The Issue Whether the Agency for Health Care Administration should grant Mercy Medical Development Inc.'s certificate of need application to establish a 29-bed long-term acute care hospital- within-a-hospital in AHCA Health Planning Service District 11?
Findings Of Fact Long-term Acute Care Hospitals A long-term acute care hospital (an "LTACH") is an acute care hospital with an average length of stay of its patients that equals or exceeds 25 days. In contrast to an LTACH, the patients in a typical acute care hospital experience much shorter lengths of stay so that the average length of stay in a non-LTACH hospital is much less than 25 days. Characteristics of an LTACH that distinguish it from a non-LTACH acute care hospital flow from that single primary factor: prolonged length of stay. LTACH Services As to be expected from the long-lasting lengths of stay of its patients, LTACHs provide services associated with complex acute conditions that require extended care. For instance, an LTACH would typically serve patients that require ventilator assistance for a long time, in many cases, indefinitely. Other typical patients in an LTACH are those who have had procedures such as open heart surgery while medically compromised so that their recoveries take considerably longer than the average open heart surgery patient, patients with slow-healing wounds or complications arising from chronic lung disease, patients served by multiple invasive pumps, or patients in need of extended treatment by chemotherapy or intravenous antibiotic therapy. The services provided in an LTACH are distinct from those provided in a skilled nursing facility or rehabilitation unit for reasons other than the acuity level of the patient. Skilled nursing facilities generally are not oriented toward patients who need daily physician visits or intense nursing services or observation. Skilled nursing clinical personnel, moreover, are generally not experienced with long-term acute care patients' and their families' psychosocial needs demanded by acuity levels and durations of illness. Comprehensive medical rehabilitation hospitals are inappropriate venues for long-term acute care patients. Rehabilitation hospitals are geared toward the physical rehabilitation of patients. It is true that "[p]atients who have been debilitated because of their long-term illness require some physical therapy to assist in rehabilitating their muscle to get them back on their feet whenever possible." (Tr. 277). But long-term acute care patients, because of their conditions, are not able to tolerate the minimum three hours of physical rehabilitation therapy per day that is a regular part of treatment in a comprehensive medical rehabilitation hospital. In the universe of health care providers in the United States, therefore, long-term acute care hospitals are unique. "Hospital-within-a Hospital" An LTACH may be a free-standing facility or it may be located inside an existing hospital. When it is located inside an existing hospital, an LTACH is referred to as a hospital- within-a-hospital. Mercy Medical proposes that its LTACH be located within Mercy Medical Hospital in Miami, Florida. In other words, Mercy Medical proposes that the LTACH subject to CON Application 9462 be a hospital-within-a hospital. As a hospital-within-a hospital, Mercy Medical's LTACH will have an advantage over a free-standing LTACH. The location within a larger acute care hospital provides an environment in which a more intensive array of acute care services is immediately accessible to LTACH patients. For example, patients in Mercy Medical's LTACH will have immediate access to emergency services and the services of hospital-based physician specialists. The location of an LTACH within a larger acute care hospital also facilitates the appropriate utilization of LTACH services. Physicians are more comfortable transferring fragile patients into an LTACH when the transfer involves relocating the patient via hospital corridors rather than via ambulance. As a practical matter, moreover, an LTACH within a hospital makes it easier for the treating physician to continue to care for the patient following the patient's transfer from the acute care setting into the long-term acute care setting. PPS Exemption In 1982, when the prospective payment system ("PPS") was adopted by the federal government for Medicare reimbursement, long-term acute care hospitals were one of seven types of institutions exempted from the system. A decade or so later, another development occurred that is significant to this case. Regulations were promulgated defining conditions for an LTACH to operate as a hospital within a hospital as part of a continuum of care. The hospital-within-a-hospital concept was required if a hospital business organization was to receive the financial benefits of an LTACH within the setting of a larger acute care hospital (see paragraph 11, below) because long-term acute care cannot not take place within a unit in a hospital. "[T]here [is] no such thing as a long-term [acute] care hospital unit." (Tr. 575). As a specific category of hospitals under the Medicare regulations that is exempt from the DRG prospective payment system, LTACHs are attractive to hospital business organizations because the Medicaid reimbursement for LTACH services is much more favorable than the reimbursement under PPS received by acute care hospitals that are not LTACHs. Qualification for PPS Exemption To be exempt from PPS, there is a six-month period during which a prospective LTACH must show that it meets the Medicare requirements, including those related to average length of stay, for an LTACH. During these six months, the LTACH receives PPS Medicare reimbursement so that it usually operates at a loss. Other considerations related to the first two years of operation keep the LTACH from fully achieving the benefits of exemption until it has both qualified as exempt based on the initial six-month period and then completed the two full years of operation. Distribution of LTACHs There are eight LTACHs in the State of Florida, all of which are free-standing facilities. All eight are owned and operated by for-profit corporations, and seven are owned by the same for-profit corporation, Kindred Healthcare, Inc., the parent of Petitioner. The LTACHs in Florida are concentrated in areas of high population. One of 16 of AHCA's hospital health service planning districts, District 11, where Mercy Medical hopes to locate its LTACH, is the most populous health planning district in the State. Its population of "65 year of age and over" is approximately 305,000. Notwithstanding its populace, District 11 has only one LTACH, Kindred Coral Gables (one of three LTACHs operated by Kindred). Other less populated districts, District 6 and District 10 have two LTACHs. District 10, consisting of Broward County is immediately to the north of District 10. Of the two LTACHs in District 10, Kindred Hospital Fort Lauderdale and Kindred Hospital - Hollywood, the latter is the closest to Mercy Hospital. Approximately 15 to 20 miles away from each other, it takes between 30 minutes and an hour (depending on traffic) to travel the distance between Mercy Hospital and Kindred Hollywood. The Parties AHCA The Agency for Health Care Administration ("ACHA" or the "Agency") is responsible for the administration of the CON program in Florida under the Health Facility and Services Development Act," Sections 408.031-408.045, Florida Statutes. Mercy Medical Mercy Medical Development, Inc., ("Mercy Medical") is the applicant for the proposed project. Mercy Medical is a subsidiary of Mercy Medical Hospital, Inc., ("Mercy Hospital"). A not-for-profit hospital, Mercy Hospital is the sole member of Mercy Medical. As the parent of Mercy Medical and its sole corporate member, Mercy Hospital controls Mercy Medical. At the time of hearing, no effort had been made to separate Mercy Development from Mercy Hospital. For example, no action had been taken to change the bylaws of the medical staff, or to hire a chief executive officer for Mercy Medical. It is appropriate, therefore (although the two must be separated prior to operation of the LTACH under applicable regulations), to find facts with regard to Mercy Medical's sole corporate member. Mercy Hospital is located in the southeastern portion of Miami-Dade County. Founded in 1950 under the administration of the Congregation of the Sisters of St. Joseph, a Roman Catholic religious organization, Mercy Hospital is a full-service general hospital. It has 512 licensed acute care beds and is accredited by the Joint Commission on the Accreditation of Health Care Organizations. Mercy Hospital's mission is distilled into a statement of core values. Among these values is to "give priority to those whom society ignores." (Mercy Ex. 2). Together these values stand for a commitment to enhance quality of life through an integrated health care delivery system. Across its continuum of care, Mercy Hospital provides excellent quality of care for which it has been publicly recognized. Recently designated a Community Comprehensive Cancer Center by the American College of Surgeons, it was one of six hospitals in the eastern United States to win the Gallup Quality Award for inpatient satisfaction. The basis for the award was re-confirmed in the most-recent year before hearing when Mercy Hospital received the Systema Award as the hospital of choice in the community following a survey conducted by the Miami Chamber of Commerce. In furtherance of its mission and in recognition of the need for medical services across the continuum of care, Mercy Hospital operates a 15-bed inpatient hospice unit and provides home-based hospice services in affiliation with other community providers. It operates a 20-bed inpatient comprehensive medical rehabilitation unit and provides a full complement of outpatient comprehensive medical rehabilitation services. And it is part owner of a 120-bed skilled nursing facility. One full wing of Mercy Hospital is dedicated to providing acute care services to HIV-positive and AIDS patients on an outpatient basis (the "Special Immunology Unit.") All patients served in the unit have AIDS or are HIV-positive. The operation of the Special Immunology Unit illustrates the depth of Mercy Hospital's commitment to providing services to the dispossessed or patients who would otherwise be unable to obtain desperately needed medical care. In support and recognition of its commitment to AIDS and HIV-positive patients, the Ryan White Foundation has awarded Mercy Hospital funding to help support the Special Immunology Unit. The funding enables Mercy Hospital to extend its care beyond the provision of acute care in recognition that most of the patients in the Special Immunology Program have lost their jobs. As Sister Elizabeth Anne Worley explained at hearing, [I]n most cases . . . they've lost their jobs and therefore they've lost their insurance, so part of [the Ryan White] funding is used to continue to purchase insurance for them so they can remain with care. It also provides vouchers for electricity, food, transportation, to assist in home health [care and] provide medical services, and it's all part of an array of outpatient services that are managed through case managers for maximum efficiency, but providing for the patients in a setting . . . that's as appropriate and comfortable as possible. . . . [I]t has been a remarkable program for (Tr. 55). folks in our local area that did not have access to care otherwise. Beyond its Special Immunology Program, Mercy Hospital provides substantial acute and outpatient health care services to Medicaid-eligible, uninsured, under-insured, and indigent patients. Historically, Mercy Hospital has provided substantial amounts of un-reimbursed charity care though the hospital and through projects such as the St. John Bosco Clinic. In 2000, Mercy Hospital provided over $3.58 million in un-reimbursed medical care to Medicaid-eligible patients, and over $1.67 million in traditional charity care. At the time of hearing in October 2001, Mercy Hospital had provided over $4.48 million in un-reimbursed care to Medicaid-eligible patients and $947,430 in traditional charity care. To fulfill its healing mission as part of the church, Mercy Hospital strives to provide charitable community services at a level twice the value of the tax benefit derived from its not-for-profit status. In 2000, for example, it met this "challenge from the congregation" (tr. 70) it sets for itself. The value of Mercy Hospital's total tax exemption was $5.7 million. The value of