The Issue The issues are whether proposed and existing Florida Administrative Code rules, both numbered 59G-6.030, are valid exercises of delegated legislative authority.
Findings Of Fact The Petitioners are 120 hospitals--some not-for-profit, some for-profit, and some governmental--that are licensed under chapter 395, Florida Statutes, provide both inpatient and outpatient services, and participate in the Medicaid program. AHCA is the state agency authorized to make payments for services rendered to Medicaid patients. Before 2013, all Medicaid outpatient services were provided and paid fee-for-service. Under the fee-for-service model, hospitals submit claims to AHCA, and AHCA reimburses the hospitals based on the established rate. For many years, AHCA has set prospective Medicaid fee- for-service reimbursement rates for outpatient hospital services, either semi-annually or annually, based on the most recent complete and accurate cost reports submitted by each hospital; has re-published the Florida Title XIX Hospital Outpatient Reimbursement Plan (Outpatient Plan) that explained how the rates were determined; and has adopted the current Outpatient Plan by reference in rule 59G-6.030. In 2005, the Florida Legislature’s General Appropriations Act (GAA) stated that the funds appropriated for Medicaid outpatient hospital services reflected a cost savings of $16,796,807 “as a result of modifying the reimbursement methodology for outpatient hospital rates.” It instructed AHCA to “implement a recurring methodology in the Title XIX Outpatient Hospital Reimbursement Plan that may include, but is not limited to, the inflation factor, variable cost target, county rate ceiling or county ceiling target rate to achieve the cost savings.” AHCA responded by amending the Outpatient Plan to provide: “Effective July 1, 2005, a recurring rate reduction shall be established until an aggregate total estimated savings of $16,796,807 is achieved each year. This reduction is the Medicaid Trend Adjustment.” The amended Outpatient Plan was then adopted by reference in rule 59G-6.030, effective July 1, 2005. AHCA collaborated with the hospitals to determine how to accomplish the legislatively mandated reduction in a manner that would be fair to all the hospitals. It was decided to take the hospitals’ unaudited cost reports from the most recent complete fiscal year and the number of Medicaid occasions of service from the monthly report of AHCA’s Medicaid fiscal agent that corresponded to the hospitals’ fiscal years, and use an Excel spreadsheet program with a function called Goal Seek to calculate proportionate rate adjustments for each hospital to achieve the legislatively mandated aggregate savings. The resulting rate adjustments were incorporated in the hospital reimbursement rates, effective July 1, 2005. In 2006, there was no further Medicaid Trend Adjustment (MTA) reduction. However, in accordance with the instructions in the 2005 GAA, the 2005 MTA reduction of $16,796,807 was treated as a recurring reduction and was applied again in the 2006 Outpatient Plan, which again stated: “Effective July 1, 2005, a recurring rate reduction shall be established until an aggregate total estimated savings of $16,796,807 is achieved each year. This reduction is the Medicaid Trend Adjustment.” The 2006 Outpatient Plan also stated: “This recurring reduction, called the Medicaid Trend Adjustment, shall be applied proportionally to all rates on an annual basis.” It also came to be known as the first cut or cut 1. It again was applied by taking the hospitals’ most current unaudited cost reports and the corresponding occasions of service from the appropriate monthly report of the fiscal agent, and using the Excel spreadsheets and the Goal Seek function to calculate rate adjustments for each hospital. The cut 1 rate adjustments were incorporated in the hospital reimbursement rates, effective July 1, 2006. In 2007, the GAA stated that the funds appropriated for Medicaid outpatient hospital services were reduced by $17,211,796 “as a result of modifying the reimbursement for outpatient hospital rates, effective July 1, 2008.” This has been referred to as the second cut or cut 2. It instructed AHCA to “implement a recurring methodology in the Title XIX Outpatient Hospital Reimbursement Plan to achieve this reduction.” The 2008 Outpatient Plan again applied the first cut as a recurring reduction and stated that it was to be “applied proportionally to all rates on an annual basis.” It then made the second cut, which was to be “applied to achieve a recurring annual reduction of $17,211,796.” These cuts were again applied by taking the hospitals’ most current unaudited cost reports and the corresponding occasions of service from the appropriate monthly report of the fiscal agent, and using the Excel spreadsheets and the Goal Seek function to calculate rate adjustments for each hospital. The resulting rate adjustments were incorporated in the hospital reimbursement rates, effective July 1, 2008. This process was repeated in subsequent years. The third cut (cut 3) was in 2008; it was a $36,403,451 reduction. The fourth cut (cut 4) was in 2009, during a special session; it was a $19,384,437 reduction; however, per the GAA that made the fourth cut, it was not applied to the rates of certain children’s specialty hospitals, which were excluded from the reduction. In addition, using language similar to what AHCA had been using in the Outpatient Plans, the 2009 GAA stated: “The agency shall reduce individual hospital rates proportionately until the required savings are achieved.” The Legislature enacted cut 5 and cut 6 in 2009 and 2010. However, the GAAs stated that AHCA should not take these cuts if the unit costs before the cuts were equal to or less than the unit costs used in establishing the budget. AHCA determined that cuts 5 and 6 should not be taken. However, cuts 1 through 4 continued to be applied as recurring reductions, and rates were adjusted for cuts 1 through 4 in 2009 and 2010 in the same manner as before. In 2011, the GAA enacted cut 7; it was for $99,045,233 and was added to the previous cuts for all but certain children’s specialty and rural hospitals, which were excluded from the additional reduction. In setting the individual hospitals’ reimbursement rates, AHCA first applied cut 7 in the same manner as cuts 1 through 4. The result was a 16.5 percent rate adjustment for cut 7, which was much higher than for previous cuts. Some of the hospitals pointed this out to AHCA and to the Legislature and its staff. There was lots of discussion, and it was determined that the rate adjustment from cut 7 would be more like what the Legislature was expecting (about 12 percent), if budgeted occasions of service were used, instead of the number from the fiscal agent’s monthly report that corresponded to the most recent cost reports. AHCA agreed to change to budgeted fee-for- service occasions of service for cut 7, with the concurrence of the hospitals and the Legislature and its staff. The year 2011 was also the year the Legislature instituted what became known as the “unit cost cap.” In that year, the Legislature amended section 409.908, Florida Statutes, to provide: “The agency shall establish rates at a level that ensures no increase in statewide expenditures resulting from a change in unit costs effective July 1, 2011. Reimbursement rates shall be as provided in the General Appropriations Act.” § 409.908(23)(a), Fla. Stat. (2011). This part of the statute has not changed. The GAA that year elaborated: In establishing rates through the normal process, prior to including this reduction [cut 7], if the unit cost is equal to or less than the unit cost used in establishing the budget, then no additional reduction in rates is necessary. In establishing rates through the normal process, if the unit cost is greater than the unit cost used in establishing the budget, then rates shall be reduced by an amount required to achieve this reduction, but shall not be reduced below the unit cost used in establishing the budget. “Unit cost” was not defined by statute or GAA. To calculate what it was in 2011, AHCA divided the total dollar amount of Medicaid payments made to hospitals by AHCA by the number of Medicaid occasions of service for all hospitals. The result was $141.51. Since 2011, AHCA has applied the unit cost cap with reference to the 2011 unit cost of $141.51. Since then, AHCA has compared the 2011 unit cost to the current cost, calculated by dividing the total dollar amount of Medicaid payments made to all hospitals by AHCA by the number of Medicaid occasions of service for all hospitals, except in children’s and rural hospitals, to determine whether the unit cost cap would require a further rate reduction, after applying the MTA cuts. Using this comparison, the unit cost cap never has been exceeded, and no further rate adjustments ever have been required. It is not clear why AHCA excluded Medicaid occasions of service for children’s and rural hospitals from the unit cost calculations made after 2011. It could have been because those hospitals were excluded from cut 7 and cut 8. Cut 8 was enacted in 2012; it was for $49,078,485 and was added to the previous cuts for all but certain children’s specialty and rural hospitals, which were excluded from the additional reduction. In 2012, the Legislature specified in the GAA that budgeted occasions of service should be used in calculating the MTA reduction for inpatient hospitals. AHCA always treated inpatient and outpatient MTAs the same, and it viewed the specific legislative direction for the inpatient MTA as guidance and indicative of legislative intent that it should continue to use budgeted occasions of service for the outpatient cut 7 and should also use them for the outpatient cut 8. Again, the hospitals did not object since the result was a higher reimbursement rate. In 2014, the Florida Medicaid program began to transition Medicaid recipients from a fee-for-service model to a managed care model. Under the managed care model, AHCA pays a managed care organization (MCO) a capitation rate per patient. The MCOs negotiate contracts with hospitals to provide outpatient care at an agreed reimbursement rate per occasion of service. Since August 2014, the majority of Medicaid recipients has been receiving services through MCOs, rather than through fee-for-service. Currently, about 75 to 80 percent of Medicaid outpatient hospital occasions of service are provided through managed care In recognition of the shift to MCOs, the Legislature began to divide the Medicaid outpatient hospital reimbursement appropriation in the GAA between what AHCA reimburses directly to hospitals under the fee-for-service model and what it pays MCOs to provide those services under the MCO delivery system. This allocation of the budgets between fee-for-service and managed care necessarily accomplished a corresponding division of the recurring MTA reductions between the two delivery systems. The Legislature did not enact any statutes or GAAs requiring AHCA to change how it applies MTA reductions to determine fee-for-service outpatient reimbursement rate adjustments, or make any other changes in response to the transition to MCOs. There were no additional MTA reductions in 2015. The 2015 Outpatient Plan, which is incorporated in existing