines to the contrary in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention), all providers of Level I adult cardiovascular services programs may provide emergency and elective percutaneous coronary intervention procedures. Aspects of the guidelines related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. (Emphasis supplied) Martin Memorial's disagreement with the proposed rule is premised on the following statement in the ACC/AHA/SCAI 2005 Guideline Update: Elective PCI should not be performed at institutions that do not provide onsite cardiac surgery. (Level of Evidence: C) The statement is contained within subsection 4.3 ("Role of Onsite Cardiac Surgical Backup") within Section 4 ("Institutional and Operator Competency"). The statement is defined as a "Class III" standard, meaning within the "conditions for which there is evidence and/or general agreement that a procedure/treatment is not useful/effective and in some cases may be harmful." According to the "Level of Evidence: C" identification, the statement reflects "consensus opinion of experts, case studies, or standard of care." A footnote to the statement provides as follows: Several centers have reported satisfactory results based on careful case selection with well-defined arrangements for immediate transfer to a surgical program (citation omitted). A small but real fraction of patients undergoing elective PCI will experience a life-threatening complication that could be managed with the immediate onsite availability of cardiac surgical support but cannot be managed effectively by urgent transfer. Wennberg, et al., found higher mortality in the Medicare database for patients undergoing elective PCI in institutions without onsite cardiac surgery (citation omitted). This recommendation may be subject to revision as clinical data and experience increase. The guidelines are statements of "best practices" in health care delivery. They are intended to assist practitioners and facility administrators in making appropriate decisions. The cited statement neither prohibits nor requires performance of elective PCI in hospitals without onsite cardiac surgical programs. Whether a practitioner performs elective PCI in a licensed Level I hospital remains a medical decision under the provisions of the enacting statute and proposed rules. The footnote recognizes that elective PCI is available at some hospitals without onsite cardiac surgery through "careful case selection with well-defined arrangements for immediate transfer to a surgical program." The proposed rule specifically establishes staff and transfer requirements designed to facilitate rapid transfer of a patient from a Level I to a Level II facility. There is no evidence that such staff and transfer requirements are insufficient or otherwise inappropriate. Patient selection criteria are those which expressly identify clinical presentations of patients who are appropriate for revascularization through PCI. Section 5 of the referenced ACC/AHA/SCAI 2005 Guideline Update, titled "Clinical Presentations" explicitly addresses such criteria and constitutes the patient selection criteria contained within the document. The patient selection criteria do not regulate the location where PCI procedures are performed. As stated previously, the Florida Legislature, presented with the option of limiting the availability of cardiac catheterization services available at Level I hospitals to emergent patients, rejected the limitation. The evidence fails to establish that Proposed Rule 59A-3.2085(16)(a)5. is vague or that Proposed Rule 59A-3.2085(16)(a)9. enlarges, modifies or contravenes the enacting statute. Martin Memorial and St. Anthony's assert that the proposed rule contravenes Subsection 408.0361(5)(a), Florida Statutes (2008), which provides that AHCA adopt rules that include "at least the following" elements: A risk adjustment procedure that accounts for the variations in severity and case mix found in hospitals in this state. Outcome standards specifying expected levels of performance in Level I and Level II adult cardiovascular services. Such standards may include, but shall not be limited to, in-hospital mortality, infection rates, nonfatal myocardial infarctions, length of stay, postoperative bleeds, and returns to surgery. Specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans. The TAP recommended to AHCA that existing outcome data reporting systems created by the American College of Cardiology and the Society of Thoracic Surgeons be utilized for data collection related to licensed hospital adult cardiovascular services programs. Subsection 408.0361(5)(b), Florida Statutes (2008), requires that hospitals licensed under the proposed rules participate in clinical reporting systems operated by the American College of Cardiology and the Society of Thoracic Surgeons. The requirement was adopted by the 2007 Legislature based on the TAP recommendation. Proposed Rule 51A-3.2085(16)(a)8. requires licensed Level I hospitals to participate in the American College of Cardiology-National Cardiovascular Data Registry (ACC-NCDR) and sets forth additional directives related to such participation. The ACC-NCDR system is a risk adjusted outcome reporting system that accounts for variation in severity and case mix. It collects approximately 200 data elements and is in use in approximately 2,000 hospitals. Proposed Rule 51A-3.2085(17)(a)6. directs licensed Level II hospitals to participate in the Society of Thoracic Surgeons National Database (STS database) and sets