Findings Of Fact HCAC, on March 14, 1986, filed with DHRS, a letter of intent giving notice of its forthcoming application for a 90 bed long term psychiatric hospital in Hillsborough County, Florida. DHRS is the state agency authorized to consider, and approve or deny, applications for CONs. The proposed location is within DHRS service district VI. On April 15, 1986, HCAC filed the CON application which DHRS designated as CON #4526. The facility, HCAC Psychiatric Hospital of Hillsborough County, was intended to provide treatment to chronically mentally disturbed patients, and was planned to contain a 74 bed adult/geriatric unit and a 16 bed adolescent unit. The application listed Anthony J. Estevez as the applicant and Francis A. Gomez as the authorized representative. Mr. Gomez is a consultant to Mr. Estevez. On May 15, 1986, DHRS requested additional information of the applicant. On June 23, 1986, HCAC provided the requested material. On June 29, 1986, DHRS deemed the application complete. The HCAC application was comparatively reviewed by DHRS with another CON application, subsequently denied, which is not at issue in this proceeding. On September 30, 1986, DHRS granted partial approval to HCAC for the construction of a 50 bed adult and geriatric long term psychiatric facility. DHRS is authorized to grant approval to an identifiable portion of an application for a CON. DHRS considers a single bed to be an identifiable portion. Notice of the agency's decision was published in Florida Administrative Weekly, Vol. 40, No. 24, at 3684. HCAC did not protest the denial of the remainder of the application. The Petitioners in the consolidated cases timely requested formal administrative hearing. On September 15, 1987, HCAC provided, to all parties, materials purporting to be updated information relating to the DHRS-mandated reduction in the scale of their proposal and changed economic circumstances. Charter moved at the hearing to exclude the material. The hearing officer denied the motion, but recognized a continuing objection to the use of such materials. In that HCAC has failed to establish that there is need for 50 long term psychiatric beds in district VI, the updated information is not relevant to this order and has been disregarded. HCAC, formally known as Health Care Advisors Corporation, Inc., was not incorporated until April 14, 1987, but - the name had been reserved prior to the incorporation. HCAC is wholly owned and controlled by Anthony J. Estevez. Following construction of the proposed facility, HCAC intends to operate as a general partnerships in which Mr. Estevez and his wife would be limited partners. Long term psychiatric services are hospital based inpatient services averaging a length of stay of 90 days. DHRS rules provide that such services may be provided in specifically designated beds in a general hospital, or in a specialty hospital setting. HCAC has failed to establish that there is a need for 50 additional long term psychiatric beds in district VI. The evidence does not indicate that there are persons within district VI who are unable to obtain long term psychiatric services, or whether there is need for any additional long term psychiatric beds in district VI. The HCAC application is inconsistent with the goals of both the district and state health plans, as well as other available needs assessment data. The district VI health plan indicates that additional long term psychiatric beds are unnecessary. The plan indicates that existing psychiatric hospital bed utilization must be at least 75%. The evidence indicates that for the three year period preceding the hearing, occupancy in existing psychiatric hospital beds was approximately 60%. Goal #1 of the state health plan indicates that mental health services should be made available to persons in need of such services in the least restrictive setting which offers treatment. Long term hospitalization does not generally offer the least restrictive setting for such treatment. Further, objective 1.3 of the state plan provides that additional long term beds in a particular district should not be approved unless the average annual occupancy rate for all existing long term beds in the district is at least 80%. The average annual occupancy rate for existing long term beds in district VI is less than 80%. The district VI alcohol, drug abuse and mental health plan also emphasizes the desirability of providing psychiatric care in a noninstitutional setting when possible, and suggests utilization of alternatives to institutionalization. Additional long term psychiatric beds are not identified as needed for the district. The plan does indicate that additional services for elderly persons are needed in the district, and that some elderly persons are inappropriately hospitalized due to lacking community resources. The evidence does not indicate that such persons would benefit from the HCAC project. DHRS approved the facility primarily based upon the premise that there was need for long term psychiatric beds in district VI. DHRS has not established a method of establishing numerical need for long term psychiatric beds. In the absence of such methodology, DHRS identified the "inaccessibility" of long-term beds in the eastern part of district VI as the most important consideration in their determination to award the HCAC certificate. The agency concluded in making the determination to grant the CON that "it is highly doubtful" that persons in need of services and residing in the eastern portion of the district would be within two hours driving time of facilities located within the district. However, the agency conducted no actual drive time study, instead relying on estimations based upon map distances and the agency analyst's perceptions of the time required to cover such distances. At least 90% of the district VI population is within two hours driving time to long term psychiatric beds. In determining that district VI residents were unable to obtain services, DHRS failed to consider existing long term psychiatric beds which are located within a two hour drive from, but outside of, district VI. Further, although it is normal for the agency to consider approved but unconstructed facilities in making CON determinations, the agency failed to consider such long term psychiatric beds located within a two hour drive from district VI for which CONs have been issued but which are not yet operating. The HCAC application did not suggest a detailed bed need assessment methodology. HCAC did not conduct a demographic study in district VI to assess or propose a numerical bed need for the district. Subsequent to the filing of the application and prior to the administrative hearing, a bed need analysis based upon the report of the Graduate Medical Educational National Advisory Committee (GMENAC) was prepared for HCAC. The GMENAC report was prepared in 1981 in order to predict the numbers of physicians (including psychiatrists) which would be needed in the United States by 1990. The study was not prepared for the purpose of predicting bed need, but was prepared for the purpose of predicting the need for educating new physicians. The GMENAC-based bed need projection results in a bed-to-population ratio of .61 beds per 1,000 residents. The accepted DHRS short term bed need methodology results in a bed-to-population ratio of .35 per 1,000 residents. However, according to the testimony of all witnesses including HCAC's and DHRS's, there is greater need for short term beds than for long term beds. The use of the GMENAC report as a basis for projection of long term psychiatric bed need overestimates the need for long term psychiatric beds. The resulting bed need projections are not supported by the weight of the evidence and have been disregarded. DHRS does not recognize numerical bed need projections which are projected pursuant to any methodology other than as specified in the agency rules. As stated previously, DHRS has not established a numerical bed need methodology applicable to long term psychiatric beds. In making the determining of need, DHRS did not consider the existence of long term beds in district VI which are designated for children and adolescents. The agency's rationale for failing to include all beds in ascertaining relevant occupancy levels in existing beds, is that children and adolescents are required by rule to be housed separately from adults in long term psychiatric hospitals. Although the rule relating to approval of short term psychiatric hospital beds requires that occupancy levels for short term adult beds and child/adolescent beds be counted separately, the long term rule states that need for additional beds will not be found unless the annual occupancy rate for all existing long term psychiatric beds in the district is at or in excess of 80%. The rule does not provide for DHRS to disregard some long term beds in determining that other long term beds are needed. There was no evidence to support the decision by DHRS to waive the 80% occupancy requirement as it relates to all existing long term beds in the district. The agency rule requires that all such beds be taken into account in determining whether there is need for a proposed facility. The evidence establishes that the annual occupancy rate for all existing long term psychiatric beds in district VI is less than 80%. The DHRS rule accordingly directs the finding that additional beds are not needed. HCAC proposes to offer a full range of high level, specialty long term psychiatric services, including diagnostics and evaluation, to chronically mentally disturbed patients. Such patients suffer from illnesses such as personality disorder, organic brain syndrome, and schizophrenia. Generally, long term patients may be differentiated from short term patients by the nature of the illnesses addressed through hospitalization and the type of care which is appropriate to particular patients. Long term patients are generally unserved or underserved, and require specialized treatment. However, many of the patients HCAC intends to serve are also appropriate for, and receive, short term treatment. The stated goal of the facility is to assure that the full continuum of psychiatric care is available to residents of district VI. The facility proposes to provide "milieu" therapy. Such therapy provides patients with a sense of community important where lengths of stay are extended. The facility proposes to offer educational programs designed to teach patients skills necessary for successful living outside an institution. The facility proposes to provide family counseling, and support for family members who are confronted with the chronic mental illness of a family member. Such services are generally currently available to residents of district VI. HCAC intends, as do other providers of similar services, to admit patients from a broad range of other facilities, private practitioners, and public and private agencies. HCAC states that it will establish relationships with other area mental health care providers in order to facilitate the cooperation between agencies conducive to providing appropriate treatment to persons needing mental health services. There was no evidence that such relationships or admission agreements have yet been entered into by HCAC. HCAC intends, as do other facilities, to closely monitor treatment plans for individual patients in order to provide a high level of care and to maintain therapeutic progress. A system of goal attainment will be utilized in evaluating appropriateness of treatment and planning further care. HCAC intends to ensure that patients receive services from existing community-based agencies following discharge so as to make subsequent readmission into a facility less likely. HCAC states that it intends to provide training to staff and other personnel, both from the HCAC facility and from other providers. However there was no evidence to establish that the facility will be specifically staffed by instructional personnel capable of providing such training. The HCAC facility is expected to draw patients primarily from within the district VI area, however, additional patient referrals from outside the service district are anticipated. The facility is planned to include 36 adult and 14 geriatric beds. Mr. Estevez is a developer and general contractor. Mr. Estevez's interest in long term psychiatric facilities is related to his personal inability to locate an acceptable instate long term psychiatric facility which could provide the level of care which Mr. Estevez believed would be appropriate for a family member in need of services. The facility would be managed by Flowers Management Corporation. Flowers' a for-profit entity, is 51% owned and controlled by Anthony J. Estevez. While Flowers manages several short term psychiatric and substance abuse facilities, Flowers has never operated or managed a long term psychiatric hospital. Nelson Rodney, Flowers, vice president for the Florida region, will be responsible for the management and programmatic operation of the proposed facility. Mr. Rodney has never managed, or been employed by, or had direct experience in, a long term psychiatric facility. The evidence does not indicate that Flowers Management Company is currently capable of managing and operating a long term psychiatric facility. The proposed HCAC facility will include a psychiatric inpatient unit, patient support services, diagnostic services, and ambulatory care services. The program to be utilized by the HCAC facility is based upon the "Flowers" model. The Flowers model is the Flowers designation for the type of services and care which are available at facilities managed by the Flowers Management Corporation. The Flowers model currently utilized by the company is constituted of numerous treatment modalities developed over a period of years and is essentially similar to treatment programs offered at short-term psychiatric hospitals. The Flowers model is applicable to both short term and long term treatment programs. None of the treatment modalities identified by HCAC as proposed for use at the facility are unavailable to residents of district VI. There are adequate, available and accessible alternatives to the proposed HCAC facility, both within and outside of district VI. In considering the HCAC application, DHRS disregarded beds in short term psychiatric facilities because agency rule distinguishes between long term and short term beds. However, DHRS has previously considered short term psychiatric services when evaluating the need for a long term psychiatric service provider. It is appropriate to consider existing short term facilities in determining whether alternatives to the proposed facility are adequate and available. Short term and long term facilities compete to some extent in providing services. Projecting an expected length of stay for a particular patient is an inexact process and is very difficult. Most psychiatric patients are considered to be in need of, intermediate care, extending beyond 30 days but less than 90 days. On occasion, some patients in short term facilities are hospitalized in excess of 90 days, and some patients hospitalized in long term facilities are discharged prior to 90 days. The average length of stay projected by HCAC was 90 days. HCAC chose the 90 day figure solely because DHRS defines a long term psychiatric facility as one with an average length of stay of 90 days, and HCAC proposes to construct a lone term facility. HCAC expects the average length of stay to be in excess of 90 days. In an attempt to screen out prospective patients with shorter lengths of stay, HCAC proposes to utilize an experimental method of projecting lengths of hospitalization, in order to eliminate patients with projected hospitalizations of less than 90 days. The experimental methodology, a "strain ratio analysis", enables psychiatric health care providers to assess a prospective patient's situation, develop an appropriate course of treatment, and determine the anticipated length of the hospitalization. However, such prototypical models are, by their nature, testing vehicles. The Flowers Management Corporation has never used the strain ratio analysis system. No facility was utilizing the strain ratio analysis system in other than an experimental capacity at the time of the administrative hearing. The strain ratio analysis system has been tested primarily in short term psychiatric facilities, rather than in long term facilities such as proposed by HCAC. While such methods hold great promise, and may be helpful in predicting the expected length of stay in individual cases, they are not sufficiently reliable to establish that HCAC's average length of stay will exceed 90 days. Some HCAC patients could be hospitalized for periods of time shorter than 90 days. Short term facilities, on occasion, provide treatment to patients hospitalized in excess of 90 days when such continued treatment is warranted. HCAC intends to take short term psychiatric facility charges into account when determining rate structure. HCAC used financial data from several short term psychiatric hospitals in preparing the information submitted to DHRS as part of the application for the CON. There are 654 licensed or approved short term psychiatric beds in service district VI, most of which may be utilized to treat adults in need of care. The annual average occupancy rate for these short term beds is less than 80%. The available beds are accessible, appropriate, underutilized and available. Additionally, there are beds in district VI residential treatment centers and nursing homes which to some extent may be used as alternatives to the HCAC proposal. UPC is a licensed short term psychiatric hospital located in Hillsborough County, approved in part as a teaching and research facility. The UPC facility contains 114 beds, including a 28 bed adult unit, a 20 bed geriatric unit, a 22 bed substance abuse unit, an 8 bed professorial unit, an 8 bed child unit, and a 28 bed-adolescent unit. The operation of the HCAC facility would negatively impact the operation of UPC through a reduction in patient days and related revenue. Charter is a short term psychiatric hospital located in Hillsborough County, containing 146 beds, 84 of which are designated as' adult or geriatric. Charter provides services to adult and geriatric patients. Although Charter is a short term facility, services to be provided by HCAC are essentially similar to services provided by Charter. Accordingly, the proposed HCAC facility would have a substantial impact on the operations of Charter. Because there is no need for additional psychiatric bed capacity, it is reasonable to assume that Charter would lose a significant number of patients, and revenue, to the HCAC facility, if the HCAC facility were operational. St. Francis is a 30 bed alcohol and drug treatment unit located in Hillsborough County. Although HCAC would not admit a patient with a primary diagnosis of substance abuse, HCAC would provide substance abuse treatment to persons receiving care for other illnesses. Patients in need of substance abuse treatment receive care at various types of facilities. At the hearing, an HCAC witness stated that some of the beds which the HCAC/GMENAC methodology indicated were needed could operate as residential substance abuse treatment beds. Accordingly, the HCAC facility could impact on the operation of St. Francis. UPC, Charter, and St. Francis provide services essentially similar to those which the HCAC facility would provide. There is a shortage Of personnel available to staff psychiatric hospitals. The HCAC facility would exacerbate the shortage, however, there are sufficient personnel to meet projected staffing levels, although it would make staff retention more difficult for existing providers. Theme was no evidence which would indicate that the HCAC facility would, through the operation of joint, cooperative, or shared health care resources, provide for probable economies or improvements in the delivery of psychiatric services. There was no evidence which would indicate that HCAC planned to participate in joint, cooperative, or shared health care service provision. There was no evidence which would indicate that there was need for special equipment or services which are not reasonably and economically accessible in district VI or in adjoining areas. There was no evidence which would indicate that there was need for research or educational facilities beyond what is currently available within and adjacent to district VI. The proposed HCAC facility is not specifically designated as a research or educational facility and would provide no opportunity for such, beyond what any additional long term psychiatric hospital would provide. The HCAC facility would be designed and constructed by Project Advisors Corporation (PAC). PAC is wholly owned and controlled by Anthony J. Estevez. Mr. Estevez has never designed or constructed a long term psychiatric hospital. Mr. Estevez has not purchased property in the district VI area. However, PAC and Mr. Estevez have been involved in constructing short term psychiatric facilities. Construction of short term and long-term psychiatric facilities are essentially similar. Mr. Estevez's background and knowledge indicate that, assuming the project were otherwise permitted, the proposed project could be constructed in a timely manner and at a reasonable cost. The projected costs of land acquisition, equipment and initial operating costs are based upon the establishment of need for the facility. Such need was not established, and accordingly the projections have not been considered. The evidence indicated that financing was available to Mr. Estevez at an annual rate of 13%. Mr. Estevez's has a continuing relationship with NCNB Bank which has indicated interest in providing financing for the project. The annual rate is reasonable. The projected construction cost is based on similar projects for which Mr. Estevez has been responsible and appears reasonable; however, such costs are related to need for the project, which was not established by the evidence, and accordingly such projections have been disregarded. Further Mr. Estevez has stated his intention to provide personal funds for capital, if necessary, and the evidence indicates that he is able to do so. The proposed staffing and salary levels are based upon the establishment of need for the proposed facility. Such need was not established, and accordingly the projections are irrelevant. HCAC states that the project will be accessible to all residents of district VI in need of services. However HCAC failed to establish that there is need for 50 additional long term psychiatric beds in district VI. In asserting that the proposed project was financially feasible, HCAC projected costs and revenue for the proposed facility. Such projections necessarily rely on the assumed need for the facility. However, the evidence has failed to establish that there is need in district VI for 50 additional long term psychiatric hospital beds. Accordingly, the financial information filed with the application, as well as the updated information provided subsequently, has not been considered to the extent based upon the assumption of need and resulting projected levels of occupancy. In that there is no demonstrable need for the project, the project is not financially feasible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order denying the application of HCAC for certificate of need #4526. DONE and ENTERED this 17th day of April, 1989, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1989. APPENDIX CASES NO. 86-4378, 86-4379, and 83-4380 The following constitute rulings on proposed findings of facts submitted by the parties. UPC UPC's proposed findings of fact are accepted as modified in the Recommended order except as follows: 15-26. Rejected. Unnecessary. 28. Rejected. Unnecessary. 48. Accepted insofar as relevant. 49-53. Rejected. Unnecessary. 58-70. Rejected. Unnecessary. 73. Rejected. Must be within service district. 80. Rejected. Conclusion of law. 87. Rejected. Unnecessary. Charter Charter's proposed findings of fact are accepted as modified in the Recommended Order except as follows: 32-35. Rejected. Statute directs consideration of beds within district. 40. Rejected. Restatement of testimony. 75. Rejected. Conclusion of law. 77-82. Rejected. Unnecessary. 83-95. Rejected. Not supported by weight of evidence. 96-121. Rejected. Unnecessary. 122. Rejected. Not supported by weight of evidence. 123-127. Rejected. Unnecessary. 128-132. Rejected. Not supported by weight of evidence. 133-134. Rejected.. Unnecessary. 135-139. Rejected. Not supported by weight-of evidence. 146-153. Rejected. Unnecessary. St. Francis St. Francis' proposed findings of fact are accepted as modified in the Recommended Order except as follows: 18. Third sentence rejected. Irrelevant. 25. Rejected. Unnecessary. 32. Rejected. Irrelevant. 36-40. Rejected insofar as related to projects not at issue in this proceeding. 41. Rejected. Not required to provide firm loan commitment. 42-43. Rejected. Unnecessary. 54. Rejected. Subordinate. 55-64. Rejected. Unnecessary. 65. Rejected. Restatement of testimony. 76. Rejected. Conclusion of law. 91. Rejected. Testimony cited relates solely to occupancy requirement for existing beds, not other agency criteria. 113. Rejected. Not supported by weight of evidence. 114-147. Rejected. Unnecessary. Rejected. Implementation of staffing plan not required. Rejected. Unnecessary. Rejected. Restatement of testimony. Rejected. Irrelevant. 156. Rejected. Methodology not' supported by evidence. HCAC HCAC's proposed findings of fact are accepted as modified in the Recommended Order except as follows: Accepted, but irrelevant. Rejected. Irrelevant. 11. Rejected insofar as related to updated information not related to the DHRS-mandated reduction in scale of project or due to changed economic conditions. 19. First sentence rejected. Not supported by weight of evidence. 31. Rejected. Irrelevant. Rejected. Irrelevant. Rejected. HCAC is not operator of facility. Flowers Is Operator and Flowers experience insufficient. 51-52. Rejected. Not supported by weight of evidence. 53. Rejected. Need not established. 63-68. Rejected. Unnecessary. 69. Rejected. Not supported by weight of evidence. 70-92. Rejected. Assumes need, not established. Rejected. Not supported by weight of evidence. Rejected. Assumes need, not established. Rejected. Inconsistent with HCAC-stated admission of non- local patients. Rejected. Service districts not necessarily related to accessibility. Rejected. Not supported by weight of evidence. Second sentence rejected. Rule does not authorize separate calculation of adult/geriatric and child/adolescent long term beds. 103-108. Rejected. Not supported by weight of evidence. 110. Rejected. Assumes need, not established. 111-112. Rejected. Not supported by weight of evidence. Rejected. Unnecessary. Rejected. Conclusion of law. 115-117. Rejected. Not supported by weight of evidence. Rejected. Unnecessary. Rejected. Not supported by weight of evidence. Rejected. Unnecessary. 121-129. Rejected. Methodology not supported by weight of evidence. 131-139. Rejected. Not supported by weight of evidence. DHRS DHRS's proposed findings of fact are accepted as modified in the Recommended Order except as follows: 6. Rejected. Need for project not established. COPIES FURNISHED: Christopher R. Haughee, Esq. Moffitt, Hart & Herron 216 South Monroe Street, Suite 300 Tallahassee, Florida 32301-1859 Susan Greco Tuttle, Esq. Moffitt, Hart & Herron 401 South Florida Avenue, Suite 200 Tampa, Florida 33602-5417 Lesley Mendelson, Esq. Assistant General Counsel Department of Health and Rehabilitative Services Regulation and Health Facilities Fort Knox Executive Center 2727 Mahan Drive, Suite 103 Tallahassee, Florida 32308 Gerald B. Sternstein, Esq. Darrell White, Esq. McFarlain, Sternstein, Wiley & Cassedy, P.A. Post Office Box 2174 Tallahassee, Florida 32316-2174 Michael D. Ross, Esq. J. Robert Williamson, Esq. King & Spalding 2500 Trust Company Tower Atlanta, Georgia 30303 George N. Meros, Jr., Esq. Rumberger, Kirk, Caldwell, Cabaniss & Burke 101 North Monroe Street, Suite 900 Tallahassee, Florida 32301 Judith S. Marber, Esq. Wood, Lucksinger & Epstein Southeast Financial Center Two South Biscayne Boulevard, 31st Floor Miami, Florida 33131-2359 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue In its petition, Florida Psychiatric Centers (FPC) alleges that HRS seeks to grant a CON to Florida Residential Treatment Centers, Inc. (FRTC), based on the agency's unpromulgated policy that ". . . at least one residential treatment center should be approved in each of DHRS' eleven health planning districts in Florida, regardless of the need for such facilities." (Petition, page 2, paragraph 6.) FPC argues that the policy is a "rule" and is invalid as a rule because it has not been adopted pursuant to Section 120.54, F.S., and because it conflicts with Sections 381.493, F.S., and 381.494, regarding need criteria. Further, FPC argues the "rule" is arbitrary and violates due process because the agency predetermines need regardless of the availability of like and existing services. HRS and Intervenor, FRTC, argue that the policy is incipient and needs not be promulgated. Further, the policy does not obviate a determination of need. HRS and FRTC claim that FPC lacks standing to bring this action, as its facility is a hospital and not the same as an intensive residential treatment program. HRS admits that the alleged policy has not been promulgated under Section 120.54, F.S. The issues for determination in this proceeding are summarized as follows: Whether FPC has standing to bring this action; Whether HRS has a policy regarding CON approval of intensive residential treatment programs, and whether that policy is a "rule"; and If the policy is a rule, is it an invalid rule?