rule 59G- 6.030, applied the previous cuts as recurring reductions. The evidence was confusing as to whether cuts 7 and 8 were applied using the occasions of service in the fiscal agent’s monthly report corresponding to the hospitals’ most current unaudited cost reports, or using budgeted occasions of service. If the former, the numbers did not yet reflect much of the shift to the managed care model because of a time lag in producing cost reports, and the evidence suggested that the numbers were approximately the same as the budgeted occasions of service used previously. Whichever numbers were used, the resulting rate adjustments were incorporated in the hospitals’ reimbursement rates, effective July 1, 2015. Leading up to the 2016 legislative session, there was a legislative proposal to determine prospective Medicaid outpatient reimbursement rates using a completely new method called Enhanced Ambulatory Patient Groups (EAPGs). EAPGs would eliminate the need to depend on hospital cost reports and complicated calculations to determine the effects of MTA reductions on prospective hospital outpatient reimbursement rates, effective July 1, following the end of the legislative session each year. Hospitals, including some if not all of the Petitioners, asked the Legislature not to proceed with the proposed EAPG legislation until they had an opportunity to study it and provide input, and EAPGs were not enacted in 2016. However, section 409.905(6)(b) was amended, effective July 1, 2017, to require the switch to EAPGs. See note to § 409.905, Fla. Stat.; and ch. 2016-65, § 9, Laws of Fla. (2016). When it became apparent that EAPGs would not be in use for prospective reimbursement rates for fiscal year 2016/2017, AHCA basically repeated the 2015/2016 process, but adjusted the occasions of service used for calculating the hospitals’ rate reductions for cuts 7 and 8 by adding 14,000 occasions of service. At the end of July, AHCA published new rates effective July 1, 2016. When the new rates were published, they were challenged by some of the Petitioners under section 120.57(1), Florida Statutes. Citing section 409.908(1)(f)1., AHCA took the position that there was no jurisdiction and dismissed the petitions. That decision is on appeal to the First District Court of Appeal. The Petitioners also challenged the methodology used to calculate the new prospective reimbursement rates as a rule that was not adopted as required, and challenged the validity of existing rule 59G-6.030, which incorporated the 2015 Outpatient Plan by reference. These challenges became DOAH cases 16-6398RX through 16-6414RX. In response to DOAH cases 16-6398RX through 16-6414RX, AHCA adopted the 2016 Outpatient Plan by reference in proposed rule 59G-6.030. The 2016 Outpatient Plan provides more detail than the 2015 version. AHCA’s position is that the additional detail was provided to clarify the 2015 version. However, it changed the occasions of service used for calculating the hospitals’ rate reductions for cuts 7 and 8, as indicated in Finding 22, as well as some other substantive changes. The 2015 Outpatient Plan addressed the unit cost cap by stating: “Effective July 1, 2011, AHCA shall establish rates at a level that ensures no increase in statewide expenditures resulting from a change in unit costs.” The 2016 Outpatient Plan elaborates and specifies the calculation AHCA has been using, as stated in Finding 14. The 2015 Outpatient Plan provided that an individual hospital’s prospective reimbursement rate may be adjusted under certain circumstances, such as when AHCA makes an error in the calculation of the hospital’s unaudited rate. It also stated: “Any rate adjustment or denial of a rate adjustment by AHCA may be appealed by the provider in accordance with Rule 28-106, F.A.C., and section 120.57(1), F.S.” The 2016 Outpatient Plan deleted the appeal rights language from the existing rule. The effect of the existing and proposed rules on the Petitioners through their effect on managed care contract rates is debatable. Those rates do not have to be the same as the fee- for-service outpatient reimbursement rates, although they are influenced by the fee-for-service rates, and it is not uncommon for them to be stated as a percentage of the fee-for-service rates. By law, managed care contract rates cannot exceed 120 percent of the fee-for-service rates unless the MCO gets permission from AHCA, as provided in section 409.975(6). Currently, rates paid by MCOs for Medicaid hospital outpatient services average about 105 percent of the fee-for-service reimbursement rates. AHCA has indicated that it would not expect or like to see the contract rates much higher than that. It is not clear whether that still is AHCA’s position. If higher rates were negotiated, the impact of fee-for-services rate adjustments on managed care rates could be reduced or even eliminated. The effect of the existing and proposed rules on the Petitioners through their effect on how fee-for-service reimbursement rates are calculated is not disputed. With the transition to managed care, the effect is greater and clearly substantial. The recurring MTA reductions enacted by the Legislature through 2014, which total $224,015,229 (after taking into account $10,656,238 that was reinstated, and $4,068,064 that was added in consideration of trauma centers), are being spread over fewer fee-for-service occasions of service, especially for cuts 7 and 8, which significantly lowers the fee-for-service outpatient reimbursement rates calculated under the proposed rule. The Petitioners’ objections to the validity of the proposed and existing rules can be summarized as follows: a lack of legislative authority for recurring (i.e., cumulative) MTA reductions; a failure to adopt a fixed methodology to calculate individual hospital outpatient reimbursement rate adjustments resulting from MTA reductions; specifically, a failure to derive the number of fee-for-service occasions of service used in calculating individual hospital outpatient reimbursement rate adjustments in the same manner every year; conversely, a failure to increase the occasions of service used to calculate individual hospital outpatient reimbursement rate adjustments resulting from cuts 1 through 4; a failure of the unit cost cap in the existing rule to specify how it is applied; a failure of the unit cost cap in the proposed rule to compare the 2011 unit cost to the current cost, calculated by dividing the total dollar amount of Medicaid payments made to all hospitals by AHCA by the number of Medicaid occasions of service for all hospitals, including in children’s and rural hospitals; and proposed rule’s deletion of the language in the existing rule stating that a rate adjustment or denial can be appealed in accordance with Florida Administrative Code Rule 28-106 and section 120.57.
Findings Of Fact Suburban Nursing and Mobile Homes, Inc., of Ohio, at all material times, wholly owned the stock of G & J, an owner of land, buildings and equipment of two nursing homes, Krestview Nursing Home and Towne House Convalescent Center located in Miami, Florida. Suburban was a holding company which owned the stock of numerous subsidiary corporations engaged in the nursing home or mobile home park business. Among its subsidiaries was B & K Investments, Inc. (hereafter "B & K") a Florida corporation. All of the stock of Suburban was controlled by Gerald D. Keller. On May 5, 1977, at the request of the Department, B & K became the licensed provider for Krestview and Towne House and G & J became the landlord. Both landlord and tenant were wholly owned by the same parent corporation. Since Medicaid rules and regulations prohibited the payment of rent by a provider to a related-party landlord, Keller arranged in May of 1977, for the sale of the stock of B & K to unrelated parties in an arm's-length transaction. Petitioner's assignor, B & K, entered into written provider agreements with the Department for the operation of the two nursing homes. That provider agreement states, in pertinent part, that: In instances of non-payment or underpayment conditions due to error(s) not attributable to provider who has furnished nursing home services and care to persons properly certified and eligible, the single state agency (HRS) shall make payment to the provider upon receipt of properly completed claims documents. (Petitioner's Exhibit 13, 13a.) (Emphasis added.) During 1978 and 1979, the Department set reimbursement rates for B & K inconsistently. During this period of time, B & K experienced at least eight different retroactive increases or decreases in a period of less than twelve months. Additionally, the relationship between the parties was increasingly strained during 1978, as evidenced by Petitioners Exhibit 18, in which a medicaid audit evaluation and review analyst, in considering cost factors at Krestview, speculated that the "Ohio group would get out of the business in Florida." In August, 1979, the independently owned B & K d/b/a Krestview Nursing Home and Towne House Convalescent Center, filed a petition in bankruptcy. Among its creditors were G & J, the landlord, which filed a secured claim in excess of $300,000 for unpaid rents. At that time B & K had not yet filed cost reports for its fiscal year ending May 31, 1979, and had filed no cost reports for the period May 31 through August 31, 1979. The trustee made a determination to file those cost reports on behalf of the bankrupt if the cost reports could be prepared. The trustee requested B & K's former accountant to prepare the cost reports. When it became apparent that the accountant was unwilling to prepare the reports without a substantial advance payment and that no funds were available to pay for such services, the trustee looked elsewhere. Keller's holding company, Suburban, owned the stock of Nursing Home Consultants, Inc., an Ohio corporation engaged in the business of providing accounting services to health care organizations. Keller had an obvious interest in offering the services of his corporation on a contingent basis since he had a $300,000 secured claim against the bankrupt whose only visible asset was the monies it asserted were due from the Department as a result of reimbursable expenses. The proposal advanced by Keller was accepted by the trustee in bankruptcy, Jennette E. Tavormina, and Judge, Thomas C. Brutton, bankruptcy judge. The court entered an order appointing Nursing Home Consultants to prepare the cost reports. Nursing Home Consultants attempted to obtain the accountant's work papers to begin preparing the cost reports, however, it was not until December, 1980, when faced with possible action from the court, that the accountant made his papers available and the time-consuming tasks of matching checks to invoices, verifying patient records and documenting expenses began. In July of 1981, Nursing Home Consultants completed the first of the cost reports and forwarded it to the trustee. The trustee in turn filed the cost report with the Department. It was returned to Nursing Home Consultants because the person who had certified the reports was not a certified public accountant in Ohio. Nursing Home Consultants had the returned cost report recertified by an independent firm of certified public accountants in Ohio. Considerable time elapsed and as of July, 1982, the cost