Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: In November of 1983, HMA filed its application for a Certificate of Need to construct and operate a 60-bed adolescent treatment center in Orlando, Florida. An omissions response was filed by HMA in January of 1984. Thereafter, HRS issued its initial intent to grant the application and PIO requested an administrative hearing. HMA is a privately held corporation which owns or manages twelve or thirteen acute care hospitals in the States of Kentucky, West Virginia, Pennsylvania, Missouri, Texas and Florida, several of which are psychiatric hospitals. The proposed long-term psychiatric treatment facility for adolescents is patterned after a 55-bed program currently operated by HMA in Arlington, Texas. The proposed facility will be a freestanding campus-like setting located on ten to fifteen acres of land in the southern portion of Orlando. The precise site has not yet been selected. The single-story facility will have a total size of approximately 45,000 to 50,000 square feet and will be divided into two separate units which connect into a core area containing various support services, such as offices, a gymnasium, a swimming pool, a media center, and an occupational therapy area. While the location finally selected for the facility will have a bearing on the site costs of the project, the estimated construction costs of approximately 3.1 billion do contain a contingency factor and are reasonable at this stage of the project. Each unit will be served by two interdisciplinary treatment teams headed by a physician or a psychiatrist. Key personnel for the facility, such as department heads and program directors, will most likely be recruited from outside the Orlando area in order to obtain persons with experience in long-term care for adolescents. The treatment program is designed to serve adolescents between the ages of 10 and 19, though the bulk of patients will be middle school and high school individuals between the ages of 13 and 17. While the primary service area will be adolescents in District 7, the remainder of the central Florida region is identified as a secondary service area. A full educational program at the facility is proposed. The concept of the hospital will be to treat the whole person, not just his psychiatric problems, and the treatment program will include and involve family members and other factors which may have a bearing on the adolescent's ability to fit into society. The form of treatment is based upon a "levels" approach -- a form of behavior modification wherein privileges are granted for appropriate behavior and the patient is allowed to move up to the next succeeding level of privileges. It is contemplated that the average length of stay for a patient will be approximately six months -- the average time anticipated for a patient to move from the admission level to the level of discharge. HMA intends to seek accreditation of its proposed facility from the Joint Commission on Accreditation of Hospitals. The total estimated project cost for the proposed facility is $6,307,310.00. Financing is to be obtained either through a local bond issue or by a private lending institution. Based upon an evaluation of HMA's audit reports for the past three years, an expert in bond financing of health care facilities was of the opinion that HMA would be eligible either for a private placement or a bond issue to finance the proposed project. HMA intends to charge patients $325.00 per day, and projects an occupancy rate of 80 percent at the end of its second year of operation. This projection is based upon a lack of similar long-term psychiatric facilities for adolescents in the area, the anticipated, experience at the Arlington, Texas adolescent facility and the anticipated serving of clients from CYF (Children Youth and Families -- a state program which; serves adolescents with psychiatric and mental problems). Although no established indigent care policy is now in existence, HMA estimates that its indigency caseload will be between 3 and 5 percent. It is anticipated that the proposed facility will become a contract provider for CYF for the care and treatment of their clients and that this will comprise 20 percent of HMA's patient population. HRS's Rule 10-5.11(26), Florida Administrative Code, relating to long- term psychiatric beds, does not specify a numerical methodology for quantifying bed need. However, the Graduate Medical Education National Advisory Committee (GMFNAC) methodology for determining the need for these beds is generally accepted among health care planners. The GMENAC study was initially performed in order to assess the need for psychiatrists in the year 1990. It is a "needs- based" methodology, as opposed to a "demand-based" methodology, and attempts to predict the number of patients who will theoretically need a particular service, as opposed to the number who will actually utilize or demand such a service. Particularly with child and adolescent individuals who may need psychiatric hospitalization, there are many reasons why they will not seek or obtain such care. Barriers which prevent individuals from seeking psychiatric care include social stigma, the cost of care, concerns about the effectiveness of care, the availability of services and facilities and other problems within the family. Thus, some form of "demand adjustment" is necessary to compensate for the GMENAC formula's overstatement of the need for beds. The GMENAC formula calculates gross bed need by utilizing the following factors: a specific geographic area's population base for a given age group, a prevalency rate in certain diagnostic categories, an appropriate length of stay and an appropriate occupancy factor. In reaching their conclusions regarding the number of long-term adolescent psychiatric beds needed in District 7, the experts presented by HMA and PIO each utilized the GMENAC formula and each utilized the same prevalency rate for that component of the formula. Each appropriately used a five-year planning horizon. However, each expert reached a different result due to a different opinion as to the appropriate age group to be considered, the appropriate length of stay, the appropriate occupancy factor and the factoring in of a "demand adjustment." In calculating the long-term adolescent psychiatric bed need for District 7 in the year 1989, HMA's expert used a population base of ages 0 to 17, lengths of stay of 150 and 180 days, an occupancy level of 80 percent and an admissions factor of 96 percent. Utilizing those figures, the calculation demonstrates a 1989 need for 158 beds if the average length of stay is 150 days, and 189 beds if the average length of stay is 180 days. If the population base is limited to the 10 to 19 age bracket, the need for long-term psychiatric beds is reduced to between 70 and 90, depending upon the length of stay. From these calculations, HMA's expert concludes that there is a significant unmet need for long-term adolescent psychiatric beds in District 7. This expert recognizes that the numbers derived from the GMENAC formula simply depict a statistical representation or indication of need. In order to derive a more exact number of beds which will actually be utilized in an area, one would wish to consider historical utilization in the area and/or perform community surveys and examine other site-specific needs assessment data. Believing that no similar services or facilities exist in the area, HMA's need expert concluded that there is a need for a 60-bed facility in District 7. In applying the GMENAC methodology, PIO's need expert felt it appropriate to utilize a base population of ages 10 through 17, an average length of stay of 90 days and an occupancy rate of 90 percent. Her calculations resulted in a bed need of 37 for the year 1990. Utilizing a length of stay of 120, 150 and 180 days and a 90 percent occupancy rate, a need of 50, 62 and 75 beds is derived. If an occupancy rate of 80 percent is utilized, as well as a population of ages 10 - 17, the need for beds is 42, 56, 70 and 84, respectively, for a 90, 120, 150 and 180 day average length of stay. The need expert for PIO would adjust each of these bed need numbers by 50 percent in order to account for the barriers which affect the actual demand for such beds. Since the HMA proposed facility intends to provide service only to those patients between the ages of 10 and 19, use of the 0 - 17 population would inflate the need for long-term adolescent psychiatric beds. Likewise, PIO's non-inclusion of 18 and 19 year olds understates the need. PIO's use of a 90-day average length of stay would tend to understate the actual need in light of HMA's proposed treatment program which is intended to last approximately six months. While some demand adjustment is required to properly reflect the barriers which exist to the seeking of long-term adolescent psychiatric care, the rationale of reducing by one-half the number derived from the GMENAC methodology was not sufficiently supported or justified. Even if HMA's calculations were reduced by one-half, a figure of between 79 and 94 beds would be derived. The existence of other long-term adolescent psychiatric beds in District 7 was the subject of conflicting evidence. West Lake Hospital in Longwood, Seminole County, holds a Certificate of Need and a license as a special Psychiatric hospital with 80 long-term beds. However, the Certificate of Need was issued prior to the adoption of Rules 10-5.11(25) and (26), Florida Administrative Code, when anything in excess of 28-days was considered long- term. The West Lake application for a Certificate of Need referred to a four- to-six week length of stay -- or a 28 to 42 day period --for adults, and a ten week, or 70 day length of stay for children and adolescents. In preparing inventories for planning purposes, HRS considers the 40 child and adolescent psychiatric beds at West Lake Hospital to be acute or short-term beds. The West Lake facility is not included in HRS's official inventory of licensed and approved long-term care beds as of October 1, 1984. In fact, the only long-term care beds listed for District 7, in addition to HMA's proposed psychiatric facility, are beds devoted to the treatment of substance abuse. PI0 is the holder of a Certificate of Need to construct and operate a 60-bed short-term adolescent psychiatric hospital in Southwest Orange County, and is currently planning the actual development and construction of the facility. If PIO is not able to reach the census projections contained in its Certificate of Need application, its ability to generate earnings could be adversely impacted. Even a five percent decrease in PIO's census projections would require PIO to either raise its rates or make reductions in direct costs. This could include a decrease in staffing, thus affecting a reduction in the available programs, problems in attracting quality staff and ultimately a reduction in the quality of care offered at the PIO facility. In a batch subsequent to the HMA application, PIO requested the addition of 15 long-term adolescent psychiatric beds and 15 substance abuse beds. When an adolescent psychiatric patient is evaluated for placement in a hospital setting, it is generally not possible to determine how long that patient will require hospitalization. The adolescent psychiatric patient is often very guarded, distrusting both parents and other adults, and it is difficult to obtain full and necessary information from both the patient and the parents. Several weeks of both observation and the gathering of data, such as school records, are necessary in order to access the adolescent patient's degree of disturbance. With respect to treatment programs, there is no sharp medical demarcation between a 60-day period and a 90 day period. Patients in short-term facilities often stay longer than 60 days and patients in long term facilities often stay less than 90 days. The length of stay is very often determined by the parents, in spite of the treatment period prescribed by the physician. The treatment programs in both short-term and long-term psychiatric facilities are very similar, and short- and long-term patients are often treated in the same unit. Staffing for the two types of facilities would be basically the same, with the exception, perhaps, of the educational staff.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that HMA grant HMA's application for a Certificate of Need to construct and operate a 60-bed long-term adolescent psychiatric facility in Orlando, Florida. Respectfully submitted and entered this 9th day of July, 1985, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1985. COPIES FURNISHED: C. Gary Williams and Michael J. Glazer P. O. Box 391 Tallahassee, Florida 32302 John M. Carlson Assistant General Counsel 1323 Winewood Blvd. Building One, Suite 407 Tallahassee, Florida 32301 Robert S. Cohen O. Box 669 Tallahassee, Florida 32301 David Pingree Secretary Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32301 =================================================================
Findings Of Fact The Parties FRTC is a wholly-owned subsidiary of Charter Medical Corporation which proposes to construct and operate a 60 bed intensive residential treatment program (IRTP) in Bradenton, Florida, which is located in the Department's District VI. The Department is the state agency with the authority and responsibility to consider CON applications. Manatee Palms is an existing residential treatment center in Manatee County, Florida which opened in January, 1987 and is currently operating without a CON. It provides services similar or identical to those proposed by FRTC. Manatee Palms was developed by, and is a subsidiary of, Psychiatric Institutes of America. Its primary service area extends beyond District VI from Orlando to Naples. Manatee Palms is a sixty bed facility providing psychiatric, substance abuse and educational services for juveniles up to 18 years of age, and is licensed by the Department as a child caring facility, as a provider of services to the Department, and for subspecialties involving drug and alcohol programs. It is accredited by the Joint Commission on Accreditation of Hospitals as a residential treatment center. The average length of stay for patients is six months. Occupancy rates have been consistently above projections and have been as high as 97 percent in May, 1987. Manatee Memorial is a full-service acute care hospital and an existing provider of short-term psychiatric services in Bradenton, Florida, with 25 licensed short-term psychiatric beds, nine of which comprise a children's and adolescent unit. It is the Manatee County contract provider of in-patient psychiatric services to the medically indigent, and provides approximately 91 percent of the indigent care in Manatee County. Manatee Memorial does not have, and has never sought, a CON as an IRTP, but does have earlier-batched applications pending for additional short and long term psychiatric beds. Its average length of stay is 35-40 days, and its utilization rate is approaching 100 percent. Manatee Memorial provides services similar or identical to those proposed by FRTC, and its program also utilizes a "levels system" similar to that used by FRTC. The Application and Project On September 15, 1986 FRTC filed a Letter of Intent notifying the Department of its intent to file a CON application for an IRTP for children and adolescents in Bradenton, Florida. On October 14, 1986 FRTC filed CON application number 4825 to obtain specialty hospital licensure as an IRTP. This application was initially approved by the Department on March 10, 1987, after the filing of a completeness response on or about December 23, 1986 at the request of the Department. Manatee Palms and Manatee Memorial timely filed petitions for formal administrative hearings challenging the Department's intent to issue the CON. The project at issue in this case is a 60 bed IRTP situated on a 9.35 acre site. The proposed building will have total gross square footage of approximately 32,000 and has been adapted from a prototype short-term psychiatric hospital design which has been used in approximately 50 locations. The floor plan submitted by FRTC provides for 28 semi-private rooms, three of which are designed to accommodate the handicapped, and one 4- bed assessment unit. Additionally, reasonable and sufficient space is provided for five classrooms, occupational therapy, a gymnasium, three group rooms, three day rooms, a seclusion area, three consult rooms, laundry and storage rooms, a nurses' station, dining room, and an administrative wing. A parking area, multi-purpose court, pool, activities field and drainage retention area are also provided. The parties have stipulated that the building will be energy efficient. Total project cost is reasonably estimated at $4,303,020. As a result of design modifications, the square footage of the project has increased by approximately 1,000 gross square feet and project costs have increased by approximately $69,000 from FRTC's completed application. The Department's Deputy Assistant Secretary for Regulation and Health Facilities, John Griffin, testified that for a project of this size these changes are not considered to be "amendments" to the application. The changes in facility design identified at hearing represent refinements and permissible modifications, rather than application amendments. There is no architectural significance to the changes. Rather, they make the design more appropriate for an IRTP. Specifically, a multi-purpose area was converted to a half-court gymnasium, the occupational therapy and interior mechanical spaces were slightly increased for more storage area, a seclusion room was deleted, the nurses' station was reduced, a 4-bed assessment unit was added, and other minor changes were made. FRTC proposes to offer 24-hour psychiatric services to children and adolescents under the age of 18, who are severely emotionally disturbed, and who are admitted voluntarily, after screening, with a history of prior treatment. Its program elements will include occupational therapy, recreational therapy, group and individual therapy, nursing care, an educational component, psychological testing, counseling and family therapy. The FRTC program will be initiated as a locked intensive program whose goal is to return the patient to his family and to life in a natural setting. Patients who are severely retarded, autistic, or with an active diagnosis of substance abuse will not be admitted. The average length of stay for patients is reasonably projected to be one year, with a range of from 6 months to two years. There are no licensed intensive residential treatment programs (IRTP) for children and adolescents in Manatee County, Florida or in the Department's District VI, which includes Manatee County as well as Hardee, Highland, Hillsborough and Polk Counties. There are also no licensed IRTPs in adjoining Districts V and VIII. Stipulations The parties have stipulated that FRTC has the ability to recruit physicians for this project, and also has funds available for FRTC's capital and operating expenditures. In addition, the parties have stipulated that review criteria concerning the need for research and educational facilities, the extent to which the services will be accessible to schools for health professional, and the special needs and circumstances of health maintenance organizations are not applicable to this CON application. Non-Rule Policy For IRTP The Department currently has no rule governing the approval of IRTP applications for a CON. However, since February 1987 the Department has followed a non-rule policy which presumes there is a need for at least one licensed IRTP of reasonable size in each Departmental service district, and which does not consider the existence of unlicensed residential treatment beds in a district in determining if the presumed need has been met. No changes or revisions in this non-rule policy of the Department are under review. The Department applied this non-rule policy in initially approving the CON application. Based upon the testimony of John Griffin, the Department's Deputy Assistant Secretary who administers the CON program and is responsible for health planning, an IRTP applicant does not have to establish "need" in a particular service district where it wants to locate a facility because the non- rule policy presumes there is a need for one IRTP of reasonable size per district. The applicant must, however, establish that there is not presently a licensed IRTP