The Issue Whether HRS should license 23 comprehensive rehabilitation beds to TMRMC, at the same time reducing general acute care beds licensed at TMRMC by 23? Whether, prior to midnight June 30, 1983, TMRMC had 23 comprehensive rehabilitation beds in service?
Findings Of Fact There are "several buildings on the campus" (T. 21) at TMRMC, including the Extended Care Building on Hodges Drive which houses 53 hospital beds, and another building that houses 60 psychiatric hospital beds as well as 60 nursing home beds. Elsewhere there are an additional 598 hospital beds at TMRMC. TMRMC was licensed at 771 beds (including 60 nursing home beds) on February 3, 1983, when TMRMC's chief operating officer, J. Craig Honaman, wrote Mr. Konrad in HRS' Office of Health Planning and Development as follows: We would like to inform you of an alteration in our acute bed utilization and request your observations relating to the need for a Certificate of Need application to reassign the title of the bed function. Historically, Tallahassee Memorial Regional Medical Center has provided rehabilitative services to inpatients of an acute nature, as well as through a progressive care approach in a skilled facility.... Therefore, we intend to reassign the 53 beds currently utilized in the skilled nursing facility to a medical rehabilitation unit. The change would not affect our license bed capacity. Joint Exhibit No. 6. In reply, Mr. Porter wrote Mr. Honaman a letter dated February 17, 1983, stating: In that you have been providing rehabilitative services to inpatients on a continuous basis, and there will be no increase in licensed bed capacity, this reassignment of beds is not reviewable according to Chapter 10-5, Florida Administrative Cede, the Certificate of Need review process Petitioner's Exhibit No. 5. Effective June 8, 1983, Rule 10-5.11(24), Florida Administrative Code, set out a bed need methodology for comprehensive medical rehabilitation inpatient services. Effective July 1, 1983, Section 395.003(4), Florida Statutes, was amended to provide: The number of beds for the rehabilitation or psychiatric service category for which the department has adopted by rule a specialty-bed-need methodology under $381.494 shall be specified on the face of the hospital license. Before July 1, 1983, general acute care hospitals like TMRMC had been free to allocate beds among various specialty services on a day to day basis. Until September 1, 1984, HRS issued and renewed TMRMC's license authorizing it to operate a hospital without specifying the number of beds to be dedicated to specialty services. In the fall of 1983, TMRMC corresponded with Blue Cross, the medicare intermediary for Florida, requesting a distinct part provider number for rehabilitation services, and enclosing Mr. Porter's February 17, 1983, letter to Mr. Honaman. Blue Cross forwarded these materials to the Health Care Finance Administration (HCFA) in Atlanta, who then contacted HRS' Office of Licensure and Certification in Jacksonville for verification. The Office of Licensure and Certification advised HCFA that their records did not reflect rehabilitation beds licensed to TMRMC. EXPANDING SERVICES When Frances Elise Brown, now TMRMC's Technical Director of Rehabilitation, came to work at TMRMC in 1971, as a physical therapist, TMRMC did not offer speech therapy, occupational therapy or recreational therapy, and did not own what became the Extended Care Building. After TMRMC acquired the Extended Care Building, "there were some physical therapy services provided in that facility." (T. 107) Thereafter, the intensity of physical therapy services increased campus-wide, and in 1978 occupational therapy was "initiated both at Extended Care and in the hospital at the same time." Id. In 1980, TMRMC "initiated speech therapy, which again was delivered both in the hospital and Extended Care at the same time." (T. 107) In 1981, TMRMC acquired an existing outpatient facility that offered physical, occupational and speech therapy. TMRMC "provide[s] services indifferent areas, acute care, long-term, nursing home, home health, in/outpatient services." (T. 102) Recreational therapy and occupational therapy are also available at TMRMC; and TMRMC enjoys a good working relationship with Williams Orthotics a firm which fits braces and prostheses for patients who need them. Respiration therapy is available as are psychological counseling and the services of a social worker. Nursing services are available, although nobody specifically trained in rehabilitation nursing is on staff. A psychiatrist and an audiologist serve as consultants, but no physiatrist consults. No substantial changes in rehabilitation services being provided at Extended Care have occurred during the last three years or so, although it might have been during that period that a speech pathologist began spending more time (ten hours a week) at the Extended Care Building. (T. 119) Neither before or after Mr. Honaman's letter of February 3, 1983, announcing "an alteration in . . . acute [sick bed utilization," Joint Exhibit No. 6, and an "inten[t] to reassign the 53 [sic] beds," Joint Exhibit No. 6, did TMRMC "change anything about those beds." (T 69) For business reasons, TMRMC was waiting for a distinct part provider number for rehabilitation before proceeding. At one time the thought was to offer comprehensive rehabilitation services in a joint venture with Rehab Hospital Services Corporation, but negotiations collapsed in May of 1983. EXTENDED CARE The Extended Care Building has 23 beds "to the right . . . as one goes in" (T. 66) and 30 beds to the left, but there are no "delineated beds" (T. 116) reserved exclusively for patients in need of rehabilitation. The Extended Care Building houses medically stable patients who need skilled nursing services, whether or not they are suitable candidates for rehabilitation. Administratively distinct from TMRMC's acute care facility, the Extended Care Building as a whole has a part-time medical director and a distinct provider number, although TMRMC never received the provider number it sought for rehabilitation beds only. Patients admitted to the Extended Care Building from acute care facilities at TMRMC must first be discharged as acute care patients. They are admitted into the Extended Care Building "according to the screening criteria for extended care." (T. 116) There are no separate rehabilitation admission criteria. The average stay for patients in the Extended Care Building is approximately one month. On an application for hospital license, TMRMC listed the 53 beds in the Extended Care Building as extended care beds on June 22, 1977. On an application for hospital license dated September 7, 1977, TMRMC listed the 43 beds in the Extended Care Building under the category "SNF (D.P.)," meaning skilled nursing facility, distinct part. TMRMC reported the beds in this category through April 23, 1981, on its renewal applications for hospital licensure. On March 17, 1983, for the first time in a licensure application as far as the evidence shows, TMRMC listed the 53 beds in the Extended Care Building as "SNF/Rehab," meaning skilled nursing facility/rehabilitation. Joint Exhibit No. 1. INVENTORY TAKE A joint communication from the director of HRS' Office of Licensure and Certification and its deputy assistant secretary for health planning and development dated December 8, 1983, advised hospital administrators that HRS had "arrived at a count of the number of beds in each category for each hospital in Florida," went on to state: We are asking that each hospital review and verify or comment on these counts prior to final agency action. Petitioner's Exhibit No. 10. In response, TMRMC's Mr. Honaman wrote HRS' Jackie Jefferson on December 20, 1983, reporting "[v]arious errors." Petitioner's Exhibit No. 11. An attachment to Mr. Honaman's letter of December 20, 1983, reported 23 "Comprehensive Rehabilitation" beds at TMRMC. HRS caused notice to be published in the Florida Administrative Weekly on February 17, 1984, Vol. 10, No. 7 of its count of licensed beds in general hospitals by bed type by district, and reported no comprehensive rehabilitation beds at TMRMC. Petitioner's Exhibit No. 12. Mr. Honaman wrote Mr. Rond, administrator of HRS' Comprehensive Health Planning, stating that the "listing is incorrect, as previously reported to you . . . ." Petitioner's Exhibit No. After exchanging letters on the matter with John Adams, a licensure supervisor for HRS, Petitioner's Exhibit Nos. 15 and 16, TMRMC requested a formal administrative hearing. Petitioner's Exhibit No. 14. HRS memoranda written on July 26, 1984, reflected HRS' view that TMRMC had no comprehensive rehabilitation beds, Petitioner's Exhibit No. 8, and that recognition of such beds hinged on their being "CARF certified." Petitioner's Exhibit No. 9. CARF STANDARDS The Commission on Accreditation of Rehabilitation Facilities (CARF) publishes accreditation criteria and standards for facilities serving people with disabilities. The Extended Care Building meets the safety requirements for physical facilities laid down by CARF (T. 122) and most of the services that CARF requires be offered TMRMC does offer, but TMRMC's Ms. Brown conceded (outside the hearing) that comprehensive rehabilitation is not available at TMRMC. TMRMC's M. T. Mustian was also quoted at hearing as acknowledging that TMRMC does not have a comprehensive rehabilitation program within the meaning of Rule 10-5.11(24), Florida Administrative Code, which references the CARF standards. Implicit throughout the CARF standards is the concept of a distinct rehabilitation unit, and there are explicit references to, e.g., "staff organization under the chief executive." Petitioner's Exhibit No. 27, p. 11. "Designated staff should be assigned to the rehabilitation program. Id., p. 39. The standards require that a rehabilitation facility "have clearly written criteria for admission." Petitioner's Exhibit No. 27, p. 27. Beds should be placed in "a designated area which . . . is staffed . . . for the specific purpose of providing a rehabilitation program." Id., p. 39. With respect to medical staff, the standards provide that the "physician responsible for the person's rehabilitation program should possess training and/or experience in rehabilitation" and that the "physician should attend and participate actively in conferences concerning those served." Id., at 39. "Rehabilitation nursing" is to be furnished in addition to basic medical nursing. Id. No staff are assigned exclusively to the putative 23-bed unit, nor are records kept separately for rehabilitation beds. TMRMC does not employ a rehabilitation nurse anywhere. There is no medical director of the comprehensive rehabilitation program TMRMC claims to have. The admitting physician sets the course of treatment and decides about discharge. Admitting physicians do not ordinarily attend conferences scheduled with the other therapists. In comprehensive rehabilitation units, physical therapists or other specialists typically spend five hours or more daily with a single patient as opposed to the 30 to 45 minutes patients at TMRMC are likely to receive from any one therapist. There are no cancer or cardiac rehabilitation patients at TMRMC. The primary caseload consists of stroke victims, patients recovering from joint replacement surgery, "amputee[s and] a few close head injuries." (T. 103) Most patients are older than 45 or 50 and none are admitted under 16 years of age. TMRMC does not furnish vocational training or try to teach people with disabilities to drive automobiles. There is no formal "activities of daily living" program. PROPOSED FINDINGS CONSIDERED Both parties filed proposed recommended orders, and proposed findings of fact have been considered in preparation of the foregoing findings of fact. Proposed findings have been adopted, in substance unless unsupported by the weight of the evidence, immaterial, cumulative, or subordinate.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That HRS deny TMRMC's request to reclassify 23 of its licensed beds as comprehensive rehabilitation beds, without prejudice to a subsequent application if TMRMC obtains a certificate of need. DONE and ENTERED this 17th day of May, 1985, in Tallahassee, Florida. ROBERT T. BENTON II 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 17th day of May, 1985. COPIES FURNISHED: Alfred W. Clark, Esquire Laramore & Clark, P.A. 325 North Calhoun Street Tallahassee, Florida 32301 Lesley Mendelson, Esquire and John Carlson, Esquire Department of HRS 1323 Winewood Blvd. Tallahassee, Florida 32301 David Pingree, Secretary Department of HRS 1323 Winewood Blvd. Tallahassee, Florida 32301
Findings Of Fact The facts, as stipulated to by the parties and as set forth above, are hereby adopted.
Conclusions THIS CAUSE comes before the Agency For Health Care Administration (the "Agency") concerning Certificate of Need ("CON") Application No. 10131 filed by The Shores Behavioral Hospital, LLC (hereinafter “The Shores”) to establish a 60-bed adult psychiatric hospital and CON Application No. 10132 The entity is a limited liability company according to the Division of Corporations. Filed March 14, 2012 2:40 PM Division of Administrative Hearings to establish a 12-bed substance abuse program in addition to the 60 adult psychiatric beds pursuant to CON application No. 10131. The Agency preliminarily approved CON Application No. 10131 and preliminarily denied CON Application No. 10132. South Broward Hospital District d/b/a Memorial Regional Hospital (hereinafter “Memorial”) thereafter filed a Petition for Formal Administrative Hearing challenging the Agency’s preliminary approval of CON 10131, which the Agency Clerk forwarded to the Division of Administrative Hearings (“DOAH”). The Shores thereafter filed a Petition for Formal Administrative Hearing to challenge the Agency’s preliminary denial of CON 10132, which the Agency Clerk forwarded to the Division of Administrative Hearings (‘DOAH”). Upon receipt at DOAH, Memorial, CON 10131, was assigned DOAH Case No. 12-0424CON and The Shores, CON 10132, was assigned DOAH Case No. 12-0427CON. On February 16, 2012, the Administrative Law Judge issued an Order of Consolidation consolidating both cases. On February 24, 2012, the Administrative Law Judge issued an Order Closing File and Relinquishing Jurisdiction based on _ the _ parties’ representation they had reached a settlement. . The parties have entered into the attached Settlement Agreement (Exhibit 1). It is therefore ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. The Agency will approve and issue CON 10131 and CON 10132 with the conditions: a. Approval of CON Application 10131 to establish a Class III specialty hospital with 60 adult psychiatric beds is concurrent with approval of the co-batched CON Application 10132 to establish a 12-bed adult substance abuse program in addition to the 60 adult psychiatric beds in one single hospital facility. b. Concurrent to the licensure and certification of 60 adult inpatient psychiatric beds, 12 adult substance abuse beds and 30 adolescent residential treatment (DCF) beds at The Shores, all 72 hospital beds and 30 adolescent residential beds at Atlantic Shores Hospital will be delicensed. c. The Shores will become a designated Baker Act receiving facility upon licensure and certification. d. The location of the hospital approved pursuant to CONs 10131 and 10132 will not be south of Los Olas Boulevard and The Shores agrees that it will not seek any modification of the CONs to locate the hospital farther south than Davie Boulevard (County Road 736). 3. Each party shall be responsible its own costs and fees. 4. The above-styled cases are hereby closed. DONE and ORDERED this 2. day of Meaich~ , 2012, in Tallahassee, Florida. ELIZABETH DEK, Secretary AGENCY FOR HEALTH CARE ADMINISTRATION
Findings Of Fact Introduction Orlando General Hospital applied in April, 1987, for a certificate of need to allow it to convert 24 existing medical-surgical beds to short term psychiatric beds. O.G. Ex. 2, p. 1. It did not explicitly apply for beds limited to serve adults. It did, however, state that adolescent care would not be provided "at this time," leaving open the use of the 24 beds in the future for possible adolescent use. Id. at p. 5. Charter Medical-Orange County, Inc., applied for a certificate of need for a 50 bed short term psychiatric specialty hospital. It explicitly applied for a specialty hospital having 50 beds of "short term adult psychiatric care." C.M. Ex. 1, application, section I. In the executive summary, it characterized its proposal as a specialty hospital "for adults." Id. at p. 1. Charter does not intend to treat child or adolescent short term psychiatric patients. T. 23. The applications were filed in early 1987 to meet need in the January, 1992, planning horizon. The rule that applies in this case is the one contained in the prehearing stipulation. T. 392. It is rule 10-5.011(1)(o), Fla. Admin. Code. A copy of the rule is contained in O.G. Ex. 7, p. 33. The provisions of the local health plan at issue in this case are accurately reproduced in the State Agency Action Report (SAAR) which is C.M. Ex. 5. Net Short Term Psychiatric Bed Need (Numeric Need) Rule 10-5.011(1)(o)4a-c, Fla. Admin. Code, provides that the projected number of beds shall be based on a bed need ratio of .35 beds per 1,000 population projected five years into the future and based, in this case, on the January, 1987, projections for January, 1992. That 1992 population for District VII is projected to be 1,505,564, and thus the gross short term psychiatric bed need is 527 beds. For this batching cycle, the inventory of licensed and approved short term psychiatric beds was 410. These were: General Hospitals Florida Hospital-Altamonte 20 Florida Hospital-Orlando 85 Orlando Regional Med. Center 32 Wuesthoff Memorial Hospital 25 Subtotal 162 Specialty Hospitals Brevard Mental Health Center 52 CPC Palm Bay (began 10/86) 40 Laurel Oaks (began 10/86) 60 Lynnhaven (approved only) 39 Park Place (approved only) 17 West Lake 40 Subtotal 248 TOTAL (Licensed and approved) 410 TOTAL (Licensed only) 354 Thus, there is a net need for 117 short term psychiatric beds In District VII by 1992. The rule further specifies that a minimum of .15 per 1,000 population should be allocated to hospitals holding a general license, and that .20 per 1,000 of the beds may be located in either speciality hospitals or hospitals holding a general license. HRS interprets the word "should" in the rule with respect to .15 per 1,000 allocated to hospitals with a general license as being mandatory. C.M. Ex. 5, pp. 13-14. This is a reasonable construction of the rule. By 1992 there must be 226 short term psychiatric beds located in hospitals holding a general license. Since currently there are 162 beds in such hospitals, there is a net need by January, 1992, for 64 short term psychiatric beds to be opened in hospitals holding a general license. The remainder of the net bed need, 53 beds, may be located in either a specialty hospital or a hospital holding a general license. T. 500-02. The Occupancy Rate for "All Existing Adult Short Term Inpatient Psychiatric Beds" Rule 10-5.011(1)(o)4e, Fla. Admin. Code, provides in part that "no additional short term inpatient hospital adult psychiatric beds shall normally be approved unless the average annual occupancy rate for all existing adult short term inpatient psychiatric beds in a service district is at or exceeds 75 percent for the preceding 12 month period." (E.S.). Calendar year 1986 is the period of time accepted by all parties as the "preceding 12 month period" as specified by the rule, that is, the period of time to calculate the occupancy rate for this batching cycle. See, e.g., T. 285; C.M. Ex. 5. The State Agency Action Report Occupancy Rate The State Agency Action Report computed the occupancy rate for all licensed short term psychiatric beds in District VII in calendar year 1986 at 70.13 percent. C.M. Ex. 5, p. 10. This figure was based upon data as to patient days as reported by District hospitals to the District VII local health council and was based upon 354 licensed beds in the District during the full calendar year, but excluded 56 beds the re approved but not opened. O.G. Ex. 7, p. 6. Exclusion of CPC Palm Bay and Laurel Oaks CPC Palm Bay and Laurel Oaks have been designated by certificate of need issued by HRS to serve only children and adolescents. T. 507. Since those facilities by law cannot serve adults, their beds are not "adult beds," their patient days are not adult patient days, and their occupancy rate is not an adult occupancy rate. T. 1128. If CPC Palm Bay and Laurel Oaks were excluded from the calculation of the occupancy rate in the SAAR, the occupancy rate would be 73.7 percent. This rate is a weighted average based upon a 86,779 patient days that were possible at 100 percent occupancy of all licensed short term psychiatric beds in District VII in 1986, excluding Palm Bay and Laurel Oaks. C.M. Ex. 17, p. 11, fn. 9. How Many Adult Patient Days and Beds? HRS often issues certificates of need without age restrictions, allowing the facility to provide short term psychiatric treatment to everyone, regardless of age. Such hospitals can and do serve all ages, and their licensed short term psychiatric beds are not designated as, or restricted to, adults. T. 1128-29. With the exception of Palm Bay and Laurel Oaks, none of the other licensed short term psychiatric hospitals in the District are restricted by HRS by patient age. HRS does not have data to enable it to determine which short term psychiatric beds were used by adult patients in the District in 1986. T. 1169. Use of beds for age cohorts can dramatically and continuously change during a calendar year, and 41 has no reliable means to know about such changes. T. 1229-30. Hospitals issued certificates of need without limitation as to the age of the patient are not required by HRS to report the number of patient days served by the hospital by age or age group of the patient. See T. 1218-19; HRS Ex. 2. HRS Ex. 2. Consequently, the reported short term psychiatric patient days for District VII for calendar year 1986 mix adult patient days with patient days for children and adolescents. Thus, with the exception of Laurel Oaks and Palm Bay, it is impossible in this case for the applicants and other parties in this batching cycle to untangle pure adult psychiatric patient days from the available data. T. 392, 353, 287, 291, 371, 1169-71. It is impossible on this record to make a finding of fact as to what would happen to the mixed occupancy rate all patient days attributable to adolescents and children could be excluded from the adult patient days. The only bit of evidence is found in C.M. Ex. 17, the data from Florida Hospital, which shows for that hospital that the 16 adolescent unit in 1986 had an occupancy rate of 60.92 percent, and the open adult unit had an occupancy rate of 82.42 percent. C.M. Ex. 17, p. 3. But that percentage is more a reflection of Florida Hospital's choice in how it set up the beds in the two programs than it is a reflection of need. For example, had Florida Hospital chosen to allocate only 12 beds to its adolescent program, instead of 16, the 1986 occupancy rate for that unit, based on 3,558 patients a day, would have been 81.23 percent. One wonders why Florida Hospital did not simply allocate a lower number of beds to the adolescent unit, since it had only 13 admissions to that unit in 1986. In any event, since a hospital like Florida Hospital has discretion as to how it sets up its beds with respect to the ages of patients. In