reports for the second facility had not been completed. Both the trustee and the bankruptcy judge desired to close the estate and ascertain what, if any, assets were present. G & J made a written offer to the trustee to purchase the trustee's right, title and interest and claims, if any, in and to the Medicare/Medicaid cost reports of the bankrupt. In consideration, G & J offered the sum of $5,000 together with the waiver of its claim for rents due and owing from B & K and any and all claims against the estate for the costs and expenses incurred in the preparation of the cost reports. A hearing was held on September 23, 1982, after notice to all creditors, concerning whether G & J's offer should be accepted. The Department appeared at the hearing and opposed the sale. The offer was accepted by the trustee and ratified and approved by the court on September 24, 1982. The objection entered by the Department to the sale was specifically denied. No appeal of the court's order was taken by the Department. On February 7, 1983, G & J, as assignee, under the bankruptcy court's order, filed the cost reports with the Department for review and audit. The Department returned the cost reports outlining its reasons by letter dated March 25, 1983, and set forth above. The cost reports for the period May 5, 1977 through May 31, 1978, were initially submitted by B & K and accepted by the Department on November 1, 1978. The final audit of those reports was not completed until December 26, 1979, for Krestview, and February 15, 1980, for Towne House, after B & K had filed for bankruptcy. While the audit was being conducted, B & K was granted extensions of time for the filing of the 1978-1979 cost reports. After the trustee in bankruptcy was appointed and began the process of attempting to prepare the cost reports, the Department conducted a final audit of the 1977-1978 cost reports. The Department failed to provide either B & K or the trustee with a copy of any proposed audit adjustments. No evidence was presented that B & K or the trustee was given an exit conference where the audit findings were discussed and explained. Instead, the Department distributed the final audit but failed at that time to advise B & K, the trustee or the Bankruptcy Court of any right to challenge the audit pursuant to Section 120.57, Florida Statutes.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department enter a Final Order accepting for audit the cost reports submitted by the Petitioner G & J Investments Corporation, Inc., for B & K Investments, Inc., for the periods May, 1977 through August 1979. DONE and ENTERED this 6th day of February, 1984, in Tallahassee, Florida. SHARYN L. SMITH 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 6 day of February, 1984. COPIES FURNISHED: Patricia A. Peoples, Esquire R. Stuart Huff, Esquire 330 Alhambra Circle Coral Gables, Florida 33134 Joseph L. Shields, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Alicia Jacobs, Esquire General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $500. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 90 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 Filed August 29, 2014 9:49 AM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this 24 day of Dutuat , 2014.
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and ory or this Final Order was served on the below-named persons by the method designated on this 6 2 , 2014, lay of 7485 as Richard Shoop, Agency Cletk Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Andrea M. Lang Miriam Alonso, Administrator Office of the General Counsel Living Care Solutions LLC d/b/a The Pointe of Agency for Health Care Administration North Gables (Electronic Mail) 5890 S.W. 8” Street Miami, Florida 33144 (U.S. Mail) Darren A. Schwartz Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
Conclusions Having reviewed the Administrative Complaint, and all other matters of record, the Agency for Health Care Administration finds and concludes as follows: 1. The Agency has jurisdiction over the above-named Respondent pursuant to Chapter 408, Part II, Florida Statutes, and the applicable authorizing statutes and administrative code provisions. 2. The Agency issued the attached Administrative Complaint and Election of Rights form to the Respondent. (Ex. 1) The Election of Rights form advised of the right to an administrative hearing. 3. The parties have since entered into the attached Settlement Agreement. (Ex. 2) Based upon the foregoing, it is ORDERED: 1. The Settlement Agreement is adopted and incorporated by reference into this Final Order. The parties shall comply with the terms of the Settlement Agreement. 2. The Respondent shall pay the Agency $1,500. If full payment has been made, the cancelled check acts as receipt of payment and no further payment is required. If full payment has not been made, payment is due within 30 days of the Final Order. Overdue amounts are subject to statutory interest and may be referred to collections. A check made payable to the “Agency for Health Care Administration” and containing the AHCA ten-digit case number should be sent to: Office of Finance and Accounting Revenue Management Unit Agency for Health Care Administration 2727 Mahan Drive, MS 14 Tallahassee, Florida 32308 1 Filed August 27, 2013 3:00 PM Division of Administrative Hearings ORDERED at Tallahassee, Florida, on this Ao day of Augear , 2013. IA a Elizabéth Dudek retary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall! be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct of this Final Order was served on the below-named persons by the method designated on this Bast g , 2013. Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Finance & Accounting Facilities Intake Unit Revenue Management Unit (Electronic Mail) (Electronic Mail) Andrea M. Lang, Senior Attorney Craig H. Smith, Esq. Office of the General Counsel Attorney for Respondent Agency for Health Care Administration Hogan Lovells US, LLP (Electronic Mail) 215 South Monroe Street, Suite 602 Tallahassee, Florida 32301 (U.S. Mail) | Stuart M. Lerner Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
Findings Of Fact The Parties St. Joseph's is a tertiary care hospital located at 3001 West Buffalo Avenue, Tampa, Hillsborough County, Florida. There is spatial capacity for 703 beds at St. Joseph's, but only 649 beds are licensed, staffed and in use. It is sponsored by the Franciscan Sisters of Allegheny, and is a subsidiary of a holding company, St. Joseph's Health Care Center, Inc. Without CON approval, St. Joseph's cannot increase licensed bed capacity at its current facility on West Buffalo Avenue, or open the satellite facility which is here at issue. St. Joseph's current service area includes Hillsborough County, particularly the central and northern portions of the County. Occupancy rates for St. Joseph's in medical surgical areas have been approximately 80 percent, and at peak times have exceeded 90 percent. However during the last half of 1986, the occupancy rate fell to 74 percent. St. Joseph's provided 16.8 percent of all Medicaid care in Hillsborough County during 1982-83 and 17 percent during 1983-84. It is second to Tampa General in provision of health care to indigents in Hillsborough County. With the exception of Tampa General, St. Joseph's has the largest Medicaid patient admissions of all Hillsborough County hospitals. In 1986, the bad debt/charity care/Medicaid contractual discount for St. Joseph's was approximately $11.3 million. However, while 6.9 percent of all patient days county wide are Medicaid patient days, St. Joseph's has only 5 percent Medicaid patient days. The cost of indigent care is absorbed and offset by paying patients. St. Joseph's decision to seek approval for a satellite in the Carrollwood area is a wise business decision since there is a high percentage of paying patients residing in that area of Hillsborough County. St. Joseph's has a 23 percent market share of all patient days reported in Hillsborough County, the largest market share for all hospital medical- surgical services provided in the County, and also has the largest market share in the proposed service are of the satellite. Its market share of paying patients is much higher than for Medicaid or indigent patients. However, since 1984 St. Joseph's market share has been declining while Tampa General's has been increasing. A relatively high proportion of admissions at St. Joseph's current facility, over 40 percent, are obtained through its emergency room. The proposed satellite will have an emergency room, but it will not offer the same intensity of services as at the current facility on West Buffalo Avenue. The Department is the state agency with the authority and responsibility to consider CON applications. Intervenor Humana of Florida, d/b/a Tampa Women's Hospital (Humana) owns and operates a 192 bed women's hospital in Tampa, Florida, which includes 96 obstetrical beds. Its occupancy rate in 1986 was approximately 50 percent. Intervenor University Community Hospital (University) is an existing hospital with 404 licensed and 320 operating beds located on East Fletcher Avenue, Tampa, Florida, and offers a full range of acute care hospital services. University is located within the service area of the proposed satellite and has been experiencing a decline in patient days from 109,000 in 1983 to 84,000 in 1986. It has had to reduce its number of employees in the last three years by 15 percent-20 percent. University has a 57 percent occupancy rate. Intervenor Tampa General Hospital (Tampa General) operates a publically supported hospital in Tampa, Florida, providing a full range of acute care services, including obstetrical/gynecological services with 707 licensed and 619 operating beds. Tampa General has CON approval for 1000 beds if it completes planned renovations. It has an occupancy rate of 80 percent-82 percent and is treating 70 percent of all Medicaid patients in Hillsborough County. Tampa General has provided $70 million of indigent care, including $40 million in charity, annually. Carrollwood is within its service and marketing area. Intervenor AMI Town and Country Medical Center (Town and Country) is a 201 bed general acute care hospital located at 6001 Webb Road, Tampa, Florida. Its occupancy rate in 1986 was approximately 46 percent. There is no dispute among the parties regarding the standing of Intervenors in this proceeding. The occupancy rates at University, Town and Country and Humana are substantially below optimal levels, and substantial unused capacity exists at each of these hospitals. St. Joseph's proposed satellite will not offer any services that are not currently available to residents of the proposed service area, and will duplicate services at University, Town and Country, and Carrollwood Community Hospital, as well as services provided at St. Joseph's existing facility. The Application and Project On or about October 15, 1985 St. Joseph's filed with the Department an application for CON 4288. This application sought approval for a 150 bed general acute care satellite hospital in Carrollwood, Hillsborough County, Florida, and proposed the transfer of 150 existing licensed beds from St. Joseph's facility on West Buffalo Avenue, Tampa, to the satellite. The estimated total cost of this project was $16,775,000. Specifically, St. Joseph's