Findings Of Fact FPC is a partnership which has received CON #2654 to construct a 100- bed psychiatric hospital in the Plantation/Sunrise area of West Broward County. The facility is under construction and will include 80 short-term psychiatric beds (40 geriatric, 15 adolescent, and 25 adult beds) and 20 short-term substance abuse beds. FPC anticipates an average length of stay of approximately 28 days for adults and less than 60 days for adolescents. FRTC is owned by Charter Medical Corporation. It proposes to build and operate a 60-bed intensive residential treatment program for children and adolescents in Broward County. The proposed facility will treat children and adolescents in need of psychiatric services. Its anticipated average length of stay is approximately one year. If it is awarded a certificate of need, FRTC intends to obtain licensing by HRS pursuant to Chapter 395, F.S., and Chapter 10D-28 F.A.C. No other facility licensed as an intensive residential treatment program, as defined in subsection 395.002(8), F.S. (1987), is available in Broward County. On March 11, 1987, HRS issued CON #4851 to FRTC for its 60-bed facility. A challenge to that CON is pending in DOAH consolidated cases #87- 2046/87-2400/87-2401. FPC is a petitioner in the case, with Florida Medical Center and South Broward Hospital District. Section 395.002(8), F.S., defines "Intensive Residential Treatment Programs for Children and Adolescents as: . . . a specialty hospital accredited by the Joint Commission on Accreditation of Hospitals which provides 24-hour care and which has the primary functions of diagnosis and treatment of patients under the age of 18 having psychiatric disorders in order to restore such patients to an optimal level of functioning. When completed, FPC will be accredited by the Joint Commission on Accreditation of Hospitals; it will provide 24-hour care and will have the primary function of diagnosis and treatment of patients with psychiatric disorders and problems of substance abuse. Unlike the other psychiatric hospitals in Broward County, FPC will have a campus-like setting and separate buildings for the various services. FPC will not be a locked facility. With the exception of the length of stay, the services provided by FPC for its adolescent patients will be essentially the same as an intensive residential treatment program, as defined above. Until recently, HRS has had very few CON applications for intensive residential treatment programs. HRS has considered that these programs must undergo CON review only if they seek licensure as a specialty hospital. In considering need for intensive treatment programs, HRS does not consider unlicensed residential treatment programs to be like and existing services because HRS is not required to review unlicensed facilities; HRS would not have any way of knowing all the programs in operation and would have no control over the services offered. This policy is similar to the policy HRS employed in conducting CON review of ambulatory surgery centers. In those cases, HRS did not consider the outpatient surgery being performed in physicians' offices. Because the legislature has created a special definition of intensive residential treatment facility, and because the State Health Plan seeks a continuum of mental health services, HRS presumes there is a need for a reasonably sized intensive residential treatment facility in each planning district. This presumption can be rebutted with evidence in a given case, such as the fact that the district has few children with mental illnesses, or that such programs have been tried and failed, or that parents in the area prefer to send their children outside the district. Moreover, any applicant for a CON for an intensive residential treatment facility must evidence compliance with the myriad criteria in Section 381.705, F.S. (1987), and in Chapter 10-5, F.A.C. Although there is no specific bed need methodology adopted by HRS for intensive residential treatment facilities, other psychiatric services, such as long-term psychiatric care, are also evaluated without a numeric bed need methodology. HRS has applied its presumption of need policy in intensive residential treatment program CON reviews at least since 1983. One reason why the policy has not been adopted as a rule is that there have been so few applications in that category. In the experience of Elizabeth Dudek, Health Facilities and Services Consultant Supervisor, the first level supervisor for CON review, there were merely three applications of this type prior to a recent batch of three more applications. FPC's Petition to Determine Invalidity of Agency Rule(s) alleges that HRS' policy is ". . . at least one residential treatment center should be approved in each of DHRS' eleven health planning districts in Florida, regardless of the need for such facilities." (paragraph 6) FPC further alleges that HRS construes Chapter 395 as requiring it to ". . . automatically approve at least one residential treatment center in each DHRS health planning district regardless of whether the statutory criteria for need in Section 381.494(b), F.S. [renumbered and amended as Section 381.705, F.S., in 1987] would be met by the applicant." (paragraph #7) These allegations were not proven in this proceeding and are rejected in favor of the less rigid presumption of need policy described in findings of fact #7 and #8, above.
The Issue At issue in this proceeding is whether petitioner's request to modify its certificate of need from a 60-bed child/adolescent psychiatric hospital to a 45- bed child/adolescent and 15-bed adult psychiatric facility should be approved.
Findings Of Fact Case status In February 1993, petitioner, Martin H.M.A., Inc., d/b/a SandyPines Hospital (SandyPines), filed an application with the respondent, Agency for Health Care Administration (AHCA), for a modification of its certificate of need (CON) from a 60-bed child/adolescent psychiatric hospital to a 45-bed child/adolescent and 15-bed adult psychiatric hospital. Upon review, AHCA concluded that SandyPines' request could not be accommodated under the modification provisions of Rule 59C-1.019, Florida Administrative Code, and required certificate of need review. Accordingly, AHCA proposed to deny SandyPines' request, and these formal proceedings to review, de novo, the agency's decision were commenced at SandyPines' request. The applicant SandyPines is the holder of certificate of need number 4004 which authorized it to construct a 60-bed child/adolescent psychiatric facility. That facility was constructed and is currently in operation in Tequesta, Martin County, Florida. SandyPines is now, and has been since it commenced operations in January 1990, licensed as a Class III Special Psychiatric Hospital with 60 psychiatric child/adolescent beds. It has never provided adult inpatient psychiatric services and, until approximately October 18, 1993, had never provided any adult outpatient psychiatric services. The adult outpatient psychiatric services currently provided by SandyPines are not subject to CON review. SandyPines's fiscal problems When SandyPines opened in January 1990, no managed care organizations existed in its local market; however, with each passing year managed care has become more prevalent such that currently 45-50 percent of SandyPines admissions are covered by some form of managed care. This has significantly adversely affected SandyPines' revenues such that it lost approximately $600,000 last fiscal year and, absent increased occupancy levels, its continued viability is, at best, questionable. Indeed, if SandyPines continues to operate as currently configured, it projects a loss for the fiscal year ending September 30, 1994, of $1,099,777. Occupancy levels are low, however, for District IX as a whole, due in large measure to the demands for managed care. For the six-month period ending June 1993, the average occupancy rate for child/adolescent psychiatric beds was 35 percent and for adult psychiatric beds 65 percent. To address its faltering business, SandyPines has, as heretofore noted, begun to provide adult psychiatric services on an outpatient basis; however, unless it can combine inpatient adult psychiatric services with the program it is doubtful that its adult program will prove successful. In this regard, SandyPines offered proof, which is credited, that patients and their physicians are looking for what has been termed "one-stop shopping." The patient does not want to go to one facility for outpatient care and another facility for inpatient care, and the referring physicians would rather send all of their patients to one facility that offers a full spectrum of services. Therefore, from a marketing perspective, the addition of adult inpatient psychiatric services at SandyPines would have a positive effect. Whether modification of SandyPines' CON to allow inpatient adult psychiatric services will increase the hospital's daily census and utilization sufficiently to assure its viability is, at best, fairly debatable. To analyze the impact of redesignating 15 child/adolescent beds to 15 adult psychiatric beds, SandyPines made an assumption of an average daily census of 10.5 patients on the 15-bed adult psychiatric unit. Based on such assumption, SandyPines calculated a net income from that unit, for the fiscal year ending September 30, 1994, assuming it opened April 1, 1994, of $589,664, and a net loss for the facility as a whole of $510,113, as opposed to a net loss of $1,099,777 without the adult unit. Based on the same assumptions, SandyPines calculated a net income for the fiscal year ending September 30, 1985, for the adult unit at $1,111,008, and a net income for the facility as a whole with an adult unit at $44,980. As heretofore noted, SandyPines' ability to achieve an average daily census of 10.5 patients is, at best, fairly debatable. To SandyPines' credit, it has an active advertising and marketing department comprised of six people and its director of marketing and business development. This marketing group is constantly striving to develop relationships with referral sources and to develop programs to meet market needs and demands. There was, however, no proof of record to demonstrate any existent commitments in the community or any objective data to support the conclusion that SandyPines could reasonably expect to attain an average daily census of 10.5 patients. Moreover, four of SandyPines' potential competitors for adult psychiatric patients exhibited more than a 78 percent occupancy rate for the first six months of 1993, which may be reflective of among other attributes, a strong existent referral pattern, and the overall District average was only 65 percent, which reflects significant unused capacity. On balance, the proof is not compelling that SandyPines could achieve the occupancy levels it projected. Whether SandyPines achieved its projected occupancy levels for adult services or some lesser level would not, however, significantly adversely impact existing providers. Moreover, the redesignation of beds and the necessary modification of the facility to meet required legal standards of separation of adult and child/adolescent units would require no more than $50,000-$80,000; a capital expenditure well below that which would require CON review. Is modification appropriate Pertinent to this case, Rule 59C-1.109, Florida Administrative Code, provides: A modification is defined as an alteration to an issued, valid certificate of need or to the condition or conditions on the face of a certificate of need for which a license has been issued, where such an alteration does not result in a project subject to review as specified in . . . subsection 408.036(1) . . ., Florida Statutes. Subsection 408.036(1), Florida Statutes, provides in pertinent part: . . . all health-care-related projects, as described in paragraphs (a)-(n), are subject to review and must file an application for a certificate of need with the department. The department is exclusively responsible for determining whether a health-care-related project is subject to review under [ss.408.031-408.045]. * * * (e) Any change in licensed bed capacity. * * * (h) The establishment of inpatient institutional health services by a health care facility, or a substantial change in such services . . . * * * (1) A change in the number of psychiatric . . . beds. Finally, pursuant to the Legislature mandate of Section 408.034(3), Florida Statutes, to "establish, by rule, uniform need methodologies for health services and health facilities," AHCA has promulgated Rule 59C-1.040, Florida Administrative Code, which establishes discrete methodologies for calculating the need for the establishment of inpatient adult psychiatric services and inpatient child/adolescent psychiatric services, and provides for the identification of the number of hospital inpatient psychiatric beds for adults and children/adolescents by facility. As heretofore noted, SandyPines' license designates it as a "Class III Special Psychiatric hospital with 60 Psychiatric Child/Adolescent beds," and the inventory established pursuant to Rule 59C- 1.040(11), Florida Administrative Code, has identified SandyPines' beds as child/adolescent. Resolution of the parties' dispute as to whether SandyPines' proposed conversion of beds from child/adolescent to adult is subject to CON review under Section 408.036(1)(e), (h) and (l), Florida Statutes, and therefore not susceptible to modification under Rule 59C-1.109(1), resolves itself to an interpretation of Section 408.306(1), Florida statutes, and the provisions of Chapter 59C-1, Florida Administrative Code. SandyPines contends that hospital inpatient psychiatric services, as used in Chapter 408, Florida Statutes, and Chapter 59C-1, Florida Administrative Code, is a generic term for the treatment of psychiatric disorders and that its proposal to treat adults, as opposed to children/adolescents, is not a change in health services. Accordingly, SandyPines concludes that the proposed conversion does not constitute "[a] change in licensed bed capacity," "the establishment of inpatient institutional health services by a health care facility, or a substantial change in such services," or " change in the number of psychiatric beds," such that CON review would be required under Section 408.306(e), (h) and (l), Florida Statutes. Contrasted with SandyPines' position, AHCA interprets the foregoing provisions of law, when read in para materia, and with particular reference to Rule 59C-1.040, Florida Administrative Code, as establishing two discrete types of inpatient psychiatric services, to wit: child/adolescent and adult. The separate CON review criteria established by Rule 59C-1.040, Florida Administrative Code, for child/adolescent and adult inpatient psychiatric services is consistent with AHCA's interpretation. Indeed, the rule, among other things, establishes separate bed need methodologies, fixed need pools, bed inventories, utilization thresholds, and minimum unit sizes for child/adolescent and adult services. Granting SandyPines' request would run counter to these CON review criteria by, among other things, altering the District IX inventory of child/adolescent and adult psychiatric beds, as well as awarding adult psychiatric beds when there is no need under the established methodology. Finally, consistent with the provisions of Section 395.003(4), Florida Statutes, the agency has issued SandyPines a license "which specifies the service categories and the number of hospital beds in each bed category [60 psychiatric child/adolescent beds] for which [the] license [was issued]." Granting SandyPines' request would constitute a change in its "licensed bed capacity." Considering the foregoing provisions of law, it is concluded that the interpretation advanced by SandyPines is strained, and the interpretation advanced by AHCA is reasonable. Accordingly, it is found that SandyPines' proposed conversion of 15 child/adolescent psychiatric beds to 15 adult psychiatric beds is subject to CON review because such conversion constitutes "[a] change in licensed bed capacity," "the establishment of inpatient institutional health services by a health care facility, or a substantial change in such services," or "a change in the number of psychiatric beds." Section 408.036(e), (h) and (l), Florida Statutes
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered denying SandyPines' request to modify its certificate of need from a 60-bed child/adolescent psychiatric hospital to a 45-bed child/adolescent and 15-bed adult psychiatric facility. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 14th day of March 1994. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March 1994.
The Issue Did Respondent, Tonya Shrader, R.N. (Ms. Shrader), violate section 464.018(1)(j), Florida Statutes (2015),1/ by being unable to practice nursing with reasonable skill and safety to patients by reason of illness or use of alcohol, drugs, narcotics, or chemicals or any other type of material, or as a result of any mental or physical condition? If Ms. Shrader violated section 464.018(1)(j), what penalty should be imposed?
Findings Of Fact Section 20.43 and chapters 456 and 464, Florida Statutes, charge the Department of Health, Board of Nursing, with the licensing and regulation of nurses. At all times material to the allegations in the Administrative Complaint, Ms. Shrader was a licensed registered nurse in the State of Florida. She holds license RN 9180605. Ms. Shrader has a complicated history of psychiatric and medical problems that affect her ability to practice nursing with the level of skill and safety to patients required in the State of Florida. Ms. Shrader has suffered from depression since childhood. Ms. Shrader treated her depression with a variety of medications, including: Lithium, Depakote, Pamelor, Elavil, Topamax, Lamictal, and Prozac. In the past five years, Ms. Shrader has not received treatment for her depression. Ms. Shrader also suffers from anxiety. Ms. Shrader is not receiving treatment for her anxiety. In addition to depression and anxiety, Ms. Shrader suffers from chronic severe migraines. The cause has not been determined despite extensive neurological evaluations. Ms. Shrader has been prescribed Tramadol, Fiorcet, and Clonazepam to treat her migraines. At all times material to the Department's complaint, Ms. Shrader was prescribed Fiorcet for her migraine symptoms. Between March 24, 2012, and July 22, 2013, Ms. Shrader complained of multiple neurological symptoms, including double vision, balance and gait instability, and tingling and numbness in her hands. Ms. Shrader elected to undergo extensive neurological testing to rule out demyelinating disease, multiple sclerosis, and palsy. The tests provided no indication that Ms. Shrader's symptoms resulted from a neurological disorder. At all times material to this proceeding, Ms. Shrader worked as a registered nurse in the Neurological and Psychiatric Unit at Gulf Coast Medical Center (Gulf Coast). On December 20, 2013, Ms. Shrader took an excessive dose of four Fiorcet pills. She told her family that she "plans to keep overdosing until she dies," and that she "predicts that [she] will be dead by the end of the year." Ms. Shrader's family contacted the Emergency Medical Services. Ms. Shrader was transported to Lehigh Regional Medical Center, where she was treated for an overdose. Ms. Shrader was involuntarily admitted to SalusCare, Inc. (SalusCare), for inpatient psychiatric observation and treatment. On December 20, 2013, the Crisis Stabilization Unit (CSU) at SalusCare conducted an in-patient psychiatric evaluation of Ms. Shrader. During the evaluation, Ms. Shrader denied past psychiatric treatments or psychiatric medication. Ms. Shrader also denied that her Fiorcet overdose was an attempted suicide. Her statements during her SalusCare evaluation contradict her medical charting and statements she has made, which indicate that she has an extensive history of psychiatric illnesses. SalusCare discharged Ms. Shrader on December 23, 2013. The director of nursing at Gulf Coast contacted the Intervention Project for Nurses (IPN) about Ms. Shrader. IPN is an impaired practitioner consultant to the Department's Board of Nursing. IPN works with nurses and monitors them for safety to practice issues. IPN contacted Ms. Shrader on January 2, 2014, to discuss her entering the program. Ms. Shrader denied that she was impaired or abused any substances. She admitted that she was depressed. But she said that she stopped her depression treatment approximately five years earlier. IPN asked Ms. Shrader to undergo an evaluation to determine her fitness to practice nursing. Ms. Shrader scheduled an evaluation with Theodore Treese, M.D., an expert in the psychiatric treatment, monitoring, and care of health care practitioners. He conducted the evaluation on January 28, 2014. Dr. Treese diagnosed Ms. Shrader with severe major depressive disorder; alcohol abuse; opioid abuse; sedative, anxiolytic abuse; relational problems, not otherwise specified; and rule-out polysubstance abuse. During the evaluation, Ms. Shrader attempted to hide her in-patient psychiatric treatment at SalusCare. Based on Ms. Shrader's diagnoses, Dr. Treese determined that Ms. Shrader was not capable of practicing as a registered nurse with reasonable skill and safety to patients. Dr. Treese recommended that Ms. Shrader seek treatment at a substance abuse treatment center at a level of at least partial hospitalization. Ms. Shrader did not agree with Dr. Treese's recommendation. IPN gave Ms. Shrader the opportunity to seek a second opinion from another IPN-approved evaluator. IPN informed Ms. Shrader that she needed to either obtain a second opinion or enter the recommended treatment before April 14, 2014; otherwise, IPN would close her intake case file. Ms. Shrader refused to obtain a second opinion or enter into the recommended treatment. IPN closed Ms. Shrader's file on April 14, 2014. On December 2, 2014, Mark Sylvester, M.D., a physician specializing in psychiatry and addiction medicine, evaluated Ms. Shrader pursuant to Department Order. Dr. Sylvester reviewed Ms. Shrader's medical records, the IPN intake case file, and the Department's investigative report. Dr. Sylvester also asked Ms. Shrader to undergo a urine and hair drug screen. Ms. Shrader did not participate in the screens. Dr. Sylvester diagnosed Ms. Shrader with recurrent major depressive disorder, opioid abuse, alcohol abuse, benzodiazepine abuse, nicotine dependence, factitious disorder versus malingering, rule-out hypochondriasis, and rule-out conversion disorder. During the evaluation, Ms. Shrader attempted to conceal her psychiatric history, substance abuse, and symptoms of depression. Ms. Shrader's unwillingness to be forthcoming during her evaluation demonstrated denial of her symptoms and presented a significant barrier to her treatment and recovery. Dr. Sylvester concluded that Ms. Shrader's poor judgment and decision-making detrimentally affected her ability to practice nursing. Specifically, Ms. Shrader's judgment in attempting to practice nursing while impaired, her lack of insight into her illnesses, her inability to follow treatment recommendations, and her disagreement with medical professionals showed poor judgment. Poor judgment can affect decision-making while practicing nursing, especially in a crisis situation. Dr. Sylvester concluded that Ms. Shrader was unable to practice nursing with reasonable skill and safety by reason of her depression, use of alcohol, opioids, and benzodiazepines, lack of insight into her symptoms, and poor judgment. In order for Ms. Shrader to be able to practice nursing with reasonable skill and safety to patients, she must: undergo treatment at a residential treatment center; enter into an IPN monitoring agreement; and submit to a hair analysis drug screening test. These steps are essential to Ms. Shrader's recovery and to regaining the ability to practice nursing with reasonable skill and safety to patients. There is no evidence that Ms. Shrader has taken any of these steps. Ms. Shrader is unable to practice nursing with reasonable skill and safety to patients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Department of Health, Board of Nursing, enter a final order: finding that Respondent, Tonya L. Shrader, R.N., violated section 464.018(1)(j); requiring her to undergo an IPN evaluation; imposing a suspension of her license until such time as she undergoes an IPN evaluation; requiring compliance with IPN recommendations, if any; requiring the payment of an administrative fine in the amount of $250.00; and awarding costs for the investigation and prosecution of this case, as provided in section 456.072(4) to the Department. DONE AND ENTERED this 29th day of July, 2015, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of July, 2015.