in the district and that it proposed to establish an IRTP of reasonable size. Griffin was not able to explicate this non-rule policy based upon health planning concerns, considerations or factors. Sharon Gordon-Girvin, Administrator of the Department's Office of Community Medical Services and Facilities, was also unable to articulate or explicate a health planning basis for this policy. Rather, the only basis enunciated at hearing by the Department for this non-rule policy was its statutory interpretation of Sections 395.002(8) and 395.003(2)(f), Florida Statutes, as renumbered by Section 34, Chapter 87-92, Laws of Florida. Need And Consistency With State And Local Health Plans There are no licensed IRTPs in District VI. Manatee Palms is a residential treatment center for children and adolescents located in Manatee County, but it is not licensed by the Department as an IRTP. Relevant issues identified in the District VI Local Health Plan are stated as follows: As a general policy, the least restrictive, most cost effective setting and programs should be used. The State of Florida, as a major purchaser of mental health and substance abuse services, can continue to lead the way by encouraging the development of non-hospital alternatives and by purchasing services from them preferentially. Another important issue in psychiatric care is the trend toward hospitalization of children who have behavior and conduct disorders, and who should more appropriately be served through non-hospital alternatives. . . At the present time, the severe emotionally disturbed or emotionally handicapped (SED/EH) child or adolescent is served in a broad range of programs. There are crisis stabilization units (CSUs) for stabilizing the adult client in acute crisis. Currently CSU services for children and adolescents are not adequate throughout the District. Intensive residential, day/night program, group and foster homes are for the client requiring close supervision. Relevant policies set forth in the District Local Health Plan are as follows: The multi-modality approach as expressed in the community mental health (and substance abuse) system should be considered a model of programming, staffing, facility requirements, costs, etc., against which applications for inpatient services should be reviewed. Review of applications for inpatient psychiatric and substance abuse services should include comment from the Alcohol, Drug Abuse and Mental Health Program Offices of DHRS. No additional psychiatric and/or substance abuse beds should be granted approval unless the capacity of current hospital providers is being fully utilized (75 percent occupancy rate annual). Additional psychiatric and/or substance abuse beds should be through conversion of existing beds. The State Health Plan sets forth the following relevant policies and statements: The goal of (mental health) services is (to) . . . provide educational; mental health treatment; and when needed, residential services for severely emotionally disturbed students. It is the intent of the Legislature that the least restrictive means of intervention be employed based on the individual needs of each patient within the scope of available services . . . The program goals for each component of the network are . . . to provide programs and services as close as possible to the child's home in the least restrictive manner consistent with the child's needs. Sufficient funding for the development of residential treatment and community support services is necessary if the state is to fulfill its commitment to providing services for long term mentally ill persons. These services provide, in the long run, a more humane and cost effective means of meeting the mental health needs of Florida residents. Continued development of long and short term inpatient hospital programs for the treatment of adolescents and children is contrary to current treatment practices for these groups and is, therefore, inappropriate without local data to support the need for these services. Such development can contribute to inappropriate placement, unnecessary costs of treatment, and divert scarce resources away from alternative uses. In addition, the following relevant goals are contained in the State Health Plan: Promote the development of a continuum of high quality, cost effective private sector mental health and substance abuse treatment and preventive services. Bring about changes in third party reimbursement policy for psychiatric and substance abuse care which would promote the development of the most appropriate, cost-effective treatment settings . . . Develop a network of residential treatment settings for Florida's severely emotionally disturbed children by 1989 . . . Develop residential placements within Florida for all SED children currently receiving treatment in out of state facilities by 1990. The FRTC application is consistent with the above cited relevant portions of the state and local health plans. It is consistent with the State Health Plan which reflects and emphasizes the trend toward deinstitutionalization and the current emphasis on education, treatment and residential services for severely emotionally disturbed students rather than what has been the traditional approach to treatment in an institutional setting, a generally more costly approach from a capital cost and staffing perspective. The FRTC application promotes treatment within the State and will assist in reducing out of state placements. Through the report and testimony of Ronald T. Luke, Ph.D., J.D., and despite the testimony of Jay Cushman, both of whom were accepted as experts in health planning, FRTC established the need for, and reasonableness of, its 60 licensed IRTP beds in District VI, with 50 percent occupancy in the first year and 60 percent in the second year, using two bed need assessment methodologies. First, using the ratio of licensed IRTP beds in other service districts to population ages 0-17 years old, a range of .07 to 1.33 beds per 1,000 population is identified. Using 1991 population projections for District VI, the 60 bed FRTC facility would result in a bed to population ratio of .17 per 1,000 population aged 0-17 years. Since there are no licensed beds in the current inventory, no adjustment of this ratio must be made to account for existing beds. Thus, the FRTC application is within the range of ratios of currently licensed IRTPs in other districts, and is therefore reasonable. Second, a utilization methodology identifies an intensive residential treatment bed need of 90 in 1987 to 95 in 1991, with target occupancy rates of 90 percent. This methodology is based upon 1987 and 1991 population projections. Using a census rate per 100,000 population of 21.58 which is appropriately and reasonably derived from national data for residential treatment patients aged 0-17, an average daily census of 74 in 1987 and 78 in 1991 is derived. Thus, FRTC has established a need for its facility in District VI, given its projected occupancy levels, and given that there are no licensed beds currently in the District. It is important to recognize that the bed ratio analysis is based upon licensed intensive residential treatment beds in Florida, and is therefore clearly relevant and credible to the issues in this case. The utilization methodology supports and confirms the need found thorough the bed ratio analysis, although it is noted that this methodology, by using national data, is not based upon licensed beds in Florida, and would therefore not be sufficient, in itself, to establish need. It is, however, persuasive and credible in confirming the bed ratio analysis. Accessibility To All Residents FRTC projects only 1.5 percent indigent care and 8 percent bad debt. Its projection for private pay patients is 25 percent and for insurance covered care is 65.5 percent. This is a marginal and insignificant indigent load. There is no provision for services to state-funded patients. FRTC's projected utilization by class of pay is reasonable. The clear purpose of this application is to enable FRTC to become licensed as a hospital under Section 395.002, Florida Statutes, and thereby enable it to be called a "hospital". It was established through the testimony of Dwight Hood, who was accepted as an expert in health care finance and health care third party payments, that if a facility is licensed as a hospital it has a significant advantage for reimbursement from third parties who more readily reimburse for care in a licensed facility than in an unlicensed residential treatment center. Therefore, accessibility will be increased for those children and adolescents in need of this care whose families have insurance coverage, since it is more likely that payments under such third party coverage will be made at an IRTP licensed as a "hospital" than otherwise. Quality of Care The applicant has clearly demonstrated its ability to provide quality care to its patients, based upon the testimony of C. Hal Brunt, M.D., Robert Friedel, M.D. and G. L. Tischler, M.D., who were accepted as experts in psychiatry, and notwithstanding the testimony of Howard Goldman, M.D., and Glen Lewis, M.D., who were also accepted as experts in psychiatry. FRTC is a wholly owned subsidiary of Charter Medical Corporation which has experience in the operation and management of a residential treatment center, Charter Colonial Institute in Virginia, and also has extensive experience in providing quality health care at five hospitals in Florida, including Charter Hospital of Tampa Bay. The treatment program at FRTC will be adapted to local community needs. In providing quality care, FRTC will assign patients to the correct level of care within the facility by insuring that they are seen by a psychiatrist within 24 hours of admission, and by having each case reviewed by an independent utilization review committee, completing appropriate patient assessments and developing integrated treatment programs which are regularly updated, making appropriate treatment outcome assessments, and providing for continuity of care for patients leaving the IRTP through the development of a community-wide continuum of care. Charter has six out-patient counselling centers located within two hours of the FRTC proposed facility. It is both reasonable and appropriate to structure psychiatric treatment and care in a hospital setting within a "levels system" that rewards and reinforces desired behavior, and FRTC will utilize a "levels system" in its highly goal oriented patient treatment programs. Quality of care is not dependent upon a hospital's environment and physical facilities, according to Dr. Goldman. The floor plan proposed by FRTC is functional and is a proto- typical design used by Charter in approximately fifty locations, although not as an IRTP. The criticisms of the floor plan and facility design to which Maxine Wolfe, Ph.D., and Glen Lewis, M.D., testified do not establish that the applicant will be unable to provide quality care in this facility. While the Petitioners might design a facility differently, and specifically provide for a different orientation of the nurses' station relative to the patient wings, a different location for the dining room, more rooms where a patient can have privacy, and more opportunity for individualized treatment, these preferences do not establish that FRTC's floor plan and design will impair the quality of care rendered at this proposed facility. It is also noted that Dr. Wolfe testified critically about residential treatment in general, and expressed the opinion that residential treatment in a hospital is not beneficial and that children should never be treated in a large facility of any kind under any circumstance. Her testimony clearly establishes her bias and impairs her own credibility and the weight to be given to her testimony in this case. Availability and Adequacy of Alternatives Although there are no licensed IRTPs in District VI residential treatment and/or psychiatric services are currently available to children and adolescents through Manatee Memorial (9 beds), Manatee Palms (60 beds), Glenbeigh (14-16 beds), Sarasota Palms (60-70 beds), Sarasota Memorial Care Center (30 beds), Children's Home in Tampa (68 beds) and Northside Center in Tampa (12 beds). The average of length of stay at the significant majority of these facilities is up to 90 days, and they also attract patients from outside District VI. FRTC proposes to serve patients who require an average length of stay of a year. Some of these facilities serve patients with a dual diagnosis that includes substance abuse whereas FRTC will not. Therefore, these facilities do not offer adequate alternatives for the patients which FRTC is seeking to serve. Further, it was not established that outpatient or ambulatory services represent an adequate and appropriate alternative to an IRTP. Availability of Resources The total project cost of $4,303,020 will be funded through an equity contribution from Charter Medical Corporation and through a conventional loan. Assuming a 50 percent occupancy rate (30 beds) in its first year of operation, the proposed facility will have a staff of 43 positions, 27 of which will represent personnel who will be direct nursing or staff support for the patients, including social workers, psychologists, staff registered nurses, mental health workers, patient care coordinator, nursing supervisors, occupational and recreational therapists and special education teachers. A part-time medical director will also be available. This results in a ratio of 1.4 positions per patient. In comparison, Manatee Palms has a 1.8 staffing ratio based on a census of 55 patients. FRTC has proposed a reasonable and adequate staffing pattern and ratio to treat 30 patients. FRTC will recruit personnel through direct advertising, community contacts, posted notices, job fairs, and school visits. It will compete with unlicensed residential treatment centers, as well as short and long term psychiatric hospitals, in attracting staff for its facility. Although only six mental health workers are identified in FRTC's list of manpower requirements, and it would be beneficial to the level of treatment and care to increase this number, nevertheless, the staffing patterns proposed by FRTC will allow it to render quality care to patients at its facility, based upon 50 percent occupancy in its first year of operation. Staff salaries proposed by FRTC are reasonable and realistic, although its proposed salaries for nurses and mental health workers are higher than that available at Manatee Memorial. Existing facilities may have to increase their salaries to the levels proposed by FRTC to continue to retain and attract qualified staff, particularly nurses and mental health workers. Recruitment difficulties have been experienced in the District VI area for nurses, social workers, mental health workers and occupational therapists. However, it appears that FRTC will be able to attract qualified applicants for all positions due to the level of salaries offered and quality of care provided. Financial Feasibility Net revenues from the first year of operation are projected to be $100,000, which represents 2.3 percent of the capital expenditure as a return on investment. In the second year of operation, net revenues are projected to be $302,000, a 7 percent return on investment. Both years show a fair return on investment, and the pro forma establishes the financial feasibility of this project. In preparing the pro forma for this project, William S. Love, who was accepted as an expert in health care finance, used the reasonable assumption of 50 percent occupancy in the first year of operation and 60 percent in the second year. Despite the testimony of Jay Cushman, who was accepted as an expert health planner, it was not established that FRTC's location will preclude these occupancy rates. Love also assumed patient revenues of $300 per day and an average length of stay of one year. Utilization by class of payor was estimated to be 65 1/2 percent insurance, 25 percent private pay, 8 percent bad debt and 1 1/2 percent indigent care. It was assumed there would be no Medicare or Medicaid. Assumptions regarding patient revenues and utilization by class of payor are reasonable based on the testimony of Love, Luke and Dwight Hood, as well as a survey of insurance benefits available through employers, and despite the testimony of Christopher Knepper, who was accepted as an expert in health care finance. Knepper's testimony is applicable to unlicensed residential treatment centers rather than an IRTP. Therefore, his criticism of the pro forma as underestimating bad debt and overestimating the private pay portion is not persuasive since it disregards the fact that a licensed IRTP, due to its status as a specialty hospital, will have an increased ability to attract patients with insurance and with an ability to pay deductibles and other unreimbursed costs for care. It was established that a residential treatment center licensed as a specialty hospital has a significant advantage in terms of an improved payor mix over unlicensed facilities because of its recognized status with insurance companies. In addition, Knepper's testimony at hearing concerning the financial feasibility of this project conflicted with estimates made during discovery, and his explanation of such discrepancy was not credible. This conflict in Knepper's position at hearing and during discovery reduces the weight to be given to his testimony. FRTC assumed it would not be subject to the indigent care tax, but even if it were subject to the tax this would only add $29,000 in expenses, and therefore not affect the financial feasibility of the project. A management fee will be charged by Charter Medical Corporation, although this is not separately shown on the pro forma. It is the position of FRTC that this fee is associated with home office costs which will exist without regard to this facility. However, this fee, as well as additional construction costs of approximately $70,000, will not affect the financial feasibility of this project since salary costs associated with administration, as well as data processing costs have been separately shown and included on the pro forma as expenses, even though they are sometimes included in a management fee. FRTC's estimate of gross patient revenue of $300 per day for the first year of operation is substantially higher than other facilities offering like services. Net revenues per day during the first year of operation are estimated to be $265.30. Total direct expenses are estimated to be $198.70 for the first year, with total expenses per patient day estimated at $250.50 in the first year. A 7 percent inflation factor was used for the second year of operation, and this is a reasonable inflation factor. Impact On Costs and Competition As previously noted, salary estimates for nurses and mental health workers for this project are above those provided at Manatee Memorial, and therefore could reasonably be expected to increase salaries in these categories for some facilities in the area. The all inclusive charge of $300 per day proposed by FRTC is greater than Manatee Palm's average gross charge of between $270 - $280 per day. It is likely that paying patients, including patients with insurance coverage, who would otherwise be treated at Petitioners' facilities, will be treated at FRTC if this application is approved. However, the extent of such a loss in paying patients due to FRTC is unclear since Manatee Palms is recently receiving greater acceptance by insurers for reimbursement purposes, and Manatee Memorial's estimates of patient losses were based upon impact from both Manatee Palms and FRTC. Reasonableness of Costs The equipment cost estimate of $360,015 is reasonable. This finding is based on the testimony of Susan Hickman, who was accepted as an expert in health care facility equipment. The equipment and beds are appropriate for an IRTP of this size. The total cost of $707,897 for telephones, signage, graphics, interior design and equipment is also reasonable. The construction cost estimate of $2,010,823 is reasonable. This finding is based on the testimony of Patrick A. Regan, who was accepted as an expert in health care facility construction budgeting. Due to the conservative nature of the cost figures, a 2 1/2 percent contingency is adequate, rather than the normal 5-6 percent contingency. The contingency could be used for unbudgeted items such as stucco siding and hard ceilings. FRTC owns the facility site, which was purchased for $664,000.