proposed the transfer of 96 medical/surgical beds, including ICU, CCU and progressive care beds, 15 obstetrical beds and 39 pediatric beds, including PICU. The Department provided St. Joseph's with an omissions letter on or about November 14, 1985, to which St. Joseph's responded on or about December 30, 1985. By letter dated February 28, 1986, the Department preliminarily denied St. Joseph's application for CON 4288 stating, "The project is not justified by the 1985 District VI Health Plan or the 1985-87 Florida State Health Plan." The Department's decision to deny this application was published in Volume 12, Number 11, Florida Administrative Weekly, on March 14, 1986, and St. Joseph's filed its petition for formal administrative hearing on April 4, 1986. On or about February 18, 1987 St. Joseph's and the Department executed a Stipulation and Settlement Agreement which, in pertinent part, provides: DHRS finds and agrees that there is a need for St. Joseph's to relocate and transfer 100 acute-care beds (but not any licensed obstetrical beds) and acute-care services (but not any obstetrical services) from its existing acute-care hospital and construct a 100 bed acute-care satellite hospital in Hillsborough County in light of a balance review of all relevant criteria established by Section 381.494 Florida Statutes, including the levels of indigent and Medicaid care agreed to herein. The project will occur entirely within Hillsborough County and not result in any increase in licensed beds for St. Joseph's. DHRS agrees that a partial approval of the St. Joseph's CON Application will satisfy this need and that said application should be partially approved as hereinbelow further specified ... The agreements and commitments made by DHRS in paragraph 1 above are predicated on commitments made by St. Joseph's concerning its intention to provide certain percentages of Medicaid and indigent care in its proposed satellite hospital and to seek only partial approval of its application as specified herein... St. Joseph's commitments, which are relied upon by DHRS and which shall be set forth as conditions in said CON, are as follows: Not less than 3.5 percent of the total number of admissions at St. Joseph's satellite hospital shall be rendered to Medicaid patients. Not less than 3.0 percent of said total admissions shall be rendered to non-Medicaid "charity/uncompensated" patients whose family income as applicable for the twelve months prior to determination of eligibility is equal to or less than 150 percent of the then current Federal Poverty Guidelines. St. Joseph's shall obtain and retain sufficient information to verify this eligibility determination. The 3.0 percent "charity/uncompensated" patients shall be acknowledged as such at admission, shall not include patients receiving third party payments and shall be in addition to St. Joseph's "bad debt" patients... DHRS specifically recognizes the lengthy history and mission of St. Joseph's in providing extensive indigent care services in Hillsborough County. St. Joseph's agrees to undertake a diligent and good faith effort to encourage physicians on its medical staff to admit and treat Medicaid and charity/uncompensated care patients in such numbers as to comply with the minimum percentages established in paragraph (a)above ... (e) St. Joseph's agrees that it will request at hearing and henceforth seek only partial approval of its proposed CON Application, as follows: The satellite facility shall be reduced in scope from 150 licensed beds to 100 licensed beds. The number of licensed beds to be relocated from the existing St. Joseph's Hospital shall be reduced in scope from 150 licensed beds to 100 licensed beds. None of the licensed beds to be relocated to the satellite hospital shall include licensed obstetrical beds, nor shall the obstetrical services, if any, provided at St. Joseph's existing hospital be relocated to the satellite facility. Labor, delivery and nursery facilities shall be deleted from the satellite hospital. DHRS has consistently maintained the proposed square footage and project cost is inadequate for a 150 bed hospital and more appropriate for a 100 bed hospital. Therefore, the total square footage and total project cost shall remain unchanged... The Stipulation and Settlement Agreement referred to in Finding of Fact 21 was executed following, and in consideration of, additional information prepared and submitted by St. Joseph's to the Department on or about January 30, 1987 and February 9, 1987. At hearing, St. Joseph's and the Department sought partial approval of CON 4288 to conform to the terms of the Stipulation and Settlement Agreement. Intervenors opposed such partial approval. The partial approval sought by St. Joseph's and the Department represents an identifiable portion of St. Joseph's original CON application. Originally, St. Joseph's sought approval to transfer 150 acute care beds, including obstetrical, but at hearing St. Joseph's sought approval for a transfer of only 100 acute care beds, without obstetrical. Labor, delivery and nursery facilities have been deleted from the satellite proposal, but total square footage, physical designs and total cost of the project remain the same for the partial approval sought at hearing compared with the original application. The number of operating rooms has also remained the same. The proposed location in Carrollwood, Hillsborough County, remains unchanged. The project at issue in this case is a 100 bed acute care satellite hospital with, 96,500 total gross square footage (965 gross square feet per bed). The schematic plan submitted by St. Joseph's provides for the following beds and includes, but is not limited to, the following facilities: (72 private rooms, 2 Semi-private); pediatric beds (5 private, 5 semi-private), ICU/CCU (9 beds); space for radiology/nuclear medicine, emergency and outpatient services, laboratory, physical therapy, pharmacy, EEG/EKG, inhalation therapy, surgical suite, sterilization suite, cafeteria, laundry, storage, maintenance, chapel, nurses office, and other miscellaneous facilities. Total project costs are estimated at $16,775,000, the same as for the original 150 bed transfer proposal. The land upon which the satellite will be located was purchased for $3 million in cash. The satellite will be able to operate at a higher occupancy level than St. Joseph's existing hospital due to the larger proportion of single bed rooms and less severe cases being treated at the satellite. After review of St. Joseph's original application for the transfer of 150 acute care beds in March 1986, the Department concluded that the proposed gross square footage per bed of 643 was below the standard range of 800-1000 gross square feet per bed, and also that the total project cost estimate of $111,833 per bed was way below the average standard range of $175,000 to $200,000 per bed. After review of the identifiable portion of St. Joseph's application for which approval was sought at hearing, the Department concluded that the total gross square footage of the satellite, square footage per bed, construction estimates, and the total project cost estimates were reasonable and acceptable. The gross square footage was raised from 643 to 965, and the cost per bed was increased from $111,833 to $167,750. The Service Area The area which St. Joseph's proposes to serve with its satellite hospital is the Carrollwood area of northwest Hillsborough County which is located in the Department's District VI. This is the fastest growing area in Hillsborough County, with an average age which is lower than the rest of the County, and an average income level above the County average. Specifically, almost 35 percent of the population in the satellite's proposed primary service area was between 25 and 44 years old in 1980, compared with approximately 28 percent for the County. In the category of 65 years and older, the primary service area had 8.2 percent of its population, while the County had 11.4 percent. A higher percentage of paying patients reside within the proposed service area than for Hillsborough County as a whole. Nevertheless, 6 percent 7 percent of the service area population have incomes below the federal poverty level, compared with 16 percent for the County as a whole. The area is already served by Medicaid providers. St. Joseph's medical roster indicates over 140 of its physicians have offices in the satellite's proposed service area. However, approximately 100 of these physicians are also on the staffs of Intervenors. The site for the satellite was chosen after review of patient origin data and population growth projections for Hillsborough County. St. Joseph's is currently treating at its facility on West Buffalo avenue an average of 64 patients a day who reside within the proposed service area of the satellite and who are not cardiac, cancer or psychiatric patients. St. Joseph's has an average daily census of 519 patients and proposes to serve 64 of these patients, who reside within the satellite's primary service area, at the satellite. Stipulations The parties have stipulated that St. Joseph's is able to provide quality care at the proposed satellite, and also that St. Joseph's is not proposing or relying upon probable economies and improvements in service that may be derived from the operation of joint, cooperative, or shared health care resources, except to the extent that the project includes a satellite facility. Intervenors contend that health services will be most economically provided by not constructing the satellite facility. Finally, the parties stipulate that Section 381.494(6)(c)11., Florida Statutes, relating to the provision of a substantial portion of services or resources to individuals not residing in the service district in which the entities are located, or adjacent thereto, is not applicable in this case. Non-Rule Policy for Bed Transfers The Department currently has no rule governing the transfer of acute care beds. Rule 10-5.011(1)(m), previously Rule 10-5.11(23), does not apply to acute care transfers since it addresses new or additional beds. However, the Department has begun developing a departmental policy for review of acute care transfer applications which do not request additional beds, and is seeking industry and staff input for the concepts expressed in a draft policy. In its current conceptual form, the transfer policy follows the statutory review criteria as they might apply to transfer applications which do not request new beds. The emerging policy, urges review of acute care transfer applications with emphasis upon the following health care planning criteria: reduction of excess beds, better utilization of existing beds, the encouragement of hospital efficiency, improvement of financial and geographic access, the encouragement of quality care, and the encouragement of competition in the hospital industry. St. Joseph's partial approval request was reviewed for conformity with this emerging policy by Robert Sharpe, the Department's Director of Comprehensive Health Planning (the state's chief health planner), who is charged with development of the bed transfer policy. Bed reduction is a key element for consideration in the Department's emerging policy. However, St. Joseph's 79-80 percent occupancy is greater than the Department's 75 percent hospital