Findings Of Fact Petitioner, Hospital Management Associates, Inc. (HMA) filed an application in June, 1984, for a 60 bed adolescent long- term psychiatric hospital in Hillsborough County, Florida. Petitioner's Exhibit 1. A completed application was filed August 13, 1984. Petitioner's Exhibit 2. (P. PFF 1.) The proposed facility is patterned after a similar HMA facility in Arlington, Texas. The facility is proposed to be freestanding and is intended to conform to the state hospital code. The plan is to place the facility on a 10 or 15 acre tract of land. The facility will be divided into two 30 bed units, each having a 15 bed wing separated by a nursing station. T. 32- 37. Separation will be useful to separate patients by age, sex, functional levels, and treatment programs. T. 33. (The remainder of P. PFF 2 is rejected because irrelevant.) Staffing that is proposed is found on table 11, Petitioner's Exhibit 2. The staffing proposed is consistent with standards set by the Joint Commission on Accreditation of Hospitals and is similar to the Arlington, Texas, facility. T. 53. There is no evidence that this is not a reasonable level of staffing. The salary levels are reasonable. T.51. (The remainder of P. PFF 3 is rejected because not consistent with Petitioner's Exhibit 2 or T. 51-53, or irrelevant.) HMA operates hospitals, both psychiatric and acute care, in Texas and Florida. T. 25-26. (The transcript does not establish that HMA currently operates hospitals in any other states, and to this extent, P. PFF 4 is rejected.) HMA proposes to treat adolescents, ages 12 to 18. T. 35. (P. PFF 5 that HMA proposes to treat ages 10, 11, and 19, is rejected, based upon the testimony of Mr. Braeuning, and on the same basis, the proposed finding that the bulk of patients will be ages 13-17 is also rejected.) The proposed length of stay is 4 to 6 months. T. 36. The treatment program is aimed at the patient and the family unit, T. 41, and includes social work, family therapy, occupational therapy, recreational therapy, and education. T. 38, 39. Recreational facilities are proposed. T. 38. The proposed facility is planned to have three levels of security. T. 37. Treatment is planned on the behavior modification model, which uses a system of levels of reward and responsibility, and is used in both system and long term treatment. T. 37-40, 92. The length of stay is proposed to be an average of six months. T. 36. (The remainder of P. PFF 5 is rejected because not supported by the record in the form proposed.) Dr. Max Sugar is an expert in child and adolescent psychiatry. T. 84. Dr. Sugar has been asked to be a consultant for the HMA facility proposed, and may accept. T. 95. His consultation would involve program arrangement, milieu arrangements, in-service staff training, and recruitment of a clinical director. Id. (P. PFF 6.) Louis DeSonier is an expert in child and adolescent pyschology. T. 102-103. He received his doctorate in 1982. T. 101. Dr. DeSonier has been hired by HMA to develop the system proposed for this certificate of need, to implement development issues, and to evaluate the program on an ongoing basis. T. 104. He would be involved in hiring staff. T. 105. (The proposed finding that she will be involved in "setting up referral patterns within District VI" is rejected because not found in the transcript on the pages cited.) Dr. DeSonier envisioned attracting people from the adolescent psychology program at Florida State University to help develop a protocol for long term care for adolescents. T. 105. Dr. DeSonier envisioned attracting other persons to work on the project. T. 106-107. Dr. Desonier was familiar with the levels of treatment concept of treatment, T. 106-107, and this will be helpful to him in his work with this proposal. (P. PFF 7.) The Petitioner plans to monitor the quality of the programs at the proposed facility from its corporate offices, and will seek to use quality assurance programs as recommended by the Joint Commission on Accrediation of Hospitals (JCAH). T. 43. The Petitioner will seek JCAH accreditation accreditation by the National Association of Private Psychiatric Hospitals, and qualification for CHAMPUS reimbursement as a long term facility. Id. (P. PFF 9.) The Petitioner intends to locate its facility near the 1-4 and 1-75 interchange, which would provide good access from many parts of District VI. T. 58. All of District VI, and portions of adjacent Districts, are within a two hour driving time of the site proposed by the Petitioner. See finding of fact 38. The Petitioner proposes to obtain patients through contacts and marketing efforts with local practitioners, local religious counselors, and school counselors. T. 54. Free standing psychiatric hospitals are not eligible for Medicaid reimbursement, and thus Petitioner's proposed hospital will not do that type of work. T. 57. Petitioner's proposed facility is projected to do two to five percent indigent work. T. 70, 57. Petitioner expressed willingness to accept patients from the Children, Youth, and Family Program of HRS T. 54-55. The Petitioner proposes to accept up to 20 percent of state-funded patients. T. 57-58. (P. PFF 10, TH PFF 12.) 10. In a long term psychiatric facility, patients may stay six months or longer. T. 88. A short term facility deals with acute problems, and tries to discharge the patient in one to three months. T. 87. Long term facilities address long standing maladaptive behavior. T. 87. A patient requiring long term treatment can become isolated among patients in a short term facility. T. All of the ancillary services in a long term facility should be staffed and planned to provide long term continuity for the patient. T. 88-9. Over time, long term problems, which the patient may hide during short term treatment, become visible. T. 92. Progress on these problems then can be made. T. 92. An acute care general hospital is geared for acute care to a range of ages, and having a program for long-term adolescent care is potentially in conflict with these goals. T. 95 However, treatment is often the same for both long and short term patients. T. 90. Behavioral modification is used in both short and long term treatment. T. 37-40, 92. The physician. determines the length of stay, and the physician cannot tell precisely how long a patient may need to stay. T. 89-91. A patient may begin as identified for short term treatment, but may later have long term treatment needs identified. T. 90-91. The adolescent portion of the proposed psychiatric facility at University Psychiatric Center is expected to experience an average length of stay of from 45 to 60 days per patient, with the greater probability of longer lengths of stay. T. 432. The average length of stay for adolescents at Tampa Heights Hospital may be about 47 days. T. 253. Tampa Heights Hospital provides short term psychiatric services. Tampa Heights is not certified for long-term care under the CHAMPUS program. T. 253. But Dr. Rene Haney, a psychiatrist and the adolescent services chief at Tampa Heights Hospital, T. 246-247, has observed some patients staying longer than 90 days, and some of his patients have stayed more than 90 days, receiving essentially the same kind of care. T. 248-49, 255. One patient stayed over 1.4 months. T. 251. During the current fiscal year, Tampa Heights will earn approximately $4 million from adolescent Patients, and approximately 36.3 percent of that $4 million will[ be derived from adolescent patient days from patients that stay over 90 days (or $1.6 million). T. 334. (TH PFF 2.) (TH PFF 1, that Dr. Haney had a "substantial" number of patients is rejected for lack of quantifying evidence in the record.) Thus, while there are some differences between a facility devoted to short term psychiatric care and a facility intended for long term psychiatric care, there is a significant overlap with respect to the manner in which both types of facilities provide the same service for patients staying in the midrange of lengths of stay. For these patients, a short term inpatient psychiatric hospital provides a service that is the same as that provided by a long term inpatient psychiatric hospital. (P. PFF 6 and 8. the remainder of P. PFF 8 is rejected as cumulative.) A loss of as much as 10 percent of long term adolescent revenue would cause Tampa Heights to increase patient charges. T. 335. (Th PFF 2.) Given the ultimate finding that a substantial need exists for the facility proposed by the Petitioner, it cannot be concluded that Tampa Heights will in fact lose 25 percent of its adolescent patient days to Petitioner. For this reason, TH PFF 2 is rejected. Given the overlap in treatment, however, Tampa Heights would probably lose some patient days to Petitioner, but the degree of lost patient days cannot be determined on this record. Tampa Heights Hospital and University Psychiatric Center both have a substantial interest that could be affected by this proceeding. The Health Council for West Central Florida, Inc., is the local planning council for HRS District VI, which consists of Hardee, Highlands, Hillsborough, Polk, and Manatee Counties. Tampa Heights Exhibit 2. The local health council has adopted a health plan for the district, which is Tampa Heights Exhibit 2. The local health plan, as corrected, shows that there are expected to be 134 excess psychiatric beds in the District by 1990. Ibid. at page 119; T. 286. Additionally, the District has a number of non-hospital residential beds, some of which are exclusively for adolescents and children, and others of mixed ages. Tampa Heights Exhibit 2, page 113; T. 311. The local health plan adopted a policy to encourage use of the least restrictive, non- hospital facility wherever possible. Tampa Heights Exhibit 2, page 112-114; T. 303-305. Thus, in these respects, the proposal of the Petitioner is not consistent with the local health plan. (TH PFF 4 and 13.) The local health plan estimates of need are not consistent with actual need as will be discussed ahead. There is no direct evidence in the record of the occupancy levels of the one long term psychiatric facility in District VI, Northside Community Mental Health Center, which has 16 beds. (TH PFF 5.) An occupancy level for Northside may be inferred from the testimony of Ms. Marsha Lewis, Deputy Director of that facility. Ms. Lewis stated that the facility has 16 licensed long term beds, and ran an average length of stay of 349 days in 12 beds. This means that the facility had 4188 patient days (12 times 349) out of a possible 5840 (16 times 365), which converts to an occupancy level of 72 percent in 16 license beds. T. 320. The 1984 occupancy rates for some short term psychiatric facilities in District VI were below 80 percent, and were as follows: 66 percent, Tampa Heights Hospital; Memorial, 76 percent Lakeland Regional, 54 percent; Winter Haven, 71 percent; Palmview, 27 percent. T. 213-216, 117. (The occupancy rate for Hillsborough County Hospital Authority was not provided by the witness.) (TH PFF 6 and 39.) The relevance of these figures is not clear, since the evidence does not state whether these occupancy rates are for adult psychiatric patients, adolescents, or both. The Petitioner projects that it would reach 80.6 percent occupancy by March 1988, and would be at 72 percent occupancy in September of that year. Petitioner's Exhibit 2, table 10; T. 49- 50. In fact, the Petitioner predicted 80 percent occupancy in the second year of operation, based upon the analysis of Mr. Braeuning of Petitioner's needs analysis, the gross population, and the number of adolescents in the District, T. 50, as well as comparisons to the HMA Arlington Texas, facility, analysis of District competition, availability of physicians, and information provided by children, family, and youth of the Department of Health and Rehabilitative Services. T. 49. Mr. Braeuning had not previously staffed or administered an adolescent psychiatric center in Florida. T. 61. He had conducted a socioeconomic profile study of Hillsborough and Highlands Counties, but not for Polk, Manatee, or Hardee Counties. T. 63-64. Mr. Braeuning was not personally aware of whether District VI psychiatrists would use the program proposed by HMA, and was not aware in any great detail of the existing programs in the District. T. 64-66. The Petitioner does not currently operate an adolescent psychiatric facility in Florida. T. 61. Mr. Braeuning is an expert in health care administration and operations. T. 25. It is the further finding of the Hearing Officer that the projections of the Petitioner that an 80 percent occupancy rate will be achieved by this projected depend primarily upon the Petitioner's evidence as to need provided by other witnesses. Since, as will be discussed ahead, that evidence was sufficient to demonstrate need, the projection of an 80 percent occupancy rate is accepted as based upon sufficient evidence. (TH PFF 7 through 11.) Children ages 0-17 are reasonably expected to require long term inpatient psychiatric hospital care at a rate of 103 per 100,000 persons in that age group. T. 159-161, 461-464; Petitioner's exhibit 5, pp. 21-22, 35. The age group that the Petitioner proposes to serve is ages 12 to 18. T. 35-36. This is a medically appropriate age group to be served by the planned facility. T. 97, 397. No party presented evidence as to the precise rate of need for long term inpatient psychiatric hospital care for ages 12-18, the ages which Petitioner proposed to serve. The Petitioner relied upon the rate for ages 0-17 adjusted by 0.96. T. 160-161. Tampa Heights relied upon the rate for ages 0- 17, unadjusted. T. 465. The method employed by Tampa Heights was much less reliable than that used by the Petitioner, and is rejected. Within the group of persons ages 0-17, the need for long term psychiatric hospital care is greatly skewed toward older persons in the group. Persons in the first 9 ages, from 0-9, account for only 3.596 of the need; in the next 5 ages, 10-14, there is 31 percent of the need; and in the last 3 years, 15-17, there is 6596 of the need. T. 160. These statistics follow a curve of accelerating need as children increase in age. The composite rate of 103 per 100,000, which includes a very large number of persons in the 0-11 age group with very little need, thus is much too low to be used as a predictor of need for the 12-18 age group. T. 578-579, 582-583. Petitioner's method of adjustment also has a flaw, but the flaw is less unreasonable than that proposed by Tampa Heights. Petitioner proposes that the rate of 103 per 100,000 be adjusted so that it reflects that portion of the rate attributable to persons ages 10-17. This includes need of children ages 10 and 11, and thus includes need which Petitioner does not propose to serve. Second, it fails to include 18 year olds, and thus underestimates need in that regard. The net result, however, is probably to underestimate need slightly. As discussed above, the need for long term hospital care seems to increase at an accelerated rate. If, for ages 0-9, only 3.5 percent of the need is represented, it is unlikely that the need of 10 year olds or 11 year olds will be all that much, and thus, inclusion of those ages probably has not contributed greatly to an overstatement of need. On the other hand, the failure to include 18 year olds, given the fact that persons 15-17 represent 6596 of the total need in the 0-17 age group, probably results in an underestimation of need. In all probability, the overinclusion and underinclusion problems with Petitioner's method cancel out. At ,worst, if one assumed a completely linear distribution of need between the ages 10-18 (which, as discussed above, is contrary to the evidence), the 0.96 adjustment would be evenly distributed throughout all the ages from 10-17. Thus, since there are 8 ages in that group, each age would account for 0.12 of the need, assuming linear distribution. Subtracting ages 10 and 11, and adding age 18, would result in an adjustment factor of 0.84. The calculations which follow will use both the 0.96 and 0.84 factors, although it is the conclusion of the Hearing Officer that the 0.96 factor is most reasonable. District VI consists of Hillsborough, Manatee, Polk, Highlands, and Hardee Counties. Tampa Heights Exhibit 2. The population for 1990 in District VI of persons ages 12-18 is predicted to be 135,627. T. 456. The population for ages 0-17 is predicted to be 380,583. (This is derived by reversing the calculations on pages 157-158 of the transcript, i.e., dividing 392 by 103 and multiplying by 100,000.) As explained above, it would be statistically incorrect to multiply the rate for ages 0-17 times the population for ages 12-18, as proposed by Tampa Heights, since the rate of 103 per 100,000 is much lower due to the inclusion of ages 0-11 in calculating the rate. Petitioner's method is mathematically sound. It requires the multiplication of 103 times the projected population for District VI in 1990 for ages 0-17, which is 380, 583, divided by 100,000, and then adjusted by multiplying the adjustment factor discussed above, by 0.96. The result is 376, which represents the number of persons, ages 10-17, who are expected to require long term inpatient psychiatric hospital care in 1990, and on this record, represents also the best estimate of the number of such persons in age group 12-18 predicted for District VI in 1990. (Assuming that 0.84 is the correct adjustment factor, and performing the same mathematical computation, the number of such persons is 329.) Calculation of the gross bed need for these 376 patients depends entirely upon the choice of length-of stay estimated for such patients. The Petitioner proposes a length of stay at its facility of from 120 days to 180 days. T. 158; 36. Petitioner's expert, Mr. Britton, admitted that he used the range of 120 days to 180 days in his estimates of need because "they were the lengths of stay that were indicated for the Applicant's project as it related to specific program they intended to utilize . . . ." T. 265. Thus, to this extent, these length of stay are inappropriate for determining projected need for the District in 1990. As Mr. Brittion admitted, these lengths of stay are only those patients which Petitioner seeks to attract and serve. Mr. Britton testified that there is no definitive length of stay for adolescents in the expert literature, hut that one study reported a range from one month to nine months, with an average of 108 days. T. 242. Tampa Heights' expert, Howard E. Fagin, Ph.D., was of the opinion that an average length of stay of 90 to 120 days would be appropriate. T. 466. Tampa Heights thus used this range in its estimates. Tampa Heights Exhibit 8. Dr. Max Sugar felt that the length of stay could be six months or longer. T. 88. Northside Community Mental Health Center, the only facility (apparently) that has a certificate of need in District VI for long term adolescent inpatient hospital psychiatric beds, had an average length of stay of 349 days for 12 of 16 long term beds. T. 320. Finally, and most persuasive to the Hearing Officer, Tampa Heights presented the testimony of Peter Michael Kreis, Program Director, Children, Youth and Families Program Office, of the Department of Health and Rehabilitative Services. Mr. Kreis was the District Administrator of District VI for five and one-half years, T. 342, and was accepted as an expert on the issue of the availability and adequacy, from the perspective of the Children, Youth and Families Program, of facilities in District VI and the central Florida area for children and adolescents eligible for that program. T. 348-352. As will be discussed ahead, Mr. Hreis identified some 320 beds in District VI that could be categorized as residential beds (including hospital beds) available to provide long term mental health care to CYF adolescents, and his testimony has been accepted as fact in the paragraph ahead. Mr. Kries testified that the normal length of stay in these facilities is "probably closer to nine months," and that the majority of them are "90 days and beyond." T. 354. Thus, the best evidence of length of stay is the actual length of stay now experienced, as shown by Mr. Kreis and the experience of Northside Community Mental Health Center, the only long term adolescent facility in the District. A length of stay of 180 days as proposed by the Petitioner is probably conservative, and is accepted as a reasonable basis for calculating need. The gross bed need for District VI for adolescent long term inpatient psychiatric hospital beds is thus calculated as follows. In 1990, 376 patients will stay an average of 180 days, resulting in 67,680 patient days. Divided by the number of days in the year, 365, this is 185 patient years, which is also the annual bed need. This figure is adjusted by dividing by 80 percent to assure that the 80 percent or less occupancy standard contained in the rule is met, which results in a gross bed need in 1990 of 231 beds. Performing the same calculation, but using the figure derived from using the 0.84 adjustment factor, the result is a gross bed need in 1990 of 202 beds. As will be seen ahead, the net bed need, insofar as the application of this Petitioner is concerned, is not materially affected, regardless whether the 0.96 (the factor chosen by the Hearing Officer) or a factor of 0.84 is used. It must be reiterated that the factor of 0.84 is rejected for the reasons stated in paragraph 22 above. Camelot Care Center is erroneously carried by HRS in the inventory of District VI long term child and adolescent psychiatric beds. T. 164, 536. Camelot Care Center is not in District VI, but is in Pasco County, which is not in District VI. T. 163-166. The only long term inpatient hospital psychiatric beds currently in District VI for children and adolescents are 16 beds located in Hillsborough County at Northside CMHC. Tampa Heights Exhibit 7. Thus, if only long term beds in District VI were to be considered, there would be a net need of 215 beds by 1990. As will be discussed ahead in the conclusions of law, both the statutes and the rules adopted by HRS require that the availability of short term inpatient psychiatric facilities to provide care for some of the long term inpatient psychiatric patients of the District must be considered in determining net bed need. This conclusion was reached, following the language used by the rules, without regard for asserted differences in treatment modalities. But even if treatment differences were relevant, the Petitioner has not proven that the short term Inpatient psychiatric hospital facilities in District VI do not provide, in part, services "like" those provided in a long term facility. It is true that the short term facility will tend to treat acute problems, and that a patient having deeply seated mental problems may not reveal such problems in a short treatment period. T. 92. But Petitioner's own expert noted that the psychiatric treatment itself is the same for short and long term patients, and that the physician sometimes needs a period of time of evaluation to determine the patient's longest term needs. T. 89-90, 92. The treatment program at Tampa Heights is very similar to that proposed by the Petitioner. T. 326. The treatment program at Palmview Hospital seems to be quite similar to that proposed by the Petitioner. T. 115. Moreover, short term facilities in fact provide treatment for those "long term" patients who experience the shorter stays. Rule 10-50.11(26)(a), Florida Administrative Code, defines long term services as those averaging a length of stay of 90 days. Thus, at least some of the need for long term services is a need for hospital care (in gross number of days) of less than 90 days, and these stays could just as easily be provided by short term facilities. In fact, such potential "long term" patients are, in part, being served by such facilities as Tampa Heights, which observed lengths of stay of 90 days and longer, one patient for 14 months, and 2 patients for 8 months at the time of the hearing in August. T. 248-249, 255, 334. For these reasons, as well as the findings in paragraph 10 above, it is the conclusion of the Hearing Officer that short term inpatient psychiatric hospital facilities in District VI have the capability of providing a portion of long term services to adolescents, and in fact do so to some extent, and thus must be considered as a "like and existing health care service" as defined by section 381.494(6)(c)2, Fla. Stat. The record does not contain high quality