Recommendation Based upon the foregoing, it is recommended that the Department enter a Final Order approving FRTC's application for CON 4825. DONE AND ENTERED this 22nd day of December, 1987 in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 87-2036, 87-2049 Rulings on the Joint Proposed Findings of Fact filed by FRTC and the Department: 1 Adopted in Findings of Fact 1, 27. 2-4 Adopted in Finding of Fact 6. 5 Rejected as irrelevant and unnecessary. 6-9 Adopted in Findings of Fact 8, 29, but otherwise rejected as cumulative and unnecessary. 10-11 Adopted in Finding of Fact 8. Adopted in Finding of Fact 47. Adopted in Findings of Fact 8, 47. Adopted in Finding of Fact 8. 15-16 Adopted in Finding of Fact 46, Adopted in Finding of Fact 27. Adopted in Finding of Fact 28, but otherwise rejected as irrelevant and unnecessary. Adopted in Findings of Fact 9, 10 but otherwise rejected as unnecessary. Rejected as irrelevant and unnecessary. 21-22 Adopted in Finding of Fact 9. Adopted in Finding of Fact 28, but otherwise rejected as unnecessary. Rejected as unnecessary. Adopted in Findings of Fact 9, 10, 27. Adopted in Finding of Fact 9. 27-30 Adopted in part in Findings of Fact 27, 28, but otherwise rejected as unnecessary. 31 Adopted in Finding of Fact 9. 32-34 Adopted in Findings of Fact 27, 28, but otherwise rejected as unnecessary. Adopted in Finding of Fact 12. Rejected as unnecessary. Adopted in part in Finding of Fact 33, but otherwise rejected as unnecessary. Adopted in Findings of Fact 33, 35. Adopted in Finding of Fact 34. Adopted in Finding of Fact 37. Adopted in Finding of Fact 12. Rejected as unnecessary. Adopted in part in Finding of Fact 39, but otherwise rejected as unnecessary. Adopted in Finding of Fact 40. Adopted in Finding of Fact 42. Adopted in Finding of Fact 39. Adopted in Finding of Fact 40. Adopted in Finding of Fact 38. Adopted in Finding of Fact 39. 50-57 Adopted in Findings of Fact 26, 39, but otherwise rejected as cumulative and unnecessary. 58 Rejected as unnecessary. 59-61 Adopted in Finding of Fact 15, but otherwise rejected as irrelevant, unnecessary or as a conclusion of law. 62 Adopted in Finding of Fact 16. 61 Adopted in Findings of Fact 6, 15, 16. Rejected as unnecessary and irrelevant. Rejected in Finding of Fact 17. Rejected in Finding of Fact 17, but adopted in part in Finding of Fact 26. Rejected as irrelevant and unnecessary. Rejected as unnecessary. 69-72 Adopted in part in Finding of Fact 24, but otherwise rejected as irrelevant since the Department's non-rule policy was not explicated and therefore cannot be relied upon. Rejected as unnecessary and irrelevant since the "reasonableness" of the facility's size is not at issue, the Department having failed to explicate its non-rule policy. Adopted in Finding of Fact 24, but otherwise rejected as cumulative and unnecessary. Adopted in Findings of Fact 9, 31, but otherwise rejected as unnecessary. Rejected in Findings of Fact 24, 33, 35, 39. The proposed average length of stay of one year is found to be reasonable in Finding of Fact 10. Adopted in Findings of Fact 21, 22. 79-81 Adopted in Findings of Fact 19, 23, but otherwise rejected as unnecessary and cumulative. Rejected as irrelevant and unnecessary. Adopted in Findings of Fact 11, 18, but otherwise rejected as unnecessary. Adopted in Finding of Fact 31. Rejected as unnecessary. Adopted in part in Findings of Fact 11, 26 but otherwise rejected as unnecessary. 87-88 Adopted in Finding of Fact 3. Rejected as irrelevant and unnecessary. Adopted in Findings of Fact 3, 44, but otherwise rejected as unnecessary and cumulative. Rejected as simply a summation of testimony and therefore unnecessary. Adopted in part in Finding of Fact 4, but otherwise rejected as unnecessary. Rejected as simply a summation of testimony and not a Finding of Fact. Rejected as unnecessary and simply a summation of testimony. 95-96 Rejected as irrelevant, unnecessary and in part simply a summation of testimony. 97-98 Rejected as a summation of testimony and otherwise as speculative and irrelevant. 99 Rejected as simply a summation of testimony. 100-103 Rejected as irrelevant. 104 Rejected as a summation of, and argument on, the evidence rather than a Finding of Fact. Rulings on the Proposed Findings of Fact filed by Manatee Palms: Adopted in Findings of Fact 1, 27. Adopted in Finding of Fact 2. Adopted in Finding of Fact 3. Adopted in Finding of Fact 4. Adopted in Finding of Fact 5. Adopted in Finding of Fact 6, but otherwise rejected as irrelevant. Adopted in part in Finding of Fact 7. Rejected as unnecessary, and as simply a statement of position. 9-11 Rejected as unnecessary and as otherwise covered in preliminary procedural matters. Adopted in Finding of Fact 8. Adopted in Finding of Fact 5, but otherwise rejected as unnecessary. Adopted in Finding of Fact 8. Adopted in Findings of Fact 9, 31, but otherwise rejected as simply a summation of testimony and position of the parties. Adopted in Finding of Fact 8. Adopted in Findings of Fact 10, 25, 39, 44. Adopted in Finding of Fact 14, but rejected in Finding of Fact 24. Adopted in Finding of Fact 17, but rejected in Finding of Fact 24. Rejected in Findings of Fact 21, 22, 23. Rejected as simply argument and a statement of position rather than a Finding of Fact. Adopted in part in Findings of Fact 25, 39. Rejected in Findings of Fact 21, 22, 23. 24-26 Rejected in Findings of Fact 19, 20, 23. Adopted in Findings of Fact 19, 44, but rejected in Finding of Fact 23. Rejected in Findings of Fact 23, 24. Adopted in Finding of Fact 17. Adopted in Findings of Fact 16, 17. Adopted in Finding of Fact 17. Rejected as unnecessary. Adopted in Finding of Fact 17. 34-42 Rejected as irrelevant and unnecessary. This is a de novo proceeding through which final agency action will be taken, and therefore preliminary agency findings are irrelevant to a determination of the issues in this case which must be decided based upon evidence presented at hearing. Rejected as simply a statement of position without any citation to the record. Adopted in Finding of Fact 24. 45-46 Rejected in Finding of Fact 24. 47-48 Adopted and rejected in part in Finding of Fact 24. 49-60 Rejected in Finding of Fact 24. Rejected as simply a conclusion of law. Rejected as without citation to the record and as simply a statement of position rather than a Finding of Fact. Rejected as irrelevant. Adopted in part in Finding of Fact 3. Adopted in Finding of Fact 3. 66-70 Rejected as unnecessary and cumulative, since it is established that services are similar or identical to those proposed by FRTC. Adopted in Findings of Fact 3, 44. Rejected as unnecessary and cumulative. Adopted in Finding of Fact 3, but otherwise rejected as cumulative and unnecessary. Rejected in Findings of Fact. 26, 39 and otherwise as irrelevant. Rejected as irrelevant and otherwise not based on competent substantial evidence. Rejected as irrelevant. Adopted in Finding of Fact 30. Rejected as simply a statement of position, without citation to the record. Rejected as simply a conclusion of law. 80-81 Adopted in part in Finding of Fact 8, but otherwise rejected as not based on competent substantial evidence. 82 Rejected as unnecessary. 83-84 Rejected in Findings of Fact 33 and 35, and otherwise as irrelevant. Rejected as simply a conclusion of law. Rejected in Finding of Fact 34. Adopted in Finding of Fact 37. Adopted in Findings of Fact 34, 36. 89-90 Rejected in Findings of Fact 35, 37. Rejected as simply a conclusion of law. Adopted in Finding of Fact 39. Rejected as irrelevant. Rejected in Findings of Fact 38, 39, 42. Adopted in Finding of Fact 39. Rejected as irrelevant. Adopted in part in Finding of Fact 39, but otherwise rejected as irrelevant and unnecessary. 98-100 Adopted in Finding of Fact 39. 101-102 Adopted in Findings of Fact 38, 39. 103-109 Rejected in Finding of Fact 39, and otherwise as not based on competent substantial evidence. Rejected in Findings of Fact 26, 29. Rejected in Finding of Fact 39. Rejected in Finding of Fact 35, and otherwise as irrelevant. Rejected in Findings of Fact 38, 39, 42. Adopted in Finding of Fact 39. 115-117 Adopted and rejected in part in Finding of Fact 40, but otherwise rejected as irrelevant. Adopted and rejected in part in Findings of Fact 8, 40, but otherwise rejected as not based on competent substantial evidence. Rejected in Findings of Fact 38-42. Rejected as a conclusion of law. Rejected as not based on competent substantial evidence. Adopted in Findings of Fact 34, 37. Adopted in Finding of Fact 36. Rejected as not based on competent substantial evidence. Adopted in part in Finding of Fact 45. Rejected as not based on competent substantial evidence and without citation to the record. Rejected as a conclusion of law. 128-129 Rejected as simply a comment on the evidence and not a Finding of Fact. Adopted in part in Finding of Fact 8. Rejected in Finding of Fact 47. Rejected as irrelevant. Adopted in part in Finding of Fact 8, but otherwise rejected as irrelevant and not based on competent substantial evidence. Rejected as simply a statement of position and argument. Rulings on Proposed Findings of Fact filed by Manatee Memorial: 1-2 Adopted in Finding of Fact 1. 3-4 Rejected as irrelevant. 5 Adopted in Findings of Fact 8, 29. 6-7 Rejected as irrelevant to a determination of the issues in this case. 8-10 Adopted in Finding of Fact 3. Adopted in part in Findings of Fact 34, 36, 45. Adopted in Finding of Fact 2. 13-22 Adopted in Finding of Fact 4, but otherwise rejected as irrelevant or unnecessary. Rejected in Finding of Fact 24 and otherwise rejected as not based on competent substantial evidence. Rejected as cumulative and unnecessary. Adopted in Findings of Fact 34, 36. Rejected as speculative and not based on competent substantial evidence. Rejected as irrelevant. Adopted in Finding of Fact 6. Adopted in Findings of Fact 1, 5, 10, but rejected in in Finding of Fact 44. 30-32 Adopted in Finding of Fact 6. 33 Adopted in Finding of Fact 7. 34-39 Rejected as unnecessary. Adopted in Finding of Fact 15. Adopted in Finding of Fact 14. Adopted in Finding of Fact 17. 43-45 Adopted in Finding of Fact 16. Rejected as unnecessary and irrelevant. Since Mr. Griffin is the highest level departmental representative who testified at hearing, his statement of the non-rule policy is presumed to be correct. Rejected in Finding of Fact 16. Rejected in Finding of Fact 16 and otherwise as unnecessary and irrelevant. 49-51 Rejected as irrelevant since this is a de novo hearing by which final agency action will be taken. Rejected as simply a conclusion of law. Rejected in Findings of Fact 21-23. Adopted in Finding of Fact 39. 58-60 Rejected in Findings of Fact 21-23 and otherwise as irrelevant. 61-63 Rejected in Findings of Fact 19, 20, 23. Adopted in Finding of Fact 30, but rejected in Finding of Fact 31. Rejected in Finding of Fact 39 and otherwise as irrelevant. Adopted in Finding of Fact 25 and rejected in Finding of Fact 26. Rejected in Findings of Fact 26, 39, 42. Adopted in part in Findings of Fact 38, 39, 44. Rejected in Findings of Fact 24 and 39. Rejected as speculative, and not based on competent substantial evidence. 71-79 Rejected in Findings of Fact 26, 38, 39 and otherwise rejected as not based on competent substantial evidence. 80-83 Rejected in Findings of Fact 33, 35. Rejected in Findings of Fact 33, 35, 38, 39, 42. Rejected in Findings of Fact 39, 40. Rejected in Findings of Fact 38-42. Rejected in Finding of Fact 37. Adopted in Finding of Fact 33. Rejected in Finding of Fact 33. Rejected in Finding of Fact 35. Rejected in Findings of Fact 27, 33, 35. Rejected in Finding of Fact 37. Rejected as unnecessary. 94-95 Rejected in Finding of Fact 37. 96 Adopted in Finding of Fact 36. 97-100 Rejected in Findings of Fact 28, 29. 101-102 Adopted in Finding of Fact 8. 103-105 Rejected in Finding of Fact 29. 106 Rejected in Finding of Fact 8. 107-109 Rejected in Findings of Fact 27, 28, 29 and otherwise not based on competent substantial evidence. 110 Rejected as irrelevant. 111-112 Rejected in Finding of Fact 9. Rejected in Findings of Fact 9, 27, 28, 29. Adopted in Finding of Fact 8. 115-116 Rejected as irrelevant. Adopted in Finding of Fact 8. Adopted in Finding of Fact 47. Adopted and rejected in Finding of Fact 47. Adopted in Finding of Fact 8 and rejected in Finding of Fact 47. Rejected as irrelevant. Adopted and rejected in Finding of Fact 47. Adopted in part in Findings of Fact 3, 4. Adopted in Findings of Fact 25, 39, 45. 125-127 Rejected as speculative and not based on competent substantial evidence. 128-130 Rejected as irrelevant and unnecessary. COPIES FURNISHED: John Rodriguez, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 Michael J. Glazer, Esquire Post Office Box 391 Tallahassee, Florida 32302 Jean Laramore, Esquire Anthony Cleveland, Esquire Bruce A. Leinback, Esquire Post Office Box 11068 Tallahassee, Florida 32302 William Hoffman, Esquire Deborah Winegard, Esquire 2500 Trust Co. Tower 25 Park Place Atlanta, Georgia 30303 Fred W. Baggett, Esquire Stephen A. Ecenia, Esquire Post Office Drawer 1838 Tallahassee, Florida 32302 John T. Brennan, Jr., Esquire 900 Seventeenth Street, N.W., Suite 600 Washington, DC 20006 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 John Miller, Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Fl 32399-0700 =================================================================
The Issue The issue presented herein is whether or not a CON to construct a 60-bed short-term psychiatric hospital in District XI should be issued to Florida Medical Center (FMC).
Findings Of Fact FMC seeks a CON for a 60-bed free-standing psychiatric facility to be located in the Key Largo area of Monroe County in HRS District XI. FMC intends to provide 6.25 percent of its patient days at no charge to indigent patients. It further intends to provide another 6.25 percent of its patient days to HRS' clients and Baker Act patients at 50 percent of its projected charge, or $200 per day. (FMC Exhibit 2, Table 7). FMC proposes to build this facility at a cost of $6,060,000. Dr. Richard Matthews, Ph.D., has been executive director of the Guidance Clinic of the Upper Keys since 1973 and is a clinical psychologist. He is responsible for the overall administration and supervision of mental health, alcohol, drug abuse and out-patient services provided under contract with HRS. Dr. Matthews was qualified as an expert in clinical psychology and the mental health delivery health system in Monroe County. (FMC Exhibit 13). There are three guidance clinics in Monroe County, one each for the upper, lower and middle Keys. HRS contracts through each of these clinics to provide mental health care for its clients. There are no community mental health centers in Monroe County and the clinics are the sole means of delivering mental health care on behalf of HRS' clients within the county. Currently, the guidance clinic of the upper Keys places its in- patients in Harbor View Hospital in Dade County at a cost of $236 per day. Neither Harbor View nor any other hospital provides free days to any of the guidance clinics for in-patient psychiatric care. (FMC Exhibit 13, P. 9) Jackson Memorial Hospital does not accept indigent or charity psychiatric patients from Monroe County. There have been occasions where patients without resources have been unable to be hospitalized although hospitalization was indicated. The middle Keys has a crisis hospitalization unit with a limited number of beds. Patients needing hospitalization longer than three days must be transferred to Harbor View or some other facility in the District. The 15 beds at Depoo Hospital in Key West are not readily accessible to residents of the upper Keys. Residents needing psychiatric services usually go to hospitals in Dade County. Coral Reef Hospital, the nearest psychiatric facility to Petitioner's proposed facility, has in the past refused to negotiate a discounted rate with the guidance clinic. Dr. Matthews, on one occasion, sent a patient to Coral Reef who was refused treatment. Currently, no psychiatrist practices in Key Largo because there are no psychiatric beds to which a psychiatrist could admit patients. The discounted rate of $200 per day quoted by FMC is some $36 per day less than the guidance clinic currently pays to providers for referrals of its patients for psychiatric care. Additionally, the 6.25 percent of free care that Petitioner proposes is greater than the free care which the guidance clinic currently receives from any facility since no facility presently gives any free care to the clinic. The guidance clinic supports Petitioner's CON application and will contract with Petitioner who provides services for in-patients. Grant Center is a long-term 140-bed psychiatric hospital specializing in the treatment of children and adolescents. It is the nearest facility to Petitioner's proposed facility. Grant Center has agreed to refer adult patients to Petitioner. Grant Center treats 2-3 adults a month who need psychiatric care. (FMC Exhibit 14). There is one hospital providing psychiatric care in Dade County which was surveyed by the Health Care Finance Administration (HCFA) in March, 1988. Currently, a third party insurance carrier no longer utilizes Grant Center because of price. If a facility has prices which carriers consider too expensive, utilization will go down. (FMC Exhibit 14, P. 7). Grant Center currently contracts with HRS to provide its clients care at a rate of approximately $350 per day, a rate one half of Grant Center's normal rate. Jackson Memorial is the only Dade County hospital which will treat an indigent psychiatric patient. Grant Center intends to assist Petitioner with staffing or programmatic needs. It has 80-100 professional staff, most of whom live in close proximity to Key Largo. Robert L. Newman, C.P.A., is the chief financial officer at FMC. He testified, by deposition, as an expert in hospital accounting and finance. Newman analyzed the Hospital Cost Containment Board (HCCB) reports for each hospital in District XI which provides psychiatric care. There is no free standing psychiatric hospital in the District which reports any indigent or uncompensated care. Among area acute care hospitals which have psychiatric units, Miami Jackson rendered 38.89 percent indigent care, Miami Children's rendered 6.5 percent indigent care, and no other facility reported that it rendered more than 1.75 percent indigent care. (FMC see Exhibit 11, disposition exhibit 1). Jackson provides no free care to Monroe County residents and Miami Children's care is limited to treating children while Petitioner is seeking adult beds. Jayne Coraggio testified (by deposition) as an expert in psychiatric staffing and hiring. She is currently Petitioner's director of behavioral sciences. The ideal patient to staff ratio is 4 to 5 patients per day per professional staff member. During the evening shift, the ideal patient ratio per professional staff member is 7 to 8 patients. (FMC Exhibit 12, PP. 6-7). Petitioner's facility is adequately staffed based on the above ratios. FMC is considered overstaffed in the psychiatric unit by some of the other area hospitals since they do not staff as heavily as does Petitioner. Lower staffing ratios can affect quality of care since patients and their families would not receive as much therapy. Family therapy is important because the family needs to know about changes in the patient in order to make corrective adjustments. The family that is required to travel in excess of 45 minutes or more one way is less likely to be involved in family therapy. Islara Souto was the HRS primary reviewer who prepared the state agency action report (SAAR) for Petitioner's CON application. (FMC Exhibit 15). District 11 has subdivided into five subdistricts for psychiatric beds. Florida is deinstitutionalizing patients from its mental hospitals. To the extent that private psychiatric hospitals do not accept nonpaying patients, their existence will not solve the problem of caring for such patients. Souto acknowledged that the local health councils conversion policy discriminates against subdistrict 5 because there are so few acute care beds in the subdistrict. In fact, the conversion policy actually exacerbates the maldistribution of beds in the district. (FMC 15, page 26). The psychiatric facility nearest the proposed site (Coral Reef), had an occupancy of 90.3 percent. Souto utilized a document entitled Florida Primary Health Care Need Indicators, February 1, 1986, and determined that Monroe County has not been designated as a health manpower shortage area, nor a medically underserved area. This information is relied upon by health planners to determine the availability of health manpower in an area. This report refers both to physicians and R.N.'s. The average adult per diem for free-standing hospitals in District 11 range from $430 at Charter to just over $500 at Harbor View. Although districts have established subdistricts for psychiatric beds, no psychiatric bed subdistrict in any district has been promulgated by HRS as a rule. The access standard that is relevant to this proceeding is a 45-minute travel standard contained in Rule 10-5.011(1)(o)5.G. That standard states: G. Access Standard. Short-term inpatient hospital psychiatric services should be available within a maximum travel time of 45 minutes under average travel conditions for at least 90 percent of this service area's population. Here, the standard refers to the service area which is determined to be an area different than a service district. Applying the travel time standard on a service area basis makes the most sense since the subdistrict is established by the local health council and not the applicant. Analyzing this access standard on a sub-district level, 90% of the sub-districts population is not within 45 minutes of any facility anywhere in sub-district V since the sub-district is more than two hours long by ordinary travel and the population is split two-thirds in lower Dade County and one-third in Monroe County, the bulk of which is in Key West. (FMC Exhibit 17). Therefore, a facility located on either end of this sub-district is not readily accessible by the applicable travel standards to citizens at the other end of the sub-district. This access standard must however be measured and considered with the needs for psychiatric services of the kind Petitioner is proposing to provide. Petitioner has not presented any access surveys or assessments of the caliber relied upon by the Department in the past. Petitioner's facility which would be located in the Key Largo area will no doubt provide better geographic accessibility to residents of District XI who live in the Key Largo area. HRS has in the past used a sub-district analysis to determine geographic accessibility for psychiatric beds even though it has not promulgated a rule for sub-districts for psychiatric beds. See, for example, Psychiatric Hospital of Florida vs. Department of Health and Rehabilitative Services and Pasco Psychiatric Center, DOAH Case No. 85-0780. Likewise, the Department has approved the conversion of acute-care beds to psychiatric beds even though it found that there was a surplus of psychiatric beds in the district. (Petitioner's Exhibit 7). The Department has in the past used a geographic access analysis to approve psychiatric beds in District XI and has used the sub- district analysis or a time travel analysis in its review of Cedars, Coral Reef, Depoo (for psychiatric beds) and the Glenbiegh case (for long term substance abuse). The bed need calculations for the January, 1992 planning horizon shows a surplus of 180 short-term in-patient psychiatric beds. (HRS Exhibit 2). The occupancy level for short-term psychiatric beds in the district is below 70%. (HRS Exhibit 2, pages 11-12). Additionally, the occupancy standards of the local and state health plan, of which the department is required to review CON applications, have not been met in this instance. (HRS Exhibit 2, Pages 6-7). Petitioner has not submitted any documentation to HRS regarding special circumstances need. Petitioner's proposal at final hearing for a staff referral agreement with another local hospital was not contained in the CON application filed with HRS. (FMC Exhibit 14, pages 11-12). Although Petitioner has alluded to some unspecified access problem for residents in the Florida Keys, Petitioner has not documented a real access problem and certainly not a demonstration of inaccessibility under the rule access standard. (Florida Administrative Code Rule 10-5.011(1)(o)5.g.)(HRS Exhibit 2, pages 14-15). Although the proposed project would increase availability and access for underserved groups in the district, the percentage of total patient days for "indigents" is not substantial and certainly not to the point to warrant deviation from the usual access criteria. 2/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, IT IS RECOMMENDED THAT: Petitioner's application for a Certificate of Need to build a 60-bed free- standing psychiatric hospital in District XI be DENIED. DONE and ENTERED this 28th day of February, 1989 in Tallahassee, Florida. JAMES E. BRADWELL 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 28th day of January, 1989.