occupancy threshold contained in the acute care rule (Rule 10-5.011(1)(m)). Application of a bed reduction formula is not reasonable, according to Sharpe, for a facility which is using its beds to a much greater extent than other facilities in the County. The Department's emerging policy would evaluate whether a proposed transfer of beds to a new site would encourage a better use of the beds than at the existing site. The emerging policy contemplates transfers of acute care beds within a single county or subdistrict in an effort to be responsive to the needs of communities. This concept is consistent with the District VI Local Health Plan's stated desire that planning occur on less than a county basis. The Department's emerging policy evaluates the relative efficiency of the hospital proposing a bed transfer. In evaluating the relative charges made by similar Florida hospitals, the Hospital Cost Containment Board has devised hospital groupings for evaluation purposes. Of the 23 hospitals that are characterized as "group nine" hospitals in Florida, St. Joseph's ranks 16th of those 23 and is below the 50th percentile in gross revenues per adjusted admission. This means that St. Joseph's has lower charges per adjusted admission than most of the other comparable hospitals in Florida. Despite the fact that St. Joseph's is a large tertiary facility, Hospital Cost Containment Board data establishes that St. Joseph's is an efficient hospital facility. Another aspect of the Department's emerging policy is that of improving Medicaid and indigent access for patients. Excluding Tampa General, St. Joseph's has more Medicaid patient admissions than all other hospitals in Hillsborough County. During the past four years, St. Joseph's has consistently provided approximately 17 percent of the Medicaid care to hospital patients in Hillsborough County. The Department considers St. Joseph's to be an indigent care facility in Hillsborough County. The Department also considers geographic access when reviewing transfers. The State Health Plan has an objective that 90 percent of the population in an urban area be within 30 minutes drive time to an acute care facility by 1989. The Local Health Plan has concluded that all of Hillsborough County is currently within a 30 minute drive time. The quality of care provided by a facility proposing a transfer is also considered, and the parties have stipulated that St. Joseph's will provide quality health care services. The Department examines the competitive affects of approval of a transfer of acute care beds. In this case, the charge levels, costs per admission, and current inventory of beds at Hillsborough County acute care hospitals were examined. Since St. Joseph's charges and costs are low relative to other hospitals, and since there is an excess of beds in the County, the Department assumed that there would be competition for existing patients, and further concluded that approval of the satellite facility would promote price and non-price competition among hospitals in Hillsborough County. Considering each of the outlined elements of the Department's emerging policy, the state's chief health planner testified that the emerging policy supports the requested approval of an identifiable portion of the St. Joseph's satellite application. Need And Consistency With State and Local Plans Health planning for CON purposes involves the assessment of need on a community-wide, rather, than an institution specific, basis. Planning on less than a county-wide basis is inappropriate in Hillsborough County. In 1986 there was an excess capacity of 1400 acute care beds in Hillsborough County. District VI is overbedded by nearly 700 beds. The Local Health Council projects that in 1992 there will still be a surplus of nearly 800 beds in the County. Since this application proposes the transfer of beds, it neither increases or decreases this excess capacity. The State Health Plan as well as the Department's non-rule policy recommends eliminating excess bed capacity, but this proposal is not consistent with that recommendation. Existing acute care hospitals in Hillsborough County experienced only percent occupancy in 1986, a drop from 71 percent in 1984. Patient days have declined at an average of 2.6 percent per year since 1983 while the population in Hillsborough County actually increased 11.2 percent during this time. In spite of a significant reduction in hospital utilization and average lengths of stay in the area, the number of licensed hospital beds in Hillsborough County increased from 3,028 in 1981 to 3,457 in 1986, an increase of 14.2 percent or 429 beds. The State Health Plan contains a stated goal of 80 percent occupancy by 1989. The Local Health Plan recognizes 80 percent for medical-surgical and ICU/CCU occupancy for all beds in the County and 90 percent occupancy for each institution. Only Tampa General and St. Joseph's are currently achieving these occupancy level goals. In fact, occupancy rates for the five hospitals within, or adjacent to, the proposed satellite's service area range from 40 percent to percent. Based upon review and consideration of the expert testimony and evidence presented at hearing, it is found that an acceptable hospital optimum occupancy rate would be from 75 percent to 85 percent overall, and 90 percent for medical-surgical beds. Of the 649 beds currently at St. Joseph's, on average there are 149 unoccupied beds on any given day. St. Joseph's proposal does not address the key element of the State Health Plan and the Department's non-rule policy which calls for bed reduction when transfers are considered. This failure is particularly significant in view of the substantial overbedding which currently exists in Hillsborough County and which is projected to exist through 1992. To the contrary, the proposal actually would result in a net increase of 3 coronary care unit beds and 3 pediatric intensive care unit beds. The most important stated purpose of the acute care policies in the 1985 District VI Health Plan is "optimizing utilization of existing resources", and this purpose is implemented through a policy that provides, "Suture changes in the hospital facilities and services systems should occur so as to maintain the fiscal and programmatic integrity of all institutions providing a full range of services... " This proposal is inconsistent with this aspect of the Local Health Plan since it does not reduce the number of excess beds, while at the same time it would transfer 100 beds to a predominantly affluent, young and growing area of the County from which St. Joseph's would realize a substantial number of paying, as opposed to indigent or Medicaid, patients. This could reasonably be expected to increase St. Joseph's already very strong patient payor mix, and increase occupancy rates above 80 percent while other facilities are at or below 50 percent. At the same time, this proposal could actually weaken St. Joseph's financial position since its margin of revenue over expenses was 12.5 percent in 1985 and 10 percent in 1986, and the pro forma for the satellite, although overly optimistic as discussed below, shows only a 4.8 percent margin in the second year of operation. Underutilization of existing facilities is not consistent with sound health care planning because it ultimately results in higher costs to patients. Other facilities currently serving the proposed service area will be more likely to achieve optimum occupancy levels if the satellite is not built, than if it is. Another important purpose of the Local Health Plan is "promoting access for the indigent and underserved population to adequate health care," a purpose also stated in the Department's non-rule policy. The service area of the proposed satellite has a median family income of $30,132 which is 26 percent higher than for Hillsborough County as a whole. Locating a hospital in a predominantly affluent area, does not generally increase access for indigents. In fact, by the terms of its Settlement Agreement, St. Joseph's will actually decrease its commitment to Medicaid patients from the current 5 percent to the proposed 3 percent at the satellite. The percentage of charity care to gross revenues at St. Joseph's in 1986 was .6 percent, and was budgeted at .5 percent for 1987. This is not a significant charity commitment in relation to gross revenues, and the satellite proposal will not improve this commitment. The State Health Plan states as an objective achieving a ratio of less than 4.11 beds per thousand by 1989. This proposal does not promote this objective because it does not represent any net reduction in total number of beds. This proposal is also inconsistent with the State Health Plan which recommends a minimum pediatric size of 20 beds since it will have only 18. Need In Relation to Geographic Accessibility According to the 1985 District VI Health Plan, "The geographic distribution of hospital services in Hillsborough County is such that the entire population is within the 30 minute drive time standard of adequate resources." Ernest J. Peters, who was accepted as an expert in traffic engineering, testified that the entire proposed satellite service area is within 30 minutes of at least one existing hospital. The 30 minute drive time standard is set forth as Objective 2.2 in the 1985-87 State Health Plan. Residents of the proposed service area have geographic accessibility to hospital services within a 30 minute drive time. St. Joseph's does not dispute this fact, but rather Barbara Myres-Fernandez, who was not accepted as an expert in traffic studies, testified that at peak travel times the 30 minute standard was exceeded. However, according to Robert Sharpe, the Department's Director of Comprehensive Health Planning, who was accepted as an expert in health care planning, as well as Ward Koutnik and Ernest J. Peters, who were accepted as experts in traffic engineering, all of the proposed service area is within 30 minutes of existing hospital facilities. Peters testified that if the satellite is built, travel times to the nearest hospital would only be improved by 2.77 minutes for Carrollwood residents in 1990. The weighted average travel time, according to Peters, for the entire proposed service area to the nearest acute care hospital is 13.13 minutes, which will only increase to 13.96 minutes in 1990. The evidence therefore establishes that there would be an insubstantial geographic access gain to Hillsborough County residents if the satellite is approved, and in any event need based upon a lack of geographic accessibility has not been established. Need In Relation to Financial Accessibility According to Myres-Fernandez, it is St. Joseph's contention on the issue of accessibility that approval of the satellite will improve financial accessibility to hospital services for indigent and Medicaid patients. In order to maintain its commitment to indigent, Medicare and charity care, St. Joseph's argues it must continue to attract and maintain its market share of private pay patients, and the Carrollwood area provides a growing source of such patients. However, according to St. Joseph's, 64 of the patients to be treated at the satellite are already being treated at West Buffalo Avenue. These 64 do not include cardiac, cancer or psychiatric patients. Therefore, only 16 "new" patients would be served