evidence as to what portion of existing and approved short term hospital inpatient psychiatric facilities for adolescents in District VI should be deemed to be "like" long term facility. The only attempt at quantification of this issue is found in the evidence presented by Tampa Heights that 36.3 percent of its revenues in the current fiscal year derived from adolescents were from adolescents who stayed longer than 90 days. There was no evidence as to the proportion of patient days represented by this revenue, and there was no evidence that this percentage holds for other short term facilities in the District. However, the percentage is conservative in one way: it includes only such stays that are more than 90 days, and does not include those who stayed less than 90 days. As discussed above, some of those adolescents who stay less than 90 days can be characterized as both a "long term" and a "short term" patients due to the definitions adopted by HRS in its rules. Rather than reject the only data available, it is concluded that approximately 36 percent of adolescent short term hospital inpatient psychiatric beds are available for the needs of "long term" adolescent patients. District VI currently has 124 licensed and approved free standing short term inpatient psychiatric hospital beds, and 19 licensed and approved beds in a general hospital, for a total of 143 short term inpatient psychiatric beds. T. 459; Tampa Heights Exhibit 7. Since 36 percent of these beds are available to serve the needs of some of the long term patients in the District, the short term beds in the District provide an additional 51 beds. Thus, the total number of psychiatric beds in District VI available to provide for the needs of long term adolescent psychiatric patients is 67, which includes 51 short term beds and 16 long term beds. (The 32 long term beds at Camelot Care Center have been excluded because not located in District VI.) Since 231 long term adolescent psychiatric beds are needed in District VI by 1990, and 67 such beds exist, there is a net long term psychiatric bed need of 164. Even if the lower bed need number is used (which was 202, derived from using the 0.84 adjustment factor), the net bed need shown by the Petitioner is at least 135 beds by 1990. The Respondent, the Department of Health and Rehabilitative Services, proposes to apply non-rule policy to the application of the Petitioner. The non-rule policy is that consideration should be given to the availability of like and existing services that are within two hours driving time of the site of the facility proposed by the applicant, even though some of those facilities are outside the District. T. 534. The Department justifies this policy to prevent overbuilding, T 535, to allow focus upon a standard metropolitan area, rather than upon a District, T. 536, and because patients for long term psychiatric hospital care cross county lines, T. 543, 550. The policy makes sense. Long term psychiatric care, in all probability, does not need to be located by District, but could be sited regionally, to serve larger numbers of people than those in just a District, since by definition, such care ought not involve acute emergencies. The policy is reasonable and has been justified by the Respondent. Intervenor Tampa Heights demonstrated that there are perhaps 270 long term psychiatric hospital beds within two hours drive of the site proposed by the Petitioner. T. 475-478; Tampa Height Exhibit 10. FIRS presented similar, if less precise, testimony. T. 535-536, 545-552. But neither the Respondent nor the Intervenors provided evidence as to how many of the beds outside District VI are actually available to serve the needs of persons in District VI. It is probable that facilities located in Orlando, Sarasota (Tampa Heights Exhibit 10) and St. Pet-ersburg (T. 536) are located in those cities to serve persons needing such services in those cities and Districts. There was no evidence that any of these out-of-District facilities were granted certificates of need to serve the needs of persons living in District VI. Moreover, without evidence to show to what extent these 270 out of District beds are needed to serve the needs of non-District VI patients, it is factually impossible to determine to what extent some of these 270 beds might be used to meet the needs of District VI. For this reason, the 270 beds identified as being within two hours of the site of the facility proposed by the Petitioner cannot be considered to be available to serve District VI needs. The Children, Youth, and Families (CYF) program of the Department of Health and Rehabilitative Services helps place eligible children and adolescents in psychiatric or other mental health programs. T. 346. Mental health programs exist in outpatient and residential facilities as well as licensed general and specialty hospitals. T. 346-347. The Department prefers not to use the more restrictive hospital setting for placement of these children. T. 353. The majority of facilities providing mental health care to children and adolescents in District VI provide such care on a long term basis, that is, for more than 90 days, and normally about nine months. T. 354. District VI has the following facilities which do provide or can provide such long term mental health care for CYF children and have the following approximate number of beds: (T. 355-357): Childrens' Home 68 Northside CMHC 24 (This is 8 more than TH. Ex. 7) FMHI 28 Childrens' Services Cen. 24 Tampa Heights 38 (This is 2 less than TH. Ex. 7) Hillsborough C. Hosp. 12 Memorial 10 University of S. Fla. 24 (Devoted to adolescents) Peach R. CMHC 34 Palmview 18 Winter Haven Hospital 30 Manatee Memorial 10 TOTAL 320 All of the above programs are residential programs, not outpatient programs. See T. 353-357. All, or a substantial portion, of these 320 beds are available in District VI to meet the need by 1990 in that District for long term psychiatric beds. T. 354. However, this inventory of 320 beds includes residential programs (such as perhaps the "Childrens' Home" listed above) that are not hospitals as characterized by Tampa Heights Exhibit 7. It should be remembered that the need for 231 long term psychiatric hospital beds was derived from data used by all parties from table 13, page 35, Petitioner's Exhibit 5. The rate of 103 per 100,000 was derived from that table by adding only the predicted number of psychoses and neuroses for the age group 0-17 needing "24-hour institution" care. Excluded from that rate were persons needing "acute hospital" care and "special programs." One cannot meaningfully assess the availability of the 320 beds listed above for long term care until the need for such beds for acute care and residential care has been calculated. Since there has been no expert testimony in this case to calculate the total need in District VI for adolescent mental health care (including long term 24 hour beds, acute care beds, and other types of residential beds), the testimony of the "availability" of the 320 beds is rejected as an irrelevant and statistically incorrect correlation of bed inventory with "need." It is possible, however, to test the meaningfulness of the testimony that 320 beds are "available" for long term care in District VI by reference to statistics contained in Petitioner's Exhibit 5. Since this exhibit and the date contained therein is heresy, the Hearing Officer cannot make a finding of fact by reference to the statistics contained in Petitioner's Exhibit 5, in the absence of expert opinion, which is lacking in this record. However, a relatively simple calculation can be made, using exactly the same method used by all the experts in this case. That calculation will be made in findings of fact 42-46, however, not as a finding of fact per se, but as explanation for why the 320 beds must be ignored absent some evidence that such beds are indeed available to serve long term patient needs (or, are unavailable because currently serving many other needs). Turning to Petitioner's Exhibit 5, table 13, the following predicted incidence of mental illness by treatment facility for the age group 0-17 is recorded therein: Special Programs Acute Hospital 24 Hour Psychoses 128 210 30 Neuroses 123 253 73 The total of these numbers is 817. Excluded from the above are "outpatient" statistics. "Outpatient" as used in table 13, Petitioner's Exhibit 5, is concluded to mean the same as "ambulatory" as described on pages 21 and 22 of the same exhibit, and "special programs" on table 13 are concluded to be "partial hospitalization" as described on the same pages. "Partial hospitalization" and "special programs" include halfway houses, group homes, day care centers, boarding homes, foster homes, and congregate care facilities. Id. at page 21. Thus, the commination of data with respect to "special programs," "acute hospital," and "24-hour institutions" much more reasonably approximates the types of facilities and care included in the 320 beds identified by Mr. Kreis. Adding these numbers, the total predicted incidence of psychoses and neuroses for persons ages 0-17 needing partial hospitalization, acute hospital care, and 24 hour hospital care, would be 817 per 100,000. This number should also be modified by the factor 0.96 to convert it to a better estimate of the rate per 100,000 for the age group 12-18, which is a rate of 784 per 100,000. Using this rate, it might thus be predicted that 2984 adolescents in District VI in 1990 (ages 12-18) will need special programs, acute hospital care, and 24 hour care, for psychoses and neuroses. This number is based upon the predicted 1990 population of the District of 380,583. Mr. Kreis testified that the majority of the 320 beds are used by adolescents staying longer than 90 days, and that the norm for these beds was about nine months. T. 354. Using a more conservative average length of stay for all of these beds of 180 days, and apply an 80 percent occupancy standard, the following calculation can be made, using the same need formula used above. The 2984 adolescents needing special programs, acute care, and 24 hour institutional care, will need 537,120 patient days of care per year at an average length of stay of 180 days. Dividing by 365, this converts to an annual bed need of 1472. Assuming the need to maintain 80 percent or less occupancy, the gross bed need is 1840 beds to provide special programs, acute care, and 24 hour institutional care. Subtracting the 320 beds now available, there would be a net need by 1990 of 1520 beds. Thus, the 320 beds identified by Mr. Kries would not adequate to fulfill the need identified in earlier parts of this order. While it is the conclusion of the Hearing Officer that a length of stay of 180 days for the combined 320 beds is appropriate, given the testimony of Mr. Kreis, it would be useful to recalculate the above figures assuming only a 60 day average length of stay for all of these beds. (This length of stay is far too low, given the probability that adolescents assigned to residential settings are, for reasons of continuity of care and for lack of parental availability to cope with the adolescent's problems, destined to spend far more than 60 days per year in such programs.) At a length of stay of 60 days, 2984 persons would generate 179,040 patient days annually, which converts to a bed need of 491 annually. At 80 percent occupancy, 614 beds would be needed by 1990, a net need (subtracting 320 beds) of 294 beds. This calculation is not correct, given the testimony of Mr. Kreis as to normal length of stay, and is not adopted by the Hearing Officer. It is performed, however, to show that even if Mr. Kries were wrong about the length of stay, the 320 beds he identified still do not meet predicted need, even if a 60 day average length of stay is used. Based upon all of the foregoing, there is a need for the 60 beds proposed by the Petitioner in District VI. George Britton, who testified on behalf of the Petitioner with respect to calculation of need, was tendered as an expert in health care planning. Mr. Britton received a master's degree in business administration in health care administration in 1979. During his master's work, Mr. Britton took a course in health economics. T. 139. In part that course concerned health care regulations at the national level. T. 140. The primary focus of his master's degree was hospital administration. T. 137. There were no courses available specifically dealing with planning for psychiatric services, and he took none. T. 137. He has had experience with various methodologies for determining bed need for a new health service both in his academic work and in practical experience. T. 140- 141. He also has attended seminars over the past five years concerning planning for new health services. T. 141. He worked as a health care administrator in a middle level position at George Washington University Medical Center between his undergraduate degree and his master's degree. T. 128. He served as assistant to the executive director, University of Florida Medical Center, Shands Teaching Hospital, from 1979 to 1982. T. 129. From 1982 to late 1984, Mr. Britton worked as vice president operations, University Community Hospital, in Tampa, Florida. Id. At Shands, Mr. Britton was also in charge of planning, and in that job, worked on several applications for certificates of need. T. 131. These certificates of need were quite substantial, one involving about $70 million for a proposed new hospital, and another for about $30 million in renovations. T. 132. Other certificates of need applications that he worked on included applications for neonatal services, radiology, and for helicopter service. T. 132. As vice president at University Community Hospital, Mr. Britton was similarly responsible for certificate of need applications, and worked on applications for cardiac catheterization, open heart surgery, and nuclear magnetic resonance imaging. T. 133. One of the applications for a certificate of need for which Mr. Britton was responsible concerned renovation of a children's mental health unit, but did not involve new beds. T. 138. All of his work with certificate of need applications involved work with need methodologies based upon the demographics of a service population. Id. Mr. Britton has been qualified on one prior occasion as an expert in emergency medical services or hospital administration. T. 135. He had not testified previously with respect to need for psychiatric services. T. 138. Mr. Britton's testimony covered areas well within his general expertise. First, Mr. Britton selected the same rate of incidence of psychoses and neuroses among persons ages 0-17 in need of 24 institutional care as selected by the Tampa Heights expert. Thus, there was no dispute as to that basic rate and its genesis from Petitioner's Exhibit 5. Second, Mr. Britton applied a factor of 0.96 to reduce that rate, deriving this factor from Petitioner's Exhibit 10. Dr. Fagin was less conservative, proposing to use the 103 per 100,000 prevalence rate without adjusting for ages 0-11. If Mr. Britton erred, the error is not in the favor of the Petitioner. Third, Mr. Britton used the same mathematical formula as used by Dr. Fagin, including use of the 80 percent occupancy standard. Fourth, there was no dispute as to the accuracy of the population figure used, and as discussed above, Dr. Fagin seriously erred in using a population figure for only ages 12-18. Fifth, the length of stay was primarily established by Mr. Kreis and testimony from Northside Community Mental Health Center, and Mr. Britton's expertise only corroborated that primary evidence. It is the conclusion of the Hearing Officer that Mr. Britton is as an expert in health planning for the testimony that he rendered in this case. TH PFF 30 is rejected for these reasons. and finding of fact 48. Mr. Britton was deposed on July 5, 1885. He was questioned about several methodologies, and thought that he had been asked about three methodologies. T. 216. But it is clear from the cross examination of Mr. Britton during the hearing that none of the deposition testimony amounted to his opinion on July 25, 1985, as to need, with the exception of one statement: on July 25, 1985, Mr. Britton apparently was of the opinion that there was a net need for 105 beds. T. 219-220. All of the other deposition testimony appears to have simply been Mr. Britton responding to questions by counsel as to the results if various other methodologies were used; at no point did Mr. Britton admit that any of the alternative methodologies were ones that he adopted. He said that he considered various age ranges, and ultimately refined his opinion as he gathered data from professional literature. T. 204. In the deposition, Mr. Britton reviewed one version of inventory of available beds, but he never stated that the 479 beds identified were in fact available to serve long term adolescent needs. He clearly stated that "there was a great deal of confusion about that at that particular time, which I indicated I was in the process of sorting out" with respect to "what constituted inventory." T. 207 He characterized the list of 479 beds as a "mixture of facilities," Id. He later said that these beds were in short term facilities. T. 213. It should be remembered that earlier Mr. Britton had stated that he considered 8 wide variety of facilities in the District, and that due to various statistical problems, it was not possible to develop a precise number of beds available for long term patients, T. 153-155. The second method explored in the deposition was based upon the District VI local health plan of 1985, and was simply something that Mr. Britton "took into consideration." T. 218. In the deposition, he went through the local health plan and verified the numbers, T. 218, and stated that there was other information not yet available on July 25, 1985, upon which he intended to rely. T. 219, 223-224. This second method was the method used to determine need for short term psychiatric facilities. T. 224. None of the foregoing detracts from the ultimate credibility of Mr. Britton. It only reflects that various types of methodologies that he considered and ultimately rejected. (TH PFF 31.) At a deposition on July 25, 1985, Mr. Britton testified that it was not possible to establish the number of beds available in District VI for long term adolescent care, and on cross examination, Mr. Britton explained that when he was asked that question, he had under consideration a wide variety of facilities throughout the District. He further explained that due to the practice of combining adult and adolescent beds and reporting irregularities, plus the inclusion of short term beds, it was not possible to develop a precise number of such beds as long term beds. T. 153-155. Rather than detract from the credibility of Mr. Britton as a witness, this answer adds to his credibility. As discussed above in other findings of fact, none of the parties presented evidence of high quality as to the availability of beds to provide long term adolescent care. Tampa Heights proposed to extrapolate from its own revenue experience to apply a 36.3 percent figure to all other facilities, and did so without any specific evidence to justify such as extrapolation. See findings of fact 11 and 32. HRS asked the Hearing Officer to consider the availability of beds within a two hour driving time without providing any evidence as to the actual availability of out-of-District beds to serve District VI needs. And Tampa Heights applied the prevalence rate of psychoses and neuroses for adolescents needing 24 hour institutional care to the bed inventory provided by Mr. Kreis, which included halfway houses and acute care hospitals. In sum, Mr. Britton's candor concerning the problems of precisely determining the availability of beds to serve the long term need of District VI adolescents adds to his credibility. (TH PFF 31.) As discussed above, Mr. Britton considered and rejected several age groups in arriving at his final opinion. T. 204. That he did so is normal for an expert in arriving at an opinion, and his testimony coupled with his deposition testimony ultimately does not detract from his credibility on this point. He admitted that he looked at various lengths of stay, including 45 days (when he was analyzing short term bed need, T. 241 and Tampa Heights Exhibit 1), and 87.2 days, T. 242, but, as found earlier, Mr. Britton testified that there is no one definitive length of stay in the professional literature. T. 242. Moreover, Tampa Heights' expert, Dr. Fagin, used two lengths of stay, without explaining a detailed basis for either. Finally, it is true that Tampa Heights Exhibit 1 contains an analysis performed by Mr. Britton as of August 9, 1985, which contains a prevalence rate of 1,010 per 100,000. T. 237. But that rate is correct for the analysis performed on Tampa Heights Exhibit 1, which shows an analysis of short term (acute hospital) bed need. As Mr. Britton stated, it was not "his" rate, it was the rate for such need derived form the GMENAC study, Petitioner's Exhibit 5. T. 238. Tampa Heights Exhibit 1 is marked "working - notes," and, as discussed in earlier parts of this recommended order, it would be appropriate to use a rate for acute care psychiatric hospitals to determine need for such hospitals as one step in an analysis of determining to what extent such short term hospitals might in fact be available to serve long term needs. That Mr. Britton performed such an analysis is to his credit. For these reasons, TH PFF 32 is rejected. The following are specific rulings upon the proposed findings of fact of the Petitioner which have not previously been identified in the above findings of fact, or which may contain sentences that have not specifically been addressed. The numbers which follow correspond to the numbers of Petitioner's proposed findings of fact: Rejected because not factual in nature. The facts proposed herein are dealt with in findings of fact 36- 38. All of the facts proposed by Petitioner in proposed finding of fact 13 are true, but irrelevant, since the methodology of Dr. Fagin, and his result, have been rejected for the reasons stated in findings of fact 18-35, and findings of fact 21 and 26 in particular. Petitioner's proposed finding of fact 14 is adopted by reference. Petitioner's proposed finding of fact 15 is adopted by reference. Petitioner's proposed finding of fact 16 is adopted by reference. Petitioner's proposed finding of fact 17 is a summary of Mr. Britton's calculations of need. The majority of these calculations were adopted, except that the average length of stay was found to be 180 days. Findings of fact 18-38 deal with Petitioner's proposed finding of fact 17. Adopted by findings of fact 29, 30 and 47. The following are specific rulings upon the proposed findings of fact of Tampa Heights which have not previously been identified in the above findings of fact, or which may contain sentences that have not specifically been addressed. The numbers which follow correspond to the numbers of Tampa Heights' proposed findings of fact: TH PFF 14 is adopted by reference, except the last sentence. The testimony of pages 529-530 of the transcript was that "the need for care is greater than those people who demand care" because people who need care sometimes do not receive it. It cannot be concluded that calculations of need based upon estimates of need are overstated, or that demand statistics are more suitable, since the point of calculating "need" is to estimate the number of people who are in need, and not to exclude those who need care but are unable to obtain it. Rejected for the reasons stated in findings of fact 18 through 38, and particularly 21 and 26. TH PFF 16 is adopted by reference. The first and last sentences were adopted in findings of fact 19 and 23. The second sentence was rejected by findings of fact 21 and 25. TH PFF 18 was adopted, except that the adjustment factor of 0.96 was also adopted; see findings of fact 18 and 22. Most of TH PFF 19 has be rejected in findings of fact 20 through The rate of 103 per 100,000 cannot be applied solely to the population ages 12-18 for the reasons stated in finding of fact 21 and 25. The average length of stay is not as low as 90 or 120 days for the reasons stated in finding of fact 26. TH PFF 20 uses a correct mathematical formula, but reaches an incorrect result for the reasons stated in the preceding paragraph. TH PFF 21 is rejected for the reasons stated with respect to TH PFF 19, except that the 80 percent occupancy standard was adopted. TH PFF 22, which concerns the correct inventory of beds available to serve the need, is rejected for the reasons stated in findings of fact 29 through 34. TH PFF 23 is rejected as stated in finding of fact 30 and findings of fact which precede that finding. TH PFF 24 has been adopted by findings of fact 31 through 34, to the extent that 36 percent of the short term beds identified by Tampa Heights were counted as available to serve long term needs. However, the resulting net bed need is rejected for the reasons stated above with respect to TH PFF 18-22. TH PFF 25 is rejected by finding of fact 29. TH PFF 26 is rejected due to differing calculations adopted above, see paragraphs dealing with TH PFF 18-22. and 37. TH PFF 27 is adopted to the extent stated in findings of fact 36 TH PFF 28 was adopted by finding of fact 38 to the extent that such facilities exist, but the conclusion reached, that these facilities were shown by evidence to be available to serve District VI needs, is rejected for the reasons stated in finding of fact 38. TH PFF 29 is rejected for the reasons stated in findings of fact 39 through 46. TH PFF 30 was rejected in findings of fact 48 and 49. TH PFF 31 was rejected in findings of fact 50 and 51. TH PFF 32 was rejected in finding of fact 52. TH PFF has been considered and ruled upon in findings of fact 20, 21, 25, and 31 through 34. 