its community service was $13.7 million. Kindred Kindred Hospitals East, LLC, d/b/a Kindred Hospital South Florida ("Kindred") operates three for-profit LTACHs: Kindred Hospital Coral Gables in Dade County, District 11, ("Kindred Coral Gables); Kindred Hospital Hollywood, in Broward County, District 10 ("Kindred Hollywood"); and Kindred Hospital Ft. Lauderdale, also in Broward County, District 10 ("Kindred Fort Lauderdale"). Kindred is a wholly-owned subsidiary of Kindred Healthcare, Inc., ("Kindred Healthcare") a publicly traded for- profit company. Kindred Healthcare and Kindred, together establish the majority of policies for Kindred's three South Florida LTACHs. Kindred Healthcare was formerly known as Vencor, Inc. ("Vencor"). In the fall of 1999, Vencor, Inc., and its subsidiary corporations filed a Chapter 11 bankruptcy proceeding. Vencor emerged from bankruptcy in approximately April of 2001. The name change from Vencor to Kindred was adopted by the parent and the subsidiary corporations. Various Vencor entities and individuals associated with Vencor were the subject of a recent Florida investigation into allegations that Vencor had unlawfully evicted Medicaid patients from a Vencor facility in Tampa, Florida. The allegations against Vencor included the allegation that there had been a corporate decision by Vencor to stop treating or curtail the treatment of Medicaid patients for financial reasons. The investigation ultimately resulted in a settlement pursuant to which Vencor paid a fine in the amount of $270,000 (i.e., $5,000 for each of the 54 Medicaid patients who were allegedly evicted). Vencor was also the subject of a companion federal investigation relating to such allegations, which was resolved by Vencor's payment of a fine to the federal government of $113,000. The Medicaid eviction matter also resulted in a class action lawsuit against Vencor on behalf of the families of the Medicaid patients, and a criminal investigation of high-ranking officers of Vencor, including the senior vice-president in charge of the eastern hospital division of Kindred, which includes the Florida operations, and the chairman of the board and chief executive officer of the parent corporation. Vencor and its subsidiaries were also the subject of a broad Medicare/Medicaid fraud and abuse investigation which was initiated by the Office of the Inspector General of the Department of Health and Human Services (OIG), in part as a result of a qui tam lawsuit relating to a Vencor LTACH in Tampa, Florida. The original allegations centered around Medicare cost report fraud. The investigation also included allegations that quality of care at Vencor facilities was poor. In particular, the government alleged that Kindred failed to staff its facilities adequately and failed to meet dietary needs of some of its residents. As part of the Medicare fraud and abuse investigation, the Medicare program sought to recover millions of dollars in overpayments made to Vencor facilities nationwide. As part of its bankruptcy proceeding, Vencor entered into a settlement agreement with the federal government settling the Medicare fraud and abuse allegations. Pursuant to the settlement agreement, Vencor agreed to pay the federal government $219 million, $90 million of which represented Medicare overpayments received by Vencor. As part of the settlement agreement, Vencor also entered into a corporate integrity agreement with the OIG which applies to all Kindred entities nationwide, including the Florida facilities operating under Kindred, i.e., Kindred Coral Gables, Kindred Hospital Hollywood, and Kindred Ft. Lauderdale. The corporate integrity agreement requires Kindred to educate its employees about financial and quality-of-care issues. The corporate integrity agreement also requires Kindred to put in place a comprehensive internal quality improvement program, including specific steps which must be taken to improve quality of care at Kindred facilities nationwide. Pursuant to the corporate integrity agreement, Kindred also is required to enhance its internal financial controls to promote compliance with the Medicare guidelines on hospital reimbursement. The corporate integrity agreement includes potential sanctions for failure to comply, including the exclusion of Kindred from the Medicare and Medicaid programs. Filing of Mercy Medical's LOI and CON Application Mercy Medical timely filed its letter of intent and CON application containing its proposal with AHCA and the local health council. Consolidated financial statements for Mercy Hospital, Inc., in the CON application contained separately audited financial information for Mercy Medical. The financial information submitted by Mercy Medical contained sufficient information to allow a thorough and accurate assessment of the financial viability of Mercy Medical as an applicant, as well as the feasibility of Mercy Medical's Proposal. Mercy Medical's Proposal Mercy Medical proposes to establish a 29-bed LTACH within Mercy Hospital. The LTACH is proposed to be located on the fourth floor west wing of Mercy Hospital, in a unit known as "Four West." Four West is currently a 29-bed medical-surgical unit of the existing acute care hospital. Mercy Hospital has agreed to delicense the 29 acute care beds in Four West upon approval of Mercy Medical's LTACH CON application. Additional description of the proposal is found in Section C., of Mercy Medical's application, entitled "Project Summary": The proposed long-term care hospital will be located on the fourth floor of Mercy Hospital in Miami at 3663 South Miami Avenue, Dade County, District 11. The facility will consist of approximately 12,200 square feet of unused hospital space, which is comprised of three single patient rooms, 10 semi- private rooms, two isolation rooms and a four-bed ventilator unit. The applicant agrees to condition award of the certificate of need on the following: A minimum of five percent of inpatient days will be provided for the treatment of Medicaid patients. A four-bed ventilator unit for the treatment of patients who are ventilator- dependent. The delicensure of 29 of Mercy Hospital's acute care beds upon the receipt of the CON to establish 29 long-term care beds. Edward J. Rosasco, Jr., President and CEO of Mercy Hospital provided a letter stating that should the applicant be granted the CON, the hospital would immediately seek to delicense 29 beds. The proposed project cost is $56,765 and will involve 791 GSF of renovation and $28,000 in renovation cost. (Mercy Ex. 19, p. 2). The rules of AHCA do not provide a numeric need methodology for LTACHs. An LTACH applicant, therefore, is required to submit its own methodology to support the need for its proposed project. Mercy Medical's application presents four bed need methodologies: the first, a "discharge-based" methodology; the second, a "population-based LTACH bed need" methodology; the third, that focuses on the number of LTACH patient days in Florida per 1000 age 65-and-over population; and, a fourth that uses a model assessment pioneered by the State of Tennessee. All four produced a need for beds dependent on occupancy rates that ranged from 91 to 666 beds. Subtracting the 53 existing LTACH beds at Kindred Coral Gables yields a range of new beds needed or net need derived from the four methodologies between 38 and 607. Of the four, the third methodology offered by Mercy Medical is the most conservative. It is a methodology commonly used by health planners in projecting the need for additional beds within a service category in a particular district. Kindred relied upon the same methodology in its recently filed CON application for additional LTACH beds at its facility in St. Petersburg, District 5. The third of the four methodologies derives a use rate for LTACH beds based on the utilization rates of the age 65-and- over population in those districts in which LTACH facilities are located. The methodology does not include "use rates" from districts that do not have access to LTACH services because to do so would artificially skew downward the expected use rate for LTACH beds in District 11. Deriving a utilization rate for LTACH services in the manner of the third methodology yields a realistic and meaningful utilization rate for LTACH beds. The third methodology is a reasonable methodology for determining need for LTACH beds in District 11. It reasonably produces a need for new LTACH beds in District 11 of 70, that is, the result of the subtraction of the 53 existing LTACH beds at Kindred Coral Gables from the need for 123 beds at an 85% occupancy rate in District 11 produced by the methodology. Mercy Medical hopes to meet the need for new LTACH beds in District 11 through a demonstration that its proposed 29-bed project meets CON review criteria. Kindred hopes that its case at hearing will establish that, on balance, Mercy Medical does not meet the CON review criteria or that the project is defeated by failure to comply with applicable rules. Utilization, Availability and Accessibility A review of pertinent data shows that all eight of the existing long-term acute care hospitals in Florida are well utilized. Overall, LTACH beds in the state were utilized at 76% occupancy in 1999 and close to 77% occupancy in 2000. In particular, Kindred Coral Gables in District 11 has experienced high utilization rates. Those rates have been high over an extended period of time. For some years, they have been extremely, unacceptably, high. In 1998, Kindred Coral Gables had an overall occupancy rate of 92.4% and a med-surg occupancy rate of 94%. In 1999, Kindred Coral Gables experienced 93% occupancy overall and 100% med-surg occupancy. In 2000, Kindred Coral Gables experienced 87% overall occupancy and 94% med-surg occupancy. For 2001 through the time of hearing as determined from available data, Kindred Coral Gables' occupancy rate had dropped to the 83 to 84% range. Although lower than the high occupancy rates observed over an extended period of time, such a rate is still high. There is, moreover, nothing in the health care environment in District 11 that indicates demand for LTACH services should have diminished in 2001. As Daniel Sullivan, expert in health care planning, testified in hearing when queried about the lower 2001 rate: [A]ll the indicators that I reviewed [indicated] . . . that the need is still strong. I can only assume that whatever reason the access went down is more internal to Kindred and their decisions about how they're going to utilize their facility than it does about the external needs of the population. (Tr. 402). High occupancy levels at Kindred Coral Gables limit access to LTACH services for a significant number of residents of District 11. Kindred's expected return to high occupancy rates, like the 87 to 98 percent occupancy rates experienced over an extended period of time, renders Kindred Coral Gables inadequate to absorb either the existing or reasonably anticipated demand for LTACH services in District 11. In addition, as a result of Kindred Coral Gables' admission policies, there is a significant underserved population in District 11. Underserved Populations in District 11 Although the only provider of LTACH services in Dade County, Kindred Coral Gables has consistently refused to admit patients appropriate for long-term acute care who do not have sufficient Medicare-reimbursable days remaining to cover the anticipated length of stay, or who are uninsured, underinsured, or have Medicaid as their only source of funding. Kindred Coral Gables has made it clear to discharge planners at Mercy Hospital that Kindred Coral Gables does not admit Medicaid patients who have no other source of funding. Mercy Hospital's discharge planners, therefore, typically focus their attention and resources on alternative solutions for such patients, rather than attempting to refer patients who are eligible for Medicaid, but not eligible for Medicare, to Kindred Coral Gables. The result of Kindred Coral Gables' admission practice and policies is that Mercy Hospital has had great difficulty placing numerous patients who need LTACH services at Kindred Coral Gables. The financial positions of these patients coupled with Kindred Coral Gables' admission policies constitute financial barriers that prevent access to service in District 11 for a significant population of patients. Barriers to Access for Medicaid-Eligible Patients That barriers to District 11 LTACH services exist for Medicaid patients is obvious. In 1998 and 1999, Kindred Coral Gables reported zero Medicaid revenue. In 2000, Kindred Coral Gables reported