forth additional requirements related to such participation. The STS database provides information generally similar to the ACC-NCDR database. Although Proposed Rule 59A-3.2085(17)(a)5. states that the Level II hospital must meet or exceed the performance standards identified within the ACC-NCDR, there appears to be no specific requirement in the proposed rules that a Level II hospital participate in the ACC-NCDR system. Proposed Rule 59A-3.2085(17)(a)6. contains a citation to Proposed Rule 59A-3.2085 (16)(a)7. The cited paragraph consists of text that is similar to the paragraph preceding the citation. The intent of the reference is unclear. If the reference were intended to incorporate the ACC- NCDR reporting requirements with those applicable to Level II hospitals, the citation in Proposed Rule 59A-3.2085(17)(a)6. should have been to Proposed Rule 59A-3.2085(16)(a)8., where the ACC-NCDR requirements are identified. In any event, the statute requires participation by licensed hospitals in the reporting systems, and, as stated previously, Level II hospitals must document plans to ensure that the cited standards are met; so, it is logical to presume that Level II hospitals will participate in the ACC-NCDR system, in addition to the STS database. Martin Memorial and St. Anthony's assert that the proposed rule does not include the "outcome standards specifying expected levels of performance" required by Subsection 408.0361(5)(a)2., Florida Statutes (2008), and that the proposed rules fail to identify the "national quality and outcome benchmarks" referenced therein. The evidence fails to support the assertions. 93. Proposed Rules 59A-3.2085(16)(a)7. and 59A- 3.2085(17)(a)5. require that each licensed hospital must document a "quality improvement plan to ensure" that the specified cardiac services meet or exceed "national quality and outcome benchmarks" reported by the ACC-NCDR and the STS databases. The word "benchmark" is not defined by statute or rule. Merriam Webster's dictionary defines "benchmark" as "a point of reference from which measurements may be made" or "something that serves as a standard by which others may be measured or judged." The evidence establishes that the "national quality and outcome benchmarks" referenced in the proposed rules are the "expected levels of performance" identified through the ACC-NCDR system. Each hospital participating in the ACC-NCDR system receives a detailed quarterly outcome report indicating the particular hospital's performance relative to all other reporting hospitals on a variety of elements associated with cardiac catheterization and PCI provided at the hospital. Accompanying each periodic report is an "Executive Summary" that identifies the relative performance of the hospital receiving the report on ten specific "PCI and Diagnostic Catheterization Performance Measures," including six "PCI Quality Measures," two "PCI Utilization Measures," and two "Diagnostic Quality Measures." The Executive Summary information visually displays the data through a set of "box and whisker plots" that present the range of data reported by all participating hospitals on each specific measure. The summary received by each hospital identifies its specific performance through an "arrow" and numeric data printed on the plot. The plot visually displays "lagging" and "leading" performance levels. The plot identifies hospitals performing below the tenth percentile of all participating hospitals as "lagging" hospitals. The plot identifies hospitals performing above the 90th percentile as "leading" hospitals. The evidence, including review of the ACC-NCDR data reporting system, establishes that the "expected levels of performance" are rationally those levels within the broad range of hospitals which are neither "leading" nor "lagging" according to the data. It is reasonable to assume that a "leading" hospital is performing at a level higher than expected and that a "lagging" hospital is performing at a level lower than expected. By reviewing the plot for each measure, a hospital can determine its performance relative to other participating hospitals on the ten measures included in the Executive Summary. The additional numeric data contained within the quarterly report permit additional comparison between an individual hospital and all other participating hospitals. Subsection 408.0361(5)(a)2., Florida Statutes (2008), does not require that AHCA establish numeric minimal standards, but only requires that the rule identify "outcome standards specifying expected levels of performance." The ACC-NCDR reporting system required by the statute and adopted by the proposed rules sufficiently identifies expected levels of performance. By their very nature, the outcome standards are not fixed. It is reasonable to presume that as hospital practices change, measurements of relative performance will also change. The rule requires only that each licensed hospital include within a quality improvement plan, documentation to ensure that such outcome standards will be met or exceeded, essentially encouraging a pattern of continual improvement by licensed programs. Subsection 408.0361(5)(a)3., Florida Statutes (2008), requires that the rule include the "specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans." The proposed rule complies with the requirements of the statute. Enforcement of outcome standards requirements applicable to Level I programs is addressed at Proposed Rule 59A-3.2085(16)(f) which provides as follows: Enforcement of these rules shall follow