those beds, the fact that it had an occupancy rate of 60.92 percent in the subunit it called the adolescent unit in 1986 is relatively meaningless when trying to predict which way a pure adult occupancy rate might change if adolescent and child patient days could be excluded. In summary, there is no accurate count of beds licensed only as adult beds, there is no accurate count of beds used only as adult beds, and there is no accurate count of adult patient days. The Problem of West Lake Hospital The record has an additional data problem with respect to calculation of the occupancy rate of adult short term psychiatric beds. West Lake Hospital is licensed for 40 short term beds (not restricted by age), and 30 long term psychiatric beds. Data for calendar year 1986, the only year relevant in this case, is a mixture of short term and long term patient days. C.M. Ex. 17. As will be discussed ahead, additional evidence as to the patient days at West Lake Hospital was excluded from evidence for failure to comply with the prehearing order. The Problem of Short Term Psychiatric Patient Days Occurring in General Hospitals Without Licensed Short Term Psychiatric Beds A general hospital with no licensed short term psychiatric care can lawfully provide temporary and sporadic short term psychiatric care in its medical-surgical beds. T. 1191. In calendar year 1986, Orlando General Hospital reported to the Hospital Cost Containment Board that it provided 4,969 psychiatric (MDC 19) patient days of care. O.G. Ex. 7, p. 11. By 1988, it had over 30 psychiatric patients in the hospital at any given time. T. 753. Orlando General Hospital does not have any beds licensed for short term psychiatric care, or for long term psychiatric care, for that matter. Orlando General Hospital's psychiatric patients are currently receiving inpatient psychiatric care that is substantially the same as would be provided in a licensed short term psychiatric bed, with the exception that the care is osteopathic in nature. See T. 797, 1355-58, 1360-62, 788-90, 792-93. HRS Policy as to the Data Problems HRS stated that it "... would not attempt to fix a specific occupancy for a specific age cohort" in this case, T. 1220. A good faith attempt was made, however. Following a new policy, HRS argued that the adult bed occupancy rate should exclude the beds and patient days of hospitals having certificates of need explicitly limited to service of the needs of children and adolescents (Palm Bay and Laurel Oaks), but should include all of the licensed short term psychiatric beds at any other facility that is not restricted by patient age. T. 1127-29. It was acknowledged that the information is faulty, but the Department urges that it is the best that it can do under the circumstances. T. 1174. With respect to patient days, HRS also urges that only the patient days reported to the local health council by hospitals having licensed adult short term psychiatric beds should be counted in the mixed rate. In particular, HRS argues that it should not use patient day data reported to the Hospital Cost Containment Board because such data is not limited to hospitals having "designated" psychiatric units. T. 1126-27. This argument is not reasonable. Hospitals that are legally authorized to provide short term psychiatric care to adults (i.e., having a certificate of need and a license) can provide such care in any licensed bed in the hospital, even though the bed is not licensed as a psychiatric bed. Moreover, a general hospital with no licensed short term psychiatric care, according to HRS witnesses, can lawfully provide temporary and sporadic short term psychiatric care in its medical-surgical beds. It may even provide such care on a continuous, ongoing basis, as in the case of Orlando General Hospital, although the legality of doing so is questioned by HRS. The critical question is not whether these licensed hospitals have legal authority to provide short term psychiatric care, but whether the care in fact given results in a short term psychiatric patient day in the District. If the care given is essentially the same as if the patient had been in a licensed short term psychiatric bed, it would be unreasonable not to treat the resulting statistic as a short term psychiatric patient day. What is at stake is a true measurement of District capacity. If tomorrow all of the District short term psychiatric patients and the patient days generated by such patients transferred to the District licensed short term psychiatric beds, these short term psychiatric patient days would certainly be counted in the occupancy rate. When trying to assess the real extent of availability of District capacity, a false picture of excess and unused capacity would be shown if real short term psychiatric patient days are occurring somewhere in the District, but are not counted in determining the occupancy rate. On the other hand, if the facility is not even a licensed hospital, it is presumptively providing an alternative kind of inpatient psychiatric care that is different from a licensed psychiatric hospital. Thus, its patient days are irrelevant absent some specific proof that the care given in such a bed is essentially the same as a short term psychiatric patient day in a licensed general or specialty hospital. What is an "Existing" Adult Short Term Bed? Rule 10-5.011(1)(o)4e, Fla. Admin. Code, calls for the occupancy rate for "all existing" adult short term psychiatric beds in the service district, and does not define the word "existing." Petitioners assert that "existing" adult beds of the facility for purposes of determining occupancy rate is the number of beds characterized by the facility as having been in fact used for psychiatric care during the year, but only if that number is less than the number of licensed short term psychiatric beds. T. 391, 354-55. The Respondent and the Intervenor argue that "existing" adult beds is fixed by the number of licensed short term psychiatric beds granted to the facility by the state if available to serve adult patients. Normally, to be licensed a bed must be available within 24 hours. T. 1121. Orlando Regional Medical Center In calendar year 1986, Orlando Regional Medical Center had 32 licensed short term psychiatric beds. T. 348. These 32 beds were not restricted by patient age. In calendar year 1986, Orlando Regional Medical Center characterized as "in service" 32 beds for the first 7 months of 1986, 22 beds for the month of August, 18 beds for the month of September, and 12 beds for the remaining 3 months of the year. The figure of 25 beds used by the Petitioners is the weighted average. T. 348. These licensed short term psychiatric beds at Orlando Regional Medical Center were temporarily not in service because of the construction of new facilities at the hospital. Orlando Regional Medical Facility intended to reopen those beds in the future because the hospital reminded the party seeking discovery that it had 32 licensed beds, and characterized the missing beds as having been "warehoused," that is, saved for future use. T. 509-10; O.G. Ex. 7, appendix 3. Thus, all 32 of Orlando Regional Medical Center's licensed beds would be available and would be used for adult short term psychiatric care if demand existed. Florida Hospital Florida Hospital has two facilities relevant to this case, one in Orlando, in Orange County, and one in Altamonte Springs, in Seminole County. In calendar year 1986, Florida Hospital had 105 beds licensed as short term psychiatric beds. Florida Hospital would serve patients of any age in these 105 beds. C.M. Ex. 18 is a document which was obtained from Florida Hospital through discovery. T. 286. The document is entitled "Florida Hospital Center for Psychiatry Monthly Operating Statistics," and thus was assumed by Charter's expert to be Florida Hospital's characterization of its data as psychiatric data. T. 289. C.M. Ex. 18 could not have been obtained by Charter at the time it made application. It was obtainable only through the discovery process after commencement of section 120.57(1), Fla. Stat., proceedings. T. 314-16, 386-87. Florida Hospital reported in discovery that in calendar year 1986, it had 113 beds operating in its "Center for Psychiatry." Of these, 16 were substance abuse beds, 13 were beds in an eating disorders unit, and 16 were adolescent beds. That left 24 beds in the intensive care unit, 24 beds in an open unit, and 20 beds at a unit at Altamonte Springs. C.M. Ex. 18. The 16 substance abuse beds clearly were not psychiatric beds. If the 13 eating disorders beds were short term psychiatric beds, Florida Hospital had 97 of its 105 licensed short term psychiatric beds in actual operation in 1986. If they were not, Florida Hospital had 84 of its 105 licensed short term psychiatric beds in actual operation in 1986. There is no evidence in this record that Florida Hospital could not and would not have readily opened 8 more short term psychiatric beds during 1986 if demand for those beds had existed, thus having "open" all 105 of its licensed beds. There is no evidence in this record that in 1986, Florida Hospital could not have closed its 16 bed adolescent unit and devoted all of those beds to adult short term psychiatric care, had there been a need. Indeed, it appears that generally speaking, that is how Florida Hospital operates: by shifting beds to other uses within its licensed authority according to demand. See T. 1322-26. Thus, all 105 of Florida Hospital's licensed beds would have been available and would have been used for adult short term psychiatric patients if the demand existed. Counting Patient Days - Are Eating Disorder Patient Days Psychiatric Patient Days? Florida Hospital reported in discovery that it had 2,982 patient days in its eating disorder unit, and that the unit operated with 13 beds. C.M. Ex. 18, P. 3, lines 8 and 26. The eating disorder unit reports to the administrative director of the Florida Hospital Center for Psychiatry. T. 977. The administrative director could not explain why the unit reported to the Center for Psychiatry. T. 977. The unit has co-directors, one a psychiatrist, and the other a specialist in internal medicine. Id. The administrative director of the Center for Psychiatry characterizes the 13 eating disorders beds as medical-surgical beds, and classifies patients in those beds as primarily having a medical problem, T. 976, but the psychiatrist co-director of the program hedged, and would not say whether the primary diagnosis is medical or psychiatric. T. 1315. The patients typically are, however, very ill from a medical point of view. T. 1314. Florida Hospital's characterization of the nature of the care given in its eating disorders unit, as summarized in the preceding paragraph, in view of the manner in which the witnesses were unclear as to how to characterize the eating disorder unit, is not evidence that the care given in that unit is not psychiatric care in view of Florida Hospital's interest in these cases in opposition to the applications. Charter's expert concluded from C.M. Ex. 18 that Florida Hospital was serving short term psychiatric patients in its eating disorders unit at Altamonte Springs. T. 287. He characterized this as a short term psychiatric service in medical-surgical beds. T. 289. But he also characterized the 13 beds as psychiatric beds. T. 287-88. HRS has issued a certificate of need to a short term psychiatric hospital limiting that certificate of need to treatment of eating disorders, thereby recognizing treatment of eating disorders in that case as a form of psychiatric treatment. T. 1191. From testimony at the hearing, it would appear that HRS's expert would view the eating disorder unit at Altamonte Springs as a short term psychiatric program. T. 1191-1192, 1194. It is concluded that the preponderance of the evidence shows that the care rendered to patients in the eating disorders unit was psychiatric care. The unit is administratively a part of the hospital's Center for Psychiatry. While the patients are very ill, medically speaking, they also have substantial mental health problems. Finally, and most persuasive, HRS has previously characterized such care as short term psychiatric care. If these 2,982 eating disorder patient days are counted as psychiatric patient days in 1986 for District VII, and if the number of beds at Florida Hospital remains as it was in the SAAR calculation (105 licensed beds), then the total patient days for the District changes from 63,976 to 66,958. The result is that the occupancy rate for District VII for 1986 for adult and mixed short term psychiatric beds changes from 73.72 percent to 77.16 percent. C.M. Ex. 17, p. 13. This calculation is the result of a weighted average discussed above. Psychiatric Patient Days Reported to the Hospital Cost Containment Board Orlando Regional Medical Center and Florida Hospital report patient days by Medicare major diagnostic categories (MDC). MDC 19 is the category for psychiatric care. T. 512; O.G. Ex. 7. The data collected in this record was for calendar year 1986. T. 603-604. Relying upon MDC 19 statistics for calendar year 1986, Florida Hospital (Orlando and Altamonte Springs combined) had 28,372 MDC 19 patient days, and Orlando Regional Medical Center had 7,328 MDC 19 patient days. The Florida Hospital MDC 19 patient days shown in table 6, O.G. Ex. 7, are very close to the number of patient days shown on C.M. Ex. 18, the operating statistics from the "Center for Psychiatry" obtained from Florida Hospital in discovery. The MDC 19 patient days, 28,372, exceed the "Center for Psychiatry" reported data by only 452. The Orlando Regional Medical Center's MDO 19 patient days, 7,328, is 618 patient days greater than the patient days reported by Orlando Regional Medical Center to the local health council. If these MDC 19 patient days are assumed to be short term adult psychiatric patient days, following the same mathematical calculation used by HRS both in the SAAR and in testimony during the hearing (with the same weighted averages), the occupancy rate for adult and mixed short term psychiatric care in District VII, using licensed beds, was 78.39 percent in calendar year 1986. O.G. Ex. 7, table 6. This calculation uses the same weighted average (86,779 patient days at 100 percent occupancy) as used by all the other parties. C.M. Ex. 17, p. 11, fn. 9. There is no evidence in the record that the foregoing MDC 19 patient days are limited to short term psychiatric days, or the extent to which the data considers long term patient days as well. Of course, there is also no evidence available to separate the MDC 19 patient days into adult patient days and patient days attributable to children and adolescents. Westlake Hospital Data as to Short Term Psychiatric Patient Days in 1986 The Intervenor, Florida Hospital, has renewed its effort to have F.H. Ex. 3, and testimony based upon that exhibit admitted, into evidence. The exhibit and testimony involves data as to short term psychiatric patient days for 1986 at Westlake Hospital, located in Seminole County. Florida Hospital argues that the ruling excluding F.H. Ex. 3 from evidence, as well as testimony related to that exhibit, is inconsistent with the ruling that allowed Charter Medical to introduce C.M. Ex. 19. It is argued that the only difference is that in the case of Charter Medical, the witness first testified as to the contents of the exhibit, whereas in Florida Hospital's case, the exhibit was admitted, the witness testified, and then the exhibit was excluded. Florida Hospital argues that as a result of this sequence of events, its witness was not afforded an opportunity to present the same evidence from memory without the exhibit. From a review of the sequence of events, it is apparent that there is a substantial difference between the two exhibits, as well as a substantial difference in the procedures used by counsel, and that difference necessitates the two rulings. C.M. Ex. 19 is nearly identical to C.M. Ex. 17, with three exceptions. In C.M. Ex. 19 the patient days at the Florida Hospital eating disorder unit were moved from the Orlando facility to the Altamonte Springs facility. C.M. Ex. 19 also excluded adolescent patient days from the Florida Hospital count changed the number of "existing" beds at Orlando Regional Medical Center to 25 instead of 32. T. 295. C.M. Ex. 19 made no other changes to C.M. Ex. 17 with respect to patient days or number of beds. Two objections were made by Florida Hospital to the admission of C.M. Ex. 19, that C.M. Ex. 19 had not been provided to opposing counsel at the exchange of exhibits, in violation of the prehearing order, and that C.M. Ex. 19 was an impermissible amendment to Charter Medical's application for certificate of need. T. 295-296. Only the first objection is the subject of Florida Hospital's renewed argument. The Hearing Officer at the time overruled the first objection because it was determined that C.M. Ex. 19 merely summarized the testimony of Dr. Luke as to changes he would make to C.M. Ex. 17. That ruling was correct, and should not be changed at this time. All of the underlying data for the expert analysis in C.M. Ex. 19 came into evidence without objection that it had not been exchanged among the parties. C.M. Ex. 18 contained the data as to adolescent patient days and eating disorder patient days at Florida Hospital in 196. That data came into evidence without objection that it had not been exchanged. T. 316. Dr. Luke's testimony that Orlando Regional Medical Center had only 25 beds operational in 1986 came into evidence without objection. T. 292. Dr. Luke's testimony concerning the location of the eating disorders unit at Altamonte Springs came into evidence without objection. T. 287, 291. Both of these latter evidentiary matters were of a type that easily could have been known to Dr. Luke without reference to a document to refresh his memory. Additionally, the parties were well aware of the argument that Orlando Regional Medical Center had only 25 operational beds in 1986, and that Florida Hospital had only 48 adult beds in operation in 1986, since that evidence and argument was a fundamental part of Orlando General Hospital's basic bed need exhibit, O.G. Ex. 7, and the testimony of Ms. Horowitz. Moreover, the type of analysis of the data contained in C.M. Ex. 19 is the same as that of Ms. Horowitz in O.G. Ex. 7. Thus, Florida Hospital was not caught by surprise by C.M. Ex. 19. The exhibit did not contain new data or new modes of analysis. Florida Hospital's attempt to introduce data as to the actual number of short term psychiatric patient days at Westlake Hospital in 1986 was quite different. The data as to patient days at Westlake had not been produced during the deposition of Florida Hospital's witness, although similar data for 1987 and 1988 was produced. T. 867. Had it been made available in discovery, the failure to exchange the data as an exhibit as required by the prehearing order would have been less serious. But the exhibit had not been given by Florida Hospital to opposing parties, in violation of the prehearing order. T. 869. F.H. Ex. 3 did not reorganize data that otherwise was exchanged between the parties. It attempted to introduce new raw statistical data that had not been furnished opposing counsel as required by the prehearing order. The Hearing Officer initially ruled that F.H. Ex. 3 should be admitted into evidence and allowed the witness to testify concerning the data contained in the document. T. 870-871. That initial ruling was in error. The data contained in F.H. Ex. 3 is not at all simple. The document consists of four pages of numbers representing monthly statistics in 1986 at Westlake Hospital for each of its units. It is highly unlikely that a witness could have remembered all of that data presented the data in testimony without reliance upon the exhibit. Indeed, the witness testified that all of his testimony was based upon F.H. Ex. 3. T. 907. The witness had apparently given a different impression as to Westlake's occupancy rate in 1986 during his deposition, and did so without the benefit of F.H. Ex. 3. T. 910. Florida Hospital could have asked the witness if he could have presented his testimony without reference to F.H. Ex. 3, but it did not ask the witness that critical question. In sum, the witness could not have presented his analysis from memory. He had to have F.H. Ex. 3 in front of him as he testified. On December 2, 1987, an order was entered setting this case for formal administrative hearing beginning on July 11, 1988. That order established prehearing procedures. Paragraph 3 of that order requires counsel to meet no later than 10 days before the hearing to, among other things, "examine and number all exhibits and documents proposed to be introduced into evidence at the hearing." Later in the same paragraph is the requirement that the parties file a prehearing stipulation containing a list of all exhibits to be offered at the hearing. Paragraph 3D of the prehearing order states in part that failure to comply with the requirements of the order "may result in the exclusion of testimony or exhibits." The first time that opposing counsel were given the opportunity to see the data in F.H. Ex. 3 was in the middle of the formal administrative hearing. The exhibit contained detailed raw statistical data. C.M. Ex. 19 did not try to present new raw statistical data. For these reasons, F.H. Ex. 3 and all testimony related to that exhibit by Mr. Menard was excluded from evidence. Later in the hearing, Florida Hospital sought to introduce the same data through the testimony of Wendy Thomas, the planning director and data manager for the local health council. T. 1050. Counsel for Florida Hospital first attempted to show the witness the document that had been excluded from evidence, and counsel for the other parties objected. T. 1047-1049. The Hearing Officer suggested to counsel that counsel should first ask the witness whether she had made a computation and then ask what was the basis of the computation, rather than show the witness the document. T. 1049. Counsel then attempted to do that. But when counsel asked the witness for her computation, it was still unclear whether the witness based her calculation upon data in the excluded document. T. 1053. After a number of other questions, it still was unclear whether the data in the excluded document was the basis for the calculation. T. 1053-1055. The Hearing Officer then asked the witness if she could identify F.H. Ex. 3. The witness said that F.H. Ex. 3 contained the exact type of information that she had in her own files, and that her document looked like F.H. Ex. 3, except it was photocopied smaller. T. 1056. During all of this exchange, the witness was never asked by counsel for Florida Hospital if she ever had an independent memory of the details of the underlying data, or whether, if that memory now had faded, looking at F.H. Ex. 3 would refresh her memory. Since it was apparent that the basis for the witness's calculation was the same raw statistical data as contained in F.H. Ex. 3, the Hearing Officer granted the motion to exclude the testimony. Later, in cross examination of the proffered testimony, the witness testified that the basis for her calculation was the use of a document containing the same data as F.H. Ex. 3. T. 1087-1088, 1091. Thus, counsel for Florida Hospital did not lay a proper predicate for attempting to use F.H. Ex. 3 to refresh the memory of either witness. As discussed above, had it done so, it is unlikely that either witness could have testified from memory as to the statistics because the data contained in F.H. Ex. 3 was too