minimal Medicaid revenues. It may be comfortably predicted that these barriers will come down if Mercy Medical's proposal is approved. Mercy Medical's sole corporate member, Mercy Hospital, has demonstrated a strong commitment to serve Medicaid patients. Mercy Medical intends to extend the mission of Mercy Hospital to Mercy Medical's proposed LTACH with respect to providing care to Medicaid-eligible and indigent patients. Barriers to Access for Medicare-Eligible Patients In addition to denying admission to Medicaid patients with no other source of funding, Kindred generally does not admit Medicare patients who have used up a large portion of their allowable acute care days under Medicare. In some instances, Medicare patients admitted to Kindred Coral Gables have had lengths of stay that exceeded their allowable acute care Medicare days, leaving only Medicaid as a source of reimbursement. These patients appear to account for the very small number of Medicaid or "charity" patient days reported by Kindred Coral Gables. Barriers to Access for Uninsured, Underinsured, Or Unfunded Patients In addition to denying access to Medicaid and Medicare patients who have used up their allowable acute care days, Kindred also does not admit patients who are uninsured, underinsured, or un-funded. Discharge planners at Mercy Hospital have been unable to obtain charity approvals from Kindred Coral Gables for uninsured or un-funded patients. Barriers to Access for Patients with Managed Care Insurance Even some patients with managed care insurance cannot gain admission to Kindred Coral Gables, as some managed care companies do not want their patients referred to Kindred Coral Gables, but prefer to keep such patients in a short-term acute care setting, notwithstanding their anticipated long length of stay. Kindred's Other Restrictive Admission Criteria Consistent with its focus on reimbursement, Kindred Coral Gables generally does not admit ventilator patients who are not weanable from a ventilator within a reasonable time. In practice, Kindred Coral Gables accepts very few of a large number of ventilator patients at Mercy Hospital who are eligible for long-term acute care. Other types of patients who require long- term acute care but whom Mercy Hospital is unable to place include patients who have slow-healing wounds; diabetic patients; patients with ischemic problems who are either receiving hyperbaric therapy, or who have received it and then are requiring very aggressive or ongoing wound care; and patients with end-stage congestive heart failure who often require weeks of treatment with IV medications and fairly intensive medical monitoring. There is a significant need for Mercy Medical's proposed 29-bed LTACH in District 11. As the most populous district in the state with a large and increasing population of elderly age 65 and older, District 11 is able to support both Kindred Coral Gables and Mercy Medical's proposed 29-bed LTACH. Alternatives Kindred Coral Gables One alternative to Mercy Medical's proposal is to preserve the status quo. But, in the absence of the proposal and the competition provided by Mercy Medical to Kindred Coral Gables, significant numbers of patients in District 11 will be denied access to LTACH services. Medicare patients with inadequate reimbursement days remaining, un-funded and uninsured patients, and patients not weanable from a ventilator are held at Mercy Hospital in an acute care bed, sometimes indefinitely, because they cannot gain admission to Kindred Coral Gables. Mercy Hospital has had a significant number of long-term ventilator patients who have stayed in the hospital for months or years, including a recent example in which Mercy Hospital provided acute care to a ventilator patient for three years. Mercy Hospital absorbs the extraordinary cost of care for its patients who could be discharged to an LTACH if one were available. Conservatively stated, the annual cost of un- reimbursed care provided by Mercy Hospital to long-term acute care patients is approximately $1.5 million. This cost represents a significant inefficiency in the delivery of long- term acute care services is District 11 and lost revenue in the context of Mercy Hospital's mission to extend needed care to Medicaid, indigent and dispossessed patients in the Miami area. The suggestion that Mercy Hospital continue to keep long-term acute care patients in the hospital, notwithstanding financial loss, is unreasonable. Every dollar lost is a dollar that cannot be used to treat the next patient-in-need who presents at Mercy Hospital. Kindred Coral Gables and the status quo are not reasonable alternatives to Mercy Medical's proposal. Aside from Kindred Coral Gables' historical high occupancy levels that prevent access for prospective LTACH patients and that are likely to return in the near future, there is a significant segment of the population in District 11, as found above in this order, that does not have access to Kindred Coral Gables because of its financial criteria for admission. Broward County LTACHs Of the two Broward County LTACHs, there is no contention that Kindred Fort Lauderdale is a reasonable alternative for Mercy Hospital patients. That leaves in District 10, Kindred Hollywood as an alternative to Mercy Medical's proposal. Kindred Hollywood's occupancy rates historically have been much lower than Kindred Coral Gables. In calendar year 1999, they were just under 65%; in calendar year 2000, 72.88%. Occupancy rates, while on the rise, are not the problem with Kindred Hollywood as an alternative. Kindred Hollywood is not a reasonable alternative to Mercy Medical's proposal for Mercy Hospital patients or to other south-central Dade County patients because of travel time from that area of Dade County to Kindred Hollywood. Mercy Hospital is located in south Dade County. Interstate 95, the main automobile and vehicular conduit from Dade County to Broward County, is often congested. Travel from Mercy Hospital to Broward County is particularly difficult for the elderly. Many of the patients who require placement in an LTACH are elderly and may have an elderly spouse. Special transportation services available to the elderly in Dade County do not cross the Dade County line into Broward County. The difficulty posed by travel from south and central Dade County to Broward County presents at least two different complications that undermine the LTACH patient's chance for recovery. First, it is likely the travel to Broward County will erode the support structure offered an LTACH patient by the family if the patient is from South or Central Dade County. Patients and their families have difficulty adjusting to the patient's status as an LTACH patient, as it is. The obstacle of difficult travel can prove too much for family members who want to support the LTACH patient. Second, physician-family relationships, the quality of which significantly affects the care of the LTACH patient, are disrupted when there is transfer from one physician to another. The patient's family often resists the transfer and the physician treating the chronically ill patient with complex medical conditions may resist the transfer of the patient to another physician, as well. The associated stress within the family and in the relationship with the physicians involved would in all likelihood be detrimental to the patient whose care is required to be transferred to another physician when the patient becomes an LTACH patient in Broward County, far, under the circumstances, from Central and South Dade County. The unreasonableness of Kindred's suggestion that Kindred Hollywood constitutes an alternative to Mercy Medical's proposal is evidenced by the fact that Kindred Hollywood has never admitted a patient from Mercy Hospital. No physician has ever asked Mercy Hospital's Director of Case Management to refer a patient to Kindred Hollywood. Nor has Kindred Coral Gables proposed such an admission. For at least the last 10 years, case managers from Kindred Coral Gables have never promoted Kindred Hollywood or Kindred Ft. Lauderdale as options for Mercy Hospital patients eligible for LTACH services who were denied admission to Kindred Coral Gables. Mt. Sinai Hospital Kindred alleges that a 20-bed unit at Mt. Sinai in which ventilator patients are treated constitutes a reasonable alternative to Mercy's proposed LTACH. Other than that Mt. Sinai is not licensed as an LTACH, there was no competent evidence at final hearing regarding the nature of the unit at Mt. Sinai. Based on general health planning principles, it is not appropriate to include these beds (in a classification of beds different from LTACH beds) as an alternative for a CON LTACH proposal in determining the need for the proposed project. Financial Feasibility Short-term The short-term financial feasibility of Mercy Medical's proposal depends upon Mercy Medical's ability to provide or obtain sufficient capital to fund its proposed project through the initial implementation and start-up stage. Mercy Medical's source of funds for its proposed project and its pre-existing capital commitments are pertinent to an analysis of the short- term financial feasibility of Mercy Medical's proposal. Mercy Hospital, Inc., will loan Mercy Medical the initial sum of $56,765 and any additional monies necessary to establish and operate Mercy Medical's proposed 29-bed LTACH. Mercy Hospital, Inc., has the financial wherewithal to fund Mercy Medical's project and to provide the additional financial support promised in its Notice of Financial Solvency included in Mercy Medical's CON application. In fiscal year 2000, Mercy Hospital, Inc., had a total gain of $4.8 million, with an operating gain of $1.3 million. For the same period, Mercy Hospital, Inc., had liquid assets in the amount of $59.9 million with current liabilities of $25 million, reflecting a better than two-to-one current ratio, and solid financial health. In addition, in 2000, Mercy Hospital, Inc., had a total of $43 million in restricted and escrowed funds that are available for capital expansion. Mercy Medical's audited financial statements also reflect its financial health. For fiscal year 2000, Mercy Medical had an operating gain of $1.1 million and a total gain of $1.9 million, with liquid assets of $4.8 million and current liabilities of $1.2 million. Accordingly, there is an adequate source of funding for the implementation and start-up of Mercy Medical's proposed LTACH. Mercy Medical's Capital Commitments In its SAAR, the Agency questioned whether Mercy Medical had capital expenditure projects applied for, pending, approved or underway that were not disclosed on Schedule 2 of Mercy Medical's CON application. Mercy Medical's capital expenditure requests must be approved for execution by the finance committee. In response to AHCA's inquiry, at the final hearing Mercy Medical identified four capital project proposals for Mercy Medical which were not approved by the finance committee at the time of filing of Mercy's CON application, and not required to be disclosed on Schedule 2 of Mercy Medical's CON application. An additional, fifth project, involving renovation of a nuclear cardiology facility, was approved and completed prior to the filing of Mercy's CON application in March 2001. Subsequent to Mercy Medical's filing of its CON application, one of the other four projects involving the replacement of darkroom cabinetry at an anticipated capital expenditure of $2,161, was presented to the finance committee. The remaining three projects, totaling $240,000, remained unapproved at the time of the final hearing. Had all five of these capital projects been included in Schedule 2 of Mercy Medical's CON application, the total capital expenditure commitment, upon approval of the projects in their entirety, would have been approximately $442,000. With current assets of $4.8 million and current liabilities of $1.2 million, capital expenditure commitments in the amount of $442,000 would not materially impact Mercy Medical's financial condition or the feasibility of Mercy Medical's proposal. Mercy Hospital and Mercy Medical have adequate financial wherewithal to ensure the short-term financial feasibility of Mercy Medical's proposed LTACH and the project thus is financially feasible in the short term. Long-term Financial Feasibility Long-term financial feasibility is assessed by an analysis of whether the proposed project will sustain itself by generating revenues in excess of expenses on an ongoing basis. The reasonableness of Mercy Medical's utilization projections, project costs, and revenue and