34-38. TH PFF 34, 35, 36, 37, and 38 are cumulative, and were completely contained in earlier proposed findings which have already been ruled upon. TH PFF 39 has been adopted and rejected for the reasons stated in finding of fact 16. TH PFF 40 has been adopted, in essence, in finding of fact 31. TH PFF 41 is adopted by reference to the extent that there is no evidence that there are access travel to and from) problems with existing psychiatric facilities in District VI. TH PFF 42 is adopted by reference. However, even with the addition of 22 long term beds, under any of the above calculations, there would still be a net need for the facility proposed by the Petitioner. Further, there was no evidence that Tampa Heights in fact intends to add 22 beds to its facility. Absent such evidence, the inference in TH PFF that 22 beds would be available to serve the needs of District VI is rejected. TH PFF 43 is rejected as irrelevant, given the calculations of need contained in earlier protions of this - recommended order. TH PFF 44 has been rejected for the reasons set forth in findings of fact 39 through 46. There was no evidence of need for additional teaching or research facilities to be served by Petitioner, nor was there evidence of the adequacy of existing teaching or research facilities. TH PFF 45 is rejected as worded, and the above sentence is adopted as an alternative. TH PFF 46 is rejected for the reasons stated in findings of fact 7 and 3. The testimony as to a national shortage of child psychiatrists was not sufficiently detailed to result in a finding that the Petitioner could not attract psychiatrists to provide treatment at its facility. In fact, the Petitioner showed consulting affiliation with one psychiatrist, Dr. Sugar, end a plan for attracting staff. The vast majority of staff shown in Petitioner's Exhibit 2 are not psychiatrists, in any event. There was no other evidence of a shortage of other types of staff. TH PFF 47, to the extent that it proposes that long term financial feasibility has not been shown, is rejected based upon the findings in finding of fact 17, since financial feasibility is largely determined by the existence of patients needing the service. Failure to present evidence from a financial expert does not cause a finding of a lack of financial feasibility where need is clearly demonstrated in the record. Although Mr. Jaffe questioned the amount that Petitioner stated it would receive per patient from the CYF" program, Mr. Jaffe did not correlate this with any evidence of the actual amount of CYF payments that should be substituted in place of Petitioner's estimates, and did not quantify the estimated revenue shortfall. Commitment from a bonding authority is not essential to show financial feasibility, since such commitment could not be expected until a certificate of need is granted. TH PFF 48 is rejected based upon finding of fact 12. TH PFF 49 is the same as proposed findings in TH PFF 37 and 42, which already have been ruled upon. TH PFF 50 is rejected due to the analysis of need contained in the findings of fact above, finding a need for an additional 151 long term adolescent inpatient psychiatric hospital beds by 1990 in District VI, and finding of fact 16.
Recommendation It is RECOMMENDED that the Department of Health and Rehabilitation approve the application of Petitioner and issue to it a certificate of need for the establishment and operation of a new 60 bed adolescent long term psychiatric hospital in Hillsborough County, Florida. RECOMMENDED this 20th day of January, 1986, in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1986. COPIES FURNISHED: Robert S. Cohen, Esquire Haben, Parker, Skelding, Costingan, McVoy & Labasky P. O. Box 669 Tallahassee, Florida 32302 Jay Adams, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Building One, Suite 406 Tallahassee, Florida 32301 George N. Meros, Esquire Carlton, Field, Wars, Emanuel, Smith & Cutler, P.A. 410 Lewis State Bank Building Tallahassee, Florida 32301 Susan Greco Tuttle, Esquire Moffit, Hart & Miller 401 South Florida Avenue Tampa, Florida 33602 David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner Hillsborough County Hospital Authority, a public body corporate, owns and operates two public hospitals - Tampa General Hospital and Hillsborough County Hospital. In 1981, the Authority received Certificate of Need Number 1784 which authorized an expenditure of $127,310,000 for the consolidation of the two hospitals. The project involved new construction and renovation at Tampa General, delicensure of beds at Hillsborough County Hospital and the transfer of those beds to Tampa General. The Certificate provided for a total of 1,000 licensed beds at Tampa General Hospital and for the "renovation, new construction, consolidation and expansion of service per application." The completion of the total project was projected to occur by October, 1987, but is presently running about four months behind schedule. When the Authority received its Certificate of Need in 1981, it was then operating a total of 93 psychiatric beds between the two hospitals -- 71 at County Hospital and 22 at Tampa General. The plan for consolidation and the 1981 Certificate of Need called for an overall reduction of 14 psychiatric beds - from 93 total beds between the two facilities to 79 total consolidated psychiatric beds, at the conclusion of the project. At the time the Authority obtained its Certificate of Need in 1981, there was no differentiation between determinations of need for general acute care beds and psychiatric beds. The number of psychiatric beds operated by a hospital were not separately listed on a hospital's license. As noted above, Tampa General was operating 22 psychiatric beds when it received its 1981 Certificate of Need. Because of an increased demand for acute care beds (non- psychiatric medical and surgical beds) in late 1982, Tampa General closed the psychiatric unit and made those 22 beds available for acute care. In the Authority's 1983-85 license for Tampa General, those 22 beds were included in the 637-bed total, which was not broken down by bed type. An attachment to the license indicates that the total bed count should read 671. In the space designated for "hospital bed utilization," the figure "O" appears after the word "psychiatric." (Respondent's Exhibit 1) In 1983, the statutory and regulatory law changed with regard to the separate licensure and independent determination of need for psychiatric beds. Section 395.003(4), Florida Statutes, was amended to provide, in pertinent part, that the number of psychiatric beds is to be specified on the face of the license. Rule 10-5.11(25), Florida Administrative Code, adopted in 1983, set forth a specific psychiatric bed need methodology for use in future Certificate of Need decisions. In order to implement its new 1983 policy and rule with regard to the separate licensure and determination of need for psychiatric beds, HRS conducted a survey to determine the number of existing psychiatric beds in the State. Hospitals then had the opportunity to indicate whether their existing beds were to be allocated or designated as acute care beds or psychiatric beds. HRS conducted the survey by directly contacting each hospital which had previously indicated it was operating a psychiatric unit and then contacting by telephone any facility not answering the initial inquiry. In August and September of 1983, the Authority indicated to HRS that Tampa General did not have any psychiatric beds in operation. HRS published the results of its survey and final hospital bed counts in the February 17, 1984 edition of the Florida Administrative Weekly, Volume 10, Number 7. The inventory listed Hillsborough County Hospital as having 77 psychiatric beds and Tampa General Hospital as having O psychiatric beds. The notice in the Weekly advised that hospital licenses would be amended in accordance with the published inventory to reflect each hospital's count of beds by bed type. Hospitals were further notified that "Any hospital wishing to change the number of beds dedicated to one of the specific bed types listed will first be required to obtain a certificate of need." (Respondent's Exhibit 2). For economic and business reasons, and in order to accomplish a more orderly consolidation of the two hospitals, the Authority now desires to re-open a small, self-funding psychiatric unit at Tampa General Hospital. It wishes to utilize the maximum number of psychiatric beds designated in its 1981 Certificate of Need application (93), including the beds which had been temporarily changed in late 1982 to acute care beds, while gradually phasing out a sufficient number of beds at the County Hospital to bring the total number of psychiatric beds down to 79 by late 1987. In order to implement this plan, the Authority applied to the office of Licensure and Certification in 1985 for the licensure of 77 psychiatric beds at County Hospital and 22 psychiatric beds at Tampa General Hospital. The Authority acknowledges that it should have applied for only 16 psychiatric beds at Tampa General Hospital to meet the 1981 figure of a total of 93 beds. HRS issued a license for the 77 requested psychiatric beds at County Hospital, but issued a license for only 2 psychiatric beds at Tampa General. The record does not adequately reflect the rationale for licensing even 2 beds at Tampa General. It is not economically or practically feasible for a hospital to operate a separate 2-bed psychiatric unit. The rationale for refusing to license the remaining psychiatric beds requested is the change in the statutory and regulatory law occurring in 1983 and the survey results published in 1984 illustrating Tampa General to have no psychiatric beds in operation at that time. The stated reason for denial is "because you have failed to obtain a Certificate of Need or exemption from [CON] review . . . ." (Petitioner's Exhibit 3).
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the request of the Hillsborough County Hospital Authority for the licensure of 16 short-term psychiatric beds at Tampa General Hospital be DENIED. Respectfully submitted and entered this 24th day of December, 1985, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of December, 1985. APPENDIX-CASE NO. 85-3109 The proposed findings of fact submitted by the petitioner and the respondent have been approved and/or incorporated in this Recommended Order, except as noted below. Petitioner Page 3, last sentence and Page 4, first sentence Rejected, not supported by competent, substantial evidence. Page 6, first full paragraph Rejected, not a finding of fact. Page 6, second paragraph Rejected, not a finding of fact. Page 7, Reject those findings based upon a conclusion that Tampa General has Certificate of Need approval for psychiatric beds. Respondent 9. Second and third sentences Rejected, irrelevant and immaterial to issue in dispute. COPIES FURNISHED: William S. Josey, Esquire Allen, Dell, Frank and Trinkle P. O. Box 2111 Tampa, Florida 33601 R. Bruce McKibben, Jr., Esquire Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 ================================================================ =
The Issue Whether there is a need for an additional 31 short-term psychiatric beds for Broward County?
Findings Of Fact I. General. History of Case. In June of 1984, the Petitioner filed an application with the Respondent for a certificate of need to add 31 short- term psychiatric beds to its existing facility. The certificate of need sought by the Petitioner was assigned certificate of need #3372 by the Respondent. The Respondent denied the Petitioner's application for certificate of need #3372. On October 25, 1984, the Petitioner filed a Petition for Formal Administrative Hearing with the Respondent challenging its proposed denial of the Petitioner's application. The Petition was filed with the Division of Administrative Hearings by the Respondent and was assigned case number 84-4037. Biscayne, Memorial and Charter were granted leave to intervene by Orders dated January 28, 1985, April 26, 1985 and July 9, 1985, respectively. The final hearing was held on November 19 and 21, 1985 in Ft. Lauderdale, Florida and February 24 and 25, 1986 in Tallahassee, Florida. The Petitioner's Proposal. The Petitioner originally sought to add 31 short-term psychiatric beds to its existing facility. If approved, the additional beds would have increased its current licensed beds from 334 to 365 beds. The Petitioner proposed to meet projected need for short-term psychiatric beds in Broward County for 1989. In its original application, the Petitioner proposed to provide services to children, adolescents, adults and the elderly. No distinct psychiatric units were proposed. The total cost of the original proposal was estimated to be $209,368.00. At the final hearing, the Petitioner proposed to relinquish 31 medical/surgical beds and to add 31 short-term psychiatric beds to meet projected need for short-term psychiatric beds in Broward County for 1989. The Petitioner will end up with a total of 334 licensed beds, the same number it now has, if its application is approved. The total cost of the proposal presented at the final hearing was $337,169.00, which is accurate and reasonable. The 31 proposed beds will be divided into a 15-bed dedicated adolescent unit and a 16-bed dedicated geropsychiatric unit. Adults will generally not be treated by the Petitioner. Involuntary admissions will be treated by the Petitioner, although there was some evidence to the contrary. The sixth floor of the Petitioner's existing facility will be converted into space for the new psychiatric units. The Petitioner changed the estimated staffing for its proposal between the time it filed its original application and the final hearing. The changes were not significant. During the 1985 legislative session, the Florida Legislature enacted Section 394.4785(1)(b), Florida Statutes (1985). This,, Section requires that most adolescents be separated from other patients for purposes of psychiatric treatment. Some of the modifications of the Petitioner's application which were made at the final hearing were made in order to conform with this Section. The changes in the Petitioner's proposal which were made between the time it filed its original application with the Respondent and the time of the final hearing are not substantial enough to require that the Petitioner's application, as modified, be remanded to the Respondent for further consideration. The Parties; Standing. The Petitioner is a 334-bed, for-profit, general acute-care hospital. The Petitioner is a full service hospital providing general medical services. The Petitioner has a medical staff of more than 400 physicians, including a department of psychiatry. The Petitioner is owned by National Medical Enterprises, one of the largest health care providers in the country. The Petitioner is located in Hollywood, Florida, which is located in the southern portion of Broward County, Florida. Broward County is the only County in the Respondent's service district 10. The Petitioner's primary service area consist of the southern portion of Broward County from State Road 84 in the North to the Broward-Dade County line in the South. Memorial is a not-for-profit general acute care hospital located in southern Broward County. Memorial holds License #1737, issued on June 1, 1985, which authorizes Memorial to operate 74 short-term psychiatric beds. This license is valid for the period June 1, 1985 to May 31, 1987. Memorial was also authorized to operate 74 short-term psychiatric beds in its license issued for the 2-year period prior to June 1, 1985. Memorial is located a short distance from where the Petitioner is located in southern Broward County. Memorial and the Petitioner share the same general primary service area. Most of the physicians on the staff at Memorial are also on the Petitioner's staff. Memorial is subsidized by tax revenues for providing indigent care for southern Broward County. About 17 percent of Memorial's revenue is attributable to bad debt and indigent care. If the Petitioner's application is approved it is likely that the Petitioner will take patients from Memorial. It is also likely that the patients taken from Memorial will be other than indigent patients. If the Petitioner were to achieve a 75 percent occupancy rate and 50 percent of its patients come from Memorial, Memorial would lose a little over $1,000,000.00 in terms of 1985 dollars. It is unlikely, however, that the Petitioner will achieve an occupancy rate of 75 percent and, more importantly, it is unlikely that 50 percent of the Petitioner's patients will come from Memorial. The loss of patients from Memorial which would be caused by approval of the Petitioner's application will, however, result in a financial loss to Memorial which may effect its ability to provide quality care. Additionally, the loss in paying patients could increase the percentage of indigent patients at Memorial and, because a portion of the cost of caring for indigents is covered by paying patients at Memorial, could result in a further loss in revenue and an increase in tax support. The public may have difficulty accepting a public hospital, such as Memorial, as a high-quality hospital if the public hospital is perceived to be a charity hospital. It is therefore important for a public hospital to attract a significant number of paying patients to its facility to avoid such an image. It is unlikely that the number of patients which may be lost to the Petitioner by Memorial is sufficient to cause the public to perceive that Memorial is a charity hospital. Biscayne is a 458-bed, general acute-care hospital located on U.S. 1 in northern Dade County, Florida, just south of the Broward County line. Biscayne's facility is located within about 5 miles of the Petitioner's facility. Biscayne is about a 5 to 10 minute drive from the Petitioner. Dade County is not in service district 10. It is in service district 11. Of the 458 licensed beds at Biscayne, 24 are licensed as short-term psychiatric beds and 24 are licensed as substance abuse beds. The rest are licensed as medical/surgical beds. Ten of the medical/surgical beds at Biscayne are used as a dedicated 10-bed eating disorder (anoxeria nervosa and bulimirexia) unit. These 10 beds are not licensed for such use. A separate support staff is used for the 10-bed eating disorder unit. Approximately 60 percent of Biscayne's medical staff of approximately 400 physicians are residents of Broward County. Most of these physicians are also on the medical staff of other hospitals, principally the Petitioner, Memorial and Parkway Regional Medical Center, which is located in northern Dade County. Most of its staff have their business offices in southern Broward County. Biscayne's service area includes southern Broward County and northern Dade County. Approximately 60 percent of Biscayne's patients are residents of southern Broward County. Biscayne markets its services in southern Broward County. Eighty percent of Biscayne's psychiatric patients are elderly. Many types of psychotic and psychiatric disorders are treated at Biscayne. Biscayne offers psycho-diagnostic services, crisis stabilization services, shock therapy services, individual therapy services and group therapy services. Biscayne has had difficulty in recruiting qualified staff for its psychiatric unit. Biscayne currently has 4 vacancies for registered nurses, 4 vacancies for mental health assistants and 1 vacancy for an occupational therapist in its psychiatric unit. Biscayne recruits nurses who are certified in mental health nursing. They have not always been successful in finding such nurses. Therefore, Biscayne provides educational programs to help train its nursing staff. These programs are necessary because of the unavailability of experienced nurses for its psychiatric unit. The Petitioner has projected that most of its patients for its proposed psychiatric units will come from southern Broward County, where Biscayne gets approximately 60 percent of its patients. The Petitioner plans to try to convince psychiatrists currently using existing providers, except Hollywood Pavilion, to refer their patients to the proposed psychiatric units. Since Biscayne and the Petitioner share some of the same physicians, it is likely that many of the patients cared-for by the Petitioner will come form Biscayne and other providers in southern Broward County, including Memorial. The loss of patients at Biscayne, if the Petitioner's proposal is approved, will result in a loss of revenue to Biscayne which may affect its ability to provide quality care. Charter was an applicant for a certificate of need to construct a free-standing psychiatric facility in Broward County. In its application Charter sought approval of long-term and short-term psychiatric beds. Charter's application was filed with the Respondent in August of 1983. It was filed for review by the Respondent in a batching cycle which preceded the batching cycle in which the Petitioner's application was filed. In December of 1983, the Respondent proposed to approve Charter's application and authorize a project consisting of 16 short-term adolescent psychiatric beds, 16 long-term adolescent psychiatric beds, 16 long-term substance abuse beds and 12 long-term children's psychiatric beds. The Respondent's proposed approval of Charter's application was challenged. Following an administrative hearing, it was recommended that Charter's application be denied. Final agency action had not been taken as of the commencement of the hearing in this case. Subsequent to the date on which the final hearing of this case commenced, the Respondent issued a Final Order denying Charter's certificate of need application. This Final Order is presently pending on appeal to the First District Court of Appeal. Charter does not have an existing facility offering services similar to those proposed by the Petitioner in Broward County or anywhere near the Petitioner's facility. When the Orders allowing Memorial, Biscayne and Charter to intervene were issued by Hearing Officer Sherrill, Mr. Sherrill determined that if the Intervenor's could prove the facts alleged in their Petition to Intervene they would have standing to participate in this case. Memorial and Biscayne have in fact proved the allegations contained in their Petitions to Intervene. Based upon all of the evidence, it is therefore concluded that Memorial and Biscayne have standing to participate in this proceeding. Both Memorial and Biscayne will probably lose patients to the Petitioner if its proposal is approved resulting in a loss of revenue. This loss could affect quality of care at Memorial and Biscayne. Also, it is possible that both would lose some of their specialized nursing personnel to ;the Petitioner to staff its proposed psychiatric units. Charter has failed to establish that it has standing to participate in this proceeding. The potential injury to Charter is too speculative. II. Rule 10-5.11(25), F.A.C. A. General. Whether a certificate of need for