detailed to have ever been in the memory of either witness. Florida Hospital argued that Ms. Thomas's calculation should be admitted because the raw data had been in her possession for over a year. That argument is unpersuasive. The raw data was in the possession of Westlake Hospital as well. The issue is not whether opposing parties might have discovered the data on their own, but compliance with the prehearing order requiring exchange of important exhibits. For these reasons, the Hearing Officer's rulings as to exclusion of the foregoing evidence will remain unchanged. The Local Health Plan Applicability No part of the District VII local health plan was adopted by HRS as a rule when these applications were and reviewed. T. 1214. Several years ago, with respect to applications for certificates of need for short term psychiatric beds, HRS considered need and occupancy rates only on a district-wide basis. T. 1184. See e.g. C.M. Ex. 20, where HRS did not refer to the local health plan as to these issues in District VII. HRS has now changed that policy, however, and considers need and occupancy at the district level and by portions of the District if those issues are effectively required by the local health plan. T. 1184. For purposes of planning for short term psychiatric services, the local health plan divides District VII into county "planning areas." Orange County is thus a local health plan planning area. The local health plan does not use planning areas for substance abuse planning, and it does not explain why there is a difference in planning. Orlando General and Charter both propose to locate their proposed short term adult psychiatric beds in Orange County if granted certificates of need. Counties are convenient units for health planning purposes because population data exists by county. T. 1180. Census tracts and zip code areas are also convenient geographical units for health planning. T. 1180-81. If a proposed facility is to be located very close to the county line, it would make no difference which side of the line it was on with respect to the ability of the facility to serve patients originating in either county. T. 1181. Allocation of Net Need to Orange County The local health plan, policy 3, provides that if the application of rule 10-5.011(1)(o) indicates a need (at the District level), the need is to be allocated among the counties in the district using the state numeric need method by county. T. 1027-29; C.M. Ex. 5. Applying all of the age calculations for the projected populations and bed inventory of Orange County only, the local health plan allocates 55 new short term psychiatric beds to Orange County by 1992. However, applying the allocation ratios of the rule, there is an excess of 18 short term psychiatric beds in general hospitals, and thus none of the 55 beds would be mainly allocable to a general hospital. There is, nonetheless, a potential allocation of need of 73 beds in either a specialty or a general hospital, and the net need of 55 beds could be allocated to either a specialty hospital or a general hospital. The Orange County Mixed Occupancy Rate The local health plan, policy 4, applies the 75 percent occupancy standard to the county level. The policy explicitly calls for an average annual occupancy rate for all existing facilities in the planning area with respect to adult short term psychiatric beds. C.M. Ex. 5. Relying upon the calculation in the SAAR, but deleting Laurel Oaks, the mixed occupancy rate for Grange County in 1986 was less than 58.4 percent. This calculation only includes the beds at Florida Hospital (Orlando) and Orlando Regional Medical Center. The calculation is based upon 18,696 patient days at Florida Hospital (Orlando) in 85 beds, and 6,242 patient days in Orlando Regional Medical Center in 32 beds. There were 4,969 MDC 19 patient days occurring at Orlando General Hospital in 1986. There were 7,328 MDC 19 patient days occurring at Orlando Regional Medical Center in 1986. The eating disorder patient days occurred in Seminole County (Altamonte springs) and should not be counted in an Orlando occupancy rate. The only data as to patient days at Florida Hospital, Orlando only, is that found in C.M. Ex. 18, which is the same as the SAAR, which reports 18,696 patient days. (The MDC 19 data mixes the two units.) The number of licensed short term psychiatric beds in Orange County in 1986 was 117. All of these beds were licensed the entire year, and thus there was no need to do a weighted average of potential patient days for these beds. See C.M. Ex. 17, p. 11; O.G. Ex. 7, table 6. Using all of the foregoing patient days, the number of patient days was 30,993, the number of licensed short term psychiatric beds was 117, and the mixed occupancy rate for Orange County for 1986 was 72.6 percent. If it is not appropriate to count the 4,969 patient days at Orlando General Hospital in the Orange County occupancy rate, the 1986 Orange County occupancy rate was only 60.09 percent. Conversion of Existing Beds and Service to Indigent Patients Policy 5 of the local health plan states that excess bed capacity in, among other types of beds, medical/surgical beds, should be eliminated by reallocation of beds among the services, including psychiatric services. Policy 6 of the local health plan states that primary consideration should be given for project approval to applicants who satisfy to the greatest extent the following priorities: The first priority is to applicants who commit to serving "underserved client groups," including Medicaid, Baker Act, and medically indigent patients. The second priority is to applicants who convert underutilized existing beds. As will be discussed in the conclusions of law, Orlando General's application satisfies these priorities, and Charter Medical's application does not. Other Evidence as to Future Need Historically, health care providers have been reimbursed on a fee- for-service basis. The more services provided, the greater the payment. These insurance arrangements had little incentive to decrease the level of services. T. 720. In the last three or four years, the health insurance industry has changed its methods of providing insurance. A very large percentage of insured patient care is now managed by use of flat rates based upon a per person count (capitation). The rates do not increase related to utilization. Managed health care reimbursement uses a system whereby the health care provider is paid a flat rate annually for each insured person, and agrees to provide for the health care needs of all such persons generally without considering the degree of utilization during the year. T. 722-723. Under the capitation system, the provider has the incentive to provide only such care that, in intensity or duration, is the minimum that is clinically acceptable. T. 724. Psychiatric services have been included in the movement of the industry toward managed health care reimbursement rather than fee-for-service reimbursement. T. 722. The health care industry now offers competitive managed health care plans in central Florida, and the trend is for an increase in the availability of such methods of reimbursement in central Florida. T. 726-727. It is now 40 percent of the insurance market, and in the early 1990's, the percentage of managed health care may be twice that percentage. T. 727. The effect of the new reimbursement system is to substantially lower the length of stay, and to lower the rate of admission as well, at short term psychiatric hospitals. T. 724-725, 881-882, 1319-1320. Orlando General Hospital projected that its average length of stay would be 30 days in 1992. It has discovered from current experience that its average length of stay is about 15 days. T. 433, 464. District VII has recently experienced an increase in the availability of community based mental health facilities. These facilities provide a variety of mental health services, including brief inpatient care. The facilities do not require a certificate of need. T. 1046-1047, 1319. The Nature of the Proposed Programs Orlando General Hospital General Orlando General is a 197 bed acute care general osteopathic hospital located in Orlando, Florida, in Orange County. Orlando General proposes to convert a 35 bed medical-surgical unit to 24 short term psychiatric beds at a capital cost of $689,272. It would relocate 11 of its medical-surgical beds, and convert the remainder to short term psychiatric beds. Orlando General Hospital is located in the southeast portion of Orange County. T. 1107. It is the most eastward facility in Orange County with the exception of a long term psychiatric hospital now under construction. T. 1107. The primary service area of Orlando General by location of physicians offices is the southern half of Seminole County and the northern portion of Orange County. In particular, the hospital serves northeastern Orange County through the location of its physicians' offices. T. 412; O.G. Ex. 2, p. 27. The program of treatment described in Orlando General's application is no longer an accurate description of Orlando General's current program or of the intended program. T. 453. The treatment programs planned for the new short term psychiatric unit are comparable to the programs planned by Charter Medical-Orange County, Inc., and are adequate and appropriate programs for short term psychiatric care. Psychiatric Care for the Elderly Orlando General Hospital would provide adequate and appropriate specialized short term psychiatric care for elderly patients, but would not provide such care in a unit physically separated from other patients. There currently is a split of professional opinion as to whether or not geriatric patients should be treated in a psychiatric unit separated (physically as well as programmatically) from other patients. There are benefits from both approaches. T. 1315-1317, 68, 74-76, 43-45, 770. Various Charter Medical hospitals do it both ways. T. 70. Osteopathic Medicine at Orlando General Hospital Osteopathic medicine differs from allopathic medicine in its emphasis upon viewing the interaction of all parts of the body, rather than a single part, and the use of muscular and skeletal manipulation. T. 1349, 753-754. Orlando General Hospital is an osteopathic hospital and has been osteopathic in nature since the 1960's. It was founded by osteopathic physicians, and the hospital abides by osteopathic philosophies. The Board of Trustees at the hospital are all osteopathic physicians. Although it has medical doctors on staff, the majority are osteopathic physicians Orlando General Hospital is accredited by the American Osteopathic Association to train osteopathic physicians, and has such training programs, primarily in family medicine. T. 412-414, 755. There are about 80 osteopathic physicians in Orange County, and the vast majority are on the staff at Orlando General Hospital. T. 760. Patients who prefer osteopathy, and osteopathic physicians, prefer an osteopathic hospital. Osteopathic physicians believe that they deliver better care to their patients in an osteopathic facility rather than an allopathic facility. About 30 percent of the psychiatric patients treated by Dr. Greene at Orlando General Hospital receive manipulation as a therapy. T. 1351. There is a shortage of osteopathic psychiatrists. T. 756. Other than Randall Greene, D.O., there are no osteopathic psychiatrists in the Orange County area. Id. There is a shortage of places for psychiatric resident training. There is no osteopathic psychiatric residency in Florida, and only a few in the country. T. 764, 1349. Consequently, osteopaths seeking to become psychiatrists often have to go to allopathic hospitals for residencies. T. 1349 Residency in an allopathic hospital is often not approved by the American College of osteopathic psychiatrists. Thus the osteopath who has had his or her residency in an allopathic hospital and lacks such approval will not be readily accepted as an osteopathic psychiatrist on the staff of an osteopathic hospital. T. 1350. Orlando General Intends to have a residency program in osteopathic psychiatric for at least two positions if it is granted a certificate of need. T. 762, 415. The Evolution of Osteo-Psychiatric Care at Orlando General Hospital Dr. Randall Greene came to Orlando in 1982. He is an osteopathic physician and psychiatrist. He initially was on the staff at four hospitals but soon discovered that other osteopathic physicians were referring patients needing psychiatric care to Orlando General Hospital because it was an osteopathic hospital. These physicians frequently asked Dr. Greene to provide psychiatric care at Orlando General. T. 754. Osteopathic physicians who referred their patients to Dr. Greene and to Orlando General Hospital continued to treat the physical ailments of those patients at Orlando General Hospital. T. 760. Dr. Greene now limits his psychiatric practice to Orlando General Hospital because of the large number of psychiatric patients being treated at the hospital. T. 756. Thirty to forty percent of the psychiatric patients come to Orlando General via the emergency room. T. 421, 445. Additionally, patients admitted to the new substance abuse program often need psychiatric care. T. 407. Orlando General has difficulty transferring its psychiatric patients to other hospitals. A number of the patients have no insurance or have only Medicaid coverage. T. 420. Orlando General Hospital is located in a lower economic area, and thus attracts patients of this type. Id. Patients who prefer osteopathic treatment also prefer not to be transferred to an allopathic hospital. T. 759. The increase in numbers of psychiatric patients served at Orlando General Hospital in medical-surgical beds helped to offset the hospital's loss of medical-surgical patient days during the same period. T. 452 Due to the large number of psychiatric patients, and the decline in need for medical-surgical beds, Orlando General hospital decided to apply for the instant certificate of need. Due to the osteopathic nature of the hospital, physicians, patients and the hospital prefer to keep these patients at Orlando General Hospital rather than refer them to an allopathic hospital. It is HRS's position that if a hospital does not advertise itself as having a distinct psychiatric unit and does not organize within itself a distinct psychiatric unit, the admission and treatment of psychiatric patients to medical-surgical beds on an "random" and unplanned basis is proper even the hospital does not have licensed psychiatric beds. T. 1191. Orlando General hospital does not hold itself out to the public through advertising as having a separate psychiatric unit. T. 468. Patient Mix & Commitment to Charity Care Orlando General Hospital currently provides a large portion of charity care for Orange County. T. 1100. In its 26 bed chemical dependency unit, Orlando General reserves 2 beds for indigents. T. 785. The unit also sets aside, as needed, one bed for any Florida nurse whose license is in jeopardy due to chemical dependence and who has no financial means to pay for treatment. Id. Orlando General Hospital typically has a larger amount of bad debt and charity care (for people who do not pay) than other hospitals in the area. T. 423. In 1987, Orlando General Hospital reported to the Hospital Cost Containment Board that it had $141,404 in charity care, and that it had $3,244,530 in bad debt. T. 657, 660. Bad debt constituted 9.7 percent of gross revenue. T. 660. Since it is very difficult to determine at admission whether the patient realistically can pay for services, a lot of this bad debt is, in a functional sense, charity care. T. 659-660. It is concluded from the foregoing that Orlando General Hospital has a genuine commitment to providing health care to persons who cannot pay. T. 422, 662. Orlando General Hospital projects that it will in its proposed 24 bed short term psychiatric unit 5 percent indigent patients, 8 percent Medicaid patients, 20 percent Medicare patients, 50 percent insured patients, and 17 percent private pay patients. These projections are reasonable and are consistent with Orlando General Hospital's current experience. T. 662-664; O.G. Ex. 2, p. 16. Charter Medical-Orange County, Inc. General Charter Medical proposes to construct a 50 bed free standing short term psychiatric hospital in Orange County, Florida. The capital cost of the proposed project would $5,85,000. C.M. Ex. 1. Charter Medical would offer adult and geriatric short term psychiatric services in the proposed short term beds. As a free standing specialty hospital devoted entirely to short term psychiatric care, Charter Medical's proposal should be able to provide more space and additional therapies than would typically be found at a general hospital with a short term psychiatric unit. T. 47-50, 890-91. Charter Medical would provide adequate geriatric short term psychiatric care in a separate unit with separate programs consisting of the latest techniques for caring for the mentally ill elderly patient. Charter Medical's proposed facility would not be able to treat short term psychiatric patients who also have serious medical problems, which undoubtedly will include elderly patients. Charter Medical would have adequate transfer arrangements with a general hospital to serve the medical needs of its patients, and would have adequate staffing and equipment within the free standing specialty hospital to meet the routine and emergency medical needs of its patients. Staffing Orlando General and Charter Medical would be able to recruit, train, and retain adequate staff to operate its proposed short term psychiatric unit. T. 635-648, 849-852, T. 137-143. Lone Term Financial Feasibility Orlando General Hospital Charges When these applications were filed, HRS did not have standards for the contents of a pro forma of income and expenses. Orlando General Hospital initially projected a charge rate of $350 in 1987 and $375 in 1988. This charge rate was based upon the charge rate for Orlando General's substance abuse unit at that time, compared with a survey of five other hospitals having short term psychiatric beds. T. 425; O.G. Ex. 2, p. 24, 49. As of the summer of 1988, the Medicaid program reimbursed Orlando General Hospital for its MDC 19 (psychiatric) patients at the rate of $418 per day. T. 585. Charter Medical proposes to charge $475 per day during 1988. Florida Hospital currently charges between $425 and $445 per short term psychiatric patient day, and these charges do not include ancillary charges. T. 992. Westlake Hospital currently charges about $550 per short term psychiatric patient day. T. 888. Winter Park Pavilion is a freestanding psychiatric hospital with 39 adult psychiatric beds. The record does not indicate whether it is licensed for short or long term care. The facility charges about $500 per patient day, which does not include ancillary costs. T. 913, 918. Crossroads University Behavioral Center is a freestanding 100 bed long term psychiatric hospital that is under construction. T. 808. Crossroads has considered charges in the range of $500 to $600 per day, but has not definitely settled on the rate. T. 832-833. The charges proposed by Orlando General Hospital in its application are very reasonable, if not very conservative. Projected Utilization Orlando General Hospital's MDC 19 patient days (psychiatric patient days) have increased steadily from 1986. In 1986, the hospital had 4,969 MDC 19 patient days; in 1987, it had 7,779 MDC 19 patient days; and extrapolating (multiplying by 4) from the data for the first three months of 196, Orlando General could reasonably expect 11,804 MDC 19 patient days in 1988. O.G. Ex. 2, p. 11; T. 516. Since a 24 bed unit at 100 percent occupancy would only generate 8,760 patient days, it is unreasonable to use 11,804 as the estimate of patient days in 1988. However, it is concluded that Orlando General Hospital would have no difficulty at all in very quickly filling its proposed 24 bed unit to capacity. Expenses Orlando General Hospital's application estimated that direct expenses of the proposed 24 bed short term psychiatric unit would be $801,505 in 1987, $839,080. In 1988, and $887,030 in 1989. O.G. Ex. 2. These are reasonable projections of direct expenses. The pro forma filed by Orlando General Hospital in its application did not include an estimate of allocated expenses. The allocated expenses would typically have been 60 percent of total expenses, and the direct expenses only 40 percent of total expenses. T. 698. The projected direct expenses for 1988 in Orlando General Hospital's application were $839,080. Since that is only 40 percent of the total expense, the total projected expense (including 60 percent for indirect allocated expense) would be $2,097,700. Long Term Financial Feasibility If Orlando General Hospital charged $375 per patient day in 1988, and had 8,760 patient days, as is reasonable to expect, given its actual experience, Orlando General would have $3,285,000 in gross revenue for 1988. Assuming that net revenue, after additions and after accounting for contractuals and bad debt, will be the same percentage of gross revenue as shown in Orlando General's application, which was 76.74 percent, this would generate a net revenue of $2,520,909. This net revenue would entirely cover not only the direct expenses but also the allocated expenses, and would leave profit of $423,209. All of the remaining issues raised by the parties as to the accuracy of Orlando General's estimates of nursing expense or bad debt are irrelevant given the large amount of leeway Orlando General would have, if necessary, to raise its charges from $375 to something closer to the charges of other area hospitals. In summary, Orlando General Hospital's proposal is financially feasible in the long term. Charter Medical-Orange County, Inc. Charter Medical's proposed charges include charges for physicians who admit patients, perform histories and physicals, and make daily medical rounds. The proposed charges are reasonable. If there were need, Charter Medical's proposal would be financially feasible in the long term. The need for Charter Medical's proposed facility has not been proven by a preponderance of the evidence, however. See the Conclusions of Law herein. While the numerical need rule as applied to Orange County shows a need for 55 beds, in actual practice that need is a need for osteopathic psychiatric care. The thirty or so patients currently treated on a daily basis at Orlando General Hospital ended up at that hospital, rather than Orlando Regional Medical Center or Florida Hospital, primarily because the patients preferred osteopathic care and were admitted to Orlando General Hospital by osteopathic physicians. Absent action by HRS to stop Orlando General Hospital from treating these patients, the patients would not be available to Charter Medical in its proposed facility. This would leave Charter Medical in a situation of opening a new 50 bed facility when the county occupancy rate in 1986 was 60 percent in the only two licensed facilities in the area. It would also leave Charter Medical in a situation of opening a new facility in the face of the trend to managed health care and the certainty that the average length of stay for short term psychiatric care by 1992 will decrease from current levels. For these reasons, Charter Medical has not proven financially feasibility in the long term by a preponderance of the evidence. Quality of Care Orlando General Hospital Orlando General Hospital would provide care of good quality comparable to care that would be provided by Charter Medical. Charter Medical-Orange County, Inc. Charter Medical Corporation is a large corporation that has experience in the operation of a large number of psychiatric hospitals. That expertise would be available to insure that the care provided in Orange County would be of good quality. Charter Medical-Orange County, Inc., would provide care of good quality comparable to care that would be provided by Orlando General. Comparative Review as to Important Differences The Orlando General Hospital Application Orlando General Hospital intends to convert 24 underutilized medical and surgical beds to 24 short term psychiatric beds. T. 517. Since the project calls for conversion of existing facilities, the capital cost is $700,000, and does not include the construction of new buildings. T. 517. Since the capital cost is relatively low, the project will not drain away a large amount of reimbursement from reimbursement funding sources, thus making those funds available to other health care facilities. T. 1223. As a licensed general hospital, Orlando General Hospital's patients including the patients that would be served by the proposed short term psychiatric unit, would be eligible for Medicaid reimbursement T. 1224. Orlando General Hospital has a good record in Orange County of serving indigent patients, and currently is providing care to a large portion of the indigents cared for by Orange County. T. 1099-1100. As discussed in the section concerning osteopathic care, Orlando General Hospital's proposal for a short term psychiatric unit would have a number of benefits to the practice of osteopathic medicine in the region, and the availability of osteopathic care to patients desiring that form of care. Patients in the short term psychiatric unit at Orlando General Hospital could be transferred to a medical bed when a medical need arises without having to be transported by an ambulance. The Charter Medical Application Charter Medical-Orange County, Inc., is a wholly owned subsidiary of Charter Medical Corporation. Charter Medical Corporation has been in existence for 20 years and has 81 hospitals. Of these, 68 are psychiatric or substance abuse facilities. Charter Medical thus has extensive resources and experience to provide very good psychiatric care at the proposed facility. As a free standing hospital dedicated solely to short term psychiatric care, it is reasonable to expect that Charter Medical's facility will tend to provide more space, more varied programs, and more intensive patient care than a general hospital. This would occur because in a general hospital, the psychiatric unit must compete with medical units for allocation of resources, and in some hospitals, the psychiatric unit is given a lower priority due to the tendency of such hospitals to emphasize the medical aspect of their services. T. 47-49. Charter Medical's facility would not treat Medicaid patients, and it proposes to serve a very small percentage of indigent patients. Charter proposes in future years after the second year to provide 1.5 percent of gross revenue as charity care, and 5 percent as bad debt. T. 377-79, 197. Charter Medical's facility would serve primarily private pay and insured patients, thus draining away these paying patients from other hospitals, to the detriment of other hospitals. T. 971. The Substantial Interest of Florida Hospital If a certificate of need were granted to Charter Medical, Florida Hospital would suffer an adverse impact by loss of patients and additional competition for staff. T. 971-972, 1318-1321, 1327.