The Issue Did Respondent, Tonya Shrader, R.N. (Ms. Shrader), violate section 464.018(1)(j), Florida Statutes (2015),1/ by being unable to practice nursing with reasonable skill and safety to patients by reason of illness or use of alcohol, drugs, narcotics, or chemicals or any other type of material, or as a result of any mental or physical condition? If Ms. Shrader violated section 464.018(1)(j), what penalty should be imposed?
Findings Of Fact Section 20.43 and chapters 456 and 464, Florida Statutes, charge the Department of Health, Board of Nursing, with the licensing and regulation of nurses. At all times material to the allegations in the Administrative Complaint, Ms. Shrader was a licensed registered nurse in the State of Florida. She holds license RN 9180605. Ms. Shrader has a complicated history of psychiatric and medical problems that affect her ability to practice nursing with the level of skill and safety to patients required in the State of Florida. Ms. Shrader has suffered from depression since childhood. Ms. Shrader treated her depression with a variety of medications, including: Lithium, Depakote, Pamelor, Elavil, Topamax, Lamictal, and Prozac. In the past five years, Ms. Shrader has not received treatment for her depression. Ms. Shrader also suffers from anxiety. Ms. Shrader is not receiving treatment for her anxiety. In addition to depression and anxiety, Ms. Shrader suffers from chronic severe migraines. The cause has not been determined despite extensive neurological evaluations. Ms. Shrader has been prescribed Tramadol, Fiorcet, and Clonazepam to treat her migraines. At all times material to the Department's complaint, Ms. Shrader was prescribed Fiorcet for her migraine symptoms. Between March 24, 2012, and July 22, 2013, Ms. Shrader complained of multiple neurological symptoms, including double vision, balance and gait instability, and tingling and numbness in her hands. Ms. Shrader elected to undergo extensive neurological testing to rule out demyelinating disease, multiple sclerosis, and palsy. The tests provided no indication that Ms. Shrader's symptoms resulted from a neurological disorder. At all times material to this proceeding, Ms. Shrader worked as a registered nurse in the Neurological and Psychiatric Unit at Gulf Coast Medical Center (Gulf Coast). On December 20, 2013, Ms. Shrader took an excessive dose of four Fiorcet pills. She told her family that she "plans to keep overdosing until she dies," and that she "predicts that [she] will be dead by the end of the year." Ms. Shrader's family contacted the Emergency Medical Services. Ms. Shrader was transported to Lehigh Regional Medical Center, where she was treated for an overdose. Ms. Shrader was involuntarily admitted to SalusCare, Inc. (SalusCare), for inpatient psychiatric observation and treatment. On December 20, 2013, the Crisis Stabilization Unit (CSU) at SalusCare conducted an in-patient psychiatric evaluation of Ms. Shrader. During the evaluation, Ms. Shrader denied past psychiatric treatments or psychiatric medication. Ms. Shrader also denied that her Fiorcet overdose was an attempted suicide. Her statements during her SalusCare evaluation contradict her medical charting and statements she has made, which indicate that she has an extensive history of psychiatric illnesses. SalusCare discharged Ms. Shrader on December 23, 2013. The director of nursing at Gulf Coast contacted the Intervention Project for Nurses (IPN) about Ms. Shrader. IPN is an impaired practitioner consultant to the Department's Board of Nursing. IPN works with nurses and monitors them for safety to practice issues. IPN contacted Ms. Shrader on January 2, 2014, to discuss her entering the program. Ms. Shrader denied that she was impaired or abused any substances. She admitted that she was depressed. But she said that she stopped her depression treatment approximately five years earlier. IPN asked Ms. Shrader to undergo an evaluation to determine her fitness to practice nursing. Ms. Shrader scheduled an evaluation with Theodore Treese, M.D., an expert in the psychiatric treatment, monitoring, and care of health care practitioners. He conducted the evaluation on January 28, 2014. Dr. Treese diagnosed Ms. Shrader with severe major depressive disorder; alcohol abuse; opioid abuse; sedative, anxiolytic abuse; relational problems, not otherwise specified; and rule-out polysubstance abuse. During the evaluation, Ms. Shrader attempted to hide her in-patient psychiatric treatment at SalusCare. Based on Ms. Shrader's diagnoses, Dr. Treese determined that Ms. Shrader was not capable of practicing as a registered nurse with reasonable skill and safety to patients. Dr. Treese recommended that Ms. Shrader seek treatment at a substance abuse treatment center at a level of at least partial hospitalization. Ms. Shrader did not agree with Dr. Treese's recommendation. IPN gave Ms. Shrader the opportunity to seek a second opinion from another IPN-approved evaluator. IPN informed Ms. Shrader that she needed to either obtain a second opinion or enter the recommended treatment before April 14, 2014; otherwise, IPN would close her intake case file. Ms. Shrader refused to obtain a second opinion or enter into the recommended treatment. IPN closed Ms. Shrader's file on April 14, 2014. On December 2, 2014, Mark Sylvester, M.D., a physician specializing in psychiatry and addiction medicine, evaluated Ms. Shrader pursuant to Department Order. Dr. Sylvester reviewed Ms. Shrader's medical records, the IPN intake case file, and the Department's investigative report. Dr. Sylvester also asked Ms. Shrader to undergo a urine and hair drug screen. Ms. Shrader did not participate in the screens. Dr. Sylvester diagnosed Ms. Shrader with recurrent major depressive disorder, opioid abuse, alcohol abuse, benzodiazepine abuse, nicotine dependence, factitious disorder versus malingering, rule-out hypochondriasis, and rule-out conversion disorder. During the evaluation, Ms. Shrader attempted to conceal her psychiatric history, substance abuse, and symptoms of depression. Ms. Shrader's unwillingness to be forthcoming during her evaluation demonstrated denial of her symptoms and presented a significant barrier to her treatment and recovery. Dr. Sylvester concluded that Ms. Shrader's poor judgment and decision-making detrimentally affected her ability to practice nursing. Specifically, Ms. Shrader's judgment in attempting to practice nursing while impaired, her lack of insight into her illnesses, her inability to follow treatment recommendations, and her disagreement with medical professionals showed poor judgment. Poor judgment can affect decision-making while practicing nursing, especially in a crisis situation. Dr. Sylvester concluded that Ms. Shrader was unable to practice nursing with reasonable skill and safety by reason of her depression, use of alcohol, opioids, and benzodiazepines, lack of insight into her symptoms, and poor judgment. In order for Ms. Shrader to be able to practice nursing with reasonable skill and safety to patients, she must: undergo treatment at a residential treatment center; enter into an IPN monitoring agreement; and submit to a hair analysis drug screening test. These steps are essential to Ms. Shrader's recovery and to regaining the ability to practice nursing with reasonable skill and safety to patients. There is no evidence that Ms. Shrader has taken any of these steps. Ms. Shrader is unable to practice nursing with reasonable skill and safety to patients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Department of Health, Board of Nursing, enter a final order: finding that Respondent, Tonya L. Shrader, R.N., violated section 464.018(1)(j); requiring her to undergo an IPN evaluation; imposing a suspension of her license until such time as she undergoes an IPN evaluation; requiring compliance with IPN recommendations, if any; requiring the payment of an administrative fine in the amount of $250.00; and awarding costs for the investigation and prosecution of this case, as provided in section 456.072(4) to the Department. DONE AND ENTERED this 29th day of July, 2015, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of July, 2015.
The Issue Whether or not Halifax' Second Amended Petition has alleged sufficient standing to initiate a Section 120.57(1) F.S. formal hearing, pursuant to Subsection 381.709(5)(b) F.S., in challenge of HRS' modification of ATC's CON.
Findings Of Fact ATC is an existing 50-bed specialty psychiatric hospital with 25 short- term psychiatric beds for children or adolescents, five beds for short-term substance abuse by children or adolescents, and 20 long-term psychiatric beds for children or adolescents. ATC has operated under CON 2331 since 1984. By correspondence dated March 7, 1990, HRS issued to ATC Amended CON 2331 authorizing ATC to convert 15 of its 20 long-term psychiatric beds for children and adolescents into long-term psychiatric beds for adults in a secure unit. Petitioner Halifax is an existing 545 bed acute care hospital with adult patients in its 50-bed secure psychiatric unit. Its existing hospital license 2700 is for a short-term psychiatric program which does not specify use of the beds for either adults or for children and adolescents. Halifax does not have a CON for a long-term psychiatric program. Halifax' Second Amended Petition alleges its standing in the following terms: . . . Halifax is a 545 bed acute care hospital, licensed pursuant to Chapter 395, Florida Statutes, and located within HRS District IV. Halifax provides psychiatric services to adult patients in its 50 bed psychiatric unit. Due to the nature of the patients served, Halifax operates it (sic) psychiatric services in a secured unit. Halifax's psychiatric unit has been in operation since December 7, 1951 and is an "established program" under Section 381.709(5)(b) Fla. Stat. * * * 5. Halifax is a substantially affected party, and its substantial interest is subject to a determination in this proceeding in that: Halifax is an existing provider of acute care hospital services, located in Volusia County, Florida, and within HRS District IV. Halifax has an established program which provides psychiatric services to adult patients within HRS District IV. If the issuance of Amended CON 2331 were upheld, ATC would offer the same adult psychiatric services presently offered at Halifax' established psychiatric program. Therefore, Halifax is entitled to initiate this proceeding pursuant to Section 381.709(5)(b) F.S. (1989). The issuance of Amended CON 2331 will result in an unnecessary duplication of the same adult psychiatric services provided by Halifax in HRS District IV. Such duplication of services will result in decreased utilization of Halifax' psychiatric program, increased costs to consumers of such psychiatric health care services, and the decreased financial viability of Halifax' established psychiatric program. Additionally, the Second Amended Petition asserts that ATC's requested amendment of CON 2331 would represent a substantial change in the inpatient institutional health services offered by ATC and, thus, is subject to CON review pursuant to Section 381.706(1)(h) F.S. (1989). Further, Halifax alleges that, if approved, the amendment to CON 2331 will authorize ATC to serve an entirely new patient population that it is not authorized to serve pursuant to the original CON.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order dismissing Halifax' Second Amended Petition and affirming the agency action modifying ATC's CON 2331. DONE and ENTERED this 26th day of October, 1990, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 26th day of October, 1990. Copies furnished to: Harold C. Hubka, Esquire Black, Crotty, Sims, Hubka, Burnett, Bartlett and Samuels 501 North Grandview Avenue Post Office Box 5488 Daytona Beach, Florida 32118 Robert A. Weiss, Esquire Parker, Hudson, Rainer & Dobbs The Perkins House 118 North Gadsden Street Tallahassee, Florida 32301 Lesley Mendelson, Senior Attorney Department of Health and Rehabilitative Services 2727 Mahan Drive, Suite 103 Tallahassee, Florida 32308 Robert D. Newell, Jr., Esquire Newell & Stahl, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact GENERAL In November 1983, Pasco filed an application with DHRS to build and operate a freestanding psychiatric and substance abuse facility in Pasco County. Pasco is a Florida corporation and is a wholly owned subsidiary of Florida Health Facilities, Inc., which is a wholly owned subsidiary of United Medical Corporation (UMC). DHRS' initial notice of intent to deny Pasco's application was issued on April 13, 1984. On May 3, 1984, Pasco timely filed its petition for formal administrative hearing. (DOAH Case No. 84-1933). Thereafter, DHRS reconsidered its initial decision, and on November 20, 1984, DHRS and Pasco entered into a Stipulation, and DHRS issued CON No. 3053 to Pasco in February 1985. (DOAH Case No. 84-1933 was subsequently, dismissed as the result of this reconsideration.) Following publication of DHRS' decision to issue the CON, petitions for formal hearing were filed by Horizon and Hernando, UPC, CHNPR, and Harborside Hospital, Inc., and petitions to intervene were filed by Community Care, Morton Plant and PIA Medfield, Inc., d/b/a Medfield Center. The petitions were consolidated and resulted in the cases at bar--DOAH Consolidated Case Nos. 85-0780, 85-1513 and 85-2346. Harborside Hospital, Inc., Petitioner in Case No. 85-2392, and PIA Medfield, Inc., d/b/a Medfield Center, Intervenor in Case No. 85-0780, subsequently voluntarily dismissed their petitions and are not parties to this proceeding. Horizon is a freestanding psychiatric facility located at 11300 U.S. 19 South, Clearwater, in Pinellas County, in District V. Hernando is an approved, as of September 1984, but as yet unopened 50-bed freestanding psychiatric facility to be located at the intersection of S.R. 50 and Clay Street in Brooksville, Hernando County. Hernando County is in District III. Hernando's bed complement will consist of 35 short-term psychiatric beds, 15 short-term substance abuse beds and a 10-bed crisis stabilization unit. UPC is an approved but yet unopened 114-bed psychiatric teaching facility to be located on the campus of the University of South Florida in Hillsborough County, in District VI. Its bed complement does not include licensed substance abuse beds. CHNPR is a 414-bed acute care hospital located in Pasco County, Florida, in District V. As part of its bed complement, the hospital operates a 46-bed psychiatric unit. Its complement does not include licensed substance abuse beds. Morton Plant is a 745-bed acute care hospital located in Pinellas County, District V. As part of its bed complement, the hospital operates a 42-bed psychiatric unit. Its bed complement does not include licensed substance abuse beds. Community Care is an approved but as yet unopened 88-bed psychiatric facility to be located in Citrus County in District Its bed complement includes 51 short-term psychiatric beds and 37 long-term substance abuse beds. Its bed complement does not include licensed short-term substance abuse beds. Pasco originally proposed to construct and develop an 80-bed short-term psychiatric and substance abuse facility, composed of 60 general adult beds, 10 adolescent beds and 10 substance abuse beds (Exhibit 4). As a result of negotiations with DHRS, Pasco revised its proposal to a 72-bed facility composed of 35 general adult beds, 20 adolescent beds and 17 substance abuse beds (Exhibit 4, paragraph 1; Exhibit 11). As a condition to DHRS' agreement to grant the Certificate of Need, Pasco has agreed to provide at least 10 percent of its patient days to residents of Pasco County eligible under the provisions of the Baker Act or who are indigent, and to locate its facility no less than five miles east of the intersection of U.S. Highway 19 and County Road 587 (Exhibit 4, paragraphs 3, 4). The revised project cost, excluding working capital, totals $6,328,981.00 (Exhibit 6). BED NEEDS Applications for certificates of need must be consistent with criteria contained in Section 381.494(6)(c) as well as applicable rules of the agency. Subsection 1 of Section 381.494(6)(c) requires DHRS determine the proposal is consistent with: The need for the health care facilities and services and hospices being proposed in relation to the applicable district plan and State Health Plan adopted pursuant to Title XV of the Public Health Service Act except in emergency circumstances which pose a threat to the public health. The State Health Plan adopted addresses need through the year 1987, which is not the target year applicable to this case. The Plan indicates the need for short-term psychiatric and substance abuse beds should be determined based on the need methodologies found in Chapter 10-5.11(25) and 10-5.11(27) (Exhibit 27, page 6). DHRS' rules establish specific criteria to be used in evaluating and acting on CON applications for psychiatric and substance abuse services and facilities. Chapter 10-5.11(25) and 3-5.11(27), Florida Administrative Code. Psychiatric Bed Need In District V Rule 5-11.25, Florida Administrative Code, allocates .35 beds per 1,000 population in each district for psychiatric beds. Of those, not less than .15 per 1,000 population may be allocated within acute care general hospital settings and no more than .20 per 1,000 population may be located in freestanding psychiatric facilities. The differentiations recognize Medicaid reimburses facilities for psychiatric services provided in the acute hospital setting, but not in the freestanding setting, assuring at least some financial access to services for Medicaid patients and allows the agency, from a policy standpoint, to weigh the cost and benefits of building new facilities on one hand against adding additional beds at existing facilities (Exhibit 26, page 3). The Office of Comprehensive Health Planning, under the signature of the Deputy Assistant Secretary of Health Planning and Development, has published the agency's Short-Term Psychiatric Bed Counts and Projected Bed Needs for 1990. On a district wide basis, the agency's document indicates a total gross need for 401 beds. There exist 372 licensed beds and no CON approved but unlicensed beds in District V. Morton Plant received preliminary approval for 22 beds but its application was subsequently denied by Final Order. See, Morton F. Plant Hospital Assn., Inc. v. DHRS, DOAH Case No. 83-1275, Final Order Oct. 8, 1985. Therefore, there currently exists a net projected need for 29 short-term psychiatric beds in District V for 1990. Final approval of the application here would result in a district surplus of 26 beds, an increase in beds of less than 7 percent over the projected 1990 numerical need. This 26-bed surplus would replace the 29-bed need after the 55 beds granted to Pasco are considered (Exhibit 27, pages 15-16). The projected numerical surplus for psychiatric beds in District V is due to an excess of 114 beds located in South Pinellas County. However, access problems to Pasco residents may, in fact, be one of the reasons for this excess (Exhibit 10, page 3). Rule 10-5.11(25) projects the need at the district level, leaving the specific allocation to the agency and to the Local Health Council by identifying particular areas within the district that may need additional beds through use of the Local Health Plan (Exhibit 26, page 3). The Local Health Council's 1985 plan projects needed beds to the target year 1990 and projects need by subdividing District V on a geographic basis of East and West Pasco and North and South Pinellas Counties (Exhibit 8, page 110, Tables 8 and 11; Exhibit 10, page 2). The Plan establishes subdistricts identical to those subdistricts which have been designated for acute care beds (Exhibit 8, page 110, Tables 8 and 11; Exhibit 10, page 2; Exhibit 27, page 8). The subdistrict concept evidences a rational division of the District's population and healthcare communities (Exhibit 10, page 2; Exhibit 27, page 8). In view of the poor transportation situation in Pasco County as well as traffic congestion along U.S. Highway 19, especially during the tourist period, an access problem exists for patients and their families seeking psychiatric and substance abuse inpatient services (Exhibit 10, page 2). In 1990, Pasco County's population will reach 286,488. This total is broken down into East and West Pasco County, with population projected to be 88,811 and 197,677, respectively. Application of the numerical need methodology to the Pasco population indicates a projected need for 101 psychiatric beds in Pasco County, allocating 70 beds to West Pasco and 31 beds to East Pasco, to insure adequate services are provided to all residents of the County (Exhibit 26, page 3). Recognizing the existence of 46 psychiatric beds at Community in West Pasco, there remains a projected need for 24 psychiatric beds in West Pasco County. With no existing psychiatric beds being located in East Pasco County, between the two areas there is an estimated need for 55 psychiatric beds in the County as a whole, the precise number of short-term psychiatric inpatient beds sought for approval by Pasco (Exhibit 26, page 3). Applying the allocation portion of the rule for freestanding facilities to Pasco County residents, there is indicated a net need for beds