expense projections are the primary factors bearing on the long-term feasibility of Mercy Medical's proposal. Mercy Medical's utilization projections are reasonable. Mercy Medical reasonably projects that it will achieve 60% utilization in the first year of operation and 77.6% occupancy in year two. Mercy Medical's most conservative bed-need methodology, discussed above, demonstrates that there is sufficient demand for LTACH services within District 11 to enable Mercy Medical to meet its utilization projections for its proposed project. In addition, Mercy Hospital will be a primary referral source for Mercy Medical's LTACH. Mercy Hospital has a fairly geriatric patient population which typically experiences advanced cardiac problems, pulmonary problems, and oncologic problems (problems related to cancer and bone marrow disorders). Within those categories, physicians at Mercy see patients with emphysema, patients with very severe asthmas, patients with skeletal deformities causing respiratory insufficiency, patients with congestive heart failure, patients with valvular disease, and patients with all manner of cancer and chemotherapy-related complications that require long-term acute care intervention. These patients are frequently candidates for long-term acute care hospitalization. On an annual basis, there are approximately 300 to 400 pulmonary patients at Mercy Hospital alone who would be candidates for long-term care. There are additional cardiac patients who would require long-term acute care hospitalization but who do not currently have access to Kindred Coral Gables. Because Mercy Hospital has difficulty placing these patients at Kindred Coral Gables, the majority remain as acute care patients within Mercy Hospital. Based on Mercy Medical's need analysis for the District as a whole, and the volume of patients at Mercy Hospital who would be candidates for admission to Mercy Medical's proposed LTACH, Mercy Medical's utilization projections, as shown on Schedule 5 of Mercy Medical's CON application, are reasonable. Mercy Medical's projected revenues for its proposed project through the second year of operation are reasonable. Mercy Medical's revenue projections are based in part upon Mercy Medical's exemption from the acute care inpatient PPS. Mercy Medical can seek exemption from PPS after six months of operation. During the initial six months of operation, Mercy Medical will receive Medicare reimbursement under the acute care PPS system. Medicare regulations set forth alternative methods of qualification for exemption from PPS for hospital-based LTACHs. Mercy will seek to qualify for exemption by limiting the amount of services the LTACH purchases from the host hospital to 15% of the LTACH's annualized operating expenses, not including the LTACH's lease payment to the host hospital. With regard to expenses, Mercy Medical will closely monitor its financial performance to ensure compliance with the pertinent Medicare regulations. This method of ensuring compliance with the Medicare requirements for exemption has proved successful for several other LTACHs. Kindred's financial witness expressed the opinion that Mercy Medical would have to purchase certain services and supplies from Mercy Hospital. The witness acknowledged, however, that Mercy Hospital can obtain a number of the identified services and supplies from sources other than the host hospital. Mercy Medical and Mercy Hospital have pledged that they will take all steps necessary to conform to the 15% rule and other requirements for exemption and have engaged consultants with substantial experience and expertise in guiding LTACHs through the exemption process. It is reasonable to expect that Mercy Medical will be able to limit its expenses attributable to services purchased from the host in a manner that complies with the rule. Medicare regulations also provide that a hospital-based LTACH seeking exemption from PPS must have a separate governing body, separate medical staff, and separate officers, including a separate chief medical officer and separate chief executive officer. These changes will involve the identification of new officers for Mercy Medical and the restructuring of Mercy Medical's governing body such that a majority of the board positions are held by at-large numbers who have no direct relationship with Mercy Hospital, Inc. Because Mercy Medical's approval of Mercy Medical's project is delayed by this CON litigation, it is not yet practical for Mercy Medical and Mercy Hospital to implement the changes in Mercy Medical's governance structure that will be necessary for Mercy Medical's PPS exemption. It is reasonable to expect, however, that Mercy Medical will implement the necessary changes. In essence, implementation of the changes must take place if Mercy Medical is ever to operate under the CON for which it has applied. Overall, the Medicare revenues projected on Mercy Medical's Schedule 7A are comparable to and lower than Medicare revenues for existing LTACHs in Florida. As a new provider, Mercy Medical's Medicare cost-based reimbursement, i.e., TEFRA rate, will be capped at $23,500 per discharge. Mercy Medical's actual TEFRA rate will be determined following the second year of operation of Mercy Medical's LTACH. Mercy Medical reasonably anticipates that its final TEFRA rate will be capped at the $23,500 limit. Mercy Medical's pro formas conservatively incorporate a projected reimbursement rate for Mercy Medical that is $3,500 below the TEFRA cap per discharge. The Medicare reimbursement structure for long-term acute care hospitals is projected to change. By approximately 2003 or 2004, CMS is expected to implement a new prospective payment system for long-term acute care hospitals. New, (i.e., post-1997) LTACH providers, will not be substantially adversely affected by the new reimbursement system, and may even benefit. The anticipated per diem of $800 to $850 per day under the proposed LTACH prospective payment system is more than the projected cost set forth in Mercy Medical's CON application. Accordingly, the anticipated reimbursement level under the proposed prospective payment system for Medicare-certified long- term acute care hospitals is reasonably expected to exceed Mercy Medical's projected expenses as reflected on Mercy Medical's pro formas. Mercy Medical has reasonably projected an average length of stay for its LTACH of 28 days in the first year of operation and 29 days in year two. Mercy Medical's projected payor mix, as shown on Mercy Medical's Schedule 7A, is reasonably consistent with the experience of the eight existing providers of long-term acute care services in Florida. Mercy Medical's projected Medicaid utilization is higher than the state average for long-term acute care services, but Mercy Medical specifically intends to serve this currently underserved segment of the population. The projected expenses shown on Mercy Medical's Schedule 8-A are reasonably consistent with those of the existing long-term acute care hospitals in Florida and are reasonable for the project proposed. Mercy Medical's pro formas do not directly reflect any interest expense associated with Mercy Hospital, Inc.'s loan of the funds necessary to implement Mercy Medical's proposed LTACH. The loan's interest expense, however, is only $3,000 (approximately.) Such a relatively minor expense is immaterial with respect to the long-term feasibility of Mercy Medical's project. Mercy Medical's projected salaries, as shown on Schedule 6, are lower in some categories than the salaries paid by Kindred Coral Gables. Nonetheless, the salaries shown, including salaries for registered nurses, are generally reasonable for the project proposed. In general, while seeking to remain competitive, Mercy Medical does not intend to be the market leader with respect to clinical staff salaries in the Miami-Dade area. The salaries projected in Mercy Medical's Schedule 6 are based on the salaries currently paid by Mercy Hospital and are within a reasonable range for the project proposed. Recruitment of clinical personnel may be challenging in view of the current nursing shortage, but Mercy Medical will be able to recruit and retain the necessary clinical staff to implement and operate its LTACH. (See paragraphs 86 - 88, below.) Mercy Medical's expense pro forma includes a cushion of $3,500 per Medicare discharge that will allow Mercy Medical to increase its salaries for clinical personnel, if necessary, and have a substantial portion of the LTACH's salary expense reimbursed by the Medicare program. Thus, salary increases, if necessary, will not directly reduce the net income of Mercy Medical's proposed project. The categories of FTEs shown on Mercy Medical's CON Application No. 9462 Schedule 6 are reasonable for the project proposed. The projected number of full-time equivalents (FTEs) needed to implement Mercy Medical's proposed LTACH in the first two years is generally reasonable. Mercy Medical's projected utilization, revenues and expenses are reasonable for the projected proposed and the project is financially feasible in the long term. The Nursing Shortage There is a serious shortage of nurses in Dade County. The nursing vacancy rate in the County is now approximately 16 percent. With the nursing shortage comes significant competition for nurses in the Dade County market. There could be a slight impact to Kindred Coral Gables if Mercy Medical's proposal is approved. Kindred Coral Gables, however, appears to be more aggressive in its advertising and salary packages than is Mercy Hospital. Its approach to the shortage should minimize its effects on Kindred Coral Gables. Rather than for the approval of Mercy Medical to have a negative impact on Kindred, the effect of the nursing shortage is more likely to make it hard for Mercy Medical to obtain the nurses it needs. Mercy Hospital has been successful in recruiting and retaining nurses by focusing on creating a working environment that is attractive to nurses. Mercy Medical will use the same approach to combat the nursing shortage. The approach has been successful in the face of the current nursing shortage and it is reasonable to expect to continue to have success toward staffing Mercy Medical's LTACH. It is reasonable to expect that Mercy Medical will be able to staff its proposed project. The impact to Kindred, if any, will be slight. Quality of Care The approach to the nursing shortage is not the only shared characteristic between Mercy Medical and Mercy Hospital. Mercy Medical embraces Mercy Hospital's commitment to providing high quality of care. Mercy Hospital will provide the advisory support to Mercy Medical with respect to quality of care and quality assurance practices. Medicaid and Indigent Commitment Mercy Medical has conditioned approval of its proposal on the pledge that at least 5% of the LTACH's total inpatient days will be comprised of Medicaid patient days. Mercy Medical shares the commitment Mercy Hospital has to serving Medicaid- eligible, uninsured, underinsured and indigent patients in District 11 for these and other categories of patients. Mercy Medical's proposed LTACH will significantly enhance access to long-term acute care hospital services in District 11. Financial Impact of Approval Approval of Mercy Medical's proposed project will not have an adverse financial affect on Kindred Coral Gables because it is unlikely to suffer reduction in admissions as a result of approval. Historically, Kindred Coral Gables has accepted few patients from Mercy Hospital. Kindred's own estimation of patient loss is 13-15 patients annually if the project is approved at a financial loss of $775,000. Kindred Coral Gables rejects significantly more referrals of patients than it accepts. There are ample patients in the community to replace any that may be lost to Mercy Medical. In any event, it is likely that Kindred would not accept many, if any, of the patients Mercy Medical intends to serve. Kindred Coral Gables opposition to the project because approval might set a precedent that would lead to additional hospitals within hospitals in Florida is not cognizable as an adverse impact under CON review criteria. Benefits of Competition Because there is demonstrable need for Mercy Medical's proposed LTACH, approval will not result in unnecessary duplication of services. On the other hand, approval has the chance of enhancing competition. That chance is diminished since the patients Mercy Medical will serve are not likely to be patients Kindred seeks to serve. Still, there may be from time- to-time a patient that both will wish to serve and there