Recommendation For these reasons, it is recommended in case number 87-4748 that a final order be entered denying the application of Charter Medical-Orange County, Inc., to construct and operate a new 50 bed short term psychiatric hospital, and in case number 87-4753 that a final order be entered granting the application of Orlando General Hospital to convert 24 medical-surgical beds to short term psychiatric beds. DONE and ENTERED this 28th day of November, 1988, in Tallahassee, Florida. WILLIAM C. SHERRILL, JR. 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 28th day of November, 1988. APPENDIX 1 TO RECOMMENDED ORDER, CASE NOS. 87-4748 and 87-4753 The following are rulings upon proposed findings of fact which have either been rejected or which have been adopted by reference. The numbers used are the numbers used by the parties. Statements of fact in this appendix or proposed findings of fact adopted by reference in this appendix are additional findings of fact. Findings of fact proposed by Charter Medical: 3-5. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The need is for beds in either a specialty or a general hospital. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The operational use of the beds is not relevant to the occupancy rate. Had the beds been restricted as a matter of licensure to children, like Palm Bay or Laurel Oaks, the beds would not have been potentially available for adults. Only in that case would exclusion of these beds have been proper. The operational use of the beds is not relevant to the occupancy rate. The testimony regarding the use of the word "existing" in the health planning field has been rejected as not persuasive. The context of such use was not explained, and thus a finding cannot be made that the use of the word is properly applicable to the way HRS intends the word to be used in its occupancy rule. The equation of "existing" with "operational" confuses capacity and need as discussed elsewhere in this recommended order. The HRS interpretation is the most reasonable construction of the word, and leads to a meaning far more consistent with the purposes of the certificate of need regulatory law than does the equation of "existing" with merely being operational. The certificate of need law is aimed at determining need five years into the future. How a hospital may temporarily operate its licensed beds during that period to respond to fluctuations in demand and operational idiosyncrasies at the particular hospital is irrelevant to the question of whether HRS should grant certificates of need and additional licensed capacity within the District. Dr. Luke's calculation was conservative and correct, but a better calculation is the one by Orlando General's expert (78 percent) that uses MDC 19 patient days. The only relevant count is 105 licensed beds at the two facilities. The last sentence is rejected for lack of credible evidence from which to draw that inference, as explained elsewhere in this recommended order. 20-21. The only relevant count is licensed beds. 22. Orlando General's average daily census was 13.6 based upon 4,969 MDC 19 patient days in 1986. 23-24. The only relevant count is licensed beds. 28. These are matters of law, and thus not appropriate as proposed findings of fact. 30. It is true that the health care needs of the metropolitan Orlando impact counties adjacent to Orange County due to the sprawl of that urban area across several county lines. But there is sufficient expert evidence in this record to conclude that generally speaking, the local health council has not acted arbitrarily and capriciously in its choices of counties as health planning areas for purposes of allocation of bed need and for purposes of applying occupancy rates. Nonetheless, the that the urban extent of the metropolitan Orlando area is important has been accepted in this recommended order with respect to the conclusion that the factor that the Orange County occupancy rate is only slightly below 75 percent is entitled to less weight in this case. 32, 33, 35, 37-63. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 64 (first sentence). It is realistically expected that Charter Medical will devote 1.5 percent of its gross patient revenue to barity care. T. 377- 379. 65-70. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 71-72. Financial feasibility has not been shown due to lack of need. Lack of need will result in insufficient occupancy and revenue. 73-74. The extrapolation from the actual trend of increase in patient days in District VII for the years 1983-1987 to create a projection of patient days in 1988 through 1992 would have been a valid and important way to show need, and would have been accepted had the projection accounted for the trend in the industry toward shorter lengths of stay due to changes in methods of payments for mental health care. The extrapolation simply assumes that the past will continue. In this case, there is substantial reason to believe that the past will not continue, that the base data, 1983-1987, is not valid for predicting patient days in 1992 because the patient days in 1992 will largely be paid for under a new system, a system that discourages inpatient stays beyond that which is absolutely necessary from a clinical point of view. Charter Medical projects that it will rely upon insurance for payment 67 percent of the time, so the changes in insurance payments will substantially affect patient days in 1992 at its proposed facility. 75-85. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 89. While osteopathic psychiatric care is essentially the same as allopathic psychiatric care, there are two critical differences. Osteopathic medicine in general emphasizes consideration of the functioning of the body as a whole; allopathic medicine does not. Secondly, osteopathic medicine utilizes muscular and skeletal manipulation in treatment, including psychiatric treatment, and allopathic medicine does not. These two differences are sufficiently marked for patients to have a preference for one or the other approach. 91-92. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 93-94. These proposed findings are true and are adopted by reference, but the findings do not prove that the quality of care at Orlando General Hospital would not be adequate in 1992. It was apparent that Dr. Greene's heavy caseload was not an optimum circumstance. However, at the time of the , Orlando General had four staff psychiatrists. T. 1355. Dr. Greene testified that the care was "basically" the same, but his testimony clearly reflected his opinion that the "deeper" differences were significant. T. 756, 1350-1354. The record cited does not support a finding that the majority of the patients transferred were indigent. That question was not asked. This proposed finding places the cart before the horse. Osteopathic physicians gravitate to Orlando General Hospital to practice osteopathy. In the practice of osteopathy, they achieve many job satisfactions, including care of patients and making money. 98-99. These proposed findings of fact are irrelevant because based upon the past, not upon a future having more staff psychiatrists. Moreover, it is clinically acceptable for other professionals to provide therapy and counseling. These proposed findings of fact are irrelevant. The program description in the application was superseded by evidence during the formal administrative hearing. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. Orlando General Hospital is an existing hospital that already has these functions. It may need some augmentation of staff in these areas, but if it does, it would be an unreasonable conclusion to make that it would fail to add such 103-106. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The only exception is the last sentence in proposed finding 106. The number 18 is not supported by the record cited. This method has not been shown to be unreasonable. It is true that it was the method used. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. There was an accounting for bad debt. O.G. Ex. 2, p. 48. The point is essentially irrelevant. A 10 percent increase based upon 1987 salaries would be only about 20,000. Moreover, Charter Medical stipulated in the prehearing stipulation that the salaries of all personnel are reasonable. The proposed finding of fact is true but irrelevant. A pro forma does not have to comport with generally accepted accounting principles. Even with the addition of these charges, the resultant charge is comparable to charges of other area hospitals, including. Charter Medical's proposed charge of $475, which with inflation would increase rapidly to $500. 113-122, 124. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 125-127. Proof that an existing health care program is in sound financial condition is essentially irrelevant to the question of whether that program has a substantial interest sufficient to permit intervention into a section 120.57(1), Fla. Stat., formal proceeding. Proof of competition for the same patients in the same service area is sufficient to show that the existing program will be "substantially affected" to entitle it to intervene. Section 381.709(5)(b), Fla. Stat. (1987). Florida Hospital has proven its substantial interest by showing that the addition of new short term psychiatric beds, particularily a new facility like proposed by Charter Medical, will increase competition in Orange County for patients and staff. T. 881, 883, 649, 855-856. 128-129. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference 130. Mr. Holton's testimony was not only based upon consideration of the data mentioned in this proposed finding of fact, but also his experience in general with managed health care plans and the effect such plans have had upon the market place. The proposed finding that his testimony was not credible is rejected. 131 (first two sentences), 132-133. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. Findings of Fact proposed by Orlando General Hospital: 7-12, 17, 19, 29. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The statement is true only from the perspective of the osteopathic psychiatrist and with respect to osteopathic care. Allopathic physicians disagree. The second sentence is subordinate to findings of fact that have been adopted. It is true, however, and is adopted by reference. 34. The second sentence is subordinate to findings of fact that have been adopted. It is true, however, and is adopted by reference. 38-49, 51-60. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The proposition that separate geriatric units offer no benefits to geriatric patients is contrary to the preponderance of the evidence. The proposition that there is no problem in mixing the elderly with younger patients, or that an elderly patient does much better in a mixed population, is contrary to the preponderance of the evidence. The second and third sentences are contrary to the preponderance of the evidence. 67-71, 73-80. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 86-87. While these proposed findings of fact are true, they are only marginally relevant since the ratio is measured as of 1992, not 1988. These are matters of law, and thus not appropriate as proposed findings of fact. It is unclear when Dr. Greene meant when he testified that his census was 35 to 40 patients. For the first 90 days of 1988, the hospital had 2,951 MDC 19 patient days, or 32.8 patients per day. The analysis with respect to "existing" beds and the county analysis have been rejected as explained in this recommended order. The last sentence is subordinate to findings of fact that have been adopted. It is true, however, and is adopted by reference. 97-102. The legal argument that beds temporarily not in operation are not "existing" has been rejected as explained in this recommended order. Thus, these findings are not relevant. 105, 107 (last sentence). These are matters of law, and thus not appropriate as proposed findings of fact. 109. The second sentence is rejected as a finding of fact because the health planning context was not adequately explained. 110-111. These are matters of law, and thus not appropriate as proposed findings of fact. 114-115. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 117. These are matters of law, and thus not appropriate as proposed findings of fact. 118-120. These proposed findings of fact are irrelevant. 122. These are matters of law, and thus not appropriate as proposed findings of fact. 123, 124, 126, 127, 129-131, 133. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The proposed finding of fact is true, but has not been shown to impact the financial feasibility of the Charter Medical proposal. The indirect costs within a single hospital are more relevant to long term financial feasibility of the proposed project than the indirect costs to a single hospital from a parent corporation that has over 60 such hospitals. 136, 147, 151, 152. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The patient body count for the first three months of 1988 was 32.8. O.G. Ex. 2, p. 11. The "consciousness" of a corporation is difficult . Orlando General Hospital was well aware that its medical-surgical census was decreasing and its psychiatric population was increasing. It is true that the increase of its psychiatric population was largely due to causes outside the control of the hospital, however, and not due to marketing efforts by the hospital. 161 (last sentence), 162. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. These are matters of law, and thus not appropriate as proposed findings of fact. This proposed finding of fact is only marginally relevant because the result could be an average caused a minority of states who do things differently. Moreover, there Is no evidence that Florida is like this. The third sentence is subordinate to findings of fact that have been adopted. It is true, however, and is adopted by reference. 167. The statement is true only if HRS allows Orlando General Hospital to continue to serve this large number of psychiatric patients without having a certificate of need. If the practice were discontinued, some of the patients would be served by other hospitals in the District, including Florida Hospital. These are matters of law, and thus not appropriate as proposed findings of fact. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 174, 176. These are matters of law, and thus not appropriate as proposed findings of fact. 177. The current state of access to short term psychiatric services in eastern Orange County was not credibly proven. 179. These are matters of law, and thus not appropriate as proposed findings of fact. Findings of fact proposed by HRS: 1, 2, 3, 4. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. 5, 6. These are matters of law, and thus not appropriate as proposed findings of fact. 13. The number should be 64, not 63. 22. The occupancy rate is a mathematical attempt to measure the degree to which the District VII capacity to serve adult short term psychiatric patients has been used up. The theory implicit in the rule is that, with respect to adult capacity, the decision to add new capacity should be delayed until the old capacity is at least 75 percent or more used up. The rate has a numerator (patient days) and a denominator (the real capacity). Any argument that tries to ignore real patient days occurring in the District, or real capacity to serve those patients, is unreasonable. Findings of fact proposed by Florida Hospital: The second sentence is true, but the issue is not she license of the beds is, but what type of patient day is generated by that service. The preponderance of the evidence is that those were short term psychiatric patient days. The first sentence is rejected for the reasons stated above. 19-21. These are matters of law, and thus not appropriate as proposed findings of fact. 20-27. F.H. Ex. 3 was excluded from evidence, and the testimony related to that exhibit was also excluded from evidence for the reasons stated elsewhere in this recommended order. 28. This proposed finding fails to consider the MDC 19 evidence of patient days at Florida Hospital and Orlando Regional Medical Center. 29-30. These proposed findings of fact are true, and the reasoning therein is part of the reason why the denominator of the fraction that is the occupancy rate must be licensed beds. 31. A correction to the number of patient days at Westlake Hospital is legally appropriate, but the evidence for such a correction has been excluded from the record for reasons having nothing to do with the legal propriety of such a correction. 33. These are matters of law, and thus not appropriate as proposed findings of fact. 34-39. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The fact that existing facilities may have beds available to treat future patients is not inconsistent with a decision to grant a certificate of need for additional licensed beds. The occupancy rate threshold in the rule is 75 percent occupancy, not 100 percent occupancy. It is to be expected that the District will have 25 percent or less of its beds unoccupied when new beds are approved. 41, 43-44, 46-47. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. This proposed finding of fact is contrary to the credible evidence. These proposed findings of fact are irrelevant. See section 381.705(1)(g) and (h), Fla. Stat. (1987). This proposed finding of fact is contrary to the credible evidence. This proposed finding of fact is contrary to the credible evidence. To the contrary, where need exists, these are grounds for determining which of the competing applicants should be approved. 60. A conclusion that the occupancy rates are "stable" cannot be made from data based only upon calendar year 1986, which was two years ago, and six years from 1992, the time when need is projected. 61-69. These findings of fact are true. Even where there is need, the opening of the new facility normally lures some patients away from existing facilities. But if need exists sufficient to grant a certificate of need, this short term harm to existing providers is irrelevant. Finally, health care costs would not increase if there is need. While it is true that the Charter Medical utilization projections were initially prepared without a close analysis of District VII, the projections are nonetheless reasonable as discussed elsewhere in this recommenced order. Inflation of expenses without projection of inflation in revenues is an incomplete and unreasonable mode of projection. T. 229-230. Given the size of the Charter Medical Corporation and the number of hospitals it owns and operates, the condition of one more hospital will not Increase home office expenses. Those expenses will exist whether this project exists or not. The financial feasibility of the project in Orlando, therefor, need not consider home office expenses. T. 242-244. These proposed findings of fact are subordinate to findings of fact that have been adopted. They are true, however, and are adopted by reference. The quantitative relevancy of this proposed finding of fact has not been shown. The proposed finding of fact is otherwise true. Orlando General Hospital's current patient census is a sufficient basis for a finding that its projected occupancy rate is reasonable. Charges proposed in an application for a certificate of need are not promises binding upon the applicant. In future years, the applicant is reasonably expected to make substantial changes in its charge structure based upon market conditions. Proposed charges, as well as proposed changes to charges to meet altered contingencies beyond the control of the applicant, is entirely appropriate for analysis in a certificate of need case. The only relevant question is whether the altered charge compares favorably with competing applicants. 81-83. Florida Hospital proved that the market for staff is competitive and that hiring staff is difficult at the moment. But it did not prove that the applicants would fail to hire adequate staff to operate their proposed facilities. T. 1327. 