in freestanding settings of 58 beds by the year 1990. The grant of 55 beds to the applicant in this case is, therefore, consistent with the provision of the rule (Exhibit 26, pages 3, 4). Rule 10-5.11(25)(d)7 recognizes that an applicant proposing to build a new but separate short-term psychiatric facility should have a minimum of 50 beds. There is no practical manner within which to approve a facility in East Pasco County at the present time, based solely on the East Pasco population, since the numerical need is only 31 (Exhibit 26, page 3). From a health planning standpoint, it is practical to build a facility in the middle of the County, as proposed here. The impact upon existing providers is lessened by its location while at the same time the facility has the ability to obtain patients from all portions of the County. A facility located farther east would not be financially feasible as a result of the low base population (Exhibit 26, page 3). According to Rule 10-5.11(25)(e)7, "short term inpatient hospital psychiatric services should be available within a maximum travel time of 45 minutes under average travel conditions for at least 90% of the service area's population." Conversely stated, not more than 10% of the Pasco service area population should be outside this time/travel standard. The Pasco proposed project meets the objectives of this criterion and improves geographic access to psychiatric care for Pasco County residents (Exhibit 28, page 3). Unlike a psychiatric unit in a general acute care medical hospital, it is not possible for the psychiatric beds proposed here to be used for acute medical purposes. The concept of a focused, single-purpose facility is also in keeping with the goal of the District Mental Health Board Plan which indicates the need to develop centralized inpatient services in Pasco County. Rule 10-5.11(25) (e)1 (Exhibit 28, page 5). The Local Health Plan notes that it would be cost effective to apply a 75 percent average occupancy threshold for psychiatric and substance abuse services within the service area when considering additional inpatient facilities or services of this type. It also indicates that facts such as patient origin and accessibility should be considered within the need for beds. The plan notes that individuals from Pasco County have had to seek Baker Act services outside of the County and even the District. Thus, access to inpatient care for the indigent psychiatric patient is recognized to be a problem in Pasco County (Exhibit 8; Exhibit 27, pages 11-12; TR-84, lines 16-25; TR-85, lines 16-25; TR-93, lines 23-25; TR-94, line 1). According to the-plan, Baker Act and indigent residents of Pasco County must travel to facilities in District VI to obtain these services. Additionally, with respect to the need for beds, the Local Health Plan indicates that if the subdistrict analysis is accepted, then the need for psychiatric and substance abuse beds is greatest in Pasco County. The plan also notes that while past utilization of the psychiatric unit which exists in West Pasco County would seem to suggest low demand in the County, the low utilization stems in part from the restriction of access to private pay and involuntary patients (Exhibit 27, page 12). According to the plan, services are only being provided to private pay, voluntary patients; consequently, indigent patients are not being served. Baker Act patients who are involuntarily admitted have not been served (Exhibit 27, pages 12-13; TR-374, lines 2-25; TR-376, lines 21-25; TR-377, lines 1- 11). The applicant is proposing to allocate a combined total of at least 10 percent of its patient days to Baker Act and indigent patients, clearly assisting in meeting this need (Exhibit 27, pages 17-18). The Local Health Plan represents local statements and input addressing the needs within the community. The application meets and is consistent with the standards noted in the existing and approved Local Health Plan for District V (Exhibit 10, page 3), a specific requirement of Rule 10-5. 11(25 (e) 1. The applicant initially projected an occupancy rate of 71 percent of the second year and approximately 83 percent of the third year of operation satisfying the criterion contained in Rule 10-5.11.(25)(d), Florida Administrative Code. Subsection (d)(5) recommends that a project would normally not be approved unless the average annual occupancy rate for all existing short- term inpatient psychiatric beds in the district is at or exceeds 75 percent for the preceding 12-month period. DHRS has interpreted this to be the average annual occupancy rate for all facilities for the short-term psychiatric beds within the service district, because the rule refers to the annual occupancy rate for existing beds in the service district, rather than to facilities (Exhibit 27, page 16). During the 12-month period July 1, 1984 through June 30, 1985 the existing short-term psychiatric facilities in District V reported an average of 75 percent occupancy level (Exhibit 27, page 17). Rule 10-5.11(25), Florida Administrative Code, indicates that a favorable determination may be made even when criteria other than those specified in the numeric need methodology, as provided further in Subsection (e) of Chapter 10- 5.11(25), are not met. This would also be true when applying the other criteria utilized in Section 381.494(6)(c) (Exhibit 27, page 13). Considering all these factors and the benefits that the proposed project would bring, there is a projected need for the 55 proposed short-term psychiatric beds shown under Rule 10- 5.11(25) (Exhibit 27, pages 22-23). Substance Abuse Bed Need In District V Rule 10-5.11(27) establishes a bed-to-population ratio of .06 beds per 1,000 population for the projected year in question (Exhibit 26, page 4). The need methodology, as applied to District V for 1990, shows a total need for 69 short-term substance abuse beds in District V. There are presently 74 licensed short-term substance abuse beds in District V and no additional CON approval. This results in a surplus of five beds in the district, without including the 17 beds approved for Pasco Psychiatric Center. (Exhibit 10, page 3, Exhibit 27, pages 23- 24). The Local Health Council has projected a need through 1990 for 17 substance abuse beds, using the State's formula contained in Rule 10-5.11(25) and 10.5.11(27) and applying the formula on a subdistrict basis (Exhibit A, page 118, table 11; Exhibit 10, page 2). Subsection (h)(l) contains a suggested standard of 80 percent occupancy rate in the District for the past 12 months. During the period from July 1, 1984 through June 30, 1985 reporting substance abuse bed facilities reported an average occupancy level of 88 percent. DHRS has determined there exist 22 short-term substance abuse beds at Horizon Hospital. However, Horizon does not report its utilization of those beds separately, but includes them within its reported short-term psychiatric beds (Exhibit 27, page 25). Much in the same manner as the short-term psychiatric rule, Rule 10-5.11(27)(h)3 refers to the Local Health Plan and consistency with local need determinations. According to the plan, there is a projected need in the two Pasco subdistricts for 17 short-term substance abuse beds by application of the numerical methodology .06 beds per 1,000 population to Pasco County. There are no short-term substance abuse beds available or approved in the Pasco County subdistricts (Exhibit 27, pages 11, 25-26). Rule 10-5.11(27)(h)4 establishes a minimum unit size of 10 designated beds. Additional calculation reveals that the numerical need for 17 beds is broken down into 12 beds in the . West Pasco area and five in East Pasco. Because of the minimum size requirement, there is no reasonable way for a unit to be built solely based on the East county portion of the numerical need. Consequently, a proper health planning alternative is to approve the 17-bed unit, which will be centrally located to serve both portions of the County (Exhibit 26, page 4). A Certificate of Need may be approved where need is determined through criteria other than the numeric need methodology. For example, criteria in Section 381.494(6)(c) and in subparagraph (f) of Rule (27) may indicate that need is demonstrated for the project beyond the numerical formula (Exhibit 27, page 23). Upon analysis of all the factors contained within the rule, the applicant meets the need for the Pasco subdistricts. AREAS OF CONSIDERATION IN ADDITION TO BED NEEDS A. Availability, Utilization, Geographic Accessibility And Economic Accessibility The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing health care services and hospices in the service district of the applicant. Section 381.494 (6) (c) 2 A number of hospital facilities serve District V's residents in need of psychiatric and substance abuse health care services (Exhibit 10, page 16 and 17, tables 9 and 10). Of these, Anclote Manor's patients have an average length of stay of more than two years. Anclote is licensed as a long-term care facility (Ibid., Exhibit 28, page 3) St. Anthony's Hospital, Mease Hospital and Suncoast Hospital have not contested the agency's initial decision to grant this application, leaving only Morton Plant and Horizon in Pinellas County and CHNPR in Pasco County as District V parties objecting to the application. CHNPR's patients are predominantly geriatric (Exhibit 28, page 3). During 1984 the utilization of psychiatric beds at Morton Plant was 137 percent. Hospitals in North Pinellas County show an average 100 percent utilization of their psychiatric beds for the period (Exhibit 35, pages 10 and 11). However, for the same period, utilization of CHNPR's psychiatric unit was 50 percent. Ibid. During the last available 12-month period of information (July 1, 1984 through June 30, 1985), the existing short-term psychiatric facilities in District V reported an average occupancy level of 75 percent (Exhibit 27, pages 16-17). Based upon utilization of less than 75 or 80 percent, there may exist underutilized beds for psychiatric services at Horizon Hospital (TR-798, lines 19-20). However, this conclusion is based upon the assumption that Horizon is licensed for 200 psychiatric beds (TR-798, lines 21-23). DHRS however, considers that Horizon is licensed (License 1809) for 178 psychiatric beds (TR-800, lines 10-15). Consequently, the number of licensed psychiatric beds affects the occupancy rates at Horizon. In order to determine access or demand within a community, factors besides utilization must be looked at (TR-887, lines 13-21). A number of other factors may and in this case do, in fact, affect occupancy rates (TR-887, lines 13-21). In addition to location, the existence of semi-private rooms, sex and age segregation policies adopted by various facilities, and corporate decisions artifically impede access and thus affect utilization and occupancy rates (TR-431, lines 9-13; TR-883, lines 12-24, 25; TR-884, lines 1-10). CHNPR's low occupancy rates are affected by the facility's location, lack of a commitment to indigents medically underserved patients, as well as its lack of segregation of psychiatric beds between adults and children (TR-392, lines 24- 25; TR-393, lines 1-9; TR-397, lines 13-19; TR-398, lines 4- 10).and 13; TR 883, lines 12-24, 25; TR-884, lines 4-10). Pasco residents have been forced to seek inpatient psychiatric and substance abuse services outside the County for years (Exhibit 21, page 1). The location of CHNPR in the western part of the county makes services inaccessible to residents of the eastern part of the county (TR-397, lines 1319; TR-398, lines 4-10). No facility exists in Pasco County that contains the proper housing for adolescents who need psychiatric services (Exhibit 21, page 2). Rainbow House, an adolescent residential care center in Dade City, can accommodate a very limited number of children and is not prepared to handle acutely ill children (TR-399, lines 5- 9). While CHNPR's psychiatric unit is designated for 46 beds, only 26 beds are available for psychiatric services. The dramatic changes in occupancy at Community Hospital of New Port Richey from 80 percent to 40 percent indicate the psychiatric beds are used for acute medical purposes (Exhibit 22, page 2). Without a public transportation system in Pasco County, travel time for Pasco residents and their families is a problem (TR-401, lines 14-25; TR-402, lines 1-23). A major portion of Pasco residents who have been provided inpatient services are provided those services by facilities located one hour away (Exhibit 22, page 2; Exhibit 23, pages 1-2; TR-397, lines 7-16). The access problem is more acute for the elderly, which comprise 32.7 percent of Pasco's population compared to 19.3 percent for all of Florida projected to 1990 (Exhibit 26, page 2). The distance to facilities serving Pasco County residents is sufficiently great as to make follow-up care very difficult, preventing family involvement, and making treatment inefficient (TR-325, lines 7-25; TR-408, lines 1-8; TR-436, lines 12-25). Based upon a July 1985 population of 240,204 approximately 13 percent of Pasco County residents are not within a 45-minute total travel time to a psychiatric facility in District V. This number is expected to increase to 19 percent of the County's population by 1990 (Exhibit 18, page 17, figures 10 and 11; page 14 and figure 13, page 15). United Medical Corporation (UMC), which owns Pasco, has a history of providing services to indigents and medically underserved (Exhibit 13, page 2) and in particular to residents of Pasco County. Ibid. This is based upon UMC's former ownership of Tampa Heights Hospital. At that time it was the facility that admitted Baker Act patients from Pasco County (Exhibit 10, page 3; Exhibit 13, page 2). CHNPR's recent corporate decision to take Baker Act patients is not persuasive as to the issue of access to indigents and medically under served (Exhibit 27, pages 19-20). The timing of the agreement with the Pasco and Hernando Human Development Councils during the pendency of these proceedings indicates, at a minimum, that the application here has already favorably affected access to these citizens. CHNPR's policy with respect to indigents, Medicaid and the medically underserved residents reduces the accessibility of these patients to its facility. See Turro v. DHRS and CHNPR v. DHRS, DOAH Case Nos. 83-005 and 83- 092, Recommended Order September 7, 1983, Final order October 25, 1983, 6 FALR 336, et seq. The proposed project will be accessible to residents in need of psychiatric and substance abuse services in District V. NEED FOR SPECIAL EQUIPMENT The need in the service district of the applicant for special equipment and services which are not reasonably and economically accessible in adjoining areas. Section 381.494 (6) (c) 6. Although an issue in this proceeding, no evidence was presented as to the applicability of this criterion or the applicant's consistency or inability to meet this criterion. It is thus specifically found that this criterion is not applicable. NEED FOR RESEARCH AND EDUCATIONAL FACILITIES The need for research and educational facilities including but not limited to institutional training programs and community training programs for health care practitioners and for doctors of osteopathy and medicine at the student internship and residency training level. Section 381.494(6)(c)7,. Although an issue in this proceeding, no evidence was presented as to the applicability of this criterion or the applicant's consistency or inability to meet this criterion. It is specifically found that this criterion is not applicable. AVAILABILITY OF RESOURCES The ability of the applicant to provide quality of care. Section 381.494(6) (c)3. The availability of resources including health manpower, management personnel and funds for capital and operating expenditures for project accomplishment and operation; the effects the project will have on clinical needs of health professional training programs in the service district; the extent to which the services will be accessible to schools for health professions in the service district for training purposes if such services are available in the limited number of facilities; the availability of alternative uses of such resources for the provision of other health services; and the extent to which the proposed services will be accessible to all residents of the service district. Section 381.494 ( 6) (c) 8. Management and Quality of Care UMC, the parent corporation, has at its disposal management personnel and will be able to obtain health manpower to accomplish the project (Exhibit 12, page 2; Exhibit 13, pages 1-2). UMC presently owns and operates three psychiatric hospitals (Exhibit 11, page 1). The facility will have at its disposal UMC's services in the areas of management and recruitment. UMC has successfully recruited physicians and other health care providers in the past (Exhibit 13, page 1) lines 1-5; TR-332, lines 19-21). The applicant will be able to adequately staff and, manage the facility and provide quality care to its patients in the service area. Funds for Capitol and Operating Expenditure UMC has obtained a commitment from Freedom Savings & Loan Association to finance the project (Exhibit 14, page 2) and will therefore be able to obtain the financing necessary to build and operate the facility. No evidence was presented to show the project will have a detrimental effect on clinical needs of health professional training programs in the district for training. Financial Feasibility The facility will be financed through a construction loan with a 5-year permanent financing package at a rate of prime plus one and one-half percent floating and a two percent fee (Exhibit 14, page 1). The projections contained in Exhibit 7 and Exhibit 5 as well as the underlying assumptions indicate the figures represent reasonable and accurate estimates of income and expenses that will be incurred in the event the Certificate of Need is issued (Exhibit 9, page 1; Exhibit 11, pages 2-3; Exhibit 12, pages 1-2; Exhibit 13, pages 1-2; Exhibit 15, page 2; Exhibit 17, pages 1-2; Exhibit 25, pages 6-9). Note: See also, Hoefle's testimony. CHNPR contends that the projected ALOS should be considered at CHNPR's level. However, the ALOS at CHNPR's psychiatric unit is directly affected by the influx of Baker Act patients and contractual limitations (TR-921, lines 19-25; TR- 922, lines 1-2; TR-452, lines 14-17; TR-453, lines 5-12). In the final analysis the financial feasibility of the proposal will depend to a large degree on whether physicians will admit patients to the facility. Doctors Vesley and Rudajev will support the facility when built and their projections as to the numbers of patients and ALOS are reasonable (TR-292, lines 17-18; TR-293, lines 4-7; TR-293, lines 12-15; TR-295, line 16; TR-317, lines 19-24; TR-324, lines 13-24; TR-325, lines 1-2; TR-336, lines 19-22; TR-332, lines 19-21). It is reasonable that other physicians in Pasco County will locate in the area surrounding the hospital and will support the facility once it is opened (TR- 413, lines 7-17; TR-792, lines 2-9). The needs and circumstances of those entities which provide a substantial portion of their services or resources or both to individuals not residing in the service district in which the entities are located or in adjacent service districts. Such entities may include medical and other health professions, schools, multi-disciplinary clinics and specialty services such as open-heart surgery, radiation therapy and renal transplantation. Section 381.494 (6) (c) 11. No evidence was presented indicating the applicability of this criterion or the applicant's ability or inability to meet this criterion. I find this criterion not applicable. AVAILABILITY OF HEALTH CARE ALTERNATIVES The availability and adequacy of other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and ambulatory or home care services which may serve as alternatives for the health care facilities and services to be provided by the applicant. Section 381.494 (6) (c) 4. At the time of hearing, no alternatives to the application proposed were presented. Nor was other evidence presented to indicate alternatives to the proposed facility and services are, in fact, available at the time of this proceeding. Other than CHNPR no facilities located in Pasco County provides inpatient psychiatric services (TR-400, lines 21 25; TR- 4 01, lines 1-3). Probable economies and improvements in service that may be derived from operation of joint, cooperative or shared health care resources. Section 381.494 (6) (c) 5. The facility will share resources with other facilities owned or operated by UMC such as common training and joint purchasing (Exhibit 11, page 1); financial management (Exhibit 12); financing (Exhibit 14); and recruitment and marketing (Exhibit 13). These shared resources will provide economies and improve services presently available in District V. IMPACT UPON EXISTING FACILITIES AND COSTS AND COMPETITION The probable impact of the proposed project on the cost of providing health services proposed by the applicant upon consideration of factors including but not limited to the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assuance and cost effectiveness. Section 381.494 (6) (c) 12. Two hospitals in Pasco County in relatively