at the satellite if it were to achieve the goal of 80 percent occupancy. Even with St. Joseph's predicted 90 percent occupancy rate, only 26 "new" patients would be served. No evidence was offered to establish that a higher level of indigents should be expected at the satellite hospital than at St. Joseph's existing facility, particularly since in its Agreement with the Department, St. Joseph's has committed to serve a lower percentage of indigents than is presently true at the main facility on West Buffalo. St. Joseph's current payor mix is very favorable, and no reasons have been shown why it should deteriorate in the foreseeable future. In fact, the mix may actually be improving, according to Hospital Cost Containment Board data. Indigent access to health care is not improved by locating a satellite hospital in a predominantly affluent area in which only 6-7 percent of the population is below the poverty level, as compared to 16 percent for the County as a whole. This proposal represents a wise business decision by St. Joseph's because it is an attempt to increase its number of private pay patients. However, it will not improve indigent access. Financial accessibility is a criteria to be evaluated under Section 381.494(6),(c), Florida Statutes, and the Department's non-rule policy. This proposal does not improve access for indigents and therefore is not consistent with this statutory and policy criterion. Availability and Adequacy of Alternatives There are five existing hospitals within, or adjacent to, the proposed service area with substantial unused capacity, including University and Carrollwood Community Hospital which is a 120 bed facility offering general acute care, emergency room and outpatient services. Carrollwood Community Hospital has an occupancy rate of approximately 50 percent, and thus has excess capacity. While one-third of its patients are osteopathic, two-thirds are allopathic; only one-fifth of its physician staff is comprised of osteopaths. The proposed service area of the satellite is within the current service areas of Intervenors. Thus, adequate alternative facilities are available to residents in the Carrollwood area. Since there are existing alternative acute care facilities within thirty minutes of the proposed service area, an ambulatory surgical center might be an appropriate alternative to the satellite proposal. However, St. Joseph's did not explore such an alternative, and presented no evidence to establish the basis for its assertion that this would not be appropriate. Such a facility could maintain and even enhance referral patterns to the main facility on West Buffalo. Additionally, it has not been shown that splitting St. Joseph's 649 beds between two locations will be more efficient than leaving all 649 beds on West Buffalo, and thereby saving the $16,775,000 in capital expense to construct the satellite. Therefore, alternatives to the construction of a satellite facility do exist, and St. Joseph's has not shown that such alternatives are less feasible or less efficient than the satellite proposal at issue. Needs For Special Equipment and Services It has not been established that any need exists within the proposed service area for special equipment and services which this proposal would provide, and which are not reasonably and economically accessible in adjoining areas. Need For Research and Educational Facilities It has not been shown that any need exists in the proposed service area for research and educational facilities which this application would address. Availability of Manpower During the hearing, the parties stipulated to the adequacy of the staffing patterns proposed by St. Joseph's for the 100 bed satellite, and also their ability to recruit and fill those staffing needs. Approval of this satellite would not have an adverse impact on Intervenors' ability to attract or retain qualified staff since the staff for the satellite would be primarily transferred from the West Buffalo Avenue facility along with the transfer of 100 beds. Since 64 patients who reside in the satellite's service area are currently being treated at the West Buffalo Avenue site, staff who serve these patients will be transferred to the satellite when it opens. Additionally, St. Joseph's conducts an extensive recruitment program outside, as well as within, the Hillsborough County area. It is therefore unlikely that staff for the satellite will come in any significant number from any of the Intervenors. It is recognized that there is almost a 20 percent vacancy level for registered nurses in District VI, and a 33 percent vacancy level for critical care nurses. However, St. Joseph's turn-over rate is relatively low, and therefore it is reasonable to expect that the satellite would be staffed predominantly with staff already employed at the West Buffalo location. Availability of Funds St. Joseph's revenues exceeded expenses by $10-$12 million for fiscal year ending June 30, 1986, and it is among the five most profitable hospitals in the State. It has no long term debt, and is the only facility of its size in Florida which has no debt. Financially, St. Joseph's is in an extremely sound position. St. Joseph's has the ability to financially support the satellite facility and to internally finance its construction. Third-party financing is also being considered. However, its operating margin will decrease slightly as a result of the construction of the satellite. Historically, it has realized an operating margin exceeding 10 percent, although it projects a profit margin of slightly under 5 percent for fiscal year 1987. Financial Feasibility St. Joseph's proposed satellite's total gross revenue for the first two years of operation was determined by multiplying the current average bed rate at the facility on West Buffalo by the expected occupancy. Proposed deductions from revenue were also based upon St. Joseph's historical experience. Assumptions utilized to prepare the satellite's pro forma relied upon St. Joseph's historical information, including but not limited to revenues, fixed expenses and variable expenses. St. Joseph's used a patient admission rate of 125 per 1,000, and a proposed average length of stay of 6 days compared with a current average length of stay at the main facility of 7-7.2 days. A basic assumption used by St. Joseph's was that on the first day of operation, 64 patients currently being treated at the main facility who reside in the Carrollwood area, will be transferred to the satellite for treatment, and thereafter an average of 64 of the satellite's beds will be occupied each day by Carrollwood residents who would have sought treatment at the West Buffalo location in the absence of the satellite. St. Joseph's assumed a case mix intensity level of 1.36 for the satellite, compared with 1.46-1.48 at the West Buffalo location. A decrease in the case mix index results in a corresponding decrease in revenues and expenses. Complex hospitalizations receive a high case mix index, and simple procedures receive a low case mix index. St. Joseph's did not conclusively establish that 64 patients presently at the main facility, except for cardiac, cancer and psychiatric patients, who reside in the service area of the satellite could be transferred on the first day of operation, or that this daily census could be maintained. Physician and patient preferences determine where a patient is admitted. Severity of illness or age of the patient are also factors. Admissions through the emergency room, which account for nearly 50 percent of the admissions on West Buffalo, cannot be redirected. It has not been shown that physicians or patients would prefer admission to a satellite, or that the very severe cases or aged patients, as well as emergency room admissions, could be redirected away from the main facility. While the satellite will have an emergency room, the satellite will not be equipped to handle the complexity of cases presently admitted on West Buffalo. Additionally, transferring 64 patients by ambulance on the first day of operation from West Buffalo to the satellite, in the middle of treatment, has not been shown to be reasonable or feasible, or that physicians and patients would tolerate such a procedure. The opening of a satellite usually begins incrementally and gradually while staff becomes familiar with the new facility and equipment. St. Joseph's has not shown that it is feasible to open the satellite with an immediate occupancy of 64 percent on day one, and 82 percent in the first year of operation. Historically, occupancy levels at satellites run between 20 percent-40 percent the first year. Forecasted revenues are unrealistic because St. Joseph's basic assumption about the transfer of 64 Carrollwood residents is unreasonable and unsubstantiated. St. Joseph's has also failed to correctly and fully estimate salary expenses at the satellite because salary estimates do not account for shift and weekend differentials paid to nurses. More than 50 percent of nurses at St. Joseph's receive shift differential pay, which is a 15 percent increase above their base hourly rate. Given the age of the service area population, a more accurate use rate for the satellite would be between 90 and 95 admissions per 1,000 population, rather than the 125 per 1,000 used by St. Joseph's. The lower use-rate reduces the available pool of patients in the service area from 136 estimated by St. Joseph's to 109. 94 Assumptions based on historical data from the main facility are inappropriate for developing the satellite's pro forma because the satellite will treat less complex cases than the main facility, and the age and income levels in the satellite's service area are significantly different from the County as a whole. Rather than a case mix index of 1.36, an average satellite and community hospital case mix index is 1.00. Using a corrected case mix index of 1.00 rather than 1.36, results in a projected loss for the satellite rather than a profit in its second year of operation. Because construction and operation of the satellite will reduce St. Joseph's overall operating margin below 5 percent-6 percent, which is a minimum standard, St. Joseph's will be less able to provide charity, indigent and Medicaid care after construction of the satellite than it is currently. Impact On Health Care Costs St. Joseph's proposal to spend approximately $16 million on construction of the satellite to serve from 16 to 26 "new" patients could reasonably be expected to adversely affect health care costs. This is exacerbated by the shelled-in space at both the satellite and the existing facility. The size of the satellite was not reduced when beds were reduced from 150 to 100, and the St. Joseph's architect testified there is enough square footage to add back the 50 beds. Despite St. Joseph's assertions that it will not increase rates to subsidize the satellite as a business investment in its own future, it appears reasonable to expect that rates would have to be increased if St. Joseph's is to maintain its historical profit margin, and to offset its failure to properly project salaries, use rates and the case mix index at the satellite. The satellite will continue to lose money through its second year of operation, and this would have to be recouped through increased charges, or reduced profit margins, which