92-102. These proposed findings of fact summarize proposed findings of fact which have previously been addressed. APPENDIX 2 TO RECOMMENDED ORDER, CASE NOS. 87-4748 and 87-4753 Rule 10-5.008(3), Fla. Admin. Code, provides that "[s]ubsequent to an application being deemed complete by the Office of Health Planning and Development, no further information or amendment will be accepted by the Department." (E.S.) The rule states that the Department will accept no information after the application is deemed complete. The words used are not ambiguous or unclear. Thus, if normal rules of construction were to be followed, the conclusion would be drawn $ha the Department is bound by its own clear rule, and cannot, by interpretation, add exceptions. But an equally valid rule of construction is that absurd results must be avoided. Certificate of need cases, particular ones like the case at bar, are highly competitive and complicated. It would be unreasonable to require the applicants to prove applications that have become erroneous due to the passage of time. While the question is a close one, the Hearing Officer has concluded that it would be better to ignore the clear words of the rule, and attempt to apply the evolving interpretative policy of the Department to avoid an absurd result. The following appear to be the existing final orders of the Department interpreting rule 10-5.008(3), and its predecessor, published in the Florida Administrative Law Reports. Health Care and Retirement Corporation of America, d/b/a Heartland of Palm Beach, 8 F.A.L.R. 4650 (September 24, 1986); Arbor Health Care Company, Inc., d/b/a Martin Health Center, Inc., v. Department of Health and Rehabilitative Services et al., 9 F.A.L.R. 709 (October 13, 1986); Mease Hospital and Clinic v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 159 (October 13, 1986); Health Care and Retirement Corporation of America, d/b/a Heartland of Collier County v. Department of Health and Rehabilitative Services, 8 F.A.L.R. 5883 (December 8, 1986); Health Care and Retirement Corporation of America, d/b/a Nursing Center of Highlands County, v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 1081 (December, 1986); Manatee Mental Health Center, Inc. d/b/a Manatee Crisis Center v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 1430 (February 2, 1987); Health Care and Retirement Corporation of America, d/b/a Heartland of Hillsborouh, v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 1630 (February 5, 1987); Manor Care, Inc. v. Department of Health and Rehabilitative Services, 9 F.A.L.R. 1628 (March 2, 1987); Psychiatric Institutes of America, Inc., d/b/a Psychiatric Institute of Orlando v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 1626a (March 5, 1987) ; Manor Care, Inc. v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 2139 (March 24, 1987); Wuesthoff Health Services, Inc. v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 2110 (April 17, 1987); Hialeah Hospital, Inc. v. Department of Health and Rehabilitative Services, et al., 9 F.A.L.R. 2363 (May 1, 1987); Palms Residential Treatment Center, Inc., d/b/a Manatee Palms Residential Treatment Center v. Department of Health and Rehabilitative Services, et al., 10 F.A.L.R. 1425 (February 15, 1988). These final orders contain the following statements concerning the Department's interpretation of rule 10-5.008(3) and its evolving policy with respect to changes to applications for certificates of need during section proceedings and admissibility of new information not contained in the original applications: Health Care and Retirement, supra, 8 F.A.L.R. 1081: During 120.57 proceedings, an application may be updated to address facts extrinsic to the application such as interest rates, inflation of construction costs, current occupancies, compliance with new state or local health plans, and changes in bed or service inventories. An applicant is not allowed to update by adding additional services, beds, construction, or other concepts not initially reviewed by HRS. Manatee Mental Health Center, supra, 9 F.A.L.R. at 1431: ... HRS has authority by statute to issue a CON for an identifiable portion of . Section 381.4C4(8), Florida Statutes. MMHC's "amended" proposal reduced the number of beds sought, and was properly considered during the 120.57 proceedings. Manor Care. Inc., supra, 9 F.A.L.R. at 1628: The amended applications [amended to address needs of Alzheimer's disease patients] changed the scope and character of the proposed facilities and services and thus, must be reviewed initially at HRS... [ limited the denovo concept by requiring that evidence of changed circumstances be considered only if relevant to the application. Hialeah Hospital, Inc., 9 F.A.L.R. at 2366: It is recognized that more than a year may pass between the free form decision by HRS and the final 120.57 hearing and this passage of time may require updating an application by evidence of changed circumstances such as the' effect of inflation on interest and construction costs. For the sake of clarity HRS would avoid the use of the word "amendment" to describe such updating. Such evidence of changed circumstances beyond the control of the applicant is relevant to the original application and is admissible at the 120.57 hearing. Taking the easiest first, those items explicitly listed by the Department in the first Health Care and Retirement case, "interest rates, inflation of construction costs, current occupancies, compliance with new state or local health plans, and changes in bed or service inventories," which change after the application is initially filed, are permitted. Not permitted are "additional services, beds, construction, or other concepts not initially reviewed by HRS." The remainder of the Department's incipient policy, as presently articulated, is obscure. The word "extrinsic" without the list of examples is of little guidance. The application is only an idea on paper. Anything new, other than the bare words on the paper as originally filed, is literally "extrinsic" thereto. The concept of whether the new information changes the "scope and character of the facilities and services" originally reviewed in free form action by the Department is similarly of little guidance because the phrase "scope and character" can mean practically anything. Of fundamental difficulty is whether this phrase is intended to select substantial changes to the original application, or all changes. For example, if the original application proposes separate shower stalls and tubs for double rooms, but the amended application proposes a combination shower and tub, has the "scope and character" of the "facilities and services" changed? The phrase "additional services, beds, construction, or other concepts not initially reviewed by HRS" is similarly vague. What is a service or construction or a concept not originally reviewed? Would this include the change in bathing equipment discussed above? The concept of "control" of the applicant over the information that goes into the original application is the only phrase that gives applicants any guidance. The word "control" probably is intended as a "knew or reasonably should have "known" standard. If the applicant reasonably should have known about the information and should have provided the Department with the information as a part of its original application, then the new information cannot be considered during the formal administrative hearing. The Hearing Officer will be guided, thus, by the explicit list of items provided by the Department in the Health Care and Retirement case, and by the concept of "control" provided by the Hialeah case. COPIES FURNISHED: For Agency HRS Theodore D. Mack. Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Fort Knox Executive Building Tallahassee, Florida 32308 (904) 488-8673 Charter Medical-Orange County, Inc. Fred W. Baggett, Esquire Stephen A. Ecenia, Esquire Roberts, Baggett, LaFace & Richard 101 East College Avenue Post Office Drawer 1838 Tallahassee, Florida 32301 (904) 222-6891 William D. Hoffman, Jr., Esquire Deborah J. Winegard, Esquire King & Spalding 2500 Trust Company Tower Atlanta, GA 30303 (404) 572-4600 Orlando Regional Medical Center, Inc. Steven R. Bechtel, Esquire Mateer, Harbert & Bates, P. A. 100 East Robinson Street Post Office Box 2854 Orlando, Florida 32802 (305) 425-9044 Orlando General Hospital, Inc. Eric J. Haugdahl, Esquire 1363 East Lafayette Street Suite C Tallahassee, Florida 32301 (904) 878-0215 Florida Hospital Stephen K. Boone, Esquire Robert P. Mudge, Esquire Boone, Boone, Klingbeil & Boone, P. A. 1001 Avenida del Circo Post Office Box 1596 Venice, Florida 34284 (813) 488-6716 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
The Issue Whether an out-of-state corporation doing business as a psychiatric hospital located out of state and as a counseling servico located in Florida's District I is entitled to formal administrative proceedings on an application for certificate of need filed by another party seeking a certificate of need to construct an 80-bed long-term psychiatric hospital in District I? For present purposes Bay Psychiatric's well-pleaded, factual allegations in its petition for formal hearing are assumed to be true. The petition alleges essentially the following ASSUMED FACTS Bay Psychiatric proposes to build an 80-bed long-term psychiatric hospital in Bay County, Florida, and HRS proposes to grant it certificate of need No. 3204 authorizing it to do so. The proposed hospital's primary service area is to be HRS Districts l and 2. Petitioner operates a free standing psychiatric hospital in Dothan, Alabama, which "includes beds defined as long-term psychiatric beds by Rule 10- 5.11(26), Florida Administrative Code, and beds defined as short-term psychiatric beds by Rule 10-5.11(25), Florida Administrative Code." Approximately one quarter of the Dothan hospital's patients come across the state line from HRS Districts l and 2. Last year the Dothan hospital experienced less than an 80 percent occupancy rate of its long-term beds, less than a 75 percent occupancy rate of its adult short-term beds, and less than a 70 percent occupancy rate of its other short-term beds. If Bay Psychiatric receives a certificate of need, the Dothan hospital "will be substantially and adversely affected because any patients admitted to the proposed UNITED MEDICAL facility would otherwise likely have been admitted to CHARTER WOODS HOSPITAL. Petitioner also operates a "counseling and intervention facility located in Panama City, Florida, "offering various outpatient services which "at least in part" are the types of outpatient services Bay Psychiatric would offer at its proposed hospital. Because of "a finite patient population" petitioner's counseling facility would also be "substantially and adversely affected " if Bay Psychiatric receives a certificate of need.
Recommendation It is, accordingly, RECOMMENDED: That the Department of Health and Rehabilitative dismiss the petition for formal proceeding. DONE AND ENTERED this 26th day of October, 1984, at Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 1984. COPIES FURNISHED: Douglas L. Mannheimer, Esquire 318 North Calhoun Street Post Office Drawer 11300 Tallahassee, Florida 32302-3300 William E. Hoffman, Jr. James A. Dyer Bondurant Miller Hishon and Stephenson 2200 First Atlanta Tower Two Peachtree Street, N.W. Atlanta, Georgia 30383 F. Philip Blank, Esquire 241 East Virginia Street Tallahassee, Florida 32301 Chris H. Bentley, Esquire Fuller & Johnson, P.A. 300 East Park Avenue Post Office Box 1739 Tallahassee, Florida 32302 David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winuwood Boulevard Tallahassee, Florida 32301
Findings Of Fact Introduction On October 15, 1986 University Community Hospital, Inc. (UCH or applicant), which operates an acute care facility in Tampa, Florida, filed an application with respondent, Department of Health and Rehabilitative Services (HRS), seeking a certificate of need (CON) authorizing approval for a new thirty-bed comprehensive medical rehabilitation (CMR) unit to be established by converting and delicensing thirty medical/surgical beds to CMR beds at an estimated cost of $325,240. As a health care provider, UCH is licensed by and subject to the regulatory authority of HRS. On February 20, 1987, and in conjunction with the above application UCH submitted a written request to HRS seeking exemption of an existing rehabilitation unit from CON review. In its request, UCH represented that its rehabilitation unit was providing CMR services prior to July 1983 and thus was eligible to have those beds grand fathered without the need for CON review. This was because prior to July 1983, HRS did not consider CMR services as a separate specialty requiring a CON. After requesting and receiving additional information from the applicant, HRS issued proposed agency action on September 23, 1987, denying the application for a CON. As grounds, HRS stated that "there is a projected District 5 (sic) surplus of 12 rehabilitation beds in the 1991 planning horizon" and that "Tampa General Hospital's 60 rehabilitation beds were occupied at an 84 percent (occupancy) during the preceding calendar quarter; L. W. Blake's 28 rehabilitation beds were occupied at a 74 percent occupancy for the same period; (and) the district had a combined occupancy of 79 percent which is below the 85 percent occupancy standard." By letter dated October 1, 1987, HRS determined preliminarily that nine existing rehabilitation beds at UCH qualified for an exemption from CON services based on HRS's finding that UCH was operating a nine-bed CMR unit prior to July 1983. This written advice was authored by HRS's administrator of community health services and facilities, Sharon M. Gordon-Girvon. Hillsborough County Hospital Authority is a public agency operating two acute care hospitals in Tampa, Florida, one being the Tampa General Hospital (TGH). Citing a potential adverse effect on its CMR unit if UCH's application was approved, TGH filed a petition to intervene in support of HRS's proposed agency action on November 6, 1987. This petition was granted on December 18, 1987. In addition, on March 8, 1988, TGH requested a formal hearing to contest HRS's preliminary determination that UCH was entitled to nine CMR beds by virtue of having operated the same prior to July 1983. In general terms, TGH asserted that HRS had no authority to grant an exemption, but if it did, UCH did not qualify for one. The two cases were consolidated on May 3, 1988. The Applicant and Protestant UCH is a community hospital that began service to patients on July 15, 1968. Its facility is located at 3100 East Fletcher Avenue, Tampa, Florida. It is managed by a twenty person board of trustees and currently is licensed by HRS for four hundred and four beds offering medical/surgical, diabetes, oncology, pediatric and rehabilitative services. UCH is accredited by the Joint Commission on Accreditation of Hospitals (JCAH). The facility provides health care services in HRS District 6, an artificially created health planning area that includes Hillsborough, Polk, Manatee, Hardee and Highlands Counties. In January 1987, UCH executed a contract with HRS and became a participant in the Medicaid program. As such, it receives reimbursement from HRS for services provided to Medicaid patients. Created by special act of the legislature, the Hillsborough County Hospital Authority operates two public, not-for-profit hospitals in Hillsborough County, those being TGH and Hillsborough County Hospital. TGH is a 770-bed facility providing services within HRS District 6. Since it provides sophisticated services to patients who are on average much more severely ill than patients at community hospitals such as UCH, TGH can be described as a tertiary hospital. Since 1984 TGH has operated a CON-approved and licensed sixty-bed CMR unit connected to its main acute care facility and is the only level one trauma center on the west coast of Florida. Also, TGH is the primary provider of indigent care in the district, carrying a disproportionate share of the indigent care burden. In 1987 alone, its indigent care costs totaled almost $30 million. C. Grandfathering of Beds Prior to July 1983, HRS determined whether there was a need for various types of hospital beds (e.g., general medical/surgical, critical care, psychiatric and rehabilitation) under its general acute care bed need rule now codified as Rule 10-5.011(1)(m), Florida Administrative Code (1987). Thus, prior to July 1983, CMR services were not recognized by HRS as a separate bed category for CON and licensure purposes, and the conversion by a hospital of licensed acute care beds to rehabilitation beds did not constitute a change in service. In January 1982 UCH established a nine-bed rehabilitation unit on the sixth floor of the south wing of its facility. The unit was established because UCH believed there to be a lack of rehabilitation care in the community. These beds came from its licensed medical/surgical inventory. At that time, only TGH offered CMR services in Hillsborough County and had sixteen beds dedicated to that specialty. According to UCH's chief physical therapist, the unit was "full from the first week." In its 1982-83 licensure application, which is a filing that must be made with HRS every two years, UCH reflected that its bed inventory included nine dedicated to rehabilitation care. On May 16, 1983, UCH, through its counsel, inquired of HRS whether a proposal to convert nine more licensed medical/surgical beds to CMR beds at a cost of less than $600,000 would be subject to CON review. 1/ Also, it requested that, in the event HRS determined that a CON was needed, the request letter be treated as a letter of intent. One week later, HRS responded by letter and requested further information. Among other things, HRS asked for "a detailed description of rehabilitative care currently being provided in the nine beds dedicated to rehabilitative use." This information was provided to HRS by UCH by letter dated June 6, 1983. It included a lengthy description of the care being provided in the nine beds dedicated to rehabilitative use. According to the response, UCH was providing, among other things, a "comprehensive rehabilitation service, or intensive care providing a coordinated multi- disciplinary approach to patients with severe physical disabilities." This letter was followed on June 30 by another letter from UCH's counsel advising HRS that it understood HRS's position that a project to change the rehabilitation beds to CMR beds would be subject to CON review and that UCH contemplated no such change in service. Effective June 8, 1983, HRS adopted a rule which prescribed a separate bed need methodology for rehabilitation beds. Effective July 1, 1983, the legislature amended Section 395.003, Florida Statutes (1983), by adding a new subsection (4) which required that all licensees providing rehabilitation services thereafter reflect the number of beds in that category on the face of their hospital license. At the same time, the legislature amended Section 381.706, Florida Statutes (1983), to require CON approval for any change in the number of rehabilitation beds by a provider. Thus, on and after July 1, 1983, CMR services were recognized as a separate bed category for licensure and CON purposes. On July 19, 1983, or after the above changes took effect, HRS advised UCH that, because UCH had not sought accreditation for its rehabilitation unit from the Commission on Accreditation of Rehabilitation Facilities (CARF), and its unit did not meet the minimum size requirements (twenty beds) for a rehabilitation unit under then-existing HRS Rule 10-5.11(24)(c)3.a., Florida Administrative Code (1983), it had concluded UCH was not providing CMR services as defined by its rule. The letter pointed out also that any effort by UCH to establish an eighteen bed unit would require a CON pursuant to the recent change in the general law. Finally, HRS advised UCH that it could "continue to provide rehabilitative care in the existing unit, using the nine (9) medical/surgical beds dedicated for that care" and that it could also "provide rehabilitative care on the third floor and use an additional nine (9) medical/surgical beds." HRS added that such beds would "not be considered to constitute comprehensive medical rehabilitation care and the beds dedicated to such care will be counted as medical/surgical beds." Because of a demand for more rehabilitation beds, UCH made a decision to expand its rehabilitation unit in the winter of 1983-84 from nine to fourteen beds. In August 1984 UCH expanded its unit to eighteen beds. It did not seek HRS's approval for either expansion project because of its interpretation of HRS's letter of July 19, 1983, that CON approval was not necessary for units having less than twenty beds. Responding to the changes in the general law, HRS undertook to inventory the existing rehabilitation beds in the state. To this end, its office of comprehensive planning sent a questionnaire to all hospitals, including UCH, in late 1983 inquiring whether they provided CMR services. To verify the accuracy of the responses, but not for the purpose of determining whether CMR services existed prior to July 1983, HRS checked whether CON authorization had been issued previously to the facility, whether the facility reported CMR services to the newly created Hospital Cost Containment Board, and whether the facility reported CMR beds in its biannual licensure application. In its reply to the questionnaire, UCH reported it had a twenty-bed rehabilitation unit. In 1983, UCH requested that the federal Health Care Financing Administration (HCFA), which operates the federal Medicare program, recognize its rehabilitation services as being exempt from diagnostic related groups (DRG). If the request was approved, this meant that UCH could be reimbursed on a cost-basis for services rendered to Medicare patients in its rehabilitation unit instead of under the DRG system which reimbursed the facility on a flat rate basis regardless of the length of stay of a patient. HCFA granted the request for exemption of the nine beds effective October 1, 1983. On October 1, 1984, HCFA recognized an exemption for eighteen beds. This exclusion was renewed after a subsequent survey of the unit in 1985. When these exemptions were granted, HCFA did not enforce a federal requirement that a facility be licensed for CMR services in order for HCFA to recognize the exemption. In 1984-85, HRS became aware of certain DRG-exempt rehabilitation units in the state that were not licensed by HRS for CMR services. As noted in a later finding, these providers, including UCH, were allowed to seek a CON exemption and demonstrate that they were providing CMR services prior to July 1983. This opportunity was given partly because HCFA began enforcement of its policy that CMR services be licensed by the state before an exemption would be recognized. Indeed, HCFA revoked UCH's exclusion from Medicare's prospective payment system effective October 1, 1987, on the ground UCH's unit was not licensed by the state. It was later reinstated in 1988, for nine beds after HCFA became aware of HRS's preliminary determination on October 1, 1987, that UCH was entitled to a CON exemption. Because of this limited exemption, UCH now accepts no more than nine Medicare patients at any one time in its unit. On March 18, 1985 UCH's chief executive officer, Terry L. Jones, filed with HRS the facility's biannual licensure application which reflected, inter alia, the facility's then current bed utilization. According to UCH's filing, UCH had three hundred sixty medical/surgical beds, twenty-six pediatric beds and eighteen CMR beds. A copy of the application