may be some benefits from the slight increase in competition caused by approval. Managed care companies, moreover, will see Mercy Medical as an alternative to Kindred Coral Gables and may improve their negotiation position for payment rates for LTACH services in District 11. Mercy Medical's proposal also provides a lower cost alternative to Kindred Coral Gables with respect to Medicare services that benefits the health care system as a whole. Medicare cost-based reimbursement for LTACHs established prior to October 1, 1997, is capped at the rate of $41,000 per discharge. As a new provider, Mercy Medical's cost-based reimbursement ceiling will be $23,500 per discharge. Kindred Coral Gables was established prior to October 1, 1997, and therefore, operates subject to the much higher cap on Medicare reimbursement. In addition, payors who pay based on charges, or some component of charges, will also benefit because Mercy Medical's proposed changes are less than Kindred Coral Gables' current charges. Competition from the approval of Mercy Medical's proposal may also have a positive effect with respect to quality of care. In addition, the introduction of an alternative to Kindred Coral Gables represents a positive enhancement in the delivery of LTACH services in District 11. This is particularly appropriate given Kindred's recent turmoil, including bankruptcy and significant governmental investigations and settlements. Approval of Mercy Medical's proposed project will have other beneficial effects within the District. Approval of Mercy Medical's proposal will allow many patients to remain under the care of their chosen physician. The conversion of Mercy Hospital's Four West wing to a Medicare-certified LTACH also will help to alleviate patient flow issues within Mercy Hospital and enhance the hospital's ability to utilize properly its short-term acute care beds. Although Mercy Hospital has 29 licensed acute care beds available on Four West, the hospital cannot feasibly keep Four West open on a full-time basis. At times, Mercy Hospital has had to close its emergency room because of capacity issues. On any given day, Mercy Hospital may have as many as 15 to 20 patients who would be eligible for discharge to a long-term acute care hospital facility, if such a facility were accessible to the patients at issue. Because of the access problems at Kindred Coral Gables, these patients are not discharged, but instead are kept in an acute care bed at Mercy Hospital. Approval of Mercy Medical's proposal would provide a discharge venue for these patients, thus freeing short-term acute care beds at Mercy Hospital. Enhancement of Access As described above, establishment of the 29-bed LTACH proposed by Mercy Medical will enhance access to LTACH services for District 11 residents who currently encounter capacity constraints and financial barriers to access at Kindred Coral Gables. In addition, because Kindred Coral Gables is highly selective with respect to the clinical conditions of patients it admits, Mercy Medical will further enhance access by admitting a broader array of patients. Architectural Criteria and Costs Section 395.003(1)(a), Florida Statutes (2001), provides, "[n]o person shall establish, conduct or maintain a hospital . . . in this state without first obtaining a license under this part." Rule 59A-3.201(34), Florida Administrative Code, provides: "Long term care hospital" means a general hospital which: Meets the provision of s. 395.002(12), F.S.; Has an average length of inpatient stay greater than 25 days for all hospital beds; and, Meets the provisions of Paragraph 59C- 1.002, F.A.C. Rule 59A-3.202(1), Florida Administrative Code, provides: The agency [AHCA] will license four classes of facilities; (a) Class I or general hospitals which includes: * * * 2. Long term care hospitals, which meet the provisions of 59A-3.201(31). Rule 59A-3.201(31), in turn, provides: "'Inpatient beds' means accommodations with supporting services for patients who are admitted by physician order with the expectation that the patient would stay in excess of 24 hours and occupy a bed." Mercy Medical's proposed LTACH will provide "inpatient beds." It meets the definition of "long term care hospital." It will have to be licensed as a Class I or general hospital to operate if it receives a CON. Rule 59A-3.202(2), Florida Administrative Code, provides: . . . [A]ll licensed hospitals shall have at least the following: Inpatient beds; A governing authority legally responsible for the conduct of the hospital; A chief executive officer or other similarly titled official to whom the governing authority delegates the full-time authority for the operation of the hospital in accordance with the established policy of the governing authority; An organized medical staff to which the governing authority delegates responsibility for maintaining proper standards for medical and other health care; A current and complete medical record for each patient admitted to the hospital; A policy requiring that all patients be admitted on the authority of and under the care of a member of the organized medical staff; Facilities and professional staff available to provide food to patients to meet their nutritional needs; A procedure for providing care in emergency cases; A method and policy for infection control; An on-going organized program to enhance the quality of patient care and review the appropriateness of utilization services. Kindred Coral Gables, an LTACH, is licensed as a Class I hospital. All parties agree the Mercy Medical's applied-for LTACH will have to be licensed as a Class I or "general" hospital and will have to comply with the licensing requirements listed above in order to receive its license. The parties disagree over the applicability of Rule 59A-3.080(4)(f), Florida Administrative Code. The Rule has a last sentence that is a grandfather clause inapplicable to this proceeding. Otherwise, the Rule provides: An ambulatory surgical center or a birth center may not be constructed or operated on the same premises as a hospital. A facility or building used for medical care, including a medical office building which is owned and operated by the licensee of a hospital, may be fully integrated with the hospital physical plant. If a fully integrated facility or building in operation or under construction on the effective date of this rule is subsequently transferred, the hospital licensee shall be solely responsible for either physical separation or assuring full compliance with all life safety codes. Any other facility or building used for medical care, including a medical office building, must be physically separated from the hospital and have clear, visible and readable signs denoting its separateness from the hospital. Physically separate means, at a minimum, separation by fire walls and distinct mechanical and electrical systems. It is AHCA's position that Rule 59A-3.080)4)(f) "[sh]ould not, as a matter of policy, [be applied] in this case." (Tr. 766). The purpose of the Rule is to prevent a non-licensed medical service provider, such as a medical office building, from being located on a hospital campus as part of the hospital, that is, without physical separation. That concern is alleviated with regard to Mercy Medical's LTACH operating as a hospital-within-a- hospital because AHCA will have direct licensure authority over the LTACH as a Class I or general hospital. Mercy Medical's LTACH, moreover, is subject to the same life safety codes as its host hospital. Furthermore, the proposed location of the LTACH is Four West of Mercy Hospital. Four West already complies with the applicable licensure codes for Class I or general hospitals found in Chapter 59A-3, Florida Administrative Code. Along the same lines, Mercy Medical's LTACH will satisfy the state and federal handicap accessibility requirements for general hospitals. The federal ADA and Florida Accessibility code both require that 10% of the patient rooms and toilets in a general hospital be handicap-accessible. Mercy Medical reasonably proposes to satisfy this requirement through renovation of two of the patient rooms on Four West. The projected costs on Mercy Medical's Schedule 1, including renovation cost, are reasonable for the proposed project. The timetable for completion of Mercy Medical's proposed renovations is reasonable for the project proposed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration: Dismiss the Petition of Kindred Hospitals East, LLC d/b/a Kindred Hospital South Florida for lack of standing; and, Approve Mercy Medical Development, Inc.'s CON Application 9462 to establish a 29-bed long-term acute care hospital-within-a-hospital in AHCA Health Planning Service District 11. DONE AND ENTERED this 23rd day of July, 2002, in Tallahassee, Leon County, Florida. DAVID M. MALONEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of July, 2002. COPIES FURNISHED: W. David Watkins, Esquire Watkins & Caleen, P.A. 1725 Mahan Drive, Suite 201 Post Office Box 15828 Tallahassee, Florida 32317-5828 Robert A. Weiss, Esquire Karen A. Putnal, Esquire Parker, Hudson, Rainer & Dobbs, LLP The Perkins House, Suite 200 118 North Gadsden Street Tallahassee, Florida 32301 Jonathan L. Rue, Esquire Parker, Hudson, Rainer & Dobbs, LLP 1500 Marquis Two Tower 285 Peachtree Center Avenue, Northeast Atlanta, Georgia 30303 Gerald L. Pickett, Esquire Agency for Health Care Administration 525 Mirror Lake Drive, North Sebring Building, Suite 310K St. Petersburg, Florida 33701 Virginia A. Daire, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308
The Issue The issue for determination is whether Southern Baptist Hospital of Florida, Inc., d/b/a Baptist Medical Center should be reimbursed by AIG for medical services rendered in accordance with the proposed agency action by the Department of Financial Services, Division of Workers' Compensation, Office of Medical Services issued on April 22, 2011.
Findings Of Fact Based on the Petition and assertions by the parties to which no disagreement exists, the following Findings of Fact are made: Baptist Medical Center filed a Petition for Resolution of Reimbursement Dispute (Petition for Resolution) with the Department. Baptist Medical Center was the Petitioner, and AIG was the respondent. On April 22, 2011, the Department issued its decision in favor of Baptist Medical Center. Contained in its decision, among other things, the Department notified all affected persons, including AIG and AIG's servicing agent, Specialty Risk Services, Inc. (SRS), that any petition for hearing was required to be filed within 21 days from their receipt of the decision and that failure to do so would constitute a waiver of the right to a hearing regarding the Department's decision. Both AIG and SRS received their respective copy of the Department's decision on April 25, 2011. A petition for hearing was required to be filed with the Department on or before May 16, 2011. SRS forwarded a petition for administrative hearing to the Department's Clerk by Federal Express on May 10, 2011. An inference is drawn and a finding of fact is made that SRS' petition for administrative hearing was received by the Department on May 11, 2011. SRS' petition for administrative hearing reflects, among other things, in the style and the allegations, SRS as the Petitioner and SRS as requesting the hearing. Also, in an allegation identifying the Petitioner and the Petitioner's address, SRS includes AIG and Liberty Asset Recovery as Petitioners. Subsequently, AIG was contacted by the Department's counsel on June 16, 2011. The Department's counsel advised AIG that SRS did not have standing to file the petition for administrative hearing; that AIG, instead of SRS, must be named as the Petitioner; and that the 21-day deadline would be extended to allow AIG to file an amended petition for administrative hearing to correct the defect of SRS as the Petitioner. AIG forwarded its Petition to the Department's Clerk by Federal Express on June 20, 2011. An inference is drawn and a finding of fact is made that AIG's Petition was received by the Department's Clerk on June 21, 2011. The Department's Clerk received AIG's Petition more than 21 days from the date that AIG received the Department's decision on the Petition for Resolution. AIG's Petition is untimely.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, Office of Medical Services enter a final order dismissing AIG's Petition for Administrative Hearing. S DONE AND ENTERED this 6th day of September, 2011, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 6th day of September, 2011.