procedures established in Rule 59A-3.253, F.A.C. Unless in the view of the Agency there is a threat to the health, safety or welfare of patients, Level I adult cardiovascular services programs that fail to meet provisions of this rule shall be given 15 days to develop a plan of correction that must be accepted by the Agency. Failure of the hospital with a Level I adult cardiovascular services program to make improvements specified in the plan of correction shall result in the revocation of the program license. The hospital may offer evidence of mitigation and such evidence could result in a lesser sanction. Enforcement of outcome standards requirements applicable to Level II programs is addressed at Proposed Rule 59A-3.2085(17)(e), which provides as follows: Enforcement of these rules shall follow procedures established in Rule 59A-3.253, F.A.C. Unless in the view of the Agency there is a threat to the health, safety or welfare of patients, Level II adult cardiovascular services programs that fail to meet provisions of this rule shall be given 15 days to develop a plan of correction that must be accepted by the Agency. Failure of the hospital with a Level II adult cardiovascular services program to make improvements specified in the plan of correction shall result in the revocation of the program license. The hospital may offer evidence of mitigation and such evidence could result in a lesser sanction. AHCA does not routinely conduct surveys of accredited hospitals. Such surveys are conducted by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). AHCA generally conducts hospital surveys only during the investigation, pursuant to Florida Administrative Code Rule 59A-3.253(8), of a complaint filed against a hospital. AHCA would likely review ACC-NCDR and Society of Thoracic Surgeons data reports associated with the investigation of a specific complaint related to adult cardiovascular services. Assuming that AHCA's review of the data identified a deficiency, the proposed rules provide the licensee a 15-day period to develop a plan of correction acceptable to AHCA, unless the issue poses "a threat to the health, safety or welfare of patients" in which case it is reasonable to expect that a more prompt resolution of a deficiency would be required. Pursuant to Florida Administrative Code Rule 59A- 3.253, a hospital could be sanctioned for failing to submit a plan of correction related to an identified deficiency, or for failing to implement actions to correct deficiencies specified in an approved plan of correction. There is no evidence that AHCA's enforcement authority under the proposed rules differs in any significant manner from the general enforcement authority already available to the agency. There is no evidence that the proposed rules would result in any alteration of AHCA's investigative practices. Martin Memorial notes that, while the proposed rule provides a 15-day period for development of a plan of correction, AHCA's general enforcement rules already provide a ten-day period and asserts that the proposed rule is therefore inconsistent, fails to establish adequate standards for agency decisions, and vests unbridled discretion in the agency. The specific time period set forth in the proposed rule is clearly applicable, and there is no credible evidence of legitimate confusion in this regard. AHCA has suggested that "lagging" hospitals could be specifically regarded as failing to meet the outcome benchmarks identified in the ACC-NCDR data, but the proposed rule makes no specific reference to any systematic classification of hospital performance, and the statute does not require that a minimal performance level be established. Martin Memorial asserts that the Proposed Rule 59A- 3.2085(17)(a)6. is capricious because it requires that "each hospital licensed to provide Level II adult cardiovascular services programs shall participate in the Society of Thoracic Surgeons National Database," but only physicians can participate in the database. The enacting statute requires such participation. Subsection 408.0361(5)(b), Florida Statutes (2008), directs AHCA to adopt rules that require Level I or Level II licensed hospitals to "participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society for Thoracic Surgeons." The proposed rule clearly implements the directive established by the statute. There is no credible evidence that the proposed rule is irrational or that a licensed Level II hospital would be unable to meet the obligations of the rule by requiring that its thoracic surgeons participate in the STS database. Martin Memorial asserts that the requirement that an applicant hospital's chief executive officer attest to compliance with certain guidelines is vague because "it is unclear what guidelines apply and what guidelines will not." The evidence fails to support the assertion. The referenced requirement applicable to a hospital seeking licensure as a Level I facility is set forth at Proposed Rule 59A-3.2085(16)(a)2., which provides as follows: The request [for licensure] shall attest to the hospital’s intent and ability to comply with the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention); including guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. The referenced requirement applicable to a hospital seeking licensure as a Level II facility is set forth at Proposed Rule 59A-3.2085(17)(a)2., which provides as follows: The request [for licensure] shall attest to the hospital’s intent and ability to comply with applicable guidelines