has been received in evidence as TGH exhibit 102. After receiving the application, HRS advised UCH by letter dated April 25, 1985, that "(HRS's) records (did) not indicate 18 comprehensive medical rehabilitation beds... Please explain." In reply to this, Jones advised HRS by letter dated April 29, 1985 that "a copy of our authorization for rehabilitation beds is attached." This "authorization" was a copy of HRS's July 19, 1983 letter. In July 1985 HRS issued License No. 1779 for the continued operation of UCH's facility. In an undated transmittal letter, HRS stated in part: Please be advised that part of the application pertaining to licensure of 18 comprehensive medical rehabilitation beds is hereby denied because you have failed to obtain a Certificate of Need or exemption from review pursuant to Section 381-493 through 381-499, Florida Statutes (F.S.) and Rule 10-5, Florida Administrative Code (F.A.C.). Certification as an excluded unit by the Department of Health and Human Services, Health Care Financing Administration does not eliminate the Certificate of Need requirements. (Emphasis added.) UCH was offered a point of entry to contest this decision. After receiving the above advice, UCH did not request a hearing but simply inquired of HRS as to whether the eighteen beds should be counted under its general medical/surgical bed component. According to UCH, it did not contest the decision because HCFA continued to recognize UCH's unit as being exempt from the DRG's. On May 16, 1986, Jones and HRS's licensure supervisor, John Adams, had a telephonic conversation concerning the status of the eighteen rehabilitation beds. To confirm the substance of this conversation, Jones advised Adams by letter as follows: I wanted to confirm our conversation today regarding our "rehabilitation" beds licensure to avoid any future problems. You suggested that our 18 beds used for rehabilitation are appropriately licensed under medical/surgical. The beds are not Comprehensive Medical Rehabilitation beds and should not be listed under the Rehabilitation section. The beds could be listed under the "Other" category with an explanation that they are medical rehabilitation, but as you suggest, it would probably further confuse the issue. We intend to continue to offer rehabilitation care with these beds, and understand they do not require a C.O.N. as they are not Comprehensive Rehabilitation Beds. (Emphasis added) On or about May 6, 1986, someone at HRS's office of licensure and certification amended UCH's 1985-86 licensure application to reflect eighteen "Rehab" beds instead of eighteen CMR beds as originally recorded on the application by UCH. In early 1986, TGH became concerned that UCH was providing CMR services without the necessary authority from HRS. It voiced these concerns to HRS on several occasions. On April 30, 1986, HRS advised TGH by letter that UCH had "authorization to use eighteen medical/surgical beds for the purpose of rehabilitation of patients in the hospital" but it did "not have approval for a comprehensive rehabilitation center." It added that HRS had been assured by UCH that UCH was not operating a comprehensive rehabilitation center. By letter dated October 6, 1986 TGH's counsel complained again to HRS's secretary that UCH was operating beyond its licensed authority. UCH learned of this complaint and responded by letter to HRS that its unit was established in 1982, nine beds "for rehabilitation purposes" had been approved by HRS in July 1983, and it had received permission to add nine more beds to its unit in 1983 because of its insufficient size (less than twenty beds) and failure to meet CARF standards. On January 4, 1987, responded to UCH's letter and advised that, based upon a site visit, it now believed UCH was providing CMR services. The letter advised further that HRS had erred in 1983 by telling UCH that its rehabilitation unit was exempt from CON review because of its size (less than twenty units). This was because HRS now construed its Rule 10-5.11(24) governing size of units to apply only to proposed CMR units and not existing CMR units. In view of this error, HRS offered UCH the opportunity to request an exemption of its rehabilitation unit from CON review. This prompted UCH's request for exemption for its nine beds dedicated to rehabilitative care prior to July 1983. In March 1987, an on-site inspection of UCH's facility was made by Robert E. Pannell, HRS's consultant for health services and facilities. This visit was prompted by UCH's request for exemption made on February 20, 1987. The results of that visit are reflected in a report and recommendation dated July 31, 1987, and received in evidence as joint exhibit 5. According to the report, UCH was providing CMR services prior to July 1983, and was entitled to an exemption. In reaching that conclusion, Pannell utilized ten criteria developed during the course of previous investigations. Except for the criteria relating to unit size and compliance with CARF standards, which Pannell deemed to be inapplicable, Pannell concluded that UCH satisfied all others. These included the categories of distinct unit, range of services, provision of service prior to June 1983, team approach/team meetings, length of stay over twenty-eight days, separate policies and procedures, types of patients treated and individualized patient goals. These criteria generally track the CMR rule. Pannell's recommendation was reviewed and concurred in by two other HRS administrators, and proposed agency action granting the exemption was issued by HRS on October 1, 1987. The evidence is conflicting as to whether UCH actually provided CMR services as defined in HRS's rule prior to July 1983. This matter is crucial since eligibility for an exemption is contingent on such a showing. The UCH rehabilitation unit was not specifically designed for rehabilitation care and did not satisfy the CARF standards prior to July 1983. Indeed, UCH has been upgrading its program and facilities since that date to comply with those standards. In 1986, UCH requested and received from HRS authorization to make a complete renovation of its sixth floor "rehabilitation unit" at a cost of $300,000. After doing so, the unit satisfied CARF standards and later became accredited by JCAH. 2/ Prior to 1986, UCH's rooms were not designed for rehabilitation care and were like those in any medical-surgical unit. For example, they did not allow wheelchair accessibility, there were no central bathing facilities and the individual bathrooms were not wheelchair accessible. As to the requirement that the unit have separate policies and procedures for rehabilitation services, UCH's policy manual on this subject was not drafted until 1984. As to the requirement that the unit have individualized patient goals, UCH's patients did not have an overall rehabilitation patient care plan prior to July 1983. Rather, there were separate patient goals in separate sections of the medical record pertaining to each discipline, such as physical therapy and nursing. Until the 1986 renovation project was completed, UCH's rehabilitation unit did not have a physical therapy room on the same floor as the patients. Physical therapy, if needed, was provided on the first floor of the facility. Thus, prior to that date, therapy was provided to rehabilitation patients bedside, exactly as medical rehabilitation services are provided bedside to general medical-surgical patients throughout the hospital. Further, the nine beds dedicated to rehabilitative care were mixed in with non-rehabilitative beds so that a semiprivate room might have one dedicated to rehabilitative care and the other used by a patient not receiving that type of service. According to HRS's supervisor of medical facilities, a rehabilitation unit is not considered to be a physically distinct unit unless all patients and support services are in the same area of a floor and not scattered throughout the hospital. In addition, the area devoted to CMR services must house only patients receiving CMR services. There is a distinction between medical rehabilitation services and CMR services. Medical rehabilitation services provided in a hospital setting include such services as physical therapy, occupational therapy and speech therapy and are routinely available to patients in general medical-surgical beds. Further, medical rehabilitation services have neither an integration of the disciplines nor the full-time assignment of the various specialties (e.g., physical therapy, occupational therapy, speech pathology, rehabilitation nursing, social services, psychologist and the like) to the care of the patient. In contrast, CMR services are a specialized, intensive type of rehabilitation service that involve a coordinated, multi-disciplinary approach to a person's disability. Indeed, CMR services are defined by statute to be a "tertiary" service that is specialized and concentrated in a limited number of hospitals to ensure the quality, availability and cost-effectiveness of that service. In summary, there is a marked difference between the two in the level of care and intensity of services. Prior to July 1983 UCH's nine bed unit provided medical, but not comprehensive medical, rehabilitation services to its patients. Application for Additional Beds - Statutory and Rule Compliance Need for New Beds - Subsection 381.705(1)(a), F.S. At hearing, UCH amended its request to seek only twenty CMR beds. If the amended application is approved, UCH will convert and delicense a comparable number of medical/surgical beds from its inventory. There are no capital costs associated with the project. As noted earlier, UCH lies within HRS District 6 which is composed of Hillsborough, Polk, Manatee, Hardee and Highlands Counties. Presently, the only existing CMR units in the District are sixty beds at TGH and twenty-eight beds at L. W. Blake Hospital in Bradenton, Florida. In addition, just prior to final hearing in this cause, Winter Haven Hospital (in Polk County) opened a twenty- four bed CMR unit at its facility giving a total of one hundred twelve beds in the District. The need for new facilities is measured in relation to the applicable district plan and state health plan. The district (local) plan, while having broad policy goals applicable to health planning in general, is nonetheless inapplicable since it fails to address the need for rehabilitation services. Rule 10-5.011(1)(n), Florida Administrative Code (1987), is the HRS specialty bed need rule applicable to CMR services. The methodology has been incorporated into the state health plan and is an important consideration in the evaluation process. Under this rule, the bed need or surplus is projected five years into the future from the application filing year. In this case the so-called planning horizon against which the need for CMR beds is to be tested is July 1991. According to HRS's proposed agency action to deny the application, there is a projected surplus of twelve rehabilitation beds in District 6 in the 1991 planning horizon. In addition, the proposed agency action found that the occupancy rate for TGH's unit was 84 percent during the "preceding calendar quarter," L. W. Blake Hospital had a 74 percent occupancy rate for the same period, and the district as a whole had a combined occupancy rate of 79 percent which is below the HRS 85 percent occupancy standard. Bed need or surplus for the district is calculated by first determining the number of projected acute care discharges, broken down by age group, from hospitals in the district for the horizon year. The rule then sets as a standard 3.9 CMR beds per 1,000 acute care discharges in the target year, with those beds occupied at an average rate of 85 percent, assuming an average length of stay of twenty-eight days. In this case, the formula yielded a gross need for 1991 of one hundred beds. The above targeted bed supply (gross need) was then compared to the actual inventory of existing and approved beds. As indicated in finding of fact 32, the actual inventory of CMR beds in District 6 was one hundred twelve beds thus indicating a surplus of twelve CMR beds. Therefore, no need was shown for UCH's proposed new CMR beds. To this extent, the application is inconsistent with the state health plan. Besides the bed need calculation, Rule 10-5.011(1)(n)2.c.(II) addresses the utilization of existing providers in a second way and provides that, even if the formula produces a need for new CMR beds, no such beds shall be authorized "unless the average annual occupancy rate for all existing comprehensive rehabilitation facilities and units within the Department service district exceeds 85 percent occupancy for the preceding calendar quarter." This standard is somewhat confusing since it uses the phrases "average annual occupancy rate" and "preceding calendar quarter" in the same sentence thereby raising the question of which time period to use. However, HRS's practice is to use the occupancy rate for the preceding calendar quarter when applying the rule to this type of application. Also, it interprets the words "preceding calendar quarter" to mean the quarter preceding the scheduled decision date on the application. Therefore, HRS determined the occupancy rate of existing district providers for the calendar quarter preceding February 27, 1987, which was the scheduled decision date on UCH's application. During this time period, TGH's sixty beds were 84 percent occupied while L. W. Blake's occupancy rate for its twenty-eight beds was 74 percent, or a weighted average of 81 percent. This was below the required district standard of 85 percent. Had HRS used the occupancy data for the calendar quarter preceding the actual decision date of September 4, 1987, the two hospitals still had a weighted average of 81 percent, or well below the necessary rate. Neither calculation includes the twenty-four beds recently opened in Polk County. Thus, occupancy was not at a level to counterbalance the oversupply of CMR beds in District 6. In an effort to show need on another basis, UCH presented evidence concerning those factors enumerated in Rule 10-5.011(1)(n)2.b.(I)-(IV) and substituted more favorable numbers into the formula. To support the use of more favorable formula data, UCH asserted that if actual admissions (4.7) and patient length of stay (35-37 days) were used, the formula would produce a need for forty-six new beds in 1991. It contended also that if national incidence and prevalence rates were applied to the District 6 population, the bed need would be in excess of three hundred. Both calculations are inappropriate since they draw upon factors already taken into account in the rule or are based on erroneous assumptions. As to evidence submitted to support the other factors for determining need, which were not a part of UCH's completed application, UCH likewise made incorrect assumptions or applied incorrect data. Thus, UCH failed to demonstrate any special circumstances that would justify a deviation from the rule methodology. Availability, Efficiency, Appropriateness, Accessibility, Extent of Utilization and Adequacy of Existing CMR Units (Subsections 381.705(1)(b) and (f), F.S. In the last three years, there have been waiting lists for admission to the rehabilitation units at TGH and UCH. However, TGH's waiting list has declined in recent times, and it now intends to intensify its marketing efforts to maintain a high occupancy level. While UCH still had a waiting list as of the time of hearing, UCH has followed the practice of placing some of these patients on the list before they were ready for rehabilitation and before being screened medically and financially to determine if they met admissions criteria. Indeed, even though UCH has experienced 1988, occupancy rates ranging from only 68 percent to 78 percent, it continues to maintain waiting lists and fails to give continual assessment to those lists. UCH's occupancy rate for its eighteen bed unit was 84 percent in 1986 and 86 percent in 1987. If the application is approved, UCH projects an 85 percent occupancy rate for the twenty-bed unit. Prior to August 1985, the unit was generally 85 percent to 90 percent full with a waiting list of three or four patients. However, until a renovation project was completed in 1986, the beds were used as medical rehabilitation beds, and utilization factors before that date are irrelevant. Further, non-licensed CMR beds are not taken into account by HRS in the licensing process. TGH's occupancy was 90.86 percent in 1986 and 88.51 percent in 1987, but the rate has declined in 1988, because of a new CMR facility in an adjoining district (New Port Richey) and a drop in the average length of stay by patients. This decline has occurred even though the demand for rehabilitation services is increasing, and it is not feasible to maintain 100 percent occupancy in a rehabilitation unit because of the way patients are historically admitted on Monday and discharged on Friday. The HRS rule contains a two hour accessibility standard. The standard is not a limitation on facilities but is designed to insure that there are facilities available to the public. The standard requires that CMR services be accessible to 90 percent of the population within two hours driving time. This means that it is not unreasonable to have patients travel up to two hours to access CMR services. In interpreting this rule, HRS includes the availability of CMR beds in adjacent districts that are reasonably accessible. Thus, Districts 5 and 8, which include communities such as Sarasota, St. Petersburg and New Port Richey, are reasonably and economically accessible in adjoining districts. CMR beds that are available, or will shortly become available, include sixty beds in St. Petersburg, forty beds in Clearwater, twenty beds in New Port Richey, and sixty beds in Sarasota. While there was an accessibility problem in the past, this problem peaked in 1986 and has been subsequently alleviated by the rejuvenation of programs in Districts 5 and 6 and the addition of twenty-four beds at Winter Haven Hospital. 3/ District 6 has experienced rapid growth and is expected to continue growing in the future. However, health planning is not done in this state on a geographically ad hoc basis, particularly for tertiary services that are planned on a regional basis. Proximity of a facility to the family of rehabilitation patients is important to the patient's recovery. This is because the training and counseling of the family is an important part of rehabilitative care. Approximately 80 percent of UCH's rehabilitation patients are elderly stroke patients. This makes driving time a significant barrier to the rehabilitation process if the families of the patients are likewise elderly and unable to drive more than a short distance. This was confirmed by the testimony of a local physician who always attempted to place patients in facilities closest to their families. However, because CMR services are not emergency health care services, HRS does not require such services to be accessible within a short drive time. Moreover, besides TGH, most of the other district facilities lie within one hour's driving time from Tampa. As to financial accessibility to CMR services within District 6, TGH provides services to indigents, medicaid and medicare patients and private pay patients. There are also financial incentives to use outpatient services whenever possible. Should UCH's application be denied, patients within District 6 will not experience any problems in obtaining CMR services. Quality of Care - Subsection 381.705(1)(c), F.S. UCH is accredited by the Joint Commission on Accreditation of Health Care Organizations (JCAH). At hearing, HRS expressed no concern over UCH's ability to provide quality of care. If approved, UCH's twenty-bed unit will meet all criteria in Rule 10- 5.011(1)(n). UCH has agreed to provide all programs and range of services specified by the rule. The unit now meets CARF standards. Finally, UCH has a fully developed referral system. Availability and Adequacy of Existing Providers - Alternatives - Subsection 381.705(1)(d), F.S. There are no alternatives to CMR services for patients who need inpatient comprehensive rehabilitation services. This is because only a CMR unit offers the comprehensive specialized services needed by CMR patients. In this proceeding, UCH does not propose an alternative to CMR services. Rather, it proposes an alternative site from that offered by other CMR providers in the district. Although there is a growing number of comprehensive outpatient rehabilitation facilities (CORF) in the district, these do not provide the same level of care as do CMR units. Availability of Resources, including Manpower - Subsection 381.705(1)(h), F.S. There is a general, overall shortage of specialized staff in the Tampa area. However, UCH does not have any problem attracting and keeping qualified staff for its eighteen-bed rehabilitation unit or finding qualified physical therapists to provide rehabilitation services. This was confirmed by HRS's administrator of community health services and facilities. Financial Feasibility - Subsection 381.705(1)(i), F.S. The proposed project, if approved, is financially feasible from both an immediate and long-term standpoint. Impact on Costs of Health Care - Subsection 381.705(1)(i), F.S. The evidence is conflicting as to whether the project will impact adversely or favorably upon UCH's costs of providing health care. It is found that the project will have a beneficial effect on UCH's cost of providing health care since the unit provides a positive cash flow and offsets in part its uncompensated indigent care costs. It will also prevent UCH from going into an operating deficit. Provision of Services to Indigents and Medicaid Patients - Subsection 381.705(1)(n)1, F.S. Historically, UCH has not provided a high percentage of care to Medicaid and indigent patients. In its application, UCH proposes a patient mix that includes 2.5 percent indigent care and 2.5 percent medicaid. Also, UCH proposes to screen patients seeking rehabilitation care and deny admission to the unit if they lack a funding source. I. Impact on TGH. TGH's CMR unit is a significant contributor to TGH's overall financial soundness. Admissions, revenues and operating margin from the unit have increased each year. Because of large indigent care costs (which totaled almost $30 million in 1987), TGH depends on cross-subsidization of profits from private paying patients to offset the cost of indigent care and other laudable purposes such as being the primary teaching hospital for the University of South Florida. Therefore, it is necessary that TGH's CMR unit be fully utilized in order to maximize the return on its investment. TGH currently attracts patients from roughly a 72-mile radius and is impacted by providers in District 6 and adjoining districts. UCH's proposed CMR service area will overlap with TGH's existing service area and thus adversely impact on TGH's admissions. Indeed, TGH's profit margin in its CMR unit could be wiped out with a 10 percent drop in the occupancy rate. Around sixty percent of UCH's rehabilitation admissions come from in- house. Virtually none of its patients come from Pinellas or Polk Counties but it does get a significant number from Pasco County. TGH also admits patients from Pasco County and would be adversely affected by this competition.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application for a Certificate of Need and the request for exemption of nine beds be DENIED. DONE AND ORDERED this 28th day of December, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 28th day of December, 1988.