Findings Of Fact At all times material hereto, Respondent has been licensed by the State of Florida to practice medicine and surgery, having been issued license number NE 14637. Respondent was born in Cuba and is a Catholic. He specializes in gynecology and obstetrics and, until March 1983, had hospital privileges at Mercy Hospital in Miami, Florida. Respondent is married and has seven children, most of whom are adults. He is supporting all of them, including grandchildren, and at the time of the formal hearing in this cause there were 12 people living in Respondent's home whom he was supporting. Respondent has not had a vacation since 1970. In approximately the late summer of 1982, Dr. Jose Carballo was walking from his office at the Mercy Hospital complex to the hospital when he encountered Respondent. Respondent grabbed Carballo's arm and appeared extremely agitated. Respondent advised Carballo that the administration at Mercy Hospital was anti-Catholic or anti-Christian, since several of the stained glass windows in the chapel in the hospital had been covered with plywood. Respondent further advised Carballo that Respondent had asked the priest in the chapel why that had been done, and the priest had advised Respondent the windows on that side of the chapel had been covered as a precaution and would remain covered until the end of the hurricane season. The windows on the side of the chapel opposite the direction of potential hurricane winds had not been covered. Although the priest had given that explanation to Respondent, Respondent still insisted that the real reason was a conspiracy on the part of the hospital administration to prevent Catholics from looking at the windows. Since Carballo had known Respondent for a number of years, he noted on that occasion that Respondent acted and appeared to be a different person. At the time, Carballo believed that Respondent was on the verge of a breakdown. During late 1982 and early 1983, both the chief of obstetrics at Mercy Hospital and the chief of the department of anesthesiology at Mercy Hospital noted a number of occasions when Respondent appeared to be engaged in bizarre behavior. They observed incidents of violent behavior and heard much talk of Communists, Zionists, and conspiracy on different occasions when they encountered Respondent. Respondent was seen in the hospital on occasions when he appeared to be very heavily medicated, and observations were made of the changes in Respondent's demeanor, in his coordination, and in his speech. Respondent appeared depressed and introverted, and even his manner of walking had slowed. Respondent's violent behavior was triggered by small incidents, and he would accuse someone of being a Communist simply if that person wore a red tie. On one occasion, Respondent accused one of the labor room nurses of poisoning his cup of tea. By late 1982, both the chief of obstetrics and the chief of the department of anesthesiology had formed the opinion that Respondent was unable to practice medicine with reasonable skill and safety. In January 1983, Respondent performed an emergency cesarean section at Mercy Hospital. During the course of that delivery, he cut the baby's ear and the area of the baby's head behind his ear. Dr. Roger Walker saw Respondent when he entered the operating room and saw him again when he left the operating room. Respondent appeared depressed, introverted, and slowed. On March 18, 1983, Respondent's hospital privileges at Mercy Hospital were suspended. During late 1982 and early 1983, Respondent realized that he was depressed and started treatment with Dr. Carlos Diaz Silvia. Diaz-Silvia believed at the time that Respondent might present a danger to himself and to others and placed him on anti psychotic drugs. Subsequent to Mercy Hospital's suspension of Respondent's staff privileges, the Department of Professional Regulation ordered Respondent to undergo a three-day evaluation at South Miami Hospital's addiction treatment program under Dr. Delores Morgan. As a result of the mental and physical examinations conducted during that three-day evaluation, it was determined that Respondent had no chemical dependency on alcohol or drugs but rather that Respondent was suffering from a major depression episode. It was further determined that the medication given to Respondent by Dr. Diaz-Silvia had been one of the major causes of the determination by the administration at Mercy Hospital that Respondent was incompetent to practice medicine. Instead, Respondent was placed on Elavil, an antidepressant drug which affects the mood centers of the brain and removes depression and allows a person to function. It was also determined that Respondent must, in addition to taking the Elavil, remove the stressors which had caused his depression by reducing his medical practice, by requiring some of his grown children and their families to begin supporting themselves so Respondent would not have to work continuously with no vacations in order to support all of the adult members of his family, and by Respondent undergoing regular therapy with a psychiatrist who could help Respondent resolve some of his problems and monitor Respondent's need for an antidepressant drug. Respondent was released from South Miami Hospital's program to the care of psychiatrist Paul Daruna. Respondent started treatment with Daruna on a weekly basis on June 1, 1983. During the next 11 sessions, Respondent showed marked improvement with the Elavil prescribed for him: his sleep pattern improved, and his mood visibly improved. It was determined that Respondent had become able to make rational decisions and presented no danger to himself or to others. By October 13, 1983, Respondent's prognosis was excellent, and Daruna believed that Respondent would be able to practice medicine with reasonable skill and safety so long as he continued his treatment regimen, including both therapy and the antidepressant drug, and so long as Respondent took whatever steps were necessary to remove the stressors in his life caused by his heavy practice and the burdensome demands of his family. Daruna has not seen Respondent since October 13, 1983, and Respondent has not been under the care of any other psychiatrist. Dr. Delores Morgan saw Respondent on February 8, 1984, two days before the formal hearing in this cause. Respondent was still taking his Elavil but was not treating with a psychiatrist. Respondent had voluntarily reduced his office practice and had relocated his office so that he was now practicing with a general practitioner, Dr. Harry Rosado, who was voluntarily monitoring Respondent's practice. Although Respondent's privileges were still under suspension at Mercy Hospital, Respondent was practicing at Baptist Hospital and had performed approximately 54 deliveries during 1983 while practicing only three days a week. Dr. Morgan noted Respondent's marked improvement and Respondent's continued cooperation. However, she determined that Respondent was still in need of psychiatric follow-up so long as he was on medication in order that he could be monitored for change. She further believed that Respondent's practice of medicine should remain restricted to the level it is at this time until his treating psychiatrist had determined that it was appropriate for him to again engage in the full-time practice of medicine. She further recommended that monitoring of Respondent's practice continue, and believed most strongly that it was still imperative that Respondent's family, comprised primarily of grown children, start to assume some responsibility for their own lives and not continue to place the total burden on their father. Although Respondent admitted at the formal hearing that he agrees with Dr. Morgan's assessment of his prognosis and that he has voluntarily restricted his practice and is voluntarily taking his medication, Respondent still does not believe that he was impaired during the approximate six-month period in question, does not believe he was "slowed down" during that time period, and does not believe that he was irrational or paranoid concerning the stained glass window episode. Accordingly, although Respondent has voluntarily imposed on himself some of the restrictions recommended in order that he continue to function well, it appears that Respondent still does not fully appreciate the extent to which his mental state had deteriorated during the time before he was involved in any treatment regimen. During late 1982 and early 1983, Respondent was mentally incompetent due to a severe depressive state and inappropriate treatment which made him more incompetent to the extent that he was unable to practice medicine with reasonable skill and safety to patients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained in the Administrative Complaint filed against him and placing Respondent's license to practice medicine on probation under such terms and conditions as may be considered necessary by the Board of Medical Examiners, including continued psychiatric care and reporting to the Board of the status of the health of Respondent, with restrictions upon his medical practice as may be recommended in the future by his treating physicians in light of his mental and physical status. DONE and RECOMMENDED this 22nd day of May, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 22nd day of May, 1984. COPIES FURNISHED: Joseph W. Lawrence, II, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Luis Fernandez, Esquire 2600 SW Third Avenue, Suite 203 Miami, Florida 33129 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Dorothy Faircloth, Executive Director Board of Medical Examiners 130 North Monroe Street Tallahassee, Florida 32301
The Issue The central issue in this case is whether the Respondent violated Chapter 458 Florida Statutes as alleged in the Administrative Complaint dated July 11, 1986; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witness and the documentary evidence received at the hearing, I make the following findings of fact: The Respondent, Maria I, Andrakovich, M.D., is a licensed physician in the State of Florida, having been issued license number MEOO2I436. On or about May 1, 1983, Respondent entered into a Service agreement with "The Doctor's Office, Inc." wherein Dr. Andrakovich agreed to provide medical services for the patients at 330 South Dixie Highway, Lake Worth, Florida. Respondent's employment with "The Doctor's Office, Inc." ended in March, 1984. On or about July 12, 1983, Respondent filed with the Board of Medical Examiners an Application for Certification for Physician's Assistant for Jean Eugene Raymond. On August 15, 1983, Mr. Raymond was certified to work under the supervision of Respondent pursuant to Chapter 458 Florida Statutes. On November 22, 1983, Mr. Raymond filed his Biennial Physician's Assistant Certification and reported a change of office address to 1177 Hypo1uxo Road, Lantana, Florida. Respondent executed the affidavit for this certification before a notary public. Respondent never worked at the Hypo1uxo, Road facility. Dr. Andrakovich remained at the prior office location which was approximately five miles from the Hypoluxo site. Prior to his move to the Hypoluxo facility, Mr. Raymond would confer, in person, with Dr. Andrakovich regarding each patient. After moving to the Hypoluxo facility, Mr. Raymond would confer with Dr. Andrakovich by telephone. Respondent relied on Mr. Raymond's judgment that this telephonic system of conferring about patients complied with any legal requirements of their relationship. Respondent did not know the regulations which govern physician's assistants. Many of the patients seen at the facilities on Hypoluxo and Dixie were elderly and suffered heart problems. Respondent's schedule required her to see one patient every fifteen minutes. This patient scheduling rate later increased to one patient every ten minutes. It was difficult for Respondent to confer with Mr. Raymond by telephone and meet the schedule. Respondent assumed Mr. Raymond would confer with the physicians at the Hypoluxo facility. No specific arrangement was made to require physicians at Hypoluxo to supervise Mr. Raymond nor did any physician there assume responsibility for Mr. Raymond's activities. During her employment with "The Doctor's Office, Inc." Respondent treated Norman Shapiro. Mr. Shapiro had a history of heart trouble, diabetes, and hypertension. During the fall of 1983, Mr. Shapiro had complained of increased pain which had resulted in Respondent doubling the strength of Mr. Shapiro's heart medication. Mr. Shapiro's medical record for this period suggested a deterioration in his heart condition. On November 21, 1983, Norman Shapiro went to the Hypoluxo facility and was seen by Mr. Raymond. Mr. Shapiro complained that he was constantly having to take his heart medication by handful amounts. Mr. Raymond recommended no coffee, tea, chocolates or smoking and that the patient should elevate his head 4-6 inches for sleeping. The only additional medication suggested was Maalox. The treatment recommended by Mr. Raymond was consistent with the diagnosis of a hiatal hernia but was inappropriate given the patient's history of heart disease. The minimally acceptable care within the medical community where "The Doctors' Office" was located would have required the patient Shapiro to be hospitalized. Mr. Raymond did not confer with Dr. Andrakovich regarding Mr. Shapiro's visit on November 21, 1983, until after the treatment had been recommended. Had Dr. Andrakovich seen Mr. Shapiro on that day, she would have put him in the hospital. Dr. Andrakovich believed Dr. Conti had treated Mr. Shapiro on November 21, 1983. On November 21, 1983, the electrocardiogram (EKG) for Mr. Shapiro was within normal limits. Despite the EKG, Mr. Shapiro's symptoms were cardiac- related and had a significant potential for morbidity and mortality. In fact, Mr. Shapiro died on November 22, 1983. Frank Colavecchio was president of the "The Doctor's Office Inc." and made all administrative decisions regarding the facilities on Dixie and Hypoluxo. Mr. Colavecchio administratively moved Mr. Raymond to the Hypoluxo office. On March 15, 1984, Dr. Andrahovich terminated employment with the "The Doctor's Office, Inc". Respondent did not notify the Board of Medical Examiners of this change and at no time advised the Board that she would no longer be supervising Mr. Raymond. It is inappropriate and contrary to standards of good medical practice for a physician's assistant to treat heart patients. Dr. Andrakovich knew or should have known that Mr. Raymond was treating heart patients.