close proximity to each other are owned by Hospital Corporation of America--Community Hospital of New Port Richey and Bayonet Point Medical Center--giving HCA 86 percent of all hospital beds in the West Pasco service area. The applicant's expert, Dr. Scott, compared statewide HCA hospital averages and daily pre-tax profits based on adjusted patient days with those at CHNPR and Bayonet Point, using 1982 actual hospital data reported to the Hospital Cost Containment Board. The data indicates a much higher than HCA average operating margin, total margin, daily gross revenues and daily pre-tax profits. In Pasco County, HCA shows profitability roughly double that of its statewide averages (Exhibit 25, pages 3-4). HCA has now acquired the nearby freestanding psychiatric hospital at the University of South Florida (Exhibit 25, pages 3-4; TR-854, lines 14-18). Without competition, HCA will not be required to compete in Pasco County for price or quality of care. Approval of the application should significantly reduce HCA's share of the Pasco-Hillsborough market in terms of beds and would positively affect competition and the delivery of health care services (Exhibit 25, page 5; Exhibit 27, pages 29-30). In 1985 CHNPR psychiatric unit's occupancy rate was 41 percent (Exhibit 41, page 4). Following execution of its Baker Act agreements, occupancy rose to 49.7 percent (TR-921, pages 5- 18). CHNPR is a large institution which grossed more than $1 million in pre-tax income based on 50 percent utilization (TR-998, lines 21-25). CHNPR projects that in 1987, 1988 and 1989 only 1 percent of its revenues will be derived from Medicaid patients and .9 percent will be derived from indigents (TR-915, lines 18- 25; TR-916, lines 1-5). Left without competition, HCA will continue to dominate the health care delivery system in Pasco County, a situation which should not be continued. (TR-620, lines 24-25; TR-621; TR- 622). Morton Plant's witness agreed there exists a need for additional psychiatric and substance abuse beds in Pinellas and Pasco Counties in District V (TR-829, lines 15-25; TR-833, lines 3-6). In 1984, approximately 4 percent of Morton Plant's psychiatric patients resided in Pasco County (TR-837, lines 14- 17). Morton Plant's psychiatric unit's occupancy rates have consistently exceeded 100 percent (TR-838, lines 3-6) and there is a waiting list at Morton Plant's adolescent unit (TR-843, lines 2-4). Morton Plant presented no evidence that issuing this CON to Pasco would substantially affect its psychiatric unit (TR- 826, line 25; TR-827, lines 1-25; TR-828, lines 1-9). UPC, now owned by HCA, is located outside District V. UPC, as a university hospital, is different from any other in Florida (TR-860, lines 17-24). It was UPC's mission as a research and teaching facility, and its regional concept of .referrals extending over 17 counties, that led to the grant of its application by DHRS (TR-860, line 25; TR-861, lines 1-21). UPC projected 30 percent of its patients would be referred from outside the area including Pasco County (TR-856, lines 6-11). This limitation was not considered by Dr. Fernandez in concluding that UPC would be adversely affected by the grant of the CON to Pasco. The effect upon UPC is further lessened when one considers the general availability of UPC's facility to the Pasco/District V community. In order to admit patients to the UPC facility, physicians must be members of the UPC faculty (TR- 857, lines 5-11). Eight of UPC's beds will be subject to admissions restricted to only two physicians (TR-857, line 25; TR-858, lines 1-25; TR-859, lines 1-20). Horizon and Hernando are owned by PIA. Horizon receives approximately 5 percent of its patients from Pasco County (TR-787, lines 23-25; TR-788, lines 1- 2). Approval of the Pasco facility may cause Horizon to lose 80 to 90 percent of its total 137 admissions from Pasco--109 to 123 admissions; however, this loss may occur with or without approval of this application (TR-792, lines 17-25; TR-793, lines 1-9). Horizon's expert's testimony regarding utilization was based upon Horizon being licensed for 200 psychiatric beds (TR- 798, lines 1-24); however, DHRS considers Horizon licensed for 178 (TR-798, lines 25; TR-799, lines 1-25; TR-800, lines 1-25; TR-801, lines 1-4). Hernando, located in District III, relied upon a need argument based solely on District III, not District V, in pursuing its CON application (TR-770, lines 18-25; TR-771, line 1). Hernando has previously defined its primary service area as only including Citrus and Hernando Counties, both in District III, and did not include Pasco County within its secondary service area, or for purposes of projecting its admission rates or feasibility (TR-771, lines 14-22; TR-772 lines 10-15; TR-775, lines 20-25; TR-776, lines 1-2; TR-777, lines 5- 16). Community Care has not determined a site for its facility in Citrus County (Exhibit 29, page 6, lines 9-11). Community Care opposes the application because its main concern is the reduction in market share that may be available to its facility (Exhibit 29, page 27, lines 2-6). In its CON application in 1983, Community Care relied only upon District III as its population base (Exhibit 29, page 8, lines 18-21; page 9, lines 19-25). Community Care relief upon the Local Health Plan in District III in establishing need (Exhibit 29, page 10, lines 1- 10) and relied solely upon Citrus and District III population growth as its patient base (Exhibit 29, page 10, lines 10-15). Community Care will not provide short-term substance abuse services (Exhibit 29, page 20, lines 12-18; page 25, lines 11-25). Approval of the Pasco facility will not increase the cost of health services in District V and will favorably affect present services, promoting more efficiency in the health delivery system. The effect of the approval, with its related conditions, will assure access to underserved residents who otherwise will continue at the mercy of the HCA facilities. 110. Approval will not substantially adversely affect providers within or outside District V. CAPITAL EXPENDITURE PROPOSALS The costs and methods of proposed con- struction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction. Section 381.49 (6) (c)13. In cases of capital expenditure proposals for the provision of new health services to inpatients, the department shall also reference each of the following its findings of fact: That less costly, more efficient, or more appropriate alternatives to such inpatient services are not available and the development of such alternatives has been studied and found not practicable. That existing inpatient facilities providing inpatient services similar to those proposed are being used in an appropriate and efficient manner. In the case of new construction, for example, modernization or sharing arrangements, have been considered and have been implemented to the maximum extent practicable. That patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. Section 381.494 ( 6) (d) 1-4. The evidence indicates the costs and methods of the proposed construction are reasonable. The normal percentage of architectural and engineering fees are in the range of 5 percent to 7 percent of construction costs; in this case the architectural and engineering fees are approximately 6 percent. The construction costs of approximately $78 to $80 per square foot are reasonable for this type facility (Exhibit 15, page 2; Exhibit 17, pages 1-2). See also footnotes to paragraphs 86 and 87. Less costly, more efficient or more appropriate alternatives to the services proposed here are not available. No existing facility or applicant has filed an application seeking to provide services similar to those sought to be provided by this applicant for the target population year 1990. Existing inpatient facilities providing services similar to those proposed are being used in an appropriate and efficient manner. Utilization rates at existing district facilities when considered in light of accessibility including artificial barriers, indicate the facilities are being used in an appropriate and efficient manner. As noted earlier, alternatives to the project here at issue are not present. The lack of access, geographical, financial and artificial, to residents of Pasco County in need of psychiatric and substance abuse services, as well as the numerical need evidenced by application of the state-mandated need methodologies indicate that, absent the proposed service, patients will experience serious problems in obtaining psychiatric and substance abuse inpatient care.
Findings Of Fact The application and project On October 15, 1986, Respondent, Florida Residential Treatment Centers, Inc. (FRTC), filed a timely application with the Respondent, Department of Health and Rehabilitative Services (Department), for a certificate of need to construct a 60-bed specialty hospital to be licensed as an intensive residential treatment program for children and adolescents in Broward County, Florida. On March 11, 1987, the Department proposed to grant FRTC's application, and petitioners, Florida Psychiatric Centers (FPC) and South Broward Hospital District (SBHD), timely petitioned for formal administrative review. FRTC is a wholly-owned subsidiary of Charter Medical Corporation (Charter). Currently, Charter owns, operates or has under construction 85 hospitals within its corporate network. Of these, 13 are general hospitals, and 72 are psychiatric hospitals. Notably, Charter now operates residential treatment programs in Newport News, Virginia, Provo, Utah, and Mobile, Alabama; and, is developing such a program in Memphis, Tennessee. Within the State of Florida, Charter operates psychiatric hospitals in Tampa, Jacksonville, Fort Myers, Miami, and Ocala. In connection with the operation of these facilities, Charter has established satellite counseling centers to screen patients prior to admission and to provide aftercare upon discharge. Of 20 such centers operated by Charter, one is located in Broward County and two are located in Dade County. The facility proposed by FRTC in Broward County (District X) will treat seriously emotionally disturbed children and adolescents under the age of 18. The patients admitted to the facility will have the full range of psychiatric diagnoses, with the probable exception of serious mental retardation and severe autism. FRTC will not treat patients who present themselves with a primary substance abuse diagnosis, nor will it admit patients who are actively dangerous. This distinguishes FRTC from an acute psychiatric hospital where actively dangerous patients requiring immediate medical intervention are often admitted. The anticipated length of stay at FRTC will vary depending upon the patient's responsiveness to treatment, but is reasonably expected to range between 6 months to 2 years, with an average of 1 year. The treatment programs to be offered at FRTC will be based upon a bio- psychosocial treatment model. This model assumes that the biological component of a patient's condition has been stabilized and that psychiatric medication will be administered solely to maintain this stabilized condition. The social component of the model is designed to resolve problems in interpersonal, family and peer relationships through educational groups, psychiatric co-therapeutic groups and family group therapy. The psychological component focuses primarily on developing personal understanding and insight to guide the patient toward self-directed behavior. Among the therapies to be offered at FRTC are individual, family, recreational, group and educational. Group therapy will be designed to resolve interpersonal problems and relationships, and focuses primarily on building trust among group members. Some group therapy sessions will also cover specific issues such as sex education, eating disorders, self-image and social skills. The goal of recreational therapy will be to teach patients to play appropriately, showing them how to give, take and share, and to follow and to lead. Recreational activities will be available both on and off campus. The goal of occupational therapy will be to develop skills used in work. For a child whose work is school, this often involves using special education techniques. For teenagers, occupational therapy also develops work skills, and prepares them for vocational training or employment. Family therapy is crucial because the family is she core of child development. Families will be invited to spend days with their children at FRTC where they will learn behavioral management techniques, and participate in parent education activities and multifamily groups. The school component of the program includes development of an individualized educational plan for each child. School will be conducted 4-5 hours a day. FRTC will utilize the level system as a behavioral management tool This system provides incentives for learning responsibility for one's own behavior and for functioning autonomously. The typical progress of a patient at FRTC will be as follows. First, a team which includes a psychiatrist, social worker, psychologist and teacher will decide, based upon available information, whether admission is appropriate. If admitted, a comprehensive assessment will be conducted within 10 days, a goal- oriented treatment program will be developed for each patient, designed to remedy specific problems. Discharge planning will begin immediately upon admission. A case manager will be involved to assure that the treatment modalities are well-coordinated. Finally, FRTC will provide aftercare upon discharge. Should any FRTC patients experience acute episodes, they will be referred to acute care psychiatric hospitals with which FRTC has entered into transfer agreements. Likewise, patients who require other medical attention will be referred to appropriate physicians Consistency with the district plan and state health plan. While the local health plan does not specifically address the need for intensive residential treatment programs (IRTPs) for children and adolescents, it does contain several policies and priorities that relate to the provision of psychiatric services within the district. Policy 2 contains the following relevant priorities when an applicant proposes to provide a new psychiatric service: ... Each psychiatric inpatient unit shall provide the following services: psychological testing/assessment, psychotherapy, chemotherapy, psychiatric consultation to other hospital departments, family therapy, crisis intervention, activity therapy, social services and structured education for school age patients, and have a minimum patient capacity of 20 and a relationship with the community mental health center. Facilities should be encouraged to provide for a separation of children, adolescents, adults, and geriatric patient' where possible. Greater priority should be given to psychiatric inpatient programs that propose to offer a broad spectrum of continuous care. ... Applicants should be encouraged to propose innovative treatment techniques such as, complementing outpatient and inpatient services or cluster campuses, that are designed to ultimately reduce dependency upon short term psychiatric hospital beds. New facilities should be structurally designed for conducive recovery, provide a least restrictive setting, provide areas for privacy, and offer a wide range of psychiatric therapies. Applicants should be encouraged to offer intermediate and follow-up care to reduce recidivism, encourage specialty services by population and age, engage in research, and offer a full range of complete assessment (biological and psychological). Additionally, the local plan contains the following policies and priorities which warrant consideration in this case: POLICY #3 Services provided by all proposed and existing facilities should be made available to all segments of the resident population regardless of the ability to pay. Priority #1 - Services and facilities should be designed to treat indigent patients to the greatest extend possible, with new project approval based in part on a documented history of provision of services to indigent patients. Priority #2 - Applicants should have documented a willingness to participate in appropriate community planning activities aimed at addressing the problem of financing for the medically indigent. POLICY #4 Providers of health services are expected to the extent possible to insure an improvement of the quality of health services within the district. Priority #1 - Applicants for certificate of need approval should document either their intention or experience in meeting or exceeding the standards promulgated for the provision of services by the appropriate national accreditation organization. Priority #2 - Each applicant for certificate of need approval should have an approved Patient Bill of Rights' `as part of the institution's internal policy. POLICY #5 Specialized inpatient psychiatric treatment services should be available by age, group and service type. For example, programs for dually diagnosed mentally ill substance abusers, the elderly, and children, should be accessible to those population groups. Priority #1 - Applicants should be encouraged to expand or initiate specialized psychiatric treatment services. The FRTC application is consistent with the local health plan. FRTC's program elements and facility design are consistent with those mandated by the local plan for mental health facilities, and its proposal offers a wide range of services, including follow-up care. FRTC intends to provide a minimum of 1.5 percent of its patient day allotment to indigent children and adolescents, and will seek JCAH accreditation and CHAMPUS approval. The state health plan addresses services similar to those being proposed by FRTC, and contains the following pertinent policies and statements: Mental health services are designed to provide diagnosis, treatment and support of individuals suffering from mental illness and substance abuse. Services encompass a wide range of programs which include: diagnosis and evaluation, prevention, outpatient treatment, day treatment, crisis stabilization and counseling, foster and group homes, hospital inpatient diagnosis and treatment, residential treatment, and long term inpatient care. These programs interact with other social and economic services, in addition to traditional medical care, to meet the specific needs of individual clients. STATE POLICIES As the designated mental health authority' for Florida, HRS has the responsibility for guiding the development of a coordinated system of mental health services in cooperation with local community efforts and input. Part of that responsibility is to develop and adopt policies which can be used to guide the development of services such that the needs of Florida residents are served in an appropriate and cost effective manner. Policies relating to the development of mental health services in Florida are contained in Chapter 394 and Chapter 230.2317, F.S. The goal of these services is: '... reduce the occurrence, severity, duration and disabling aspects of mental, emotional, and behavioral disorders.' (Chapter 394, F.S.) '... provide education; mental health treatment; and when needed, residential services for severely emotionally disturbed students.' (Chapter 230.2317, F.S.) Within the statutes, major emphasis has also been placed on patient rights and the use of the least restrictive setting for the provision of treatment. 'It is further the policy of the state that the least restrictive appropriate available treatment be utilized based on the individual needs and best interests of the patient and consistent with optimum improvement of the patient's condition.' (Chapter 394.459(2)(b), F.S.) 'The program goals for each component of the network are'... 