Conclusions THIS CAUSE comes before the State of Florida, Agency for Health Care Administration, (“the Agency”) regarding certificate of need ("CON") application number 10157 filed by Tallahassee Medical Center, Inc. d/b/a Capital Regional Medical Center (“CRMC”) and CON application number 10156 filed by Bay Hospital, Inc. d/b/a Gulf Coast Medical Center (*GCMC”). 1. CRMC filed a CON application which sought the establishment of a 12-bed comprehensive medical rehabilitation unit within its hospital located in Leon County, Florida, Service District 2. The Agency denied CRMC’s CON application 10157. 2. GCMC filed a CON application which sought the establishment of a 20-bed comprehensive medical rehabilitation unit within its hospital located in Bay County. Florida, Service District 2. The Agency denied GCMC’s CON application 10156. 3. Both parties filed a petition for formal hearing challenging the Agency’s denials of their respective CON applications. 4. Both parties have since voluntarily dismissed their petitions for formal hearing. 5. Based upon these voluntary dismissals, the Division of Administrative Hearings entered an Order Closing Files in the above styled matter. IT IS THEREFORE ORDERED: 6. The denial of CRMC’s CON application 10157 is UPHELD. 7. The denial of GCMC’s CON application 10156 is UPHELD. ORDERED in Tallahassee, Florida on thie 2 day of Crfebe_ . 2013. hob Py eclets Elizabeth Dudk, Secretary Agency for Health Care Administration
Other Judicial Opinions A party who is adversely affected by this final order is entitled to judicial review, which shall be instituted by filing the original notice of appeal with the agency clerk of AHCA, and a copy along with the filing fee 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 proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of the rendition of the order to be reviewed. CERTIFICATE OF SERVICE 1 HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by U.S. Mail or electronic mail to the persons named below on this f 3S day of /Voye—he/ . 2013. Richard J. Shoop, Agency Cler Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 (850) 412-3630 Janice Mills Facilities Intake Unit Agency for Health Care Administration (Electronic Mail) James McLemore, Supervisor Certificate of Need Unit Agency for Health Care Administration (Electronic Mail) James H. Peterson, IE] Administrative Law Judge Division of Administrative Hearings | (Electronic Mail) Lorraine M. Novak, Esquire Assistant General Counsel Agency for Health Care Administration (Electronic Mail) Stephen A. Ecenia, Esquire R. David Prescott, Esquire Rutledge Ecenia, P.A. 119 South Monroe Street, Suite 202 Tallahassee, Florida 32302 Counsel for CRMC and GCMC (U.S. Mail) R. Terry Rigsby, Esquire Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. 215 South Monroe Street, 2"! Floor Tallahassee, Florida 32301 Counsel for HealthSouth { (US. Mail)
The Issue Whether University Community Hospital should be issued Certificate of Need Number 6936 to convert 20 acute care beds to 20 comprehensive medical rehabilitation beds.
Findings Of Fact UCH is a 424 bed acute care hospital located in northern Hillsborough County. UCH is the applicant for CON Number 6936 to convert 20 medical/surgical acute care beds to 20 comprehensive medical rehabilitation ("CMR") beds. Its service area is northern Hillsborough and eastern Pasco Counties. AHCA is the successor to HRS as the designated agency to administer the CON laws. UCH currently operates 404 acute care beds and 20 skilled nursing beds. Its services include an emergency room, open heart surgery, obstetrics, and a home health agency. From 1982 to 1990, UCH operated an inpatient comprehensive rehabilitation unit, certified by HRS and recognized by the Federal Health Care Finance Administration ("HCFA") as a 9-bed unit in 1984, and as an 18-bed unit from 1985 through 1988. Substantial renovation of the unit's sixth floor south wing, in 1987 and 1988, was intended to meet the standards of the Commission on Accreditation of Rehabilitation Facilities ("CARF"). UCH was never actually CARF accredited. After the enactment of a CMR rule, HRS preliminarily determined that UCH was a "grandfathered" 9-bed provider of CMR services. That preliminary determination was successfully challenged in University Community Hospital v. Department of Health and Rehabilitative Services, 11 FALR 1150 (HRS Final Order 2/13/89), and the unit was closed in 1990. In September 1990, UCH applied for CON 6412 to convert 20 acute care beds to 20 CMR beds. That application was denied. University Community Hospital v. Department of Health and Rehabilitative Services, et al., 14 FALR 1899 (HRS Final Order 4/15/92). NEED IN RELATION TO STATE AND LOCAL HEALTH PLAN Five preferences in the 1989 Florida State Health Plan relate to CMR programs and are applicable to the review of the UCH application. The first preference relates to applicants proposing the conversion of excess acute care beds to establish a distinct rehabilitation unit within a hospital. AHCA agrees that the UCH application is consistent with this preference. The second preference, favoring applicants proposing specialty inpatient or outpatient rehabilitation services not currently offered in the district, it not met. In District VI, three CMR providers have a total of 112 licensed beds, 111 beds in operation: 59 at Tampa General Hospital in Hillsborough County, 24 at Winter Haven Hospital in Polk County, and 28 at L.W. Blake in Manatee County. The third preference applies to the teaching hospitals. UCH is not a teaching hospital although it does have contracts with teaching institutions to allow students to gain clinical experience at UCH. See, Subsection 408.035(1)(g), Fla. Stat. (1992 Supp.). The fourth preference, is for applicants with a history of providing a disproportionate share of charity care and Medicaid patient days. The preference specifically requires qualifying hospitals to meet Medicaid disproportionate share hospital criteria. UCH is not a disproportionate share provider, and does not meet this preference. The fifth preference, for applicants with an existing comprehensive outpatient rehabilitation facility ("CORF"), is met. UCH planner's testimony was not refuted and AHCA concedes that UCH offers a number of therapies to outpatients. The June 1990 District VI Allocation Factors Report, prepared by the Health Council of West Central Florida, Inc., is the local health plan applicable to the review of this application. The first preference favors disproportionate share providers, and does not support the UCH application. See, Finding of Fact 10. UCH is entitled to the second local preference for the conversion of existing medical/surgical beds. See, Finding of Fact 7. The fourth preference is for existing providers of fewer than 20 beds seeking to add more beds and is, therefore, not applicable to the UCH application. POPULATION CONDITIONS AND NEED The third local preference, for additional rehabilitation services if existing ones are not meeting community needs, is the essence of the UCH claim that its services are needed. The local factor is also directly related to the criteria of Subsection 408.035(1)(b), Florida Statutes, and Florida Administrative Code, Rule 59C-1.039(2)(b). The rule is as follows: Historic, current and projected incidence and prevalence of disabling conditions and chronic illness in the population in the Department service district by age and sex group; Trends in utilization by third party payers; Existing and projected inpatients (e.g., orthopedic, stroke and cardiac cases) in need of rehabilitation services; and The availability of specialized staff. Based on rule methodology for computing numeric need, there is zero need for additional CMR beds in District VI. That methodology is based on the assumption that there will be 3.9 CMR beds needed for every 1000 acute care discharges. In terms of population conditions, UCH has urged the consideration of the actual statewide use rate of 8.46 CMR admissions for every 1000 acute care admissions, which would equate to a need for an additional 132 beds in the District. In District VI, there are 6.67 CMR admissions for every 1000 acute care admissions which, considering projected population increases, equates to a need for 80 additional beds. According to UCH, CMR bed availability is a factor in determining utilization In District VI, there are 7 CMR beds per 100,000 people. UCH points to the actions of AHCA in approving an increase from 8 to 12 CMR beds per 100,000 people in District IX in the absence of any published numeric need. AHCA emphasizes that empty CMR beds exist in District VI, which had 1990-1991 occupancy rates of 72.07 percent, below the 85 percent minimum for approval of new beds absent not normal circumstances. Tampa General's rate was 82.77 percent, but Winter Haven's was 50.82 percent and L. W. Blake in Manatee County was 67.36 percent occupied. As AHCA also indicated, population projections and numeric need are calculated to determine future need. UCH has demonstrated that the geographic and economic accessibility of Winter Haven in Polk County is limited for patients from the UCH area. In part, the limitations result from the requirement of third party payers for CARF accredited facilities, when intense, inpatient rather than outpatient CMR services are needed. Winter Haven is not CARF accredited. In addition, during the time there was a low rate of utilization at Winter Haven, some licensed beds were not in service due to construction. Utilization in the first quarter of 1992 reached just under 80 percent at Winter Haven. UCH also claims that AHCA approved beds at Winter Haven based on the geographic inaccessibility of beds in Tampa. AHCA filed a Request for Official Recognition on February 3, 1993, which shows the award of beds to Winter Haven resulted from a stipulated settlement. UCH's Exhibit 9 does include the distance to Tampa as one of several factors considered in the agency's approval of the stipulated settlement with Winter Haven. L. W. Blake in Manatee County is also geographically inaccessible for Hillsborough County patients and their families, particularly the elderly proposed to be served by UCH. In addition, L.W. Blake's utilization increased to an average of 84 percent in the first quarter of 1992. Tampa General has 59 of its 60 CMR beds in service. All rooms at Tampa General are semi-private, necessitating same gender placements, except one isolation room. In addition, patients with similar injuries are grouped together. Tampa General is a regional referral center for vocational rehabilitation and a state designated center for head and spinal cord injuries. These factors limit the availability of Tampa General's beds to serve District VI residents, as does its occupancy rate of 85 percent. In the past, when UCH operated and then closed a CMR unit, there was no statistical impact on Tampa General. Currently, Tampa General has a waiting list and patients average a 9 day wait. For the reasons identified by UCH, including geographic and economic inaccessibility, the district incidence of CMR admissions as compared to acute care admissions, UCH has provided sufficient, credible evidence of the need for the services proposed by UCH in additional CMR beds in District VI. AHCA has amended its CMR rule to better predict need. Although it is not applicable to computing numeric need for this cycle, AHCA asserts that its new rule methodology is the alternative which should be used rather than other factors, such as the ratio of CMR beds to acute care admissions, or population. Under the new rule methodology, there is no numeric need for additional CMR beds in District VI. Assuming arguendo, that AHCA is correct, the other factors related to the accessibility and availability of services at the three existing providers could not be disregarded. PROJECT COSTS AND FINANCIAL FEASIBILITY In this application, UCH proposes to operate a 20-bed CMR unit in the renovated space of the sixth floor south wing. That space currently is being used as an overflow area for 30 medical/surgical beds. UCH estimates total project costs of $248,596, with major expenses for consulting, legal, and accounting expenses, and $67,496 of the total or $3.66 per square foot for redecorating the renovated wing. No additional construction is anticipated. AHCA acknowledges that UCH has the funds to finance the project, but asserts that the costs are understated by $150,000 due to the failure of UCH to include construction costs to bring the wing into compliance with the Americans with Disabilities ACT ("ADA"). UCH notes, and AHCA concedes, that the rule requiring compliance with ADA standards was not adopted until a year after this application was filed. In addition, ADA compliance is required for new construction, not redecorating. AHCA also criticized UCH for omiting the cost of relocating 10 medical/surgical beds, after the conversion of 20 of the existing 30 beds to CMR beds. UCH asserts that the conversion or relocation of the 10 beds is properly an expense item in the project which would utilize the 10 beds and is included in other pending CON applications for difference services. Other CON projects however, are not certain to be approved. If none are, UCH's expert planner testified that the 10 beds will be located in a general surgical area which is being redecorated. UCH also maintains that as long as it can bring the CMR beds on line within the total project costs within the application, it should be allowed to do so, even if that involves shifting amounts among the various expense items. AHCA has not estimated the cost of relocating the 10 beds, nor contradicted UCH's alternative plans for covering that cost. UCH's projected total project costs are, therefore, accepted as reasonable. AHCA agrees that UCH could profitably operate a CMR unit, particularly, as proposed to provide stroke and orthopedic services to medicare patients. When UCH operated an 18-bed unit, occupancy ranged from 77 percent to 84 percent, with 80 to 85 percent of the patients transferring from UCH acute care beds. Projected charges, deductions from revenue, payor mix, and expenses are reasonable. AHCA did not dispute UCH's assertions that its proposal is the most cost-effective alternative for increasing district CMR beds, because no other provider could initiate such services without substantial construction costs, and that utilization of CMR beds is increasing. ADDITIONAL CON CRITERIA AND CMR PROGRAM REQUIREMENTS UCH, as acknowledged by AHCA, has a history of providing quality care and is accredited by the Joint Commission on Hospital Accreditation. UCH has a staff physiatrist to serve as CMR Medical Director. The types of therapists needed to provide a coordinated multidisciplinary approach to rehabilitation are already on staff at UCH. The staffing and renovations of the wing in the late 1980's indicate that UCH will meet the requirements for CARF accreditation. UCH does not propose to offer CMR services as a joint venture with any other health care facility, nor does it propose to offer a service which is not available in adjacent districts. In fact, AHCA notes that District V providers had occupancy rates of 53.31 percent for 1990-1991. The agency's rule, however, places at issue the historic, current and projected population conditions in the Department service district by age and sex group.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered issuing Certificate of Need No. 6936 to University Community Hospital to convert 20 medical/surgical acute care beds to 20 comprehensive medical rehabilitation beds in District VI. DONE and ENTERED this 19th day of October, 1993, at Tallahassee, Florida. ELEANOR M. HUNTER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of October, 1993. APPENDIX TO CASE NO. 92-5107 University Community Hospital Accepted in Findings of Fact 1 and 3. Accepted in Finding of Fact 1. Accepted in Finding of Fact 4. Accepted in Finding of Fact 5. Accepted in Finding of Fact 5. Accepted in Finding of Fact 4. Accepted in Findings of Fact 1 and 5. Accepted in Finding of Fact 29. Accepted in Finding of Fact 29. Accepted in Finding of Fact 6. Accepted in Preliminary Statement. Accepted in Preliminary Statement. Accepted in Finding of Fact 17. Accepted in Finding of Fact 18. Accepted in Finding of Fact 18. Accepted in Finding of Fact 18. Accepted in or subordinate to Finding of Fact 19. Subordinate to Finding of Fact 19. Accepted in Findings of Fact 20 through 24. Accepted in Finding of Fact 16. Subordinate to Finding of Fact 21. Subordinate to Finding of Fact 21. Accepted in Finding of Fact 29. Accepted in part and rejected in part in Findings of Fact 6-16. Accepted in Finding of Fact 8. Accepted in Finding of Fact 20. Accepted in Finding of Fact 20. 28. Accepted in Finding of Fact 21. 29. Subordinate to Finding of Fact 21. 30. Accepted in Finding of Fact 22. 31. Accepted in Finding of Fact 22. 32. Accepted in Finding of Fact 24. 33. Subordinate to Finding of Fact 24. 34. Subordinate to Finding of Fact 24. 35. Subordinate to Finding of Fact 24. 36. Accepted in Finding of Fact 23. 37. Subordinate to Finding of Fact 23. 38. Subordinate to Finding of Fact 23. 39. Subordinate to Finding of Fact 23. 40. Subordinate to Finding of Fact 23. 41. Subordinate to Finding of Fact 23. 42. Accepted in Finding of Fact 23. 43. Subordinate to Finding of Fact 23. 44. Subordinate to Finding of Fact 23. 45. Subordinate to Finding of Fact 23. 46. Subordinate to Finding of Fact 23. 47. Subordinate to Finding of Fact 24. 48. Subordinate to Finding of Fact 24. 49. Subordinate to Finding of Fact 24. 50. Subordinate to Finding of Fact 24. Accepted in Findings of Fact 7 and 27. Accepted in Finding of Fact 29. Accepted in Finding of Fact 29. Accepted in Finding of Fact 29. Accepted in Finding of Fact 30. Accepted in Finding of Fact 27. Accepted in Findings of Fact 26 and 28. Subordinate to Finding of Fact 27. Accepted in Finding of Fact 27. Accepted in Finding of Fact 27. Accepted in Finding of Fact 27. Accepted in Findings of Fact 31 and 32. Subordinate to Finding of Fact 1. Accepted in Findings of Fact 27 and 32. Subordinate to Finding of Fact 27. Subordinate to Finding of Fact 30. Subordinate to Finding of Fact 30. Accepted. Accepted in Finding of Fact 32. Accepted and subordinate to Finding of Fact 1. Agency For Health Care Administration 1. Accepted in Findings of Fact 1 and 3. 2. Accepted in Findings of Fact 1 and 3. 3. Accepted in Finding of Fact 1. 4. Accepted in Finding of Fact 4. 5. Accepted in Finding of Fact 5. 6. Accepted in Finding of Fact 6. 7. Accepted in Findings of Fact 1 and 4. Accepted in Findings of Fact 26 and 28. Accepted in Finding of Fact 27. Accepted in Finding of Fact 32. Accepted in Finding of Fact 1. Accepted in Finding of Fact 29. Accepted in Finding of Fact 5. Accepted in Finding of Fact 6. Accepted in Finding of Fact 7. Accepted in Finding of Fact 8. Accepted in Finding of Fact 9. Accepted in Finding of Fact 10. Rejected in Finding of Fact 11. Accepted in Finding of Fact 12. Rejected in Finding of Fact 16. Accepted in Finding of Fact 13. Accepted in Finding of Fact 14. Rejected in Findings of Fact 20 and 22. Accepted in Finding of Fact 15. Subordinate to Finding of Fact 32. Accepted in Finding of Fact 19. Accepted in Finding of Fact 21. Rejected in Findings of Fact 20-23. Accepted in Finding of Fact 17. Accepted in Findings of Fact 8, 17 and 19. Accepted in Finding of Fact 17. Accepted in Finding of Fact 16. Accepted in Finding of Fact 16. Rejected in Findings of Fact 20-23. Rejected in Findings of Fact 20-23. Accepted in Finding of Fact 18. Rejected in Finding of Fact 24. Accepted in Finding of Fact 18. Accepted in Finding of Fact 25. Rejected in Finding of Fact 24. Accepted in Finding of Fact 16. Accepted in relevant part in Finding of Fact 21. Accepted in Finding of Fact 16. Conclusion Rejected in Findings of Fact 20-23 and 29. Accepted in Finding of Fact 16. Accepted in Finding of Fact 32. Accepted in Finding of Fact 20. Accepted in Finding of Fact 20. Rejected in Finding of Fact 29. Accepted in Findings of Fact 29 and 4. Rejected in Finding of Fact 29. Accepted in Finding of Fact 21. Subordinate to Findings of Fact 21-24. Accepted in Findings of Fact 21-24. Accepted in Findings of Fact 21-24. Subordinate to Finding of Fact 24, and Accepted in Finding of Fact 33. Accepted in Findings of Fact 4, 21 and 32. Rejected in Findings of Fact 4, 21, and 32. Subordinate to Finding of Fact 21. Subordinate to Finding of Fact 21. Accepted in Finding of Fact 33. Accepted in Finding of Fact 33. Accepted in Finding of Fact 9. Accepted in Finding of Fact 9. Subordinate to Finding of Fact 29. Subordinate to Finding of Fact 29. Subordinate to Finding of Fact 29. Accepted in Finding of Fact 29. Rejected in relevant part in Findings of Fact 27 and 28. Rejected in Findings of Fact 27. Subordinate to Finding of Fact 21. Accepted in Finding of Fact 23. Rejected in Finding of Fact 27. Accepted in Finding of Fact 29. Issue not reached. See Finding of Fact 27. Issue not reached. See Finding of Fact 27. Issue not reached. See Finding of Fact 27. Accepted in relevant part in Finding of Fact 28. Subordinate to Finding of Fact 29. Rejected in Findings of Fact in 21-24. Rejected in Finding of Fact 23. Accepted, except last sentence in Findings of Fact 21-24. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303 Lesley Mendelson, Senior Attorney Agency for Health Care Administration 325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131 Cynthia S. Tunnicliff, Esquire Post Office Box 190 Tallahassee, Florida 32302