in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-2; in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention); and in the ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons, including guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Proposed Rule 59A-3.2085(16)(a)6. designates the guidelines applicable to the operation of Level I hospital services. Proposed Rule 59A-3.2085(17)(a) designates the guidelines applicable to the operation of Level II hospital services. The specific elements of the referenced guidelines are identified in both the statute and the proposed rules. Martin Memorial asserts that the proposed rule is vague as to training requirements applicable for physicians performing elective PCI in Level I hospitals. In making the assertion, Martin Memorial references training requirements established at Proposed Rule 59A-3.2085(16)(b)2. and applicable to Level I physicians performing emergent PCI with less than 12 months experience. There is no credible evidence that the proposed rule is vague. Proposed Rule 59A-3.2085(16)(b), in relevant part, provides as follows: Each cardiologist shall be an experienced physician who has performed a minimum of 75 interventional cardiology procedures, exclusive of fellowship training and within the previous 12 months from the date of the Level I adult cardiovascular licensure application or renewal application. Physicians with less than 12 months experience shall fulfill applicable training requirements in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) prior to being allowed to perform emergency percutaneous coronary interventions in a hospital that is not licensed for a Level II adult cardiovascular services program. The rule provides that a physician with less than 12 months experience working in a Level I facility can perform emergent PCI only if applicable training requirements have been met. The proposed rule does not authorize performance of elective PCI in a Level I hospital by a physician not meeting the minimum annual procedure volume requirements. Proposed Rule 59A-3.2085(17)(b) clearly identifies the requirements applicable to Level II physicians and in relevant part provides as follows: Each cardiac surgeon shall be Board certified. New surgeons shall be Board certified within 4 years after completion of their fellowship. Experienced surgeons with greater than 10 years experience shall document that their training and experience preceded the availability of Board certification. Each cardiologist shall be an experienced physician who has performed a minimum of 75 interventional cardiology procedures, exclusive of fellowship training and within the previous 12 months from the date of the Level II adult cardiovascular licensure application or renewal application. Martin Memorial asserts that the experience requirements set forth at Proposed Rule 59A-3.2085(16)(b)3. (related to Level I hospitals) and Proposed Rule 59A- 3.2085(17)(b)3. (related to Level II hospitals) are arbitrary or capricious. The evidence fails to support the assertion. The text of both proposed rules provides as follows: The nursing and technical catheterization laboratory staff shall be experienced in handling acutely ill patients requiring intervention or balloon pump. Each member of the nursing and technical catheterization laboratory staff shall have at least 500 hours of previous experience in dedicated cardiac interventional laboratories at a hospital with a Level II adult cardiovascular services program. They shall be skilled in all aspects of interventional cardiology equipment, and must participate in a 24-hour-per-day, 365 day-per-year call schedule. Martin Memorial argues that there is no evidence to suggest that 500 hours of experience indicates that appropriate competency levels has been achieved. The evidence establishes that the required experience level was developed by AHCA's hospital licensure unit staff and is the training level currently applicable for hospitals providing emergency PCI services under existing exemptions from CON requirements. The training requirements are not arbitrary or capricious. Martin Memorial asserts that the Proposed Rule 59A-3.2085(16)(c)1. is arbitrary or capricious. The cited rule requires that a Level I hospital make provisions for the transfer of an emergent patient to a Level II hospital, as follows: A hospital provider of Level I adult cardiovascular services program must ensure it has systems in place for the emergent transfer of patients with intra-aortic balloon pump support to one or more hospitals licensed to operate a Level II adult cardiovascular services program. Formalized written transfer agreements developed specifically for emergency PCI patients must be developed with a hospital that operates a Level II adult cardiovascular services program. Written transport protocols must be in place to ensure safe and efficient transfer of a patient within 60 minutes. Transfer time is defined as the number of minutes between the recognition of an emergency as noted in the hospital’s internal log and the patient’s arrival at the receiving hospital. Transfer and transport agreements must be reviewed and tested at least every 3 months, with appropriate documentation maintained. Martin Memorial asserts that the rule is arbitrary or capricious because it does not include a requirement that a Level I hospital make provisions for the transfer of an elective patient to a Level II hospital. There is no credible evidence to support the assertion. There is no evidence that a patient