The Issue Should Respondent be disciplined for practicing beyond the scope of his license or by accepting and performing professional responsibilities which he knows or has reason to know that he is not competent to perform? See Section 460.413(1)(t), Florida Statutes, formerly Section 460.413(1)(u), Florida Statutes.
Findings Of Fact Petitioner is charged with regulating the practice of chiropractic pursuant to Sections 20.165, 20.42, Florida Statutes and Chapters 455 and 460, Florida Statutes. Respondent is a Florida licensed chiropratic physician. His license number is No. CH-0001538. He was issued that license on September 21, 1968. Respondent practices chiropratic at the McCall Chiropractic Clinic located at 811 Grace Avenue in Panama City, Florida. Respondent is not licensed as an osteopathic or allopathic physician as recognized by the Florida Board of Osteopathic Physicians or the Board of Medicine respectively. In 1992 Respondent sent Micheal Smith, D.C., a chiropractic physician practicing in Panama City, Florida, information described as an invitation for Dr. Smith to join Respondent in clinical research "designed to test the effectiveness of Scalar E.M. Technology upon AIDS-CANCER opportunistic organisms falling within the meaning of chapter 460.403(3)(a)(b)(c)(e), and Rule 21D-1702, Florida Statutes." The correspondence went on to describe some details about the research. In particular, Respondent stated that "preliminary field data suggest that Scalar E.M. TENS Technology is effective in 47 pathological conditions including AIDS-Cancer disease." The correspondence also set forth information concerning patients who wished to contribute to the research by making financial contributions to the "Allaganey Occupational Development Foundation, 22 Floor Pacific First Center, 1425th Avenue, Seattle, Washington 98101-2333". Respondent provided Dr. Smith a sheet on the McCall Chiropractic Clinic letterhead related to purported medical research at Stanford University in 1988 studying "the Biological Interactions with the Scalar Energy Cellular Mechanisms of Action" in response to weak ELF ectromagnetic (EM) radiation and the claimed results. That sheet describes how the McCall Chiropractic Clinic would be "conducting private research into the effectiveness of Scalar E.M. Technology upon the following conditions, for a two-year period of time." Arthritis Arm Pains Angina Pectoras Arethemia Asthma Allergies Bacterial Infection of the Lung Carple Tunnel Syndrome Cancer of the: Bone, Brain, Bladder, Bowell, Lungs, Liver, AIDS Colon Polyps Cholitis Candidia Albicans Deafness Diabetes Neuropathy Emphysemia Eckcemia Ear Infection Epstine Barr Infection Exothalmic Goider Feavers Fungus of the skin Fibrosis of the Lung Gout High Blood Pressure Herniated disc Herpes B infection Hemrroids Hardening of the arteries Herpes of the Genitals Hypertrophy of the Prostate Inflimation of the joints Nectniuria Kendidia Albicans Leg Pains Multipleschlerosis Musculardistrohy Neuropathy Nose bleads Premenstral Syndrome Paracititis of digestive track Phlebitis Sinus Infection Tumors of the Eye Varicose Veines Warts Leupus Erethematosis Parkinsons Disease Dr. Smith was also provided with a copy of an advertisement which stated: ATTENTION: Aids - Cancer Patients Dr. Curtis J. McCall, Jr. Chiropractor Research program utilizing scalar tens antineoplastic technology is available through the provisions of Chapter 460.403(3)(a)(b)(c)(e) Rule 21D-1702 Florida Statutes. Patients suffering with Aids - Cancer disease who would like to participate in the research program should call 769-1708 for an appointment or come by the office: 811 Grace Ave., P.C., Fla. 32401 In the 1993 yellow pages for the Panama City, Florida, telephone book, Respondent placed an advertisement to this effect: MCCALL CHIROPRACTIC CLINIC PEOPLE HAVE TRUSTED THE HANDS OF DR. McCALL SINCE 1968 -- TENS AIDS -- CANCER THERAPY -- 811 Grace Av Panama Cy 769-1708 In the July 8, 1993 advertising service in the "Thrifty Nickel" circulated in Panama City, Florida, Respondent placed the following advertisement: NOTICE: The McCall Chiropractic Clinic has on display a 1953 classified federal document that discloses successful treatment for cancer. Patient response indicates this technology is effective in the treatment of 47 conditions. This technology is available through the provisions or Chapter 460- 1403(3), (a), (b), (c), (e). Rule 210-1702 Florida Statutes. Phone 769-1708 for appointment, 811 Grace Avenue, Panama City, Florida 32401. F24 On July 19, 1993, Respondent, on stationary from McCall Chiropractic Clinic, wrote to TCRS, Inc., in Tallahassee, Florida, asking that company to place McCall Chiropractic Clinic on its list of AIDS/Cancer Therapeutic Center listings for national referrals. That correspondence gave a brief description of the service that Respondent intended to provide. It indicated that the therapy to be provided would cost the patient $18.00 per 20 minutes. Through Respondent's activities that have been described, Respondent directly held himself out to the public as having the ability to treat persons with AIDS. In furtherance of his intentions, Respondent developed a treatment protocol consisting of approximately 55 weeks of treatment to be monitored initially by Respondent at his chiropractic facility. That protocol required the patient to receive TENS therapy for two hours each day. The TENS device is designed to deliver transcutaneous electrical nerve stimulation. Its principal chiropractic use is for pain control. However, Respondent, in his intended care, contemplated that the device would stimulate "T-Cells" in combatting AIDS. In the protocol, Respondent also required monthly blood tests to monitor the patient's "T-Cell" counts. The protocol required the patient to be free from all other drugs, in particular, the AIDS treatment medication "AZT". Under the protocol, the patient was required to receive a weekly injection of a compound identified as "chondriana", in amounts determined by Respondent. Finally, the patient was to ingest a compound identified by Respondent as "life crystals". On or about February 4, 1994, Respondent began to care for the patient C.L. That care ended on September 29, 1994. In this arrangement Respondent and C.L. had a chiropractic physician-patient relationship. Patient C.L. died on August 18, 1995. Respondent made a diagnosis, proposed a course of treatment and directly treated C.L. for AIDS. In this treatment Respondent maintained a patient record for C.L. In an effort to secure reimbursement for the services provided to C.L., Respondent prepared insurance claim forms, affixing a diagnosis of AIDS to the claim forms and had C.L. assign benefits to the Respondent from the insurance policy. In this connection Respondent had C.L. execute a sworn statement describing the services received from Respondent. It was Respondent's expectation that the claim forms would be honored by the insurance carrier and that Respondent would be paid for the services rendered to C.L. With one exception, Respondent's billings to the insurance carrier for C.L.'s visits to Respondent's office were all for the treatment of AIDS. An investigation was instituted by the State of Florida, Department of Business and Professional Regulation/ Agency for Health Care Administration to ascertain whether Respondent was offering patient treatment for AIDS. James Cooksey, an investigator with the regulator, performed that investigation in conjunction with Tom Willoughby, investigator for the Bay County, Florida, Sheriff's Office. James Cooksey is an insurance fraud/medical malpractice investigator. To conduct the investigation Mr. Cooksey assumed the fictitious name James Stark. The reason for assuming the name was to present James Stark as a patient suffering from AIDS. In furtherance of the investigation Mr. Cooksey went to the Tallahassee Memorial Regional Medical Center and obtained a fictitious positive AIDS test in the name James Stark. On May 16, 1994, Mr. Cooksey initiated contact with Respondent. The investigator traveled from Tallahassee to Panama City. When he reached Panama City he called Respondent and told Respondent that he needed to come and talk to him. Respondent invited Mr. Cooksey to come by that afternoon. On May 16, 1994, Mr. Cooksey met with Respondent at Respondent's office. At that meeting Mr. Cooksey told Respondent that the investigator understood that Respondent could possibly cure AIDS. Mr. Cooksey further stated that he had seen something in a newspaper article that Respondent was treating AIDS patients and explained to Respondent that Mr. Cooksey had contracted AIDS and was interested in being cured. Mr. Cooksey provided Respondent with the results of the fictitious blood test. When Mr. Cooksey presented to Respondent he did not complain of any condition other than AIDS. Respondent did not physically examine Mr. Cooksey. Respondent explained to Mr. Cooksey about the nature of Respondent's treatment in which the TENS unit, also known as a Rife machine, chondriana and life crystals would be used. To demonstrate the treatment Respondent took Mr. Cooksey into a room in the back of his office, a treatment room, and had Mr. Cooksey take his shoes and socks off and place his feet on a metal pad associated with the TENS unit. When the unit as turned on Mr. Cooksey could feel tingling inside his feet. On this occasion Respondent told Mr. Cooksey that, he, Mr. Cooksey could get injections of chondriana and then the machine would be turned on and Cooksey would receive stimulation to fight the infection associated with AIDS. Respondent told Mr. Cooksey that the initial treatments for AIDS would have to be done at his office where Respondent would monitor the investigator. Respondent indicated that a nurse would come to the office and give the injections of chondriana and that Mr. Cooksey would be monitored concerning those injections until Mr. Cooksey's "system built up a little". Mr. Cooksey understood that he was to receive those injections and use the TENS unit and was not to take other forms of medication during the treatment. Respondent gave Mr. Cooksey a card with the name of a blood test that would need to be obtained and the results reported to Respondent. Mr. Cooksey was responsible for paying for the blood test. Respondent told Mr. Cooksey that the life crystals were to be taken in orally as a drink and they were described as being part of the AIDS treatment. On this date Respondent gave the investigator an estimate of the costs of this treatment, constituted of $2,000 for the TENS unit and $2,925 for chondriana and life crystals. Subsequent to that date Respondent called Mr. Cooksey and left a message on Cooksey's telephone. Respondent also wrote the investigator on May 23, 1994, providing the investigator more information concerning Respondent's treatment for AIDS. The investigator