Findings Of Fact Petitioner applied to the Board of Medicine for licensure by endorsement as a physician in the State of Florida. The Board of Medicine is the regulatory agency in the State of Florida charged with the duty to regulate the practice of medicine in the state, including the licensure of physicians. Petitioner has been in psychotherapy as a patient of Dr. Stanley G. Garner since 1986. Dr. Garner was qualified and accepted as an expert witness in the speciality of psychiatric medicine. Petitioner began psychotherapy with Dr. Garner and has remained in therapy with him on a voluntary basis. The purpose and emphasis of Petitioner's psychotherapy has been the identification and resolution of ongoing family problems, including marital and divorce issues, which have been imposed upon an earlier history of being raised in a dysfunctional family. Petitioner was very upset when she first saw Dr. Garner in 1986 due to events that resulted in protracted divorce proceedings. The purpose of Petitioner's therapy has never been to assess or ensure Petitioner's fitness to practice medicine since this was never a therapeutic issue to either the Petitioner or to Dr. Garner. Petitioner's psychotherapy has been directed towards improving her comfort, happiness, and quality of life. Dr. Garner has spent over 400 hours in therapy with Petitioner and has diagnosed Petitioner as having Dysthymia, which is a fairly recent term for a depressive condition that used to be called neurotic depression or depressive neurosis. Dysthymia was described by Dr. Garner as being an extremely common condition and one that is shared by many of his physician patients without impairment of their ability to perform as physicians with reasonable care and skill. According to the Diagnostic and Statistical Manual of the American Psychiatric Association, the diagnosis of Dysthymia has to include the presence of at least two of the following conditions while depressed: (1) poor appetite or over eating, (2) insomnia or hypersomnia, (3) low energy or fatigue, (4) low self esteem, (5) poor concentration or difficulty making decisions, (6) feelings of hopelessness. Dysthymia does not usually lead to sudden changes in personality or behavior, and Dr. Garner has noted no sudden changes in Petitioner's personality during the course of his treatment of her. Petitioner's application reflected that she had undergone psychotherapy as a patient of Dr. Garner since 1986. In response to the application, Respondent required information from Dr. Garner as to Petitioner's treatment. By his letter of July 17, 1991, Dr. Garner provided Respondent with historical information as to Petitioner's condition and her psychotherapy and advised Respondent, in pertinent part, as follows: Dr. Shienvold has been in psychotherapy with me, on a regular basis, since 9/13/86 for treatment of her depressive disorder. She is currently being seen weekly in individual psychotherapy and weekly in group psychotherapy. The frequency of her visits has varied during the course of her treatment. Currently, she is taking Prozac 20 mg. each morning; this medication seems to be helping her cope with the many pressures of her current life situation. She was not on medication during most of her time in therapy. * * * Dr. Shienvold's diagnosis is Dysthymia (300.40 DSM III-R). She has never shown any evidence of a psychotic disorder and has no history of, nor propensity for, substance abuse. Her prognosis is excellent, but she definitely needs ongoing psychotherapy for the foreseeable future. There are still many current vocational, financial, familial, and parental pressures which impede her more rapid progress. I have no doubt, however, that she will overcome these obstacles and continue to be a dedicated and hard working physician. This applicant for medical licensure, in my professional opinion, will certainly be able to practice medicine with reasonable skill and safety. Given her very high level of intelligence and her rapidly increasing fund of knowledge and experience, along with her genuine caring devotion to her patients, I am convinced that Dr. Shienvold will become a truly outstanding physician and do honor to our profession. If my comments seem flowery and excessive, it is because in my almost 35 years as a physician, and as a psychiatrist to a large number of fellow physicians, I have only rarely seen someone as qualified to practice Medicine as Frances Shienvold. As part of the application process, Respondent arranged for the Physician's Recovery Network (PRN) to have Petitioner examined by an independent psychiatrist. This examination was performed in January 1992 by Dr. Burton Cahn. On February 24, 1992, Dr. Cahn submitted his report to Dr. Goetz by letter. Dr. Cahn's letter provided, in pertinent part, as follows: At the present time, I see no reason why Dr. Shienvold would be unable to practice medicine because of a mental or emotional condition. She is not psychotic. She is not a substance abuser. She is not at this time significantly depressed. She does not represent a danger to herself or to others. I therefore find no reason on a mental or emotional basis that Dr. Shienvold is unable to practice medicine. The record in this proceeding is not clear when the idea that a monitoring contract with the PRN would be deemed necessary by the Board of Medicine. It is apparent from Dr. Garner's follow-up letter to the Board of Medicine on January 16, 1992, that Petitioner was aware at that time that such a condition may be imposed on her licensure by Respondent. Dr. Garner's letter of January 16, 1992, provided, in pertinent part, as follows: It is my professional opinion that the assignment of Dr. Shienvold to the Physicians Recovery Network was an error. The requirement that she sign an Advocacy Contract with "PRN" is inappropriate for her situation, and would be for anyone else with her particular medical/psychological history. There is certainly no need for any kind of "monitoring" of her continuation in psychotherapy. . . . * * * In summary, I believe that Dr. Shienvold should be granted her Florida license to practice medicine without any special conditions or restrictions. . . . * * * Her diagnosis remains the same (Dysthymia), and her prognosis is excellent. By letter dated February 26, 1992, Dr. Goetz advised the Board of Medicine that "Dr. Cahn finds no reason why Dr. Shienvold would be unable to practice medicine with reasonable skill and safety." Dr. Goetz's letter of February 26, 1992, also provided the following: "If the Board chooses to license this applicant, I would be pleased to monitor Dr. Shienvold's continuing treatment with a PRN contract." By Order dated March 16, 1993, the Board of Medicine approved Petitioner's application for licensure by endorsement with a condition. The Board's Order provided, in pertinent part, as follows: You are hereby notified pursuant to Section 120.60(3), Florida Statutes, that the Board of Medicine voted to APPROVE with certain requirements your application for licensure as a physician by endorsement. The Board of Medicine reviewed and considered your application by endorsement on October 2, 1992, in Miami, Florida and has determined that said licensure by endorsement be APPROVED with the requirement that you establish a monitoring contract with the Physician Resource Network (PRN). The Board stated as grounds therefore: That you have a history of successful psychotherapy for a depressive disorder that requires ongoing treatment. Although your ability to practice medicine has not been compromised, it is appropriate to establish monitoring to ensure continued successful treatment. At its February 6, 1993, meeting in Jacksonville, Florida, the Board denied your request for reconsideration of this matter. The requirement set forth herein is a requirement for licensure and should not be interpreted or applied as disciplinary action by the Board. The Physician's Resources Network referred to by the foregoing Order is the same organization as the Physician's Recovery Network. The PRN is also referred to as the Impaired Practitioner Program. The purpose of the PRN program is to protect the public by assuring the health and well being of licensed health practitioners in the State of Florida. Dr. Garner's testimony at the formal hearing was consistent with the opinions he expressed in his two letters to Respondent. Petitioner has been responsible in securing appropriate medical care for herself including psychiatric care, and has been a cooperative patient while under Dr. Garner's care. For most of her psychotherapy, Petitioner has been seeing Dr. Garner twice a week. At the time of the formal hearing, she was seeing him once a week. Dr. Garner has no reason to believe that she would irresponsibly discontinue her therapy or become uncooperative in the foreseeable future. Petitioner has not suffered severe Dysthymia, but she has been at times severely depressed. Those occasions when she was severely depressed were in reaction to her mother's death and in reaction to her abandonment by her father and by her husband. Prior to entering medical school, Petitioner held a Ph.D. in cell biology and anatomy. Over the past seven years she has gone through a divorce, reconciled with her mother, suffered the death of her mother, become estranged from her father and stepmother, and completed medical school. At the time of the formal hearing, she had almost completed her residency. Petitioner has never been found to be unfit to practice medicine with requisite levels of skill and care at any time during her residency. Petitioner has participated in a residency program at Jackson Memorial Hospital for approximately three years. The residency program includes participation in out patient clinics at Mt. Sinai Hospital and service in regular hospital wards, the emergency room, intensive care units for both neonatal patients and other pediatric patients. As a resident, Petitioner worked under the general supervision of a licensed physician, but she had ample opportunity to independently exercise her professional responsibilities and judgment. Petitioner's ability to practice medicine with fitness and safety has not been impaired by Dysthymia, any other mental or emotional condition, or the medication she takes for the Dysthymia. Her memory has not been impaired. At any given time, a person suffering from depression can have difficulty in concentrating or in making decisions. The evidence in this proceeding established that Petitioner's ability to concentrate and to make decisions in the day to day practice of her profession has not been impaired. Her interest in her patients has not been impaired. She does not suffer from unusual fatigue. Petitioner has various medical conditions that add stress to her life. She suffers from sinus problems which have resulted in surgery and ongoing treatment for infections, hypertension, hyperthyroidism, gastritis which includes duodenitis, and esophageal reflux. Petitioner continues to suffer financial and family problems relating to her father, stepmother, brother, and son. Petitioner can still become very upset at times. It is anticipated that Petitioner will remain under Dr. Garner's care for at least one more year. Petitioner intends to continue in psychotherapy until her symptomology is fully resolved. Dr. Garner considers Petitioner's prognosis to be excellent, but is of the opinion that she needs ongoing psychotherapy for the foreseeable future. Dr. Garner is of the opinion that Petitioner could practice medicine with the requisite skill and safety if she were to discontinue psychotherapy completely. At the time of the formal hearing, Petitioner had been taking Prozac for approximately two years. Prozac is an antidepressant which helps Petitioner keep her mood at a high level while she deals with difficult problems in psychotherapy. Dr. Garner is of the opinion that Petitioner can practice medicine with the requisite level of skill and safety without Prozac. He is of the opinion that it is best for her to continue to take Prozac and that there are no significant side effects to the medication. Dr. Roger Goetz is the director of the PRN program and was accepted as an expert in Respondent's impaired practitioner program. The purpose of a monitoring contract with the PRN is to monitor whether there is a failure of a participant to progress in psychotherapy, if there is a change in medication, if there is any discontinuance of therapy, or if there is a change of treating professionals. Dr. Goetz considers the monitoring contract to be the least intrusive way to establish a relationship between the participant and the PRN program. Dr. Goetz is of the opinion that it is in Petitioner's best interest and the best interest of the public that she be in a monitoring contract with the PRN as a condition of her licensure because the contract would provide confirmation that Petitioner is doing well in her therapy before it became necessary to institute a disciplinary action or investigation, the contract would ensure that no abnormal transference was going on, and the contract would, in light of her psychiatric treatment, give assurance that she poses no problem to the public welfare. Dr. Goetz made it clear that he was testifying as the Director of the PRN and that he was not attempting to speak on behalf of the Board of Medicine. He also made it clear that it was the responsibility of the Board of Medicine to decide whether a practitioner needs services from the PRN and that the PRN becomes involved after the Board of Medicine determines that a practitioner needs its services. The terms and conditions of the monitoring contract would be negotiated by the parties after the Board of Medicine enters a Final Order that requires the imposition of a monitoring contract. Because those negotiations have not occurred, Dr. Goetz could only testify as to the terms he would expect to be contained in a monitoring contract. In addition to the reports required of the treating psychiatrist, the contract would confer on the PRN the authority to require Petitioner to withdraw from practice for evaluation if the PRN determines that "any problem" has developed. The monitoring contract is expected to be of at least five years duration and, according to Dr. Goetz, be imposed as long as Petitioner is in therapy without regard to the purpose or the nature of her therapy. Dr. Garner is of the opinion that PRN monitoring would impede rather than ensure Petitioner's progress in therapy because it would diminish the underlying confidentiality of therapy. From the proceedings before the Board of Medicine, it is apparent that the board considered the information contained in Petitioner's application file, including the opinions expressed by Dr. Garner and by Dr. Cahn before entering its Order of March 16, 1993. At the formal hearing, there was no articulation of the reasons the Board of Medicine had for determining that Petitioner's history of psychotherapy and the fact that the psychotherapy was ongoing justified the imposition of the monitoring contract with the PRN.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order which unconditionally grants Petitioner's application for licensure to practice medicine by endorsement. DONE AND ENTERED this 29th day of November, 1993, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3038 The following rulings are made on the proposed findings of fact submitted by Petitioner. The proposed findings of fact in paragraphs 1, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 22, 25, 26, 27, 29, 32, 33, 34, and 40 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 2 are adopted by the Recommended Order or are subordinate to the findings made. The proposed findings of fact in paragraphs 19, 20, 21, 23, 24, 28, 30, 31, 35, 36, 37, 42, and 43 are subordinate to the findings made. The proposed findings of fact in paragraphs 38 and 41 are rejected as being unnecessary as findings of fact, but are consistent with the conclusions reached. The proposed findings of fact in paragraph 39 are rejected as being speculative. The proposed findings of fact in paragraph 44 are rejected as being unnecessary to the conclusions reached. The following rulings are made on the proposed findings of fact submitted by Respondent. The proposed findings of fact in paragraphs 1, 2, 3, 4, 5, 7, 8, 10, 11, 13, and 14 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 6 and 9 are adopted in part by the Recommended Order. These proposed findings of fact are, in part, rejected as being inconsistent with the findings made. The proposed findings of fact in paragraph 12 are adopted as being opinions expressed by Dr. Goetz. COPIES FURNISHED: Howard J. Hochman, Esquire 1320 South Dixie Highway, Suite 1180 Coral Gables, Florida 33146 Claire D. Dryfuss, Esquire Assistant Attorney General Office of the Attorney General The Capitol, PL-01 Tallahassee, Florida 32399-1050 Dorothy Faircloth, Executive Director Board of Medicine Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0770 Jack McRay, Acting General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0770