undergoing elective PCI at a Level I would not be regarded as an emergent patient were circumstances such that an emergent transfer to a Level II hospital warranted. There is no credible evidence to suggest a rationale for transferring a non-emergent patient from a Level I to a Level II hospital. Martin Memorial asserts that the proposed rule enlarges, modifies or contravenes the enacting statute on grounds that, although AHCA is directed to adopt rules to ensure compliance "with the most recent guidelines of the American College of Cardiology and American Heart Association Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories," the proposed rule provides that "in case of conflicts between the provisions of this rule and the designated guidelines" the rule provisions "shall prevail." Such provisions appear in Proposed Rule 59A-3.2085(13)(j), Proposed Rule 59A-3.2085(16)(g), and Proposed Rule 59A-3.2085(17)(f). The enacting statute requires that hospitals licensed under the provisions of the proposed rules comply with guidelines "for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety." To the extent that guidelines that relate to elements other than "staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety," the enacting statute does not require compliance by properly- licensed Florida hospitals. Other than as addressed elsewhere herein, the evidence fails to identify any specific conflicts between the guidelines and the proposed rules and, accordingly, fails to establish that the cited proposed rules enlarge, modify or contravene the enacting statute.
The Issue The main issue in these proceedings is whether the Respondent Doctors is entitled to a certificate of need to establish a cardiac catheterization laboratory in Sarasota County. The parties stipulate that the only statutory and rule criteria which remain to be reviewed by the Hearing Officer areas follows: 1. Sections 381.705(1)(a) , (b) , (c) , (d) , , and (h), Florida Statutes. Section 38l.705(1)(h)) will be reviewed insofar as it refers to the availability of health manpower, management personnel, funds for capital and operating expenditures, the alternative uses of the applicant's resources, and the extent to which the proposed services will be accessible to all residents of the district. Section 38l.705(1)(1) and (n), Florida Statutes. Section 381.705(2)(a) , (b) and () Florida Statutes. Rule 10-5.011(1)(e), Florida Administrative Code. 5. Rule 10-5.011 (8)b and (8)0, (9)b, (9)d, (9) e (1) and (9)e(ll) The other statutory criteria and the remaining subsections of the rule have either been stipulated to by the parties or are inapplicable.
Findings Of Fact Respondent Doctors is a 168 bed, acute care general hospital. The hospital has a 40 bed cardiac care unit in which all beds are monitored. Hospital Corporation of America (HCA) owns Doctors. HCA owns or operates four hundred hospitals, including nineteen in Florida. Three of the in-state hospitals have cardiac catheterization laboratories (CCLs) . Two of the existing labs, located in Bradenton and Tallahassee, are available to assist in training and preparation which may be needed in the creation of a cardiac catheterization lab at Doctors. In September 1987, Doctors applied for Certificate of Need No. 5283 to establish a cardiac catheterization laboratory. The certificate of need has been preliminarily approved by the Respondent HRS. The initial agency action has been challenged by the Petitioner, Memorial. Memorial is the primary existing health care facility which would compete with Doctors by providing cardiac catheterization services in the same city where the new lab is to be located. Consistency with State and Local Health Plans The local health plan does not directly address the need for CCLs in the area. As nothing in the plan is relevant, no inconsistencies are created with the plan in the balancing of criteria with regard to the certificate of need determination. The State Health Plan provides that an average of 600 cardiac catheterization procedures per laboratory are to be maintained in each district through 1990. To determine the use rate under Rule 10-5.011, Florida Administrative Code, HRS must look to the number of procedures provided in the district between June 1984 and July 1986. The data reveals that seven programs completed 5,841 procedures. The required averages were exceeded by over two hundred procedures per lab. The need criteria has been met by Doctors for purposes of the State Health Plan, and the local plan, as it existed at the time of the initial review of the application. Existing Facilities Memorial is an 849 bed, acute care hospital which is a regional referral hospital in the area. The hospital provides Level 3 cardiac services. These services include angioplasty and open heart surgery in addition to cardiac catheterization. Memorial's first catheterization lab opened in 1978. Memorial currently contains two CCLs that assist in fulfilling the health care needs of the district. Before the recent addition of three CCLs within the district, Memorial served as the center for cardiac services. Manatee County and Charlotte County now have their own CCLs, which reduces Memorial's pool of potential patients in need of those services. In spite of reductions in the patient pool in the past, Memorial's use of its two CCLs has continued to grow. The Sarasota County area has a unique characteristic in that many tourists who arrive in the winter months (October-April) make use of the two local hospitals, Doctors and