'to provide programs and services as close as possible to the child's home in the least restrictive manner consistent with the child's needs.' (Chapter 230.2317(1)(b), F.S.) Additional policies have been developed in support of the concept of a 'least restrictive environment' and address the role of long and short term inpatient care in providing mental health services for severely emotionally disturbed (SED) children. These include: 'State mental hospitals are for those adolescents who are seriously mentally ill and who have not responded to other residential treatment programs and need a more restrictive setting.' (Alcohol, Drug Abuse and Mental Health Program Office, 1982) 'Combined exceptional student and mental health services should be provided in the least restrictive setting possible. This setting is preferably a school or a community building rather than a clinical or hospital environment.' (Office of Children Youth and Families, 1984) 'Alternative, therapeutic living arrangements must be available to SED students in the local areas, when family support is no longer possible, so that they may continue to receive services in the least restrictive way possible.' (Office of Children Youth and Families, 1984) 'SED students should not be placed in residential schools or hospitals because of lack of local treatment resources, either educational or residential.' (Office of Children Youth and Families, 1984). * * * Sufficient funding for the development of residential treatment and community support is necessary if the state is to fulfill its commitment to providing services for long term mentally ill persons. These services provide, in the long run, a more humane and cost effective means of meeting the mental health needs of Florida residents. Community services have been shown to be effective in rapidly returning the majority of individuals to their productive capacity and reducing the need for costly long term, institutional mental health services. There is, therefore, a need to proceed as rapidly as possible with the development of publicly funded services in those districts which are currently experiencing problems resulting from gaps in services. * * * Services for Adolescents and Children An additional issue which has been identified as a result of increased pressures for development of hospital based programs is the need to differentiate between services for adults and those for children and adolescents. Existing policy supports the separation of services for children and adolescents from those of adults and requires the development of a continuum of services for emotionally disturbed children. The actual need for both long and short term inpatient services for children and adolescents is relatively small compared to that of adults but is difficult to quantify. Providers, however, continue to request approval for long and short term adolescent and children services as a means of gaining access to the health care market. Continued development of long and short term inpatient hospital programs for the treatment of adolescents and children is contrary to current treatment practices for these groups and is, therefore, inappropriate without local data to support the need for these services. Such development can contribute to inappropriate placement, unnecessary costs of treatment, and divert scarce resources away from alternative uses. In addition, the following pertinent goals are contained in the state health plan: GOAL 1: ENSURE THE AVAILABILITY OF MENTAL HEALTH AND SUBSTANCE ABUSE SERVICES TO ALL FLORIDA RESIDENTS IN A LEAST RESTRICTIVE SETTING. * * * GOAL 2: PROMOTE THE DEVELOPMENT OF A CONTINUUM OF HIGH QUALITY, COST EFFECTIVE PRIVATE SECTOR MENTAL HEALTH AND SUBSTANCE ABUSE TREATMENT AND PREVENTIVE SERVICES. * * * GOAL 3: DEVELOP A COMPLETE RANGE OF ESSENTIAL PUBLIC MENTAL HEALTH SERVICES IN EACH HRS DISTRICT. * * * OBJECTIVE 3.1.: Develop a range of essential mental health services in each HRS district by 1989. * * * OBJECTIVE 3.2.: Place all clients identified by HRS as inappropriately institutionalized in state hospitals in community treatment settings by July 1, 1989. RECOMMENDED ACTIONS: 3.2a.: Develop a complete range of community support services in each HRS district by July 1, 1989. * * * OBJECTIVE 3.3.: Develop a network of residential treatment settings for Florida's severely emotionally disturbed children by 1990. The FRTC application is consistent with the state health plan which emphasizes the trend toward deinstutionalization, and the importance of education, treatment and residential services for severely emotionally disturbed children and adolescents rather than the traditional approach of institutional placement. Deinstutionalization assures more appropriate placement and treatment of patients, and is less costly from a capital cost and staffing perspective. The FRTC application also promotes treatment within the state, and will assist in reducing out-of-state placements. Need for the proposed facility The Department has not adopted a rule for the review of applications for IRTPs, and has no numeric need methodology to assess their propriety. Rather, because of the paucity of such applications and available data, the Department reviews each application on a case by case basis and, if it is based on reasonable assumptions and is consistent with the criteria specified in Section 381.705, Florida Statutes, approves it. In evaluating the need for an IRTP, the Department does not consider other residential treatment facilities in the district, which are not licensed as IRTP's and which have not received a CON, as like and existing health care services because such facilities are subject to different licensure standards. Under the circumstances, the Department's approach is rational, and it is found that there are no like and existing health care services in the district. While there are no like and existing health care services in the district, there are other facilities which offer services which bear some similarity to those being proposed by FRTC. These facilities include short-term and long-term residential treatment facilities, therapeutic foster homes and therapeutic group homes. These facilities are, however, operating at capacity, have waiting lists, and do not in general offer the breath or term of service proposed by FRTC. There are also short-term and long-term psychiatric hospitals within the district that include within their treatment modalities services similar to those proposed by the applicant. The short-term facilities are not, however, an appropriate substitute for children and adolescents needing long-term intensive residential treatment and neither are the long-term facilities from either a treatment or cost perspective. Notably, there are only 15 long term psychiatric beds in Broward County dedicated to adolescents, and none dedicated to children. In addition to the evident need to fill the gap which exists in the continuum of care available to emotionally disturbed children and adolescents in Broward County, the record also contains other persuasive proof of the reasonableness of FRTC's proposal. This proof, offered through Dr. Ronald Luke, an expert in health planning whose opinions are credited, demonstrated the need for and the reasonableness of FRTC's proposed 60-bed facility. Dr. Luke used two persuasive methodologies which tested the reasonableness of FRTC's 60-bed proposal. The first was a ratio of beds per population methodology similar to the rule methodology the Department uses for short-term psychiatric beds. Under this methodology, approval of FRTC's proposal would result in 25.47 beds per 100,000 population under 18 in District X. This ratio was tested for reasonableness with other available data. Relevant national data demonstrates an average daily census of 16,000 patients in similar beds. This calculates into 24.01 beds per 100,000 at a 90 percent occupancy rate and 25.93 beds per 100,000 at an 85 percent occupancy rate. Additionally, Georgia has a category of beds similar to IRTP beds. The Georgia utilization data demonstrates a pertinent ratio of 27.05 beds per 100,000 population. The second methodology used by Dr. Luke to test the reasonableness of FRTC's proposal, was to assess national utilization data for "overnight care in conjunction with an intensive treatment program." The national census rate in such facility per 100,000 population for persons under 18 was 21.58. Multiplying such rate by the district population under 18, derives an average daily census of 52. Assuming an optimal occupancy rate of 85 percent, which is reasonable, this demonstrates a gross need for 61 IRTP beds in District X. Dr. Luke's conclusions not only demonstrate the reasonableness of FRTC's proposal, but corroborate the need for such beds within the district. This proof, together with an analysis of existing or similar services, existing waiting lists for beds at similar facilities, and the placement by the Department of 28 children from Broward County outside the county in 1986 for long-term residential treatment, demonstrates the need for, and reasonableness of, FRTC's proposal. Quality of care The parties have stipulated that Charter and its hospitals provide quality short and long term psychiatric care. All of Charter's psychiatric hospitals are JCAH accredited, and Charter will seek JCAH accreditation and CHAMPUS approval for the proposed facility. Based on Charter's provision of quality psychiatric care, its experience in providing intensive residential treatment, and the programs proposed for the Broward County facility, it is found that quality intensive residential treatment will be provided at the FRTC facility. The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. The parties have stipulated that FRTC has available resources, including management personnel and funds for capital and operating expenditures, for project accomplishment and operation. The proof further demonstrates that FRTC will be able to recruit any other administrative, clinical or other personnel needed for its facility. 1/ Accessibility to all residents FRTC projects the following utilization by class of pay: Insurance 66.5 percent, private pay 25 percent, indigent 1.5 percent, and bad debt 7 percent. While this is an insignificant indigent load, FRTC has committed to accept state-funded patients at current state rates. FRTC's projected utilization by class of pay is reasonable. The evident purpose of FRTC's application is to permit its licensure as a hospital under Section 395.002, Florida Statutes, and thereby permit it to be called a "hospital." If a residential treatment facility is licensed as a hospital it has a significant advantage over unlicensed facilities in receiving reimbursement from third party payors. Therefore, accessibility will be increased for those children and adolescents in need of such care whose families have insurance coverage since it is more likely that coverage will be afforded at an IRTP licensed as a "hospital" than otherwise. Design considerations The architectural design for the FRTC facility was adopted from a prototype short-term psychiatric hospital design which Charter has constructed in approximately 50 locations. This design contains the three essential components for psychiatric facilities: administration, support and nursing areas. The floor plan allows easy flow of circulation, and also allows for appropriate nursing control through visual access to activities on the floor. This design is appropriate for the purposes it will serve, and will promote quality residential care. As initially proposed, the facility had a gross square footage of 31,097 square feet. At hearing, an updated floor plan was presented that increased the gross square footage by 900 square feet to 32,045, an insignificant change. In the updated floor plan the recreational component was increased from a multipurpose room to a half-court gymnasium, an additional classroom was added, and the nursing unit was reduced in size to create an assessment unit. The updated floor plan is an enhancement of FRTC's initial proposal, and is a better design for the provision of long-term residential care to children and adolescents than the initial design. While either design is appropriate, acceptance of FRTC's updated floor plan is appropriate where, as here, the changes are not substantial. Financial feasibility As previously noted, the parties have stipulated that FRTC has the available funds for capital and operating expenses, and that the project is financially feasible in the immediate term. At issue is the long-term financial feasibility of the project. FRTC presented two pro forma calculations to demonstrate the financial feasibility of the project. The first pro forma was based on the application initially reviewed by the Department. The second was based on the proposal presented at hearing that included the changes in staffing pattern and construction previously discussed. Both pro formas were, however, based on the assumption than the 60-bed facility would achieve 50 percent occupancy in the first year of operation and 60 percent occupancy in the second year of operation, that the average length of stay would be 365 days, and that the daily patient charge in the first year of operation would be $300 and in the second year of operation would be $321. These are reasonable assumptions, and the proposed charges are reasonable. The projected charges are comparable to charges at other IRTP's in Florida, and are substantially less than those of acute psychiatric hospitals. For example, current daily charges at Charter Hospital of Miami are $481, and FPC anticipates that its average daily charge will be $500. FRTC projects its utilization by class of pay for its first year of operation to be as follows: Insurance (commercial insurance and CHAMPUS) 65.5 percent, private pay 25 percent, indigent 1.5 percent, and bad debt 8 percent. The projection by class of pay for the second year of operation changes slightly based on the assumption that, through experience, the bad debt allowance should decrease. Consequently, for its second year of operation FRTC projects its utilization by class of pay to be as follows: Insurance (commercial insurance and CHAMPUS) 66.5 percent, private pay 25 percent, indigent 1.5 percent, and bad debt 7 percent. These projections of utilization are reasonable. FRTC's pro forma for the application initially reviewed by the Department demonstrates an estimated net income for the first year of operation of $97,000, and for the second year of operation $229,000. The updated pro forma to accommodate the changes in staffing level and construction, demonstrates a $102,000 loss in the first year of operation and a net income in the second year of operation of $244,000. The assumptions upon which FRTC predicated its pro formas were reasonable. Accordingly, the proof demonstrates that the proposed project will be financially feasible in the long-term. Costs and methods of construction The estimated project cost of the FRTC facility, as initially reviewed by the Department, was $4,389,533. The estimated cost of the project, as modified at hearing, was $4,728,000. This increase was nominally attributable to the change in architectural design of the facility which increased the cost of professional services by approximately $7,500 and construction costs by $139,322. Of more significance to the increased cost of the project was the increase in land acquisition costs which raised, because of appreciation factors, from $750,000 to $1,000,000. The parties stipulated to the reasonableness of the majority of the development costs and most of the other items were not actively contested. Petitioners did, however, dispute the reasonableness of FRTC's cost estimate for land acquisition and construction supervision. The proof supports, however the reasonableness of FRTC's estimates. FRTC has committed to construct its facility south of State Road 84 or east of Interstate 95 in Broward County, but has not, as yet, secured a site. It has, however, allocated $1,000,000 for land acquisition, $200,281 for site preparation exclusive of landscaping, and $126,000 for construction contingencies. The parties have stipulated to the reasonableness of the contingency fund, which is designed as a safety factor to cover unknown conditions such as unusually high utility fees and unusual site conditions. Totalling the aforementioned sums, which may be reasonably attributable to land acquisition costs, yields a figure of $1,326,281. Since a minimum of 6 acres is needed for project accomplishment, FRTC's estimate of project costs contemplates a potential cost of $221,047 per acre. In light of the parties' stipulation, and the proof regarding land costs in the area, FRTC's estimate for land acquisition costs is a reasonable planning figure for this project. FRTC budgeted in its estimate of project costs $6,000 for the line item denoted as "construction supervision (Scheduling)." Petitioners contend that construction supervision will far exceed this figure, and accordingly doubt the reliability of FRTC's estimate of project costs. Petitioners' contention is not persuasive. The line item for "Construction supervision (Scheduling)" was simply a fee paid to a consultant to schedule Charter's projects. Actual on site supervision will be provided by the construction contractor selected, Charter's architect and Charter's in-house construction supervision component. These costs are all subsumed in FRTC's estimate of project cost. FRTC's costs and methods of proposed construction, including the costs and methods of energy efficiency and conservation, are reasonable for the facility initially reviewed by the Department and the facility as modified at hearing. The petitioners FPC, a Florida partnership, received a certificate of need on May 9, 1986, to construct a 100-bed short term psychiatric and substance abuse hospital in Broward County. At the time of hearing, the FPC facility was under construction, with an anticipated opening in May 1988. Under the terms of its certificate of need, the FPC facility will consist of 80 short-term psychiatric beds (40 geriatric, 25 adult, and 15 adolescent) and 20 short-term substance abuse beds. Whether any of the substance abuse beds will be dedicated to adolescent care is, at best, speculative. The principals of FPC have opined at various times, depending on the interest they sought to advance, that 0, 5, or 20 of such beds would be dedicated to adolescent care. Their testimony is not, therefore, credible, and I conclude that FPC has failed to demonstrate than any of its substance abuse beds will be dedicated to adolescent care and that none of its treatment programs will include children. As a short term psychiatric hospital, FPC is licensed to provide acute inpatient psychiatric care for a period not exceeding 3 months and an average length of stay of 30 days or less for adults and a stay of 60 days or less for children and adolescents under 18 years. Rule 10-5.011(1)(o), Florida Administrative Code. While its treatment modalities and programs may be similar to those which may be employed by FRTC, FPC does not provide long-term residential treatment for children and adolescents and its services are not similar to those being proposed by FRTC. Notably, FPC conceded that if the patients admitted by FRTC require treatment lasting from 6 months to 2 years, there will be no overlap between the types of patients treated at the two facilities. As previously noted, the proof demonstrates that the length of stay at the FRTC facility was reasonably estimated to be 6 months to 2 years, with an average length of stay of 1 year. Under the circumstances, FPC and FRTC will not compete for the same patients. As importantly, there is no competent proof that FRTC could capture any patient that would have been referred to FPC or that any such capture, if it occurred, would have a substantial impact on FPC. Accordingly, the proof fails to demonstrate that FPC will suffer any injury in fact as a consequence of the proposed facility. SBHD is an independent taxing authority created by the legislature. Pertinent to this case, SBHD owns and operates the following facilities in Broward County: Memorial Hospital of Hollywood, 1011 North 35th Avenue, Hollywood, Florida, and Memorial Hospital Share Program, 801 S.W. Douglas Road, Pembroke Pines, Florida. Memorial Hospital of Hollywood is a general acute care hospital, with 74 beds dedicated to short-term psychiatric care. These beds are divided between three units: two closed units for acute care (42 beds) and one open unit (32 beds). There is no unit specifically dedicated to the treatment of adolescents, and Memorial does not admit any psychiatric patient under the age of 14. When admitted, adolescents are mixed with the adult population. From May 1987 through January 1988, Memorial admitted only 5-10 adolescents (ages 14-18). Their average length of stay was 12-14 days. Memorial Hospital Share Program is a 14-bed inpatient residential treatment program for individuals suffering from chemical dependency. No patient under the age of 18 is admitted to this program, which has an average length of stay of 27 days. SBHD contends that its substantial interests are affected by this proceeding because approval of FRTC's facility would result in the loss of paying psychiatric and residential treatment patients that would erode SBHD's ability to provide services to the indigent, and would, due to a shortage of nursing, recreational therapy and occupational therapists who are skilled and trained in the care of psychiatric patients, affect the quality of care at its facility and increase costs for recruiting and training staff. Due to the paucity of competent proof, SBHD's concerns are not credited, and it has failed to demonstrate that its interests are substantially affected by these proceedings. Succinctly, SBHD offered no proof concerning any staffing problems it was encountering and no proof of any disparity that might exist between wages and benefits it offers its employees and those to be offered at the FRTC facility. In sum, it undertook no study from which it could be reasonably concluded that the FRTC facility would adversely impact its staffing or otherwise increase the cost of recruiting and training staff. Likewise, SBHD undertook no study and offered no credible proof that the FRTC facility would adversely impact it financially. In fact, the FRTC facility will not treat the same patient base that is cared for by SBHD.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that FRTC's application for certificate of need, as updated, be granted, subject to the special condition set forth in conclusions of law number 12. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 7th day of September, 1988. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of September, 1988.