then went to the state attorney's office in Panama City and informed the state attorney of the nature of the administrative investigation and the belief that the activities by Respondent might constitute a criminal law violation. The state attorney represented to the investigator that he concurred. The state attorney then had Mr. Cooksey contact the Bay County Sheriff's office. Following that contact Mr. Cooksey took up a joint investigation between Mr. Cooksey and Bay County Sheriff's investigator Tom Willoughby. On October 18, 1994, Mr. Cooksey placed a call to Respondent and told the Respondent that he was in Panama City and would like to come by and meet with the Respondent and that he would be accompanied by a friend who might be able to "come up" with the money that was required to purchase the chondriana and life crystals and TENS unit. The part of the friend was to be played by Officer Willoughby. Mr. Cooksey and Officer Willoughby then went to Respondent's office where Respondent again explained the nature of the AIDS treatment. Officer Willoughby asked the Respondent questions concerning the nature of the treatment and how much the treatment would cost. Respondent explained that the treatment involved injections of the chondriana, drinking the life crystals and using the TENS machine for two hours a day to treat James Stark for AIDS. At the October 18, 1994 meeting between the investigators and Respondent, Respondent stated that a nurse practitioner with whom he was friends would administer the chondriana and that activity would be monitored by Respondent in Respondent's office. Officer Willoughby asked Respondent if there would be side affects to the injections. Respondent indicated that there would be sweating and that Respondent would monitor Mr. Cooksey for whatever period of time would be necessary for the side affects to subside. The investigators watched a video tape explaining the treatment for AIDS which Respondent intended to employ. The injections of chondriana would be given monthly. Respondent indicated to the investigators that he would instruct Mr. Cooksey on how many of the life crystals to take. Respondent told the investigators that the cost of the TENS unit was $2,000.00 and that the unit would be used to spread the impulses through out the body. Respondent indicated to the investigators that the nature of the treatment would form new T-cells to replace T-cells containing the AIDS virus or which were cancerous. Respondent had stated in Officer Willoughby's presence that the TENS unit cost $500.00 to produce. Respondent and the two investigators then went to a local health food store, known as the Olive Leaf, to ascertain the amount of money needed to pay for chondriana which the health food store would provide. There, the attendant at the store indicated that he could arrange to provide the chondriana and life crystals for a price approximating $2,800.00. After leaving the health food store the investigators told the Respondent that they would come back with the necessary money on October 21, 1994. The investigators returned to Respondent's office on October 21, 1994, after obtaining warrants to search the office and arrest the Respondent. Before Respondent was arrested and the search made, the investigators asked Respondent to again explain the nature of the treatment that would be provided to Mr. Cooksey and paid Respondent $1,700.00 for the TENS unit from funds belonging to the Bay County Sheriff's Office. Respondent gave the investigators a receipt for the $1,700.00 payment. Respondent was then arrested for practicing medicine without a license. On one occasion Respondent explained to the investigators that the procedures that were used to treat Mr. Cooksey for AIDS were not condoned by the FDA, but that it was working in other places where it had been tried and that three patients treated in another location had gained remission from the AIDS. Based on the proof, it is found that Respondent diagnosed Mr. Cooksey as having AIDS and developed a course of treatment for that condition. Paul Doering, M.S., is a registered pharmacist in the State of Florida. He is also licensed as a consultant pharmacist in the State of Florida. He is a Distinguished Service Professor of Pharmacy Practice at the University of Florida. He is accepted as an expert pharmacist. Mr. Doering established that the drug AZT is an antiviral drug designed to address the HIV virus associated with AIDS. Mr. Doering established that AIDS is an acronym for acquired immuno- deficiency syndrome, "a disease that affects the immune system caused by a virus or different types of viruses which attack the immune system in the body rendering the body unable to effectively mount an immune response when it comes into contact with certain types of infectious organisms." Mr. Doering established that drugs are divided into two basic groups, one group which is sold without prescription and the other group requiring a doctor's prescription. The latter category of drugs are known as Federal Legend Drugs. Mr. Doering established that there is no reference to a medication known as "chondriana" in any directory of medications which he was familiar with. As he established, chondriana does not constitute a food because foods are not generally injected into the human body. Mr. Doering established that chondriana has not been approved to be used as a drug in the United States, nor is it an experimental drug, based upon his research of sources that list drugs or experimental drugs. Marianne Gengenbach, D.C., is licensed to practice chiropractic in Florida and is an expert in chiropractic practice. She established that chiropractors are limited to using proprietary drugs, and then only where the chiropractor has passed a specific exam and obtains a proprietary drug license. Proprietary drugs are "over the counter drugs" not prescription drugs. Absent such as a license to prescribe proprietary drugs chiropractors may only make recommendations, educate patients and prescribe nutritional supplements. Dr. Gengenbach established that Respondent had diagnosed C.L. for AIDS and had treated C.L. for that condition. The treatment was directly related to the condition AIDS, and Dr. Gengenbach established that the treatment was outside the accepted standard of care for chiropractic and exceeded the scope of authorized practice from the view point of a practitioner. As Dr. Gengenbach established, Respondent also exceeded the proper scope of practice in caring for C.L. by recommending that C.L. discontinue the AZT therapy. Those same perceptions were held for treatment of Mr. Cooksey and are accepted. Dr. Gengenbach established that Respondent proposed a course of treatment for Mr. Cooksey related to the condition AIDS, without reference to any other complaints by the patient. As a consequence the course of treatment which Respondent planned for Mr. Cooksey was directed solely to the HIV infection as established by Dr. Gengenbach. Dr. Gengenbach established that the use of the chondriana and life crystals was intended to treat Mr. Cooksey for AIDS. Dr. Gengenbach established that even should the substances chondriana and life crystals be considered food or nutritional supplements, there proposed use for Mr. Cooksey would not meet the prevailing standard of care for chiropractic, in that they would be employed for the treatment of AIDS. Respondent intended that the chondriana and life crystals be used in the cure, treatment, therapy and prevention of AIDS in C.L. and Mr. Cooksey. Respondent intended that those substances affect the structure and function of the bodies of those patients. In proposing and carrying out the treatment that has been described directed to AIDS, Respondent did so mindful that chiropractic physicians in Florida are prohibited from directly treating the AIDS condition. Respondent's treatment of C.L. and proposed treatment of Mr. Cooksey violated the standards of practice acceptable to a reasonably prudent chiropractic physician under similar conditions and circumstances and exceeded the scope of his chiropractic license. In the past Respondent has been disciplined by the Board of Chiropractic on three separate occasions. Two of those cases involve the receipt of a reprimand and in the third case Respondent's license was suspended and he was required to pay an administrative fine. Respondent was also required to cease and desist the activities described in these facts based upon action taken by the Board of Medicine, which was persuaded that Respondent was engaging in the treatment of AIDS without benefit of a medical license.
Recommendation Based upon the facts found and the conclusions of law reached, given the severity of the offense and the danger posed to the public, it is, RECOMMENDED: That a final order be entered which revokes Respondent's license to practice chiropractic medicine in Florida. DONE and ENTERED this 21st day of November, 1995, in Tallahassee, Florida. CHARLES C. ADAMS, 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 21st day of November, 1995. APPENDIX CASE NO. 95-2881 The following discussion is given concerning the proposed findings of fact of the parties: Petitioner's Facts: Paragraphs 1 through 4 are subordinate to facts found. Paragraphs 5 and 6 constitute conclusions of law. Paragraphs 7 through 13 are subordinate to facts found. Paragraph 14 is not necessary to the resolution of the dispute. Paragraphs 15 through 35 are subordinate to facts found. Paragraphs 36 through 40 are conclusions of law. Paragraph 41 is subordinate to facts found. Paragraphs 42 and 43 are conclusions of law. Paragraphs 44 through 51 are subordinate to facts found. Respondent's Facts: Paragraphs 1 through 5 constitute legal argument as reported at pages 2 through 5. The proposed facts 1-3 found at pages 15 and 16, Paragraph 1 is contrary to facts found. Paragraph 2 is rejected as a discussion of activities of the Probable Cause Panel, not a proper subject for consideration. Paragraph 3 constitutes a conclusion of law. COPIES FURNISHED: Jon M. Pellett, Esquire Medical Quality Assurance-Allied Health Agency For Health Care Administration 1940 North Monroe Street, Suite 60 Tallahassee, FL 32399-0792 Curtis J. McCall, D.C. 514 North Bonita Avenue Panama City, FL 32401 Diane Orcutt, Executive Director Agency For Health Care Administration Board of Chiropractors 1940 North Monroe Street Tallahassee, FL 32399-0792 Jerome W. Hoffman, General Counsel Agency For Health Care Administration 2727 Mahan Drive Tallahassee, FL 32308
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Board take no action. DONE and ORDERED this 29th day of September, 1976 in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Michael Schwartz, Esquire Suite 201, Ellis Building 1311 Executive Center Drive Tallahassee, Florida 32301 Kirk N. Kirkconnell, Esquire Post Office Box 1537 Winter Park, Florida 32790