Memorial. The use of Memorial's CCLs increases as the local cardiologists need to complete a number of diagnostic tests in order to evaluate these new patients quickly, in times of critical need. Because of the season, Memorial's CCLs are heavily utilized for emergency procedures in the winter months. Accordingly, patients who have elective procedures scheduled are often reprioritized because of the emergency needs for use of the CCLs for more seriously ill patients. This last-minute rescheduling results in prolonged hospitalizations for the nonemergency patients and increases the cost of their medical care. Although the quality of testing does not appear to suffer from the season, a significant pool of patients is denied the opportunity for convenient medical care. The treating physicians are denied lab use and test results at the anticipated times within these patients' courses of treatment. Because of Memorial's inability to make the labs readily accessible to the pool of patients scheduled for elective procedures in the winter, a need exists for a CCL for this pool of patients. Doctors primarily seeks to provide cardiac catheterization services for diagnostic purposes. However, the lab will be capable of providing immediate endocardiac catheterization pacemaking in cases of cardiac arrest. A rapid mobilization team will be available for emergency procedures when the need arises. Angioplasty and open heart surgery procedures are not planned in conjunction with the CCL services. The lab will be in operation from 7:30 a.m. to 4:00 p.m. Monday through Friday, excluding holidays. Quality of Care Doctors currently provides quality care. There are no complaints outstanding, and the hospital has sufficient capabilities and support services to provide for a CCL. Doctors is JCAH accredited and provides the necessary services required under the catheterization rule. The same cardiologists are on staff of both Memorial and Doctors. Most of these physicians admit patients to both hospitals. Approximately one-third of Doctors' admissions are patients with cardiac problems. Many of these patients require catheterization and are transferred to Memorial. If it is determined that a catheterization is needed before admission, physicians admit those patients to Memorial. Alternative Care The other CCL which currently exists in Sarasota is an outpatient lab. This facility is owned and operated by a group of invasive cardiologists who also perform catheterizations at Memorial. Because the outpatient lab restricts a patient's selection of a physician able to perform a cardiac catheterization to the lab owners, this lab is not a realistic alternative for most patients or the referring physicians. A hospital-based lab gives those involved greater personal choice, and it is better equipped to handle unanticipated emergencies. Reasonable and Economic Accessibility Memorial's CCL services are not always accessible at the times scheduled for elective procedures. Some patients have remained hospitalized for days until they can be rescheduled. The delays increase the costs attached to the procedures due to the length of the hospital stay and the additional services required. Patients admitted to Doctors who require the services of a CCL are moved to Memorial by ambulance and have to be admitted there. These transfers cost patients an additional $180-$340. The ambulance charges are not reimbursed by medicare so the majority of the patients pay these charges themselves. The proposed lab will be capable of providing a range of diagnostic tests without the need to admit patients to another hospital prior to, or during treatment at, Doctors. This will reduce costs two ways: The additional ambulance and hospital costs will be omitted, and the proposed charge for the service is less than the current charge set by Memorial. Availability of Resources Doctors currently has a staff of trained cardiac nurses. There are two nurses on staff who have taught cardiac catheterization techniques at an accredited nursing school prior to moving to Sarasota. Although the husband and wife team was originally recruited to the area by Memorial, the two nurses chose to leave that facility because of the stress from the high level of activity in those labs. Doctors plans to cross train staff and to allow for a trained special procedures staff with alternating roles and duties. The proposed CCL will be staffed with 2.5 FTEs. These consist of the 1 FTE cardiac nurse and 1.5 FTE special procedures technicians. The budgeted FTEs do not include an allocation of time for an administrative director or secretarial/clerical services. The assistant hospital administrator anticipates that provisions will be made for management personnel at a later stage of the lab's development. Although the number of FTEs scheduled is less than those anticipated for a CCL which provides more complex procedures, the number scheduled by Doctors is reasonable for the number of services and kind of services it seeks to provide for the type of cardiac patients in its care. The proposal for the lab, as described in the application and revised in the omissions response, is financially feasible. The proposed expenditure of funds will serve the needs of the hospital's current patient pool as well as the special needs of the community for cardiac catheterization services. While Doctors' proposal does not increase geographic access, it will increase access in the population center, where services are currently inaccessible for one pool of patients at certain