short-term psychiatric beds should be approved for Broward County is to be determined under the provisions of Section 381.494(6)(c), Florida Statutes (1985), and the Respondent's rules promulgated thereunder. In particular, Rule 10-5.11(25), F.A.C., governs this case. Under Rule 10-5.11(25)(c), F.A.C., a favorable determination will "not normally" be given on applications for short-term psychiatric care facilities unless bed need exists under Rule 10-5.11(25)(d), F.A.C. B. Rule 10-5.11(25)(d) , F.A.C. Pursuant to Rule 10-5.11(25)(d)3, F.A.C., bed need is determined 5 years into the future. In this case, the Petitioner filed its application with the Respondent in 1984, seeking approval of additional short-term psychiatric beds for 1989. The Petitioner did not change this position prior to or during the final hearing. Therefore, the planning horizon for purposes of this case is 1989. Under Rule 10-5.11(25)(d)3, F.A.C., bed need is determined by subtracting the number of "existing and approved" beds in the service district from the number of beds for the planning year based upon a ratio of .35 beds per 1,000 population projected for the planning year in the service district. The population projection is to be based on the latest mid-range projections published by the Bureau of Economic and Business Research at the University of Florida. Bed need is determined under the Respondent's rules on a district-wide basis unless the service district has been sub- divided by the Respondent. District 10 has not been subdivided by the Respondent. Therefore, bed need for purposes of this case under Rule 10-5.11(25)(d), F.A.C., is to be determined based upon the population projections for all of Broward County for 1989. The projected population for Broward County for 1989 is 1,228,334 people. Based upon the projected population for Broward County for 1989, there will be a need for 430 short-term psychiatric beds in Broward County in 1989. The evidence at the final hearing proved that there are currently 427 licensed short-term psychiatric beds in Broward County. During the portion of the final hearing held in November of 1985, evidence was offered that proved that there were also 16 approved short-term psychiatric beds for Broward County. These short-term beds were part of the application for the certificate of need sought by Charter. Subsequently, however, a Final Order was issued by the Respondent denying Charter's application. Therefore, the 16 short-term psychiatric beds sought by Charter do not constitute "existing and approved" short-term psychiatric beds in Broward County for purposes of this case. Subsequent to the conclusion of the final hearing in this case, the First District Court of Appeal reversed a Final Order of the Respondent denying an application for a certificate of need for a free-standing 10 -bed psychiatric facility, including 80 additional short-term psychiatric beds, for Broward County. Balsam v. Department of Health and Rehabilitative Services, So.2d (Fla. 1st DCA 1986). As indicated in Finding of Fact 23, Memorial is licensed to operate 74 short-term psychiatric beds. Memorial is in fact operating all 74 of these licensed beds. Memorial filed an application with the Respondent for certificate of need #1953 in October of 1981 in which Memorial indicated that it planned to reduce the number of short-term psychiatric beds it had available by 24 beds. Memorial's certificate of need application involved an expenditure of capital and did not specifically involve an application for a change in bed inventory at Memorial. Memorial also represented that it would reduce the number of its available short-term psychiatric beds by 24 in a bond prospectus it issued in September of 1983. The Respondent approved Memorial's certificate of need application. Despite Memorial's representations that it would reduce its short-term psychiatric bed inventory, the beds are still in use in Broward County. Memorial has no plans to close any beds and the Respondent does not plan to take any action against Memorial to require it to stop using 24 of its short-term psychiatric beds. Hollywood Pavilion is licensed to operate 46 short- term psychiatric beds in Broward County. In 1985, 475 patients were admitted to Hollywood Pavilion and its occupancy rate was 62.3 percent. In fact, Hollywood Pavilion had more admissions than Florida Medical Center had to its psychiatric unit. It therefore appears that other physicians find Hollywood Pavilion acceptable. Hollywood Pavilion is accredited by the Joint Commission on Accreditation of Hospitals. The Petitioner presented the testimony of a few physicians who questioned the quality of care at Hollywood Pavilion. These physicians indicated that they did not use Hollywood Pavilion. At least one of the physicians indicated, however, that he did refer patients to other physicians whom he knew admitted patients to Hollywood Pavilion despite his feeling that the quality of care at Hollywood Pavilion was poor. This action is inconsistent with that physician's opinion as to the lack of quality of care at Hollywood Pavilion. His opinion is therefore rejected. The other physicians' opinions are also rejected because very little evidence was offered in support of their opinions and because of the contrary evidence. Based upon a consideration of all of the evidence concerning the quality of care at Hollywood Pavilion, it is concluded that the Petitioner failed to prove that the 46 short-term psychiatric beds licensed for use and available for use at Hollywood Pavilion should not be counted as existing short- term psychiatric beds in Broward County. Coral Ridge Hospital is licensed to operate 74 short- term psychiatric beds in Broward County. The average length of stay at Coral Ridge Hospital during 1984 and 1985 was almost 80 days. The average length of stay at Coral Ridge Hospital has been in excess of 40 days since 1980 and in excess of 60 days since 1983. The average length of stay at Coral Ridge Hospital is in excess of the average length of stay for which short-term psychiatric beds are to be used under the Respondent's rules. Rule 10-5.11(25)(a), F.A.C., provides that short-term beds are those used for an average length of stay of 30 days or less for adults and 60 days or less for children and adolescents under 18 years of age. Rule 10-5.11(26)(a), F.A.C., provides that long-term beds are those used for an average length of stay of 90 days or more. The psychiatric beds at Coral Ridge Hospital, based upon an average length of stay for all of its beds, falls between the average length of stay for short-term beds and long-term beds. The occupancy rate at Coral Ridge Hospital for 1985 was between 40 percent and 50 percent. Therefore, it is possible that a few patients at Coral Ridge Hospital with a very long length of stay could cause the overall average length of stay of the facility to be as long as it is. Coral Ridge Hospital will probably take short-term psychiatric patients because of its low occupancy rate. Therefore, there are at least 29 to 37 short-term psychiatric beds available for use as short-term psychiatric beds at Coral Ridge Hospital. The Petitioner failed to prove how many of the licensed short-term psychiatric beds at Coral Ridge Hospital are not being used for, and are not available for use by, short-term psychiatric patients in Broward County. It cannot, therefore, be determined how many, if any, of the licensed short-term beds at Coral Ridge Hospital should not be treated as existing short-term psychiatric beds in Broward County. Based upon the foregoing, the 427 licensed short-term psychiatric beds in Broward County should be treated as "existing" beds for purposes of determining the need for short- term psychiatric beds under Rule 10-5.11(25)(d), F.A.C. There is a net need for short-term psychiatric beds in Broward County for 1989 of only 3 additional beds under Rule 10- 5.11(25)(d)3, F.A.C. If the 80 short-term psychiatric beds approved by the First District Court of Appeal in Balsam are taken into account, there will be a surplus of 77 short-term psychiatric beds in Broward County for 1989 under Rule 10- 5.11(25)(d)3, F.A.C. Based upon an application of Rule 10-5.11(25)(d)3, F.A.C., there is no need for the additional 31 short-term psychiatric beds sought by the Petitioner. Rule 10-5.11(25)(d)1, F.A.C., provides that a minimum of .15 beds per 1,000 population should be located in hospitals holding a general license to ensure access to needed services for persons with multiple health problems. Some patients who need psychiatric care also need other medical services which can better be obtained in an acute care hospital. This fact is taken into account by the requirement of Rule 10-5.11(25)(d)1, F.A.C. Based upon the projected population for Broward County in 1989, there should be a minimum of 184-short-term psychiatric beds in hospitals holding a general license in Broward County. There are currently 243 short-term psychiatric beds in hospitals holding a general license in Broward County. Therefore, the standard of Rule 10-5.11(25)(d)1, F.A.C., has been met without approval of the Petitioner's proposal. There is no need for additional short-term psychiatric beds in general hospitals in Broward County for 1989. Rule 10-5.11(25)(d)4, F.A.C., provides that applicants for short-term psychiatric beds must be able to project an occupancy rate of 70 percent for its adult psychiatric beds and 60 percent for its adolescent and children's psychiatric beds in the second year of operation. For the third year of operation, the applicant must be able to project an 80 percent adult occupancy rate and a 70 percent adolescent and children's occupancy rate. The beds sought by the Petitioner will be managed by a professional psychiatric management company: Psychiatric Management Services (hereinafter referred to as "PMS"). PMS is owned by Psychiatric Institutes of America, a subsidiary of National Medical Enterprises. Because of the lack of need for additional short-term psychiatric beds in Broward County, it is doubtful that the Petitioner can achieve its projected occupancy rates as required by Rule 10-5.11(25)(d)4, F.A.C. Rules 10-5.11(25)(d)5 and 6, F.A.C., require that certain occupancy rates normally must have been met in the preceding 12 months before additional short-term psychiatric beds will be approved. The facts do not prove whether the occupancy rates provided by Rule 10-5.11(25)(d)5, F.A.C., have been met because the statistics necessary to make such a determination are not available. The evidence failed to prove that the occupancy rates of Rule 10- 5.11(25)(d)6, F.A.C. have been met. The average occupancy rate for short-term psychiatric beds in Broward County for 1985 was between 64.8 percent and 68.4 percent. Occupancy rates in Broward County for short-term psychiatric beds have not reached 71 percent since 1982. These rates are well below the 75 percent occupancy rate provided for in Rule 10-5.11(25)(d)6, F.A.C. This finding is not refuted by the fact that Florida Medical Center added 59 beds in 1984 and the fact that occupancy rates at most general hospitals exceeded 75 percent in 1985. Based upon the average occupancy rate in Broward County for 1985, there were approximately 100 empty short-term psychiatric beds in Broward County on any day. Rule 10-5.11(25)(d)7, F.A.C. requires that short-term psychiatric services provided at an inpatient psychiatric hospital should have at least 15 designated beds in order to assure specialized staff and services at a reasonable cost. The Petitioner's proposal to add 31 short-term psychiatric beds meets this requirement of the rule. C. Rule 10-5.11(25)(e), F.A.C. Rule 1O-5.11(25)(e)1, F.A.C., requires that an applicant prove that its proposal is consistent with the needs in the community as set out in the Local Health Council plans, local Mental Health District Board plans, State Mental Health Plan and needs assessment data. The Petitioner has failed to meet this requirement. The Petitioner's proposal is inconsistent with the District 10 Local Health Plan, the Florida State Health Plan and State and Local Mental Health Plans. In particular, the Petitioner's proposal is inconsistent with the following: The District 10 Local Health Plan's recommendation that applications not be approved if approval would result in an excess number of beds under the Respondent's bed need methodology; The District 10 Local Health Plan's recommendation concerning occupancy standards for the district (75 percent during the past 12 months); The position of the Florida State Health Plan that inpatient psychiatric services are a setting of last resort; The recommendation of the District 10 Mental Health Plan that alternatives to hospitalization for psychiatric services should be encouraged; and The recommendation of the Florida State Mental Health Plan that less restrictive treatment alternatives should be encouraged. Rule 10-5.11(25)(e)3, F.A.C., requires that applicants indicate the amount of care to be provided to underserved groups. The Petitioner's representations concerning its plans to provide indigent care contained in its application are misleading, in that the Petitioner represented that it would not turn away indigents. At the final hearing, the Petitioner indicated that it will generally provide care to indigents only on an emergency basis. Patients who need indigent care on a non-emergency basis will be referred to Memorial. Also, once an indigent patient who needs emergency care has stabilized, that patient will be transferred to Memorial for care. The Petitioner accepts few Medicaid and indigent patients. During 1985, the Petitioner treated 21 Medicaid patients out of a total of 6,800 patients. Only 1.5 percent of its total revenue was for uncompensated care. During 1984, the Petitioner treated 22 Medicaid patients out of a total of 7,321 patients. Only 1.2 percent of its total gross revenue was for uncompensated care. Memorial is subsidized by tax revenues for providing indigent care, or southern Broward County. Because Memorial provides indigent care, indigent patients are usually referred to Memorial if they do not need emergency care or are transferred to Memorial after they stabilize if they do need emergency care. There are other hospitals in northern Broward County which provide similar indigent care. It is therefore common practice to refer patients to those hospitals. Rule 10-5.11(25)(e)5, F.A.C., provides that development of new short- term psychiatric beds should be through the conversion of underutilized beds in other hospital services. The Petitioner's proposal to convert 31 medical/surgical beds for use as short-term psychiatric beds meets this provision. Rule 10-5.11(25)(e)7, F.A.C., provides that short- term psychiatric services should be available within a maximum travel time of 45 minutes under average travel conditions for at least 90 percent of the service area's population. There is no geographic access problem in Broward County. At least 90 percent of the population of Broward County is within a maximum of 45 minutes driving time under average driving conditions to existing short-term psychiatric services in Broward County. The Petitioner's proposal will not significantly enhance geographic access in Broward County. III. Statutory Criteria. Need for Services. The Respondent has approved two certificates of need authorizing the addition of a total of 135 long-term psychiatric beds for Broward County. The addition of 135 long-term beds probably means that additional short-term beds in Broward County which have been used for patients requiring longer treatment will be available. If the additional long-term beds free up short-term beds, the occupancy rate of short-term psychiatric beds in Broward County would be even less than it has been during the past 12 months, if other things remain equal. Both Memorial and Florida Medical Center have been using short-term psychiatric beds for the care of long-term patients. Once the new long-term psychiatric beds are operational, more short-term psychiatric beds will be available in Broward County. Existing Providers. In addition to the short-term psychiatric beds available at Coral Ridge Hospital and Hollywood Pavilion, short- term psychiatric beds are available at the following existing facilities in the service district: Ft. Lauderdale Hospital: 64 beds Florida Medical Center: 74 beds Imperial Point: 47 beds Broward General Medical Center: 48 beds There is no geographic distribution problem in district 10. Generally, the Petitioner did not prove that existing short-term psychiatric beds in Broward County are not available, efficient, appropriate, accessible, adequate or providing quality of care. The Petitioner also did not prove that existing facilities are over-utilized. No new services are proposed by the Petitioner. The evidence did prove that there is usually a waiting list for short-term psychiatric beds at Memorial and that physicians have resorted to various devices to get their patients into short-term psychiatric beds at Memorial. Specialized adolescent psychiatric services are available in the service district at Ft. Lauderdale Hospital and at Florida Medical Center. Ft. Lauderdale Hospital has 24 short- term psychiatric beds dedicated to the treatment of adolescents. Florida Medical Center has 20 short-term psychiatric beds dedicated to the treatment of adolescents. Broward General Medical Center and Imperial Point also provide children/adolescent services. Treatment for eating disorders is provided and available at Imperial Point and Florida Medical Center. Florida Medical Center solicits patients from all parts of the service district. Geropsychiatric short-term psychiatric beds are available in the service district at Hollywood Pavilion, Imperial Point and Ft. Lauderdale Hospital. Florida Medical Center has a closed adult psychiatric unit and often treats persons over 60 years of age. It also has a 26-bed adult short-term psychiatric unit with 2 specialized treatment programs: one for eating disorders and the other for stress and pain management. The Petitioner has proposed to provide a dedicated geropsychiatric unit to meet the needs of geriatric patients which are different from those of adults generally. Although there are no such dedicated geropsychiatric units in the service district, the Petitioner failed to prove that geriatrics are not receiving adequate care from existing providers. Quality of Care. The Petitioner is accredited by the Joint Commission on Accreditation of Hospitals. The Petitioner has established adequate quality control procedures, including educational programs and a quality assurance department. These quality control procedures will also be used to insure quality of care in the proposed psychiatric units. The psychiatric units will be managed by PMS. PMS specializes in the management of psychiatric units in acute care hospitals. PMS has programs for adolescents and geriatrics. These programs will be available for use in the proposed psychiatric units. PMS also has a large variety of programs, services and specialists available to establish and maintain quality of care at the Petitioner. The Petitioner will be able to provide quality of care. Alternatives. The Petitioner did not prove that available and adequate facilities which may serve as an alternative to the services it is proposing do not exist in Broward County. Economies of Scale. The Petitioner's parent corporation, National Medical Enterprises has purchasing contracts available for use by the Petitioner in purchasing items needed for the proposed psychiatric units. These contracts can result in a reduction of costs for the proposed project. Staff Resources. PMS will help in recruiting staff for the proposed psychiatric units. Recruiting will be done locally but the Petitioner also has the ability to recruit specialized staff on a broader geographic scale. There is a shortage of nursing personnel for psychiatric services in southern Broward County and northern Dade County. Since the Petitioner plans to recruit locally, this could cause existing providers to lose specialized nursing personnel to the Petitioner. If the Petitioner causes vacancies at existing facilities, this could adversely affect quality of care. Financial Feasibility. The total projected cost of the project ($337,169.00) can easily be provided by National Medical Enterprises, the parent corporation of the Petitioner. The Petitioner's financial projections are unrealistic to the extent of the projected utilization and revenue for the proposed psychiatric units. Based upon the projected need of only 3 short-term psychiatric beds (or possibly a surplus of 77 beds) for 1989, the Petitioner's projected utilization and revenue for its proposal is rejected. The Petitioner has proved immediate financial feasibility but has failed to prove the proposal is financially feasible in the long-term. Impact of Proposal. The Petitioner's proposal could adversely effect the costs of providing health services in Broward County. This is especially true in light of the lack of need for additional short-term psychiatric beds in Broward County. Because of the high quality of the services the Petitioner proposes to provide, competition in Broward County could be enhanced and ultimately benefit consumers, if there was a need for the proposed additional beds. If a hospital has an image of being a charity hospital serving the needs of underserved groups, the hospital can experience difficulty in attracting paying patients and have difficulty in getting consumers to accept the high quality of the services of the hospital. Although it is likely that the Petitioner will take paying patients away from Memorial, it is unlikely that the number of patients lost could substantially affect the public's image of Memorial. The effect the Petitioner's proposal will have on Memorial is limited by the fact that the Petitioner is only seeking 31 beds and they are only short-term psychiatric beds. Memorial provides a variety of services and psychiatric services are only a small part of those services. I. Construction. It the Petitioner's proposal is approved, 11,500 square feet on the sixth floor of the Petitioner's hospital will be renovated and converted for use for the two proposed psychiatric units. The renovations can be made quickly. There will be space for 16 beds in a geropsychiatric unit and 15 beds in an adolescent unit. There will be a separate lobby for the psychiatric units and the elevators to the lobby will be strictly controlled. The two units will be separated and adequate security precautions will be taken to keep the two units separate. The ceilings in both units will be modified to insure security. Nurse stations will be provided for both units. Visibility from the nurse stations will be fair. Space is provided for a dayroom for each unit and there will be a class room and four rooms for therapy. These spaces will barely be adequate to meet the various needs of patients. With adequate planning and coordination, patients' needs can be met. There is inadequate space in the proposed facility for physical activities for patients.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the certificate of need application filed by the Petitioner for certificate of need #3372 should be denied. DONE and ENTERED this 15th day of May, 1986, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of May, 1986. COPIES FURNISHED: Michael J. Glazer, Esquire AUSLEY, McMULLEN, McGEHEE, CAROTHERS & PROCTOR Post Office Box 391 Tallahassee, Florida 32302 Lesley Mendelson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services Building One, Suite 407 1323 Winewood Boulevard Tallahassee, Florida 32301 James C. Hauser, Esquire MESSER, VICHERS, CAPARELLO, FRENCH & MADSEN Post Office Box 1876 Tallahassee, Florida 32302 Kenneth G. Oertel, Esquire Eleanor A. Joseph, Esquire OERTEL & HOFFMAN, P.A. Post Office Box 6507 Tallahassee, Florida 32313-6507 Cynthia S. Tunnicliff, Esquire CARLTON, FIELDS, WARD, EMMANUEL SMITH & CUTLER, P.A. Post Office Drawer 190 Tallahassee, Florida 32302 Mr. William Page, Jr. Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact CPC is an international health care company specializing in psychiatric care. It operates 25 hospitals in the United States and three in Great Britain. Its proposed Orlando hospital would be its fourth Florida facility. CPC has not yet selected a site for the proposed facility, but anticipates a South Orange County or Osceola County location. Site factors such as cost, services and zoning are obviously not determined and the estimated project cost of $6,776,125 is subject to substantial change. It has prepared basic architectural plans, however, which were shown to provide adequate space and necessary health care features for its proposal. The CPC facility would be "freestanding" and not a part of any larger medical complex. It would provide a range of psychiatric and substance abuse services for adolescent and adult patients, emergency evaluation, family therapy and follow-up care. CPC policy provides that up to 5 percent of gross annual revenue may be allocated for indigent care. Thus, some indigent patients could be treated. However, no specific commitment in this regard was made. CPC has adequate funds to finance this project "in-house" and anticipates no difficulty in obtaining necessary medical staffing. In view of this company's resources and experience, its ability to fund this project and adequately staff it are reasonably certain. OGH is a nonprofit 171-bed osteopathic acute care facility located in Orange County, seven miles east of downtown Orlando. It has been operated as a nonprofit facility since 1945, and has existed at its present location since 1960. In 1981, HRS issued a Certificate of Need authorizing OGH to add 70 medical-surgical beds to its facility by constructing four new floors to an existing building, including a top (sixth) floor which is now proposed for the OGH substance abuse program. The additional cost of construction is estimated to be $500,000. OGH proposes to apply osteopathic principles to its substance abuse program. Of the approximately 60 doctors of osteopathy in Orange County, most are admitted to the staff of OGH and not to the allopathic facilities in Orange County, which require that doctors of osteopathy have postgraduate training in an allopathic residency program. The proposed OGH facility would thus be the only one available to these physicians and would provide an opportunity for osteopathic practice and training in substance abuse. This would also be the only program of this type available to substance abuse patients who seek osteopathic treatment in Orange County. There are patient care advantages to locating a substance abuse program within an acute care hospital such as OGH, since patients who require substance abuse treatment frequently require other services provided by a general hospital. The program proposed by OGH would have such auxiliary hospital services readily available where the CPC program would not. OGH has made tentative arrangements for the additional health care and management personnel required by its proposal. OGH will provide some indigent care and anticipates that it will continue to experience a "bad debt" rate of about 9 per cent, which includes indigent care costs. Intervenor, Florida Hospital (FH), consists of three major campuses in the Orlando metropolitan area, (Orlando, Orange County; Altamonte Springs, Seminole County; and Apopka, Orange County). FH is a not-for-profit tertiary care hospital owned by the Seventh Day Adventist Church. It has been in operation for approximately 75 years and currently has 943 beds. As of the date of the hearing, FH had 99 beds in its facility dedicated to psychiatric and substance abuse services with 2 in Altamonte Springs, 51 in the main Orlando campus building and 24 in a building adjacent to the Orlando campus main hospital building. FH has been providing psychiatric and substance abuse services for approximately 25 years, but does not currently have any beds designated specifically for substance abuse patients. At the time of the hearing, FH had under construction and scheduled to be completed in October, 1984, a 56-bed, freestanding psychiatric facility which is to be located approximately 600 feet from the main Orlando campus building, consisting of 24 adult general psychiatric beds, 16 substance abuse beds and 16 adolescent psychiatric beds. During FH's current fiscal year, which began January 1, 1981, there has been a decrease in patient days in the hospital in general and a decline in occupancy in the psychiatric treatment program. At the time of the hearing, the occupancy level for the pregram was approximately 60 percent and had been less than 75 per cent during the calendar years 1982, 1983 and 1981 (through August), with a projection of 62 percent for all of 1984. The opening of the facility by Intervenor, West Lake Hospital (WLH) in May, 1984, has had the effect of reducing the number of patient days and percentage of occupancy at FH. Intervenor, WLH, is located in Longwood, Seminole County, Florida, (HRS District VII) and provides psychiatric and substance abuse treatment. Forty-eight percent of its patients come from Orange County and it estimates that as many as 60 percent of those patients would go to another facility in Orange County, were one available. Since its opening in May, 1984, the WLH facility has had an occupancy level of less than 75 per cent for its 80-bed facility. Both intervenors oppose grant of the CPC application, but neither opposes grant of the OGH application. HRS Rules 10-5.11(25)(d) and 27(f), Florida Administrative Code (FAC), set forth the methodology to be used in computing bed need for short term psychiatric and substance abuse treatment. Beds are allocated within each health planning district on the basis of a five year projection. The proposed facilities would be located in HRS Health Planning District VII. Thus, projections, allocations and computations are based on health planning data applicable to this district. Although CPC seeks to create a sub-district consisting of Orange and Osceola Counties for evaluation of its application, there is no basis in these rules or in existing health plans for this proposed subdivision. The projected bed need for District VII (1989) is as follows: A. Short term psychiatric Existing and approved beds 368 Tentatively approved beds 60 1/ Total existing and approved 428 Total need 454 2/ Net need 26 B. Short term substance abuse Existing and approved beds 40 Tentatively approved beds 26 3/ Total existing and approved 66 Total need 78 4/ Net need 12 The above referenced rules, while providing for a minimum number of psychiatric beds in general hospitals, require no corresponding minimum number of beds in freestanding specialty hospitals, nor do they establish any preference for freestanding hospital beds. Should a freestanding facility be viewed as desirable, the new psychiatric treatment center at Florida Hospital is essentially freestanding, and would meet any such need. Further, the inventory of short term psychiatric beds indicates that the limited existing need is within the category of general hospital beds, rather than the specialty hospital category. HRS Rule 10-5.11(25)(d)5, F.A.C. provides that no additional short term psychiatric beds shall normally be approved unless the average annual occupancy rate for all existing psychiatric beds in the district exceeds 75 percent (for adult services) or 70 percent (for adolescent and children's services) for the preceding twelve months. Virtually all of the psychiatric beds in District VII have been for adult services. For calendar year 1983, the occupancy rate for short term psychiatric beds in District VII was approximately 73.5 percent. For the 12-month period from July, 1983 through June, 1984 the occupancy rate had declined to 71.7 percent. Thus, the occupancy standard for short term psychiatric beds was not met. Similarly, Rule 10-5.11(27)(h)1, F.A.C. provides that no additional inpatient substance beds will normally be approved unless the average occupancy rates for all existing hospital based substance abuse inpatient beds is at or exceeds 80 percent for the preceding twelve months. Since the occupancy rate for substance abuse beds during the 12-month period of July, 1983 through June, 1984 was in the low sixties, this standard was not met.
Recommendation Based on the foregoing, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order granting the application of Orlando General Hospital to establish a 26-bed substance abuse treatment program and denying the application of Community Psychiatric Centers to construct a 105-bed short term psychiatric and substance abuse facility in District VII. DONE and ENTERED this 20th day of December, 1984 in Tallahassee, Florida. R. T. CARPENTER Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1984.
Findings Of Fact Based on the stipulations 3/ and admissions of the parties, the exhibits received in evidence, and the testimony of the witnesses at hearing, I make the following findings of fact: FIRST HOSPITAL's address is the World Trade Center, Suite 870, Norfolk, Virginia 23510. CHARTER GLADE HOSPITAL is a freestanding psychiatric hospital located in Fort Myers, Lee County, Florida. CHARTER GLADE has (80) licensed psychiatric beds, and twenty-four (24) licensed substance-abuse beds. The service area served by CHARTER GLADE includes Collier, Lee, and Charlotte Counties. The address of HRS is 1317 Winewood Boulevard, Tallahassee, Florida 32301. HRS is responsible for the administration of the "Health Facilities and Health Services Planning Act," Section 381.493, et seq., Florida Statutes (the Act), and has implemented its provisions through the adoption of rules set forth in Chapter 10, Florida Administrative Code. FIRST HOSPITAL applied to HRS for a certificate of need (CON) for the establishment of a freestanding specialty hospital in Naples, Florida. Pursuant to the Act, a CON is required before FIRST HOSPITAL can establish its specialty hospital. FIRST HOSPITAL's application was denied by HRS. FIRST HOSPITAL appealed the denial of its application to the Division of Administrative Hearings, DOAH Case No. 84-1835. CHARTER GLADE has intervened in DOAH Case No. 84-1835. In this proceeding, Petitioner has challenged the validity of Rule 10- 5.11(25) and (26), Florida Administrative Code, asserting that the rule is arbitrary and capricious and, therefore, invalid. By virtue of the fact that CHARTER GLADE is an existing facility located in the same service area in which Petitioner proposes to construct and operate its facility, and further by virtue of its participation in DOAH Case No. 84-1835, at least in part, on the basis of the provisions of Rule 10 15.11(25) and (26), Florida Administrative Code, CHARTER GLADE is substantially affected by the issues presented for determination in this cause and should be allowed to participate as a party. The Act contemplates rule adoption by HRS of specialty bed-need methodologies for psychiatric services. See, e.g., Subsection 381.494(8)(g), Florida Statutes (1983). Toward this end, HRS has adopted Rules 10-5.11(25) and (26), Florida Administrative Code. Rule 10-5.11(25), cited as the basis for denying FIRST HOSPITAL's CON application, addresses need for short-term psychiatric beds; Rule 10-5.11(26) purports to address need for long-term psychiatric beds. FIRST HOSPITAL's substantial interest in establishing its proposed specialty hospital has been determined by both of these rules. In particular, Rule 10-5.11(25), Florida Administrative Code, was applied by HRS in the denial of FIRST HOSPITAL's CON application. In addition, FIRST HOSPITAL alleges that Rules 10-5.11(25) and (26) combined fail to assess the need for intermediate inpatient specialty psychiatric services, one of the types of psychiatric services proposed by FIRST HOSPITAL. FIRST HOSPITAL's CON application proposes intermediate inpatient specialty psychiatric services. Rules 10-5.11(25) and (26), Florida Administrative Code, were adopted in early 1983. The adoption process began in the summer of 1982 when HRS assigned to one of its employees, Elfie Stamm, the task of developing a bed-need rule for psychiatric services. Ms. Stamm, at that time, was a planner in the Office of Comprehensive Health Planning of HRS. Ms. Stamm has been a planner with HRS for several years and had been responsible for the development of the State Health Plan and for the development of various rules used in the CON process. She had also been employed in the Mental Health Program Office of HRS, where her responsibilities included the development of a state plan with regard to alcoholism and mental health. She was also responsible for monitoring statewide mental health programs. Upon being assigned the task of developing the subject rules, Ms. Stamm made a thorough review of all information available to HRS with regard to the number of existing psychiatric beds and programs throughout Florida. She also evaluated all available local health plans and spoke with various individuals who had been involved in health planning, particularly those with interest in mental health planning. Ms. Stamm surveyed the available literature on health planning emphasizing mental health planning and bed-need methodologies for psychiatric beds. Ms. Stamm wrote the initial draft of Rule 10-5.11(25) based upon her collection and evaluation of data regarding existing and approved psychiatric beds in Florida and her review of literature, both Florida specific and national. A primary feature of the drafts, as well as of the adopted version, of Rule 10-5.11(25) is a fixed bed-to-population ratio of .35/1000, meaning that normally there should be no more than .35 short-term psychiatric beds for each 1,000 persons. Ms. Stamm was instructed to develop rules to assess the need for inpatient psychiatric services. As finally adopted, short-term care is defined in Rule 10-5.11(25) as care not exceeding three months and averaging a length of stay of 30 days or less for adults and 60 days or less for children and adolescents, and long-term care is defined in Rule 10-5.11(26) as care averaging a length of stay of 90 days. Neither rule defines the term "intermediate care." The documents contained in HRS Composite Exhibit IX and reviewed by Ms. Stamm are a representative sample of the literature available in the field and the level of knowledge among health planners as of the date of the promulgation of the subject rules. The documents are a reasonable cross-section of the literature available in the area of psychiatric bed-need assessment. In terms of the literature that was available at the time of the rule adoption in the area of psychiatric bed-need assessment, there is nothing missing from these documents which would have been important to a health planner in developing a psychiatric bed-need methodology. There is discussion in those documents of all the basic methodologies for determining psychiatric bed need. After reviewing all of the available materials, the HRS established a range of from .35 to .37 beds per 1,000 population and from that point made a policy decision to establish a figure of .35 to use in the bed-need formula. In promulgating the subject rules HRS invited and received comment from a broad cross-section of the public, with particular emphasis on those persons and organizations with special knowledge and interest in the provision of mental health services and the determination of psychiatric bed need. HRS conducted a workshop to which it invited a broad cross-section of individuals and organizations with particular knowledge about psychiatric bed need, including representatives of the Florida Hospital Association, Florida Psychiatric Association, Florida Council for Community Mental Health, Florida State Association of District Mental Health Boards, Florida League of Hospitals, Florida Association of Voluntary Hospitals, and the Florida Alcohol and Drug Abuse Association. The comments and results of the workshop were considered by Ms. Stamm and HRS in the promulgation of the subject rules. In response to several requests, HRS conducted a public hearing in accordance with Section 120.54(3), Florida Statutes, to receive comments from interested persons on the subject rules. More than fifteen (15) people representing various hospitals and organizations concerned with psychiatric services entered appearances and made comments at the public hearing. In addition to the oral comment presented at the public hearing, various persons and organizations submitted numerous written comments expressing their opinion with regard to the proposed rules. The comments, both oral and written, were all considered by Ms. Stamm and HRS prior to the promulgation of the subject rules. The process engaged in by HRS, primarily through Ms. Stamm, in the development of the subject rules was extensive and reasonably calculated to invite substantive public comment and to procure the knowledge on the part of HRS necessary to write workable and rational rules concerning psychiatric bed need. The knowledge acquired by HRS through this process with regard to the assessment of psychiatric bed-need methodologies was reasonably sufficient to allow it to knowledgeably draft and promulgate the subject rules. Consideration of this substantive public comment led to several changes in the subject rules as originally drafted. As originally promulgated, Rules 10-5.11(25) and (26) were challenged pursuant to Section 120.54, Florida Statutes, in various petitions filed with the Division of Administrative Hearings. In settling these proposed rule challenges, HRS modified the rules to provide for even greater flexibility in their application. HRS Composite Exhibits I through XII constitute all written matters considered or produced by HRS in the rule adoption process with regard to the subject rules. All of those documents and papers have been maintained in the records of HRS since the promulgation of the subject rules. The statutory criteria for reviewing CON applications are set out in Sections 381.494(6)(c) and (d), Florida Statutes. Rule 10-5.11, Florida Administrative Code, sets forth the rule criteria against which CON applications are evaluated. Subsections (1) through (12) and (25) of Rule 10-5.11 are the rule criteria against which applications for CONs for short-term hospital inpatient psychiatric services are to be evaluated. Subsections (1) through and (26) of Rule 10-5.11 are rule criteria against which applications for CONs for long-term psychiatric services are to be evaluated. Rule 10-5.11(25) sets forth certain criteria specifically for the evaluation of CON applications for short term hospital inpatient psychiatric services. Short-term services are in part defined as services averaging a length of stay of thirty (30) days or less for adults and a stay of sixty (60) days or less for children and adolescents under eighteen (18) years. Rule 10- 5.11(25) in its adopted form provides in relevant part as follows: Short Term Hospital Inpatient Psychiatric Services. Short term hospital inpatient psychiatric services means a category of services which provides a 24-hour a day therapeutic milieu for persons suffering from mental health problems which are so severe and acute that they need intensive, full-time care. Acute psychiatric inpatient care is defined as a service not exceeding three months and averaging a length of stay of 30 days or less for adults and a stay of 60 days or less for children and adolescents under 18 years. Short term hospital inpatient psychiatric services may be provided in specifically designated beds in a hospital holding a general license, or in a facility holding a specialty hospital license. Applications for proposed short term hospital inpatient psychiatric services will be reviewed according to relevant statutory and rule criteria. A favorable need determination for proposed general acute care psychiatric inpatient services will not normally be given to an applicant unless a bed need exists according to paragraph (25)(d) of this rule. A favorable Certificate of Need determination may be made when the criteria, other than as specified in (25)(d), as provided for in Section 381.494(6)(c), Florida Statutes, and paragraph (25)(e) of this rule, demonstrate need. Bed allocations for acute care short term general psychiatric services shall be based on the following standards: A minimum of .15 beds per 1,000 population should be located in hospitals holding a general license to ensure access to needed services for persons with multiple health problems. These beds shall be designated as short term inpatient hospital psychiatric beds. .20 short term inpatient hospital beds per 1,000 population may be located in specialty hospitals, or hospitals holding a general license. The distribution of these beds shall be based on local need, cost effectiveness, and quality of care considerations. The short term inpatient psychiatric bed need for a Department service district five years into the future shall be calculated by subtracting the number of existing and approved beds from the number of beds calculated for year x based on a bed need ratio of .35 beds per 1,000 population projected for year and based on latest mid-range projections published by the Bureau of Economic and Business Research at the University of Florida. These beds are allocated in addition to the total number of general and acute care hospital beds allocated to each Department District established in Rule 10-5.11(23). Occupancy Standards. New facilities must be able to project an average 70 percent occupancy rate for adult psychiatric beds and 60 percent for children and adolescent beds in the second year of operation, and must be able to project an average 80 percent occupancy rate for adult beds and 70 percent for children and adolescent short term psychiatric inpatient hospital beds for the third year of operation. No additional short term inpatient hospital adult psychiatric beds shall normally be approved unless the average annual occupancy rate for all existing adult short term inpatient psychiatric beds in a service district is at or exceeds 75 percent for the preceding 12 month period. No additional beds for adolescents and children under 18 years of age shall normally be approved unless the average annual occupancy rate for all existing adolescent and children short term hospital inpatient psychiatric beds in the Department district is at or exceeds 70 percent for the preceding 12 2 month period. Hospitals seeking additional short term inpatient psychiatric beds must show evidence that the occupancy standard defined in paragraph six is met and that the number of designated short term psychiatric beds have had an occupancy rate of 75 percent or greater for the preceding year. Unit size. In order to assure specialized staff and services at a reasonable cost, short term inpatient psychiatric hospital based services should have at least 15 designated beds. Applicants proposing to build a new but separate psychiatric acute care facility and intending to apply for a specialty hospital license should have a minimum of 50 beds. Other standards and criteria to be considered in determining approval of a Certificate of Need application for short term hospital inpatient psychiatric beds are as follows: . . . . 