could then be expected to result in a reduced ability to fund charity, indigent and Medicaid patients. Project Costs Construction cost estimates are reasonable. The estimated cost for fixed equipment for a 150 bed satellite facility was reduced by $250,000 to reflect the decrease cost of moving 50 beds and the obstetrical surgical suite. This $250,000 savings provides an inflationary contingency in case of construction delays, and while it does increase construction costs from $9,650,000 to 9,900,000, it does not have a negative impact on the appropriateness of the proposed construction costs. Equipment cost estimates as well as total project cost estimates, with the exception of salary estimates, are reasonable. Admitting Practices St. Joseph's has a written admissions policy which requires that it receive patients regardless of their ability to pay. There is no evidence that St. Joseph has ever denied admission to any patient in a life threatening situation. It is standard practice at St. Joseph's to request a deposit on admission and to inform patients that arrangements for payment can be made upon discharge. However, inability to pay the deposit or to make financial arrangements does not result in a patient being denied admission. Patients who are unable to pay are sometimes admitted at St. Joseph's through, the emergency room when a physician sends such patients to the emergency room. Effect On Competition Enhancement of future competition is a factor which is considered under the Department's non-rule transfer policy There is substantial competition among acute care hospitals in Hillsborough County which are currently engaged in aggressive marketing campaigns. Dominance by one provider in a market can be anti-competitive, and at the present time St. Joseph's is the dominant provider for paying patients in Hillsborough County. The current market shares for hospitals already serving the satellite's proposed service area are: St. Joseph's - 33.45 percent; University - 28.92 percent; Town and Country - 17.72 percent; Tampa General - 11.06 percent; and Carrollwood Community - 8.86 percent. The satellite will allow St. Joseph's market share to increase and possibly approach 40 percent. Such market dominance is not consistent with a competitive market. St. Joseph's increase in market share will take patients away from the other hospitals now serving the Carrollwood area, particularly University which receives almost 38 percent of all its patients from this area. University is already projecting an operating loss for fiscal year 1987 of $563,000. Tampa General is a disproportionate provider of indigent services in the County. The Local Health Plan has as one of its objectives protecting such providers of indigent care. Tampa General lost $12 million in fiscal 1983, and in order to improve its financial condition embarked on a $160 million renovation and building effort. It is now indebted to bondholders in that amount. Tampa General's payor mix has begun to improve, and it is actively marketing in the proposed service area. Approval of this project will not further the Local Health Plan objective of protecting disproportionate indigent providers, because it will result in the loss to Tampa General of a significant number of paying patients.
Recommendation Based upon the foregoing, it is recommended that the Department enter a Final Order denying St. Joseph's application for CON 4288 for the establishment of a satellite hospital with the transfer of 100 acute care beds. DONE AND ENTERED this 8th day of September, 1987, in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1987. APPENDIX TO RECOMMENDED ORDER Rulings on St. Joseph's Proposed Findings of Fact are as follows: Adopted in Finding of Fact 1. Rejected as unnecessary and cumulative. Adopted in Finding of Fact 1. Adopted in Findings of Fact 1, 2. Rejected as unnecessary and irrelevant. Adopted in Finding of Fact 2. Adopted in Finding of Fact 1. Adopted in Finding of Fact 8. Adopted in Finding of Fact86. Rejected as irrelevant. Adopted in Findings of Fact 3, 7. Adopted in Findings of Fact 4, 38. Adopted in Finding of Fact 4. Adopted in Findings of Fact 38, 54. Adopted in Findings of Fact 38, 6, 70, 54. Adopted in Finding of Fact 5. Adopted in Finding of Fact 5. Adopted in Finding of Fact 5. Rejected as irrelevant and not supported by competent substantial evidence. Adopted in Finding of Fact 5. Adopted in Findings of Fact 5, 44. Adopted in Finding of Fact 6. Rejected as irrelevant and unnecessary. Rejected as irrelevant and unnecessary. Rejected as unnecessary. Rejected as unnecessary. Adopted in Findings of Fact 6, 38, 70. Adopted in Finding of Fact 7. Rejected as irrelevant and unnecessary. 30-34. Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 10. Adopted in Finding of Fact 11. Adopted in Finding of Fact 12. Rejected as irrelevant. Adopted in Finding of Fact 108. Adopted in Finding of Fact 12. 41-43. Rejected as irrelevant and unnecessary. Rejected as cumulative and unnecessary. Rejected as speculative, irrelevent and unnecessary. Adopted in Finding of Fact 12. Adopted in Findings of Fact 21, 23, 50. Adopted in Finding of Fact 21. Rejected in Findings of Fact 59, 68. Rejected in Findings of Fact 65, 71, 97, 106. Rejected as not based on competent substantial evidence. Adopted in Findings of Fact 18, 21, 22. Adopted in Finding of Fact 24. Adopted in Finding of Fact 24. Rejected as unnecessary and cumulative. Adopted in Findings of Fact 32, 67, but rejected in 89, 90. Adopted in Findings of Fact 32, 67. Adopted in Finding of Fact 21. Adopted in Finding of Fact 26. Rejected as not based competent substantial evidence, and irrelevant. Adopted in Finding of Fact 29. 62-63. Rejected as cumulative and unnecessary. 64-65. Adopted in Finding of Fact 29. Rejected in Findings of Fact 11, 72. Rejected in Findings of Fact 65, 72. Adopted in Finding of Fact 30. Adopted in Finding of Fact 31. 70-71. Adopted in Finding of Fact 7. Rejected as unnecessary and not based competent substantial evidence. Adopted in Findings of Fact 6, 70. Rejected as irrelevant and speculative. 75-76. Adopted in Finding of Fact 7. 77-78. Adopted in Finding of Fact 6. Rejected in Findings of Fact 59, 60, 68, 70, 95. Adopted in Findings of Fact 6, 70. Rejected as irrelevant. Adopted in Finding of Fact 30. 83-91. Rejected in Findings of Fact 7, 105 and otherwise rejected as cumulative and unnecessary. Adopted in Finding of Fact 34. Adopted in Finding of Fact 35. Adopted in Finding of Fact 36. Adopted in Finding of Fact 37. Adopted in Finding of Fact 38. Adopted in part in Finding of Fact 39. Rejected as cumulative. Adopted in Finding of Fact 40. Adopted in Finding of Fact 41. Adopted in Finding of Fact 42. Adopted in Finding of Fact 43. Adopted in Finding of Fact 44 104-105. Rejected as cumulative. Adopted and rejected in part in Finding of Fact 45. Adopted in Finding of Fact 46. Adopted in Finding of Fact 47. Rejected in Findings of Fact 47, 106, 107, 108. Adopted in Finding of Fact 48. 111-122. Rejected in Findings of Fact 63, 64, 65, and otherwise irrelevant and cumulative. Rejected in Findings of Fact 68, 70, 71. Adopted in Findings of Fact 29, 70. Adopted in Finding of Fact 78. Adopted in Finding of Fact 78. Rejected as unnecessary. Adopted in Finding of Fact 80. Rejected as cumulative. Adopted in Finding of Fact 81. 131-133. Rejected as cumulative and unnecessary. 134. Adopted in Findings of Fact 78, 83, 98, 99. 135-138. Rejected in Findings of Fact 50, 56, 57, 59, 61, 62, 65, 71, 108. Rejected as unnecessary. Adopted in part in Finding of Fact 59, but otherwise rejected as unnecessary and not based competent substantial evidence. 141-146. Rejected as unnecessary and irrelevant. 147. Rejected as not based on competent substantial evidence. 148. Rejected in Findings of Fact 50, 56, 57, 59, 61, 62, 65, 71, 108. Rejected in Finding of Fact 75. Rejected in Finding of Fact 73. Rejected in Findings of Fact 72-75. 152-153. Adopted in part in Findings of Fact 89, 90 but otherwise rejected as unnecessary. 154-155. Rejected as irrelevant and unnecessary. Adopted and rejected in part in Finding of Fact 72. Rejected as irrelevant. Adopted in Finding of Fact 42. Adopted in Finding of Fact 107. Rejected as unnecessary and speculative. Rejected in Findings of Fact 87, 89. Rejected as not based on competent substantial evidence. Rejected as irrelevant and not based on competent substantial evidence. Rejected as irrelevant and unnecessary. Rejected as not based on competent substantial evidence. 166-169. Rejected as irrelevant. 170-171. Rejected in Finding of Fact 106. 172. Rejected as unnecessary. 173-174. Rejected as not based on competent substantial evidence and irrelevant. 175. Rejected as unnecessary. 176-177. Adopted in Finding of Fact 82. Rejected as unnecessary. Adopted in Finding of Fact 82. Adopted in Finding of Fact 83. Rejected as unnecessary. Rejected in Findings of Fact 91-94. Adopted and rejected in part in Finding of Fact 83. Rejected in Findings of Fact 84-95. 185-189. Adopted in part in Finding of Fact 85 but otherwise rejected as unnecessary. Rejected in Finding of Fact 97. Adopted in Finding of Fact 85. Rejected as unnecessary. Rejected as unnecessary. 194-195. Rejected in Finding of Fact 92. 196-197. Rejected as unnecessary. 198. Adopted in Finding of Fact 85. 199-200. Rejected as unnecessary and irrelevant. Adopted in Finding of Fact 86 and rejected in Finding of Fact 93. Adopted in Finding of Fact 86. Adopted in Finding of Fact 87. Rejected as not based on competent substantial evidence. Rejected in Findings of Fact 89, 90, 91. Adopted in Finding of Fact,.88. Adopted in Finding of Fact 88, but rejected in Finding of Fact 94. Adopted in Finding of Fact 88. Rejected as unnecessary and cumulative. Adopted in Finding of Fact 89. Adopted in Finding of Fact 42. Adopted in Finding of fact 43. 213-217. Rejected as unnecessary and irrelevant. 218. Adopted in part in Finding of Fact 97, but otherwise rejected as irrelevant. 219-220. Rejected as unnecessary. Rejected as cumulative. Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 98. 224-233. Missing. Adopted in Finding of Fact 98. Adopted in part in Finding of Fact 24, but otherwise rejected as cumulative and unnecessary. 236-241. Adopted in Finding of Fact 28. Adopted in Finding of Fact 96. Adopted in Finding of Fact 24. Rejected as irrelevant and unnecessary. 245-246. Adopted in Finding of Fact 100. 247. Adopted in Finding of Fact 102. 248-250. Adopted in Findings of Fact 100, 101. 251. Adopted in Findings of Fact 100-102. 252-253. Adopted in Finding of Fact 101 Adopted in Finding of Fact 102. Adopted in Findings of Fact 100-102. 256-259. Rejected as cumulative. 260. Rejected as irrelevant. Rulings on Department of Health and Rehabilitative Services Proposed Findings of Fact: Adopted in Finding of Fact 34. Adopted in Finding of Fact 35. Adopted in Finding of Fact 36. Adopted in Finding of Fact 37. Adopted in Finding of Fact 38. Adopted in Finding of Fact 39. Rejected as cumulative. Adopted in Finding of Fact 40. Adopted in Finding of Fact 41. Adopted in Finding of Fact 42. Adopted in Finding of Fact 43. Adopted in Finding of Fact 44. Rejected as cumulative. Rejected as cumulative. Adopted in Finding of Fact 45. Adopted in Finding of Fact 46. Adopted in Finding of Fact 47. Adopted in Finding of Fact 47. Adopted in Finding of Fact 48. Rulings on University Community Hospital's Proposed Findings of Fact: Adopted in Finding of Fact 1. Adopted in Finding of Fact 17. Adopted in Findings of Fact 19, 20. Adopted in part in Finding of Fact 21. Adopted in Finding of Fact 49. Rejected as unnecessary and cumulative. Adopted in Findings of Fact 19, 20. Adopted in Findings of Fact 37, 48. Adopted in Findings of Fact 50, 56. Adopted in Findings of Fact 51, 52, 57. Adopted in Finding of Fact 59. Adopted in Finding of Fact 61. 