times. A need for a project is evidenced by the utilization of like and existing services. The rule which contains the need methodology takes into account the utilization of existing facilities in determination of numeric need. Numeric needs exists in this district, pursuant to Rule 10-5.011. Written Referral Agreement Doctors submitted a written referral agreement with a facility with open heart surgery services within 30 minutes travel time by emergency vehicle under average travel conditions. The agreement meets the general requirements of HRS. The agency does not require a detailed agreement during the preliminary granting of a certificate of need because other local providers do not wish to assist applicants during the CON process. However, such applicants are able to obtain more detailed agreements after the certificate is approved. The agency has determined that the agreement is sufficient. Because a rational basis has been given for the determination, the agency's acceptance of the agreement is given great weight by the Hearing Officer. Competition and Service Doctors' project will affect competition between Doctors and Memorial. Doctors will provide services for patients who would have gone to Memorial for such services in the past because Doctors was unable to provide the service. This is because of the geographic location and the fact that the same cardiologists are on staff at both hospitals. It appears that Doctors will be providing services for patients who are not in critical need of the services. This will allow Memorial to concentrate on the more complex cases has traditionally dealt with in the past. The stress from "unhappy" elective patients will be reduced at Memorial's labs, but so will the economic incentive for the staff which is related to the number of procedures performed. The elective cardiac catheterizations are quicker and easier to perform and increase the earnings of the lab staff. Both hospitals compete directly for staff. There is a "revolving- door" situation in staffing as local heath care personnel negotiates and works in either hospital, most of the time. Because of cash bonuses offered by Doctors for joining its staff Memorial is concerned about the adverse impact upon its CCL staff. Testimony presented at hearing showed by substantial and competent evidence that Memorial is committed to equipping its two labs with the most responsive equipment available for its more complex needs. The preservation of its current lab staff has been planned for by an able administrator. Recruitment is done nationwide and plans are being made with the local community college to provide nurses training involving cardiac catheterizations. The evidence also demonstrated that Memorial plans to meet the competition by improving the health services delivery, quality assurance, and cost-effectiveness. It appears that there is room for all three labs in Sarasota, and that healthy competition will occur in the area. Past and Proposed Indigent care Doctors has given little care to the medically indigent in the past. In fact, the hospital has maintained a written policy suggesting that those who cannot pay for services should be transferred by physicians to another hospital. Rather than admit such patients, the Doctors has chosen to pay into an indigent care fund. The new assistant director maintains that the current hospital policy is to provide health care to Medicaid and indigent patients in the CCL. Doctors projects that 2.5 per cent of its catheterization volume will be Medicaid and .75 per cent will be indigent care. Alternatives to the Project The alternative which has been developed and studied by Doctors is its past use of Memorial's CCLs. This use has been found to be more costly for elective cardiac catheterizations than the current proposal. The status quo has not met the needs of the elective catheterization patients in the geographical area. Similar Inpatient Services Memorial is using its similar facilities in an efficient manner. It is not using the facilities in an appropriate manner as most elective catheterization patients do not want to be in a hospital any longer than necessary. These people are predominantly type A personalities who do not like being rescheduled and charged additional hospital costs. Problems in Outpatient Inpatient Care Elective catheterization patients have a problem obtaining local inpatient care when they want it and when their cardiologists have prepared for it in their treatment plans. This does not appear to be a serious health problem, but the evidence has demonstrated it is a serious problem. Proposed Volume of Catheterizations Based upon numeric need, utilization of Memorial, physician support, and the growth history of other providers within the district, the projected utilization of 246 procedures in 1990, 294 in 1991, and 351 in 1992 is reasonable. There is no evidence which has been extrapolated from reliable data which shows that the proposed lab, coupled with alternative treatments and currently available noninvasive technological advancements, will reduce the average number of procedures per lab within the district below 600 each year. Due to the population growth projections for Sarasota County, approval of Doctors' application will have minimal impact on lab utilization at Memorial or other facilities within the district. Doctors' projected number of procedures will not decrease procedures at Memorial below its 1987 level of 2,495 cardiac catheterization procedures performed on an annual basis.