7. Access standard. Short term inpatient hospital psychiatric services should be available within a maximum travel time of 45 minutes under average travel conditions for at least 90 percent of the service area's population. There are three basic types of methodologies generally accepted in the field of health planning as valid for determining the need for psychiatric hospital beds. The first type is a need-based methodology which evaluates the need for services. The second is a demand or utilization-based method, which utilizes current or projected utilization statistics for a particular service. The third is a fixed-ratio method which involves the use of a ratio, or rate, of service to population to determine projected need for that service in the future. All three of these methodologies are generally accepted and utilized by health planners throughout the United States. Each has its advantages and disadvantages, but all are valid. The fixed ratio methodology is that which HRS has employed in Rule 10 5.11(25). The ratio of .35 beds per thousand population is a reasonable ratio with a rational basis in fact. It is not arbitrary and capricious as a measure of short-term psychiatric bed need. The National Institute of Mental Health developed draft guidelines in the late 197Os suggesting a range of .15 beds to .40 beds per thousand population as an appropriate fixed-bed ratio program for psychiatric short-term acute-care programs. At least four other states presently or in the past have utilized a fixed bed-need ratio in planning for health care needs. They are Massachusetts, Indiana, Michigan and Georgia. Some of those states used fixed-bed ratios less than .35 per thousand. Ms. Stamm, in developing this rule methodology for HRS, considered and balanced the different approaches relating to the establishment of need. One of her concerns on behalf of HRS, in developing the methodology was to strike a proper balance between need and demand since not everyone who needs psychiatric care will choose to seek that care or can afford to seek that care. In 1982, during the time of the rule adoption process, the ratio of existing short-term psychiatric beds per thousand population in Florida was .29 per thousand. Ms. Stamm selected .35 per thousand, in part, to allow for growth in the number of psychiatric beds for reasons other than just population growth. The current rate of existing licensed short-term psychiatric beds in Florida in 1985 is .28 beds per thousand. However, the ratio for currently existing short-term psychiatric beds, plus CON approved beds not yet licensed in 1985, is .39 beds per thousand. The fact that the existing and approved inventory of psychiatric beds is greater than the .35 ratio specified in the rule demonstrates that HRS has applied Rule 10-5.11(25) in a flexible manner as envisioned by the "not normally" language in the rule. A theoretically ideal way to determine psychiatric bed need would be for HRS to go into each community and conduct epidemiological surveys to identify the people who actually need mental health care. While such a survey, properly conducted, might produce momentarily reliable date, it is not a realistic method for statewide planning purposes because of several problems attendant to such a methodology. Such a survey would be very expensive and very time-consuming and is not practical for use on a statewide basis in a state the size of Florida. Because of the time-consuming nature of such a methodology, if applied on a statewide basis, some of the data would be stale before all of the data was gathered. Further, the rapidly changing population in Florida would require that such a survey be continually updated. The allocation of short-term beds between general and specialty hospitals set forth in subsections (d)1 and 2 of Rule 10-5.11(25) has a rational basis in fact and is not arbitrary. There are many patients who simultaneously need medical as well as psychiatric care. To have those patients located in a specialty hospital, away from a general hospital, would be inappropriate. There are also patients who have acute episodes of psychiatric illness and who need to be treated very rapidly. Because there are many more general hospitals than there are freestanding psychiatric specialty hospitals, it is appropriate to ensure that psychiatric beds are available to general hospitals to fill the particular episodic acute needs. Further, there are many patients in Florida who can afford health care only through Medicaid. Because Medicaid does not provide funding of mental health inpatient services in psychiatric specialty hospitals, it is appropriate to include in the methodology an incentive for the location of some psychiatric beds in general hospitals where psychiatric services can be funded by Medicaid. The specific allocation of the .35 per thousand bed need ratio set forth in Rule 10-5.11(25)(d)(1) and (2) is that .15 beds per thousand "should" be associated with general hospitals and .20 beds per thousand "may" be associated with specialty hospitals. This allocation was designed to be flexible so that, in any given circumstance, an allocation other than the .15 and .20 guideline could be applied. The occupancy rate standards set forth in Rule 10 5.11(25) specify that normally, additional beds should not be approved unless the average occupancy of all existing beds in a service district exceeds 75 percent for adults and 70 percent for children and adolescents. The occupancy rate standards set forth in Rule 10- 5.11(25) were not arrived at in an arbitrary fashion and are reasonable in themselves. The occupancy rates are designed to ensure that a reasonable number of beds in each facility are filled. Hospitals with a substantial number of empty beds are not cost effective. Therefore, it is reasonable to project occupancy rates in the range of those projected in the subject rule. Indeed, the occupancy rates in the rule are liberal in terms of minimum occupancy levels, compared with those in the past and those recommended by others in the industry. With regard to the travel access standard in the rule, the Task Force for Institutional Care recommended a 60 minute travel standard for 90 percent of the population in the district. The 45 minute standard is reasonable. The rule does not exclude from within the travel standard area other facilities providing the same service. At the time of the final hearing, there were sixty five (65) existing hospital facilities in Florida which had psychiatric bed services. Of those sixty-five (65) facilities, sixty-one (61), or 93 percent, had more than fifteen (15) psychiatric beds, and fifty-five (55), or 84 percent, had more than twenty (20) psychiatric beds. In the exceptional event that the average occupancy rate for a particular district did not accurately reflect the availability of beds, the language of Rule 10-5.11(25)(d)5, which says that no additional beds shall "normally" be approved unless the occupancy rates are met is sufficiently flexible to account for the exceptionality. The methodology set forth in Rule 10-5.11(25) is designed to identify and express a need for short-term psychiatric inpatient beds for the overall population of Florida. The rule was intended to be sufficiently flexible that, when balanced with the other criteria set forth in Rule 10-5.11(1) through (12), it would allow substantive input from the district and community levels with regard to the need for beds by subpopulation groups such as child, adolescent, adult, and geriatric. The "national guidelines" referred to by Ms. Stamm were proposed hut never adopted. They recommended fixed bed ratios between .15/1000 and .40/1000. The guidelines were based on a 1978 survey by the National Institute of Mental Health (NIMH), which indicated that .15/1000 was the 25th percentile and .40/1000 was the 75th percentile of 1978 existing short-term psychiatric beds nationwide. The NIMH report stated that selection of an appropriate ratio for a particular state depended on the development of the state's mental health system and recognized that special consideration was necessary for traditionally underserved groups such as children, adolescents, and geriatrics. In the context of inpatient psychiatric care, there has been a trend over the last twenty years, and more particularly over the last five years, toward the development of specialty treatment programs, separately planned for children, adolescents, adults, and geriatrics. In recent years in Florida there has also been a trend toward the provision of alternatives to inpatient psychiatric services in facilities such as residential care. In 1982, Ms. Stamm considered evidence that children, adolescents, and geriatrics were not being adequately served by Florida's mental health facilities. Nevertheless, she did not plan for these subgroups in the rule because in her judgment decisions about allocation of services to subpopulation groups were best made at the district level by the local health councils.
The Issue Whether the Agency for Health Care Administration has a policy regarding the determination of the need for long term care beds which constitutes a rule and, if so, whether rulemaking is feasible and practicable.
Findings Of Fact Vencor Hospitals South, Inc. (Vencor), applied for a certificate of need (CON No. 8614) to establish a 60-bed long term care hospital in Agency for Health Care Administration (AHCA) District 8, for Fort Myers, Lee County, Florida. AHCA is the state agency authorized to administer the CON program for health care services and facilities in Florida. AHCA reviewed and preliminarily denied Vencor's application for CON No. 8614. The reasons for AHCA's actions on this or any other CON application are memorialized in documents called State Agency Action Reports (SAARs). Vencor alleges that the following statement generally describes AHCA's policy in regard to the review of CON applications for long term care hospitals: Long term care is not a separate category of health service, but is instead merely an allowable form of reimbursement pursuant to Medicare regulations. The care provided in acute care hospitals, hospital based skilled nursing beds, "subacute" care in nursing homes, and care at rehabilitation facilities, are all equivalent to the care provided at long term care hospitals. Therefore, in evaluating the need for long term care hospital beds, AHCA will assess the availability of other categories of beds and services to meet the need for the services proposed by the applicant for long term care hospital beds. Need for long term care beds is determined on a regional basis. Prior to 1994, long term care hospitals were not regulated separately and were considered comparable to general acute care hospitals. In 1994, AHCA amended the CON rules to establish long term care beds and hospitals as separate categories of health care providers. In 1994, AHCA defined and continues to the present to define long term care hospital as follows: "Long term care hospital" means a hospital licensed under Chapter 395, Part I, F.S., which meets the requirements of Part 412, subpart B, paragraph 412.23(e), [C]ode of Federal Regulations (1994), and seeks exclusion from the Medicare prospective payment system for inpatient hospital services. Rule 59C-1.002(29), Florida Administrative Code. In the federal regulations referenced by the AHCA rule, long term care hospital is more specifically defined as a hospital with an independent governing structure, an average length of stay greater than 25 days, referral of at least 75 percent of total patients from separate hospitals, and which meets the requirements for Medicare participation. 42 CFR Ch. IV, Subch. B, Pt. 412, Subpt. B, s. 412.23. AHCA also distinguishes long term care in its rules governing the conversions from one type of health care provider to another. The applicable conversion rules provide: "Conversion from one type of health care facility to another" means the reclassification of one licensed facility type to another licensed facility type, including reclassification from a general acute care hospital to a long term care hospital or specialty hospital or from a long term care hospital or specialty hospital to a general acute care hospital. Rule 59C-1.002(14), Florida Administrative Code (emphasis added); and "Conversion of beds" means the reclassification of licensed beds from one category to another including, for facilities licensed under Chapter 395, F.S., conversion to or from acute care beds, neonatal intensive care beds, hospital inpatient psychiatric beds, comprehensive medical rehabilitation beds, hospital inpatient substance abuse beds, distinct part skilled nursing facility beds, or beds in a long term care hospital; and, for facilities licensed under Chapter 400, Part I, F.S., conversion to or from skilled beds and intermediate care beds in a facility that is not certified for both skilled and intermediate nursing care if such conversion effects a change in the level of care of 10 beds or 10 percent of the total bed capacity of the facility within a 2-year period, or conversion to or from sheltered beds and community beds. Rule 59C-1.002 (15), Florida Administrative Code (emphasis added). AHCA also defined "substantial change in health services" to include: The conversion of a general acute care or specialty hospital licensed under Chapter 395, Part I, F.S., to a long term care hospital. Rule 59C-1.002(41)(c), Florida Administrative Code. Taken together AHCA's rules recognize long term care hospitals or beds as a separate and distinct category. Elfie Stamm was responsible for the development of the rules and is currently the chief of the CON and Budget Review Office at AHCA. Ms. Stamm testified in a 1994 rule challenge case, when AHCA was drafting a rule with a numeric need methodology for long term care beds, that: long term care hospitals serve patients who cannot be cost effectively treated in an acute care hospital, who do not have the same needs for the same types of service; it would not be fair for an applicant for the new construction of a long term care hospital to be compared to an acute care hospital; comprehensive medical rehabilitation (CMR) services are different than services in a long term care hospital; a long term care hospital with an average length of stay of 25 days or more is different from an acute care hospital that generally has a length of stay of 5 to 6 days but provides a full range of services; the patient populations in long term care hospitals are different from those in an acute care hospital in terms of overall patient characteristics, including older than average age, higher percentage of patients with particular diagnoses, such as ventilator dependency, higher overall mortality rates than acute care hospitals, and a much higher percentage of admissions by referrals from acute care hospitals. [T. 262-283]. See also Tarpon Springs Hospital Foundation, etc. v. AHCA, et al., DOAH Case No. 94-0958RU (R.O. 8/2/94). On behalf of AHCA, Ms. Stamm testified in this proceeding that: AHCA has changed its mind on whether or not it is appropriate to leave a patient in an acute care setting rather than transfer to long term care, specifically with regard to cost-effectiveness. [T. 373]. AHCA has not changed its mind and still says acute care hospitals and long term care hospitals should be reviewed separately, because if they would be reviewed comparatively, . . . there would be no chance for any [long term] beds ever because we don't show any need for acute care beds anywhere in the state. [T. 376]. But in evaluating Vencor's application for long term care hospitals in District 8 that would be located in Lee County, the Agency viewed hospital-based skilled nursing units, community nursing home subacute beds and comprehensive medical rehab beds throughout the entire district as existing and like potential alternatives to the proposed project. [T. 389]. AHCA does not necessarily agree that CMR services are different from long term care hospital services. [T. 265]. AHCA does not have a clearly identified population group for whom long term care would be more cost-effective, or to determine a numeric need methodology. [TR. 324]. Although there is a population that does need services that exceed 25 days or prolonged ventilator service, AHCA is not sure what is the most appropriate setting for their care because of inadequate data on comparative costs and outcomes. [TR. 327-8]. AHCA attributes its change in position to the publication titled Subacute Care: Policy Synthesis And Market Area Analysis, submitted to the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, on November 1, 1995, by Lewin-VHI, Inc. The document is commonly referred to as the Lewin Report. The Lewin Report concludes that long term care hospitals serve patients who are also served in other subacute settings, including CMR beds and hospitals, acute care hospital skilled nursing units, and skilled nursing units in freestanding nursing homes. As a result of the conclusions in the Lewin Report, AHCA maintains that it is unable to develop a numeric need methodology without an identifiable patient population. AHCA has not, however, repealed the rules establishing long term care as a separate type of health care service. Rather, the agency intends to wait for additional studies, including one being conducted for Vencor. The Medicare prospective payment system (PPS) for acute care hospitals created the market for subacute and long term care. Under the PPS, acute care hospitals receive a fixed payment based on the patient's diagnosis or diagnostic related group (DRG). Upon discharge to a subacute or long term setting, the patient's care is no longer reimbursed on a fixed basis, but at actual, reasonable costs. AHCA maintains that financial pressures created the current system, but without cost/benefit or outcomes analyses to demonstrate the appropriateness of using long term care hospitals. Therefore, AHCA considered the occupancy levels of acute care hospitals and available nursing home beds in determining the need for Vencor's project. AHCA has no rule defining subacute care, no inventory of subacute care units in nursing homes, and no reporting requirements from which it can determine the level of care or services provided in hospital based skilled nursing units. AHCA has no reports on specific levels or types of services provided in CMR beds. AHCA, nevertheless, presumed that the services are like those provided in long term care beds based on the Lewin Report. In rejecting Vencor's attempts to distinguish itself from other types of health care providers, AHCA relied, in part, on its finding that 1995 District 8 acute care hospital occupancy averaged 47.69 percent and peaked at 60.26 percent. By not adopting rules for determining the numeric need for long term care, AHCA also failed to establish the appropriate service area for determining need. AHCA considers the need for long term care services on a regional basis. In support of AHCA's decision to deny a long term care hospital application in District 9, Ms. Stamm's predecessor, Elizabeth Dudek, testified that long term care is a regional service. As further evidence of AHCA's position, the SAARs issued by AHCA on long term care hospital applications, have examined available services beyond the limits of the district. AHCA contends that long term care is regional, but determines its need by comparison to available hospital based skilled nursing units and subacute beds in community nursing homes, which are evaluated on a subdistrict basis, and CMR services which are tertiary but evaluated on a district-wide basis. See Finding of Fact 22. Since November 1995, AHCA has preliminarily denied all CON applications for long term care hospitals. Its policy of comparing the need for long term care to available beds in nursing homes and other types of hospitals is consistently repeated in the portions of the SAARs which address need. In analyzing the need for long term care hospitals in AHCA District 1, the SAAR dated January 10, 1997, includes the following statements: Vencor Hospitals South, Inc. defines its patient population as those currently being treated in ICUs and belonging to roughly 10 DRGs (which account for approximately 83% of Vencor patients. . . .) However these DRGs could also [be] appropriate for acute care, hospital based freestanding skilled nursing care, skilled nursing facility care and comprehensive medical rehabilitation care and the applicant does not demonstrate that these services are not available to residents of District 1. and The applicant [Baptist Health Affiliates Inc.] also discusses the differences between its proposed patient population and that of an acute care hospital, nursing home and those treated at home. However, there is no documentation provided which demonstrates the applicant's potential patients could not receive appropriate care in the District's existing rehabilitation facility, hospital based or nursing home skilled subacute nursing units. . . . Vencor Exhibit 12, pages 3-4 and 8. AHCA reviewed a CON application filed by Columbia of Pinellas County, Inc., to convert acute care beds to a long term care hospital in District 5, and concluded: The patient population represented by the DRGs listed above (by the applicant) are typical of freestanding nursing home with subacute units and hospital based SNUs in the state. There appear to be strong similarities between the subacute patient population of nursing homes/units and those of a long term care hospital. Vencor Exhibit 13, page 8. The SAAR issued on the Columbia of Pinellas County CON application continued with an extensive discussion of the Lewin Report. The SAAR reported AHCA's finding that CMR hospitals are alternatives since they admit patients who do not fit federal guidelines for CMR admissions (being able to tolerate three hours of therapy a day), and who might otherwise be in long term care hospitals. In the SAAR issued after the review of long term care applications for District 7, the same statement appears: The patient population represented by the DRGs listed above [by Orlando Regional Hospital] are typical of freestanding nursing home with subacute units and hospital based SNUs in the state. There appear to be strong similarities between the subacute patient population of nursing homes/units and those of a long term care hospital. Vencor Exhibit 14, page 11. Finally, in reviewing applications from Palm Beach County in District 9, AHCA concluded again: The applicant states that generally speaking the long term care hospital patients have respiratory complications, . . . tracheostomies, . . . chronic diseases, an infectious process requiring antibiotic therapy, . . . skin complications . . . need a combination of rehabilitation and complex medical treatment or are technology dependent individuals requiring high levels of nursing care. However, these patients could also [be] appropriate for acute care, hospital based skilled nursing care, skilled nursing facility care and comprehensive medical rehabilitation care and the applicant does not demonstrate that these services are not available to the residents of District IX. Vencor Exhibit 15, page 4. AHCA relies on the statutory review criteria in Subsection 408.035(1)(b), Florida Statutes, as authority for its consideration of all beds and facilities which may serve the same patients. That provision requires consideration of: (b) The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care facilities and health services in the service district of the applicant. The expert witness for AHCA, however, distinguished between "like and existing" services for purposes of determining numeric need and the statutory criteria. She noted that once numeric need is established and published for nursing beds or CMR beds, for example, that same category of beds outside the appropriate health service planning subdistrict or district is not considered "like and existing." Similarly, within the district or subdistrict, there is a factual issue in each case but no presumption that beds of a different category are "like and existing." AHCA contends that it has no policy related to long term care and any comparable services. Since 1995, long term care CON applicants, according to AHCA, have failed to meet the requirements of Rule 59C-1.008(e), which provides in pertinent part: If no agency policy exists, the applicant will be responsible for demonstrating need through a needs assessment methodology which must include, at a minimum, consideration of the following topics, except where they are inconsistent with the applicable statutory or rule criteria: Population demographics and dynamics; Availability, utilization and quality of like services in the district, subdistrict or both; Medical treatment trends; and Market conditions. (Emphasis added). AHCA's argument ignores the fact that its expert witness provided competent, substantial evidence that it has redefined and expanded the meaning of "like services" for purposes of demonstrating need through a needs assessment methodology. It also ignores the fact that AHCA has expanded the comparison of need beyond the geographical limits of the district. AHCA's argument that it is waiting for additional data before adopting a need methodology, including data from a Vencor study, is to no avail since AHCA has already changed its policy. After reviewing a total of eighteen CON applications for long term care hospitals, AHCA has issued two CONs, one as part of a settlement agreement and the other approving an application filed by St. Petersburg Health Care Management, Inc. (St. Petersburg), for CON 8213. The St. Petersburg application demonstrated need using an identical methodology prepared by the same health planner as Vencor in this case. Referring to CON 8213, AHCA's expert witness candidly admitted . . . "I want to make clear that particular application was actually submitted and approved prior to the Lewin study." (T. 393). Subsequent to the Lewin study, AHCA has consistently denied applications for long term care beds or hospitals.