13-14. Rejected as unnecessary. 15. Adopted in Finding of Fact 58, but otherwise rejected as irrelevant and unnecessary. 16-17. Adopted; in Findings of Fact 63-65. 18. Rejected as irrelevant 19-21. Adopted in Findings of Fact 68-71. Adopted in part in Finding of Fact 29. Adopted in Finding of Fact 16. Adopted in Findings of Fact 72, 76, 77, 104. Adopted in Findings of Fact 56, 81. Adopted in Findings of Fact 80, 81 and otherwise rejected as not based on competent substantial evidence. 27-35. Adopted in Findings of Fact 85-94 but otherwise rejected, as cumulative and unnecessary. 36-38. Adopted in Findings of Fact 85, 94. 39-40. Adopted in Findings of Fact 88, 94. Adopted in Finding of Fact 94. Adopted in Finding of Fact 92. Adopted in Finding of Fact 73. 44-49. Adopted in Findings of Fact 96, 97 but otherwise rejected as cumulative, irrelevant and not based on competent substantial evidence. Adopted in Finding of Fact 6. Rejected as cumulative and unnecessary. Rejected as irrelevant. Adopted in Finding of Fact 105. Adopted in Finding of Fact 69. Adopted in Finding of Fact 69, but otherwise rejected as unnecessary and cumulative. Adopted in Findings of Fact 68, 95, 97. Adopted in Finding of Fact 60. Adopted in Finding of Fact 35. Adopted in Findings of Fact 38, 50. Adopted in Finding of Fact 55, but otherwise rejected as irrelevant and unnecessary. Rejected as cumulative. Adopted in Finding of Fact 53. 63-65. Rejected as cumulative and unnecessary. Adopted in Finding of Fact 104. Adopted in Finding of Fact 105. Adopted in Findings of Fact 82, 83. Adopted in Finding of Fact 105. 70-71. Rejected as unnecessary and cumulative. 72. Adopted in part in Finding of Fact 106, but otherwise rejected as cumulative and unnecessary. 73-76. Adopted in part in Findings of Fact 96, 97, but otherwise rejected as cumulative and unnecessary. Adopted in part in Finding of Fact 95, but otherwise rejected as unnecessary. Adopted in part in Findings of Fact 91, 97, but otherwise rejected as unnecessary. Rejected as cumulative. Adopted in Findings of Fact 1,1, 107. Adopted in Finding of Fact 30. 82-84. Adopted-in Finding of Fact 107, but otherwise rejected as cumulative. Rulings on Tampa General's Proposed Findings of Fact: Adopted in Finding of Fact 17. Adopted in Finding of Fact 18. Adopted in Finding of Fact 19. Adopted in Finding of Fact 22. Adopted in Finding of Fact 21. Rejected as unnecessary. Adopted in part in Finding of Fact 33, but otherwise rejected as unnecessary. 8-9. Adopted in part in Finding of Fact 1, but otherwise rejected as unnecessary. Adopted in Findings of Fact 1, 3. Adopted in Finding of Fact 4. 12-13. Rejected as irrelevant. Adopted in part in Findings of Fact 82, 83, but otherwise rejected as unnecessary. Adopted in Findings of Fact 7, 29, 57, 69, 105. Adopted in Finding of Fact 5. Adopted in Finding of Fact 11. Adopted in Finding of Fact 13. Adopted in Finding of Fact 12. Adopted in Findings of Fact 10, 72. Adopted in Findings of Fact 10, 11, 12, 13, 15, 72. Adopted in Findings of Fact 49, 50. Adopted in part in Findings of Fact 10, 11, 12, 13, 15, 50, 51, 52, 53, 54 and 72, but otherwise rejected as cumulative. Adopted in Finding of Fact 29. 25-26. Rejected as irrelevant. 27. Adopted in Finding of Fact 16. 28-35. Adopted in part in Findings of Fact 17, 21, 24, 25, 28, but otherwise rejected as unnecessary. Adopted in Findings of Fact 83, 97. Adopted in Findings of Fact 34, 35. Rejected as cumulative and unnecessary. 39-44. Adopted in Findings of Fact 63-65, but otherwise rejected as cumulative and unnecessary. 45-51. Adopted in Findings of Fact 66-71, but otherwise rejected as cumulative and unnecessary. 52-55. Adopted in Findings of Fact 36, 38, 50, 56, but otherwise rejected as unnecessary and cumulative. Adopted in Findings of Fact 12, 104. Adopted in Findings of Fact 14, 16, 72, 106. Adopted in Finding of Fact 106. Adopted in Findings of Fact 105, 106, 107. Adopted in Finding of Fact 108. Rejected as cumulative and unnecessary. Adopted in Finding of Fact 74. Rejected as irrelevant and unnecessary. 64-65. Adopted in part in Finding of Fact 74, but otherwise rejected as irrelevant. Adopted in Finding of Fact 16 Adopted in Finding of Fact 73. 68-69. Rejected as unnecessary and without specific citations to the record. 70-73. Adopted in Findings of Fact 91, 94, 95, 97, but otherwise rejected as cumulative and unnecessary. Adopted in part in Findings of Fact 81, 97. Adopted in part in Finding of Fact 57, but otherwise rejected as cumulative. Adopted in Finding of Fact 107. 77-83. Adopted in Finding of Fact 108, but otherwise rejected as cumulative and irrelevant. Rulings on Town and Country's Proposed Findings of Fact: 1-3. Introductory matters. Adopted in Finding of Fact 1. Adopted in Finding of Fact 17. Adopted in Findings of Fact 19, 20. Adopted in Finding of Fact 21. Adopted in Findings of Fact 24, 25. Adopted in Finding of Fact 56. Rejected as cumulative and unnecessary. Rejected as unnecessary. 12-16. Adopted in Findings of Fact 87, 89, 90. 17. Adopted in Finding of Fact 8. 18-24. Rejected as unnecessary and cumulative. 25-26. Adopted in Finding of Fact 67, but otherwise rejected as unnecessary. 27. Rejected as without citation to the record and cumulative. 28-37. Adopted in Findings of Fact 86, 93, but otherwise rejected as unnecessary and cumulative. 38-39. Adopted in Findings of Fact 106-108. Rejected as without citation to record and unnecessary. Adopted in Findings of Fact 15, 50, 51. 42-44. Adopted in Finding of Fact 51. Adopted in Finding of Fact 52. Adopted in Findings of Fact 4, 12, 38. Adopted in Findings of Fact 11, 13, 72. 48. Rejected as without citation to the record and unnecessary 49-51. Rejected as unnecessary and not based on competent substantial evidence Adopted in Finding of Fact 50. Rejected as without citation to the record and unnecessary. 54-55. Adopted in Finding of Fact 53. 56. Adopted in Finding of Fact 54. 57-58. Adopted in Finding of Fact 58. Rejected as cumulative. Adopted in Finding of Fact 60. Rejected as unnecessary. Adopted in Findings of Fact 5, 60. 63-64. Rejected as cumulative and unnecessary. Adopted in Findings of Fact 29, 70. Adopted in Finding of Fact 29. Adopted in Findings of Fact 71, 95. 68-70. Adopted in Findings of Fact 45, 63-65. Rejected as irrelevant and unnecessary. Adopted in Findings of Fact 103-108. 73-74. Adopted in Finding of Fact 16. 75-77. Adopted in Findings of Fact 82, 83. Rejected as unnecessary. Adopted in Finding of Fact 82. Rejected as cumulative. Rejected as irrelevant. Adopted in Finding of Fact 105. Adopted in Finding of Fact 82. Rejected in Finding of Fact 99. 85-92. Rejected in Finding of Fact 98, and otherwise rejected as not based on competent substantial evidence. 93-96. Rejected in Finding of Fact 99, and otherwise rejected as not based on competent substantial evidence. Adopted in Finding of Fact 97. Rejected as unnecessary. 99-103. Rejected as cumulative and unnecessary. 104-105. Adopted in Findings of Fact 95, 97, but otherwise rejected as unnecessary and cumulative. Adopted in Finding of Fact 95. Rejected as cumulative. Adopted in Finding of Fact 95. Adopted in Finding of Fact 97. Adopted in Findings of Fact 95, 97. 111-114. Rejected as cumulative and unnecessary. 115-116. Adopted in Finding of Fact 97, but otherwise rejected as cumulative and unnecessary. 117. Rejected as without citations to the record. 118-119. Adopted in Finding of Fact 88. 120-122. Adopted in Finding of Fact 94. 123. Rejected as cumulative and without citations to the record. 124-128. Adopted in Finding of Fact 92, but otherwise rejected as cumulative and unnecessary. 129-130. Rejected as not based on competent substantial evidence. 131-133. Rejected as cumulative and unnecessary. 134. Adopted in Finding of Fact 14. Rulings on Humana's Proposed Findings of Fact: 1-2. Adopted in Finding of Fact 1. Adopted in Finding of Fact 17. Adopted in Finding of Fact 19. Adopted in Finding of Fact 21. Adopted in Finding of Fact 24. Adopted in Finding of Fact 25. 8-10. Adopted in Finding of Fact 16. 11-12. Adopted in Finding of Fact 3. 13-14. Rejected as cumulative. 15-17. Adopted in Finding of Fact 50. Adopted in Findings of Fact 53, 54. Adopted in Finding of Fact 51. 20-21. Adopted in Finding of Fact 52. Adopted in Finding of Fact 51. Adopted in Finding of Fact 55. 24-41. Adopted in Findings of Fact 45, 63-65, but otherwise rejected as unnecessary and cumulative. 42-46. Adopted in Finding of Fact 29. Adopted in Finding of Fact 21. Rejected as unnecessary. Adopted in part in Finding of Fact 59. 50-51. Adopted in Finding of Fact 60. 52. Rejected as unnecessary. 53-55. Adopted in Findings of Fact 85-95, but otherwise rejected as unnecessary. 56-57. Adopted in Finding of Fact 90. 58-66. Adopted in Findings of Fact 86, 93, but otherwise rejected as unnecessary. 67-71. Adopted in Findings of Fact 87, 89, 90, 91. Adopted in Finding of Fact 88. Rejected in Finding of Fact 88. Rejected as cumulative. 75-77. Adopted in Finding of Fact 94, but otherwise rejected as unnecessary. 78-81. Adopted in Finding of Fact 92. 82-85. Rejected as unnecessary. 86-92. Adopted in part in Finding of Fact 97, but otherwise rejected as cumulative and unnecessary. 93-94. Adopted in Finding of Fact 82, but otherwise rejected as unnecessary. 95. Adopted and Rejected in part in Findings of Fact 4, 12. 96-97. Adopted in Findings of Fact 105, 106, 107. Rejected as cumulative. Adopted in Finding of Fact 61. 100-101. Adopted in Findings of Fact 63-65. 102. Adopted in Finding of Fact 50. 103-104. Rejected as cumulative. 105-107. Adopted in Findings of Fact 57, 107, 108. 108-109. Adopted in Finding of Fact 60. 110-114. Adopted in Findings of Fact 82, 83, but otherwise rejected as cumulative and unnecessary. Adopted in Finding of Fact 108. Rejected as unnecessary. Rejected as cumulative. 118-119. Adopted in Finding of Fact 62. 120-121. Adopted in Findings of Fact 72-75. 122. Adopted in Findings of Fact 50, 56. 123-125. Rejected in Finding of Fact 28 and as not based competent substantial evidence. COPIES FURNISHED: Ivan Wood, Esquire WOOD, LUCKSINGER & EPSTEIN The Park in Houston Center 1221 Lamar Street, Suite 1400 Houston, Texas 77010 Howard J. Hochman, Esquire Southeast Financial Center 200 S. Biscayne Blvd, Suite 3700 Miami, Florida 33131 James C. Hauser, Esquire Post Office Box 1876 Tallahassee, Florida 32302 John Radey, Esquire 101 North Monroe Street, Suite 1000 Tallahassee, Florida 32302 Cynthia Tunnicliff, Esquire Post Office Box 190 Tallahassee, Florida 32302 Douglas L. Mannheimer, Esquire Post Office Drawer 11300 Tallahassee, Florida 32302 Theodore E. Mack, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Michael J. Cherniga, Esquire Post Office Drawer 1838 Tallahassee, Florida 32302 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, Esquire Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