The Issue The issue is whether Hialeah Hospital, Inc. may be licensed for a 21-bed psychiatric unit, without first obtaining a certificate of need, on the basis that it provided psychiatric services before a certificate of need was statutorily required.
Findings Of Fact Background of the Controversy The Parties The Department of Health and Rehabilitative Services (the Department) is responsible for determining whether health care projects are subject to review under the Health Facility and Services Development Act, Sections 381.701- 381.715, Florida Statutes. It also licenses hospitals under Chapter 395, Florida Statutes. The Department's Office of Community Medical Facilities renders decisions about requests for grandfather status which would exempt a psychiatric service offered at hospital from certificate of need review. The Department's Office of Licensure and Certification issues licenses but does not grant grandfather exemptions. A hospital will not receive separate licensure for psychiatric beds unless a certificate of need has been obtained for those beds, or the beds are in a psychiatric unit which had been organized before certificate of need review was required. See Section 381.704(2), Florida Statutes (1987). A hospital can provide inpatient psychiatric services to a patient in one of three ways: a) as a patient housed among the general hospital population, b) as a patient housed in a special unit organized within the hospital and staffed by doctors, nurses and other personnel especially to serve patients with psychiatric diagnoses, or c) in a hospital organized as a psychiatric specialty hospital. Serving patients through methods b and c requires special certificate of need approval and licensure. Most community hospitals place psychiatric patients among the general patient population; few hospitals create a distinct psychiatric unit; fewer hospitals still specialize as psychiatric hospitals. Hialeah Hospital, Inc. is a 411-bed general hospital in Hialeah, Florida. It does not currently hold a certificate of need for licensure of a distinct psychiatric unit. As a result, its reimbursement for psychiatric services from the Federal government for Medicare patients is limited. The Health Care Finance Administration (HCFA) generally reimburses hospitals for services based upon flat rates which are paid according to categories known as diagnostic related groups. Hialeah Hospital now receives reimbursement for services it renders to psychiatric patients on this basis. If it is entitled to a grandfather exemption from certificate of need review, and its distinct psychiatric unit is separately licensed by the Department, Hialeah Hospital will receive cost-based reimbursement for services to psychiatric patients, which will result in higher income to the hospital. Approval of the grandfathering request will not result in a) any capital expenditure by the hospital, b) the addition of staff, or c) a change in the type of services currently offered at the hospital. Just before July 1, 1983, the hospital had an average daily census of 16-17 psychiatric patients. If the psychiatric services the hospital has offered do not qualify for grandfathering, Hialeah Hospital may apply for a certificate of need for a distinct psychiatric unit. Even without a psychiatric certificate of need, Hialeah is still entitled to continue to serve patients with psychiatric diagnoses among its general population, and to receive the lower diagnostic related group reimbursement for those services from HCFA. Palmetto General Hospital is a licensed general hospital with 312 acute care beds and 48 separately licensed psychiatric short-term beds operated as a distinct psychiatric unit. It is located near Hialeah Hospital, and both hospitals serve the same geographic area. The primary markets of both hospitals overlap. They compete for patients, including psychiatric patients. Agency Action Under Review From 1973 to 1979 the license issued to Hialeah Hospital by the Department bore a designation for 21 psychiatric beds, based on information submitted in the hospital's licensure application. The hospital then dropped the psychiatric bed count from its licensure applications. This change probably was caused by a problem generated by an announcement from the Northwest Dade Community Health Center, Inc., the receiving facility for psychiatric emergencies in northwestern Dade County, which includes Hialeah. That center had written to the Hialeah Police Department, informing the police that when the center was not open, it had a crisis worker at the Hialeah Hospital emergency room, and that persons needing involuntary psychiatric hospitalization should be taken to the Hialeah Hospital emergency room. The only other hospital in Hialeah treating psychiatric patients was Palmetto General Hospital, which did not accept, as a general rule, patients who could not pay for care. The Hialeah Police Department thereafter began dropping psychiatric patients at Hialeah Hospital, much to the distress of the Hialeah Hospital emergency room staff. The Hospital thereafter dropped the designation of any of its beds as psychiatric beds on its annual licensure applications. It still received psychiatric patients from Jackson Memorial Hospital when that hospital reached its capacity for psychiatric patients. On its 1980 licensure application Hialeah Hospital collapsed all of its medical, surgical and psychiatric beds into a single figure. This was consistent with its practice of serving medical, surgical and psychiatric patients throughout the hospital. Hialeah Hospital filed similar licensure applications in 1981, 1982, 1983. In 1984 there was a dispute over the total number of beds to be licensed, which was resolved in early 1985. In 1985, after a change in the licensing statute which is discussed below, the Department informed Hialeah Hospital that its application for licensure was incomplete and could not be processed until Hialeah explained its basis for seeking separate licensure for 20 short-term psychiatric beds. In its response, Hialeah's Vice President stated: [W]e felt it was appropriate to indicate that Hialeah Hospital did accept psychiatric admissions. These patients have been randomly placed in the institution, many times based on other primary or secondary diagnoses. The application indicates bed usage, not that it is currently a discrete unit. Hialeah Hospital does currently have a Letter of Intent [on file] for establishment of a discrete med/psych unit. Hialeah Ex. 24a On August 1, 1985, the Department's Office of Licensure and Certification informed Hialeah Hospital by certified mail that the application for licensure of 20 short-term psychiatric beds was denied for failure to have obtained a certificate of need for them or to have obtained an exemption from review [both could only come from the Department's Office of Community Medical Facilities]. The hospital was provided a clear point of entry to challenge this determination through a proceeding under Chapter 120, Florida Statutes, but Hialeah filed no petition for review of that decision. Instead, Hialeah pursued the certificate of need application which it had filed in April, 1985 for separately licensed psychiatric beds. There was no reason to challenge the August 1, 1985, denial because the factual bases alleged by the Department were true--the hospital had no certificate of need for psychiatric beds and had not yet asked the Department's Office of Community Health Facilities to decide whether Hialeah qualified for grandfathered beds. On October 21 and 23, 1986, Hialeah Hospital wrote to the Office of Community Health Facilities seeking a determination that it was entitled to have 21 pyschiatric beds grandfathered on its license. In certificate of need application 4025 Hialeah Hospital sought the establishment of a distinct 69 bed psychiatric unit at Hialeah, with separately licensed beds. The application went to hearing and was denied on its merits on February 17, 1987, in DOAH Case 85-3998. In his recommended order, the Hearing Officer discussed the issue of whether Hialeah Hospital was exempt from certificate of need review because it already had a psychiatric unit. He found that the issue was not appropriately raised in the proceeding before him, which was Hialeah Hospital's own application for a certificate of need to establish a psychiatric unit. He therefore found he lacked jurisdiction to consider the grandfathering issue. Hialeah Hospital v. HRS, 9 FALR 2363, 2397, paragraph 5 (HRS 1987). The Department adopted that ruling in its May 1, 1987, final order. Id. at 2365. A letter dated December 5, 1986, from the Office of Community Medical Facilities denied Hialeah's request to grandfather 21 short-term psychiatric beds on its license and thereby exempt them from certificate of need review, as requested in Hialeah's letters of October 21 and 23, 1986. The Department denied the grandfathering request for four reasons: When the Department conducted a physical plant survey on June 1, 1980, there were no psychiatric beds in operation at the hospital; The hospital bed count verification form returned to the Department on January 31, 1984 by the Director of Planning for Hialeah, Gene Samnuels, indicated that the hospital had no psychiatric beds; An inventory of psychiatric beds had been published by the Department in the Florida Administrative Weekly on February 17, 1984 which showed that Hialeah Hospital had no psychiatric beds, and Hialeah never contested that inventory; The Department had not received evidence demonstrating that psychiatric services were provided "in a separately set up and staffed unit between 1980 and 1985." This letter again gave Hialeah a point of entry to challenge the Department's decision to deny licensure of psychiatric beds and it was the genesis of Hialeah's petition initiating this case. It is significant that the Department's Office of Community Health Facilities gave Hialeah a clear point of entry to challenge the December 5, 1986, grandfathering denial with full knowledge that the Department's Office of Licensure and Certification had denied a request from Hialeah Hospital on August 1, 1985, to endorse psychiatric beds on Hialeah's 1985 license. The Departmental personnel knew that those two denials involved different issues. Once the Office of Licensure and Certification told the hospital it had to produce either a certificate of need or a grandfathering approval to have psychiatric beds endorsed on its license, the hospital had to turn to the Office of Community Health Facilities to get a ruling on its grandfathering claim. The letter of December 5, 1986, was the first ruling on the merits of Hialeah Hospital's claim that it was entitled to have 21 beds grandfathered. History of the Department's Specialty Bed Recognition Psychiatric Beds in Florida Hospitals Before July 1, 1983 Before April 1, 1983 no state statute or Department rule required that psychiatric beds in a hospital be located in physically distinct units. Psychiatric patients could be located throughout a hospital. They were not required to be placed in rooms having distinguishing characteristics, or to use group therapy rooms, dining rooms, or other rooms exclusively dedicated to use by psychiatric patients. There were, of course, hospitals that had distinct psychiatric units, and some entire hospitals which were specifically licensed as psychiatric hospitals. After 1983, a hospital had to obtain a certificate of need to organize what had previously been diffuse psychiatric services into a distinct unit dedicated to serving patients with psychiatric diagnoses. Today no special certificate of need is required to serve psychiatric patients in the general hospital population, but without separate licensure the hospital receives Medicare reimbursement from the federal government for psychiatric patients at the level established by the diagnostic related groups, not cost based reimbursement. Before July 1, 1983 annual hospital licensure application forms asked hospitals to identify their number of psychiatric beds as an item of information. The hospital licenses issued, however, were based on the hospital's total number of general medical-surgical beds, a category which included psychiatric beds. The 1983 Amendments to the Florida Statutes and the Department's Rules on Specialty Beds In April of 1983, the Department adopted a rule which established a separate need methodology for short-term psychiatric beds, Rule 10-5.11(1)(o), Florida Administrative Code. Thereafter, the Legislature amended the statutes governing the hospital licensing, Section 395.003, Florida Statutes (1983) by adding a new subsection (4) which read: The Department shall issue a license which specifies the number of hospital beds on the face of the license. 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 s. 381.494 shall be specified on the face of the hospital license. All beds which are not covered by any specialty bed need methodology shall be specified as general beds. Section 4, Chapter 83-244, Laws of Florida (underlined language was added). In the same Act, the Legislature amended the planning law to require hospitals to apply for certificates of need to change their number of psychiatric and rehabilitation beds. Section 2, Chapter 83-244, Laws of Florida, codified as Section 381.494(1)(g), Florida Statutes (1983). The Department's rules defined short-term psychiatric services as: [A] category of services which provide a 24- hour a day therapeutic milieu for persons suffering from mental health problems which are so severe and acute that they need intensive, full-time care. Acute psychiatric inpatient care is defined as a service not exceeding three months and averaging a length of stay of 30 days or less for adults and a stay of 60 days or less for children and adolescents under 18 years. Rule 10- 5.11(25)(a), Florida Administrative Code (1983), effective April 7, 1983. A minimum size for any new psychiatric unit was prescribed in Rule 10- 5.11(25)(d)7., which states: In order to assure specialized staff and services at a reasonable cost, short-term inpatient psychiatric hospital based services should have at least 15 designated beds. Applicants proposing to build a new but separate psychiatric acute care facility and intending to apply for a specialty hospital license should have a minimum of 50 beds. After the effective date of the rule, April 7, 1983, no hospital could organize its psychiatric services into a distinct psychiatric unit using specialized staff unless the unit would have at least 15 beds. This did not mean that a hospital which already had organized a distinct psychiatric unit using specialized staff had to have at least 15 beds in its unit to continue operation. Whatever the number of beds, whether fewer or greater than 15, that number had to appear on the face of the hospital's license. Section 395.003(4), Florida Statutes (1983). To change that number, the hospital had to go through the certificate of need process. Section 381.494(1)(g) Florida Statutes (1983). Those hospitals whose pre-existing units were endorsed on their licenses can be said to have had those units "grandfathered". There is no specific statutory exemption from certificate of need review for pre-existing units, but such treatment is implicit in the regulatory scheme. The Department's Grandfather Review Process To know which hospitals were entitled to continue to operate discrete psychiatric units without obtaining a certificate of need, the Department's Office of Community Medical Facilities had to identify hospitals which had separate psychiatric units before the July 1, 1983, effective date of Section 395.003(4), Florida Statutes (1983). An inventory of beds in the existing psychiatric units also was necessary to process new certificate of need applications. The Department's rule methodology authorized additional beds in psychiatric units based upon a projected need of 15 beds per 10,000 population. Rule 10-5.11(25)(d)1., Florida Administrative Code (1983). The Legislature approved the psychiatric service categories which the Department had already adopted by rule when it enacted Section 4 of Chapter 83- 244, Laws of Florida. The Legislature thereby validated a process the Department had initiated in 1976 with its Task Force on Institutional Needs. That group had developed methodologies to be used throughout the state to determine the need for different types of medical services, because local health systems agencies were reviewing CON applications based upon idiosyncratic methodologies. To develop review criteria for psychiatric services, the Task Force had to both define psychiatric services and determine how it should measure them. In doing so, the Department looked for assistance to publications of entities such as the American Hospital Association and the Joint Commission on Accreditation of Hospitals. According to the American Hospital Association, psychiatric services are services delivered in beds set up and staffed in units specifically designated for psychiatric services. In the Task Force report, a psychiatric bed was defined as: A bed in a clinical care unit located in a short-term, acute care hospital or psychiatric hospital which is not used to provide long-term institutional care and which is suitably equipped and staffed to provide evaluation, diagnosis, and treatment of persons with emotional disturbances. An inpatient care unit or clinical care unit is a group of inpatient beds and related facilities and assigned personnel in which care is provided to a defined and limited class of patients according to their particular care needs. HRS Exhibit 14 at 92 and 1-5. The definition of a psychiatric bed in the Report of the Department Task Force on Institutional Needs is compatible with the requirements of the Florida Hospital Cost Containment Board in its Florida Hospital Uniform Reporting Manual. Reports made by hospitals to the Hospital Cost Containment Board include information about services provided in separately organized, staffed and equipped hospital units. The information provided to the Board assisted the Department in determining which Florida hospitals already were providing psychiatric services in separately organized, staffed and equipped hospital units before separate licensure became necessary. The Department surveyed hospitals to determine the number of existing beds in distinct psychiatric units. It also looked to old certificates of need which referenced psychiatric services at hospitals, reports hospitals had made to the Florida Hospital Cost Containment Board, to past licensure applications the Department had received from hospitals, and to the Department's 1980 physical plant survey. These sources of information were, however, imperfect, for the reasons which follow: 1. Certificates of Need Issued 22. Before July 1, 1983, certificates of need were required for the initiation of new services which involved capital expenditures above a certain threshold dollar amount. Hospitals which had a long-standing psychiatric units would have had no occasion to request a certificate of need for psychiatric services. Review of certificates issued would not turn up a hospital with a mature psychiatric service. 2. Hospital Cost Containment Board Information 23. The reports from hospitals during the early years of the Hospital Cost Containment Board are not entirely reliable, because the hospitals did not yet have uniform accounting systems in place, despite the Board's attempt to establish uniform accounting methods through its reporting system manual. Hospitals commonly made errors in their reports. If the reports were prepared correctly, they would identify hospitals with discrete psychiatric units. Hialeah's HCCB Reports for 1981, 1982 and 1983 indicated that the hospital had no active psychiatric staff, no psychiatric beds and no psychiatric services. 3. Departmental Survey Letters 24. In Spring, 1983, the Department tried to verify the existing inventory of beds for specialty services such as psychiatric services, comprehensive medical rehabilitation services and substance abuse services. There is no record, however, that this survey letter was sent to Hialeah Hospital. In late 1983 or early 1984, the Department again attempted to establish inventories for psychiatric beds and rehabilitation beds. It distributed a cover letter and a form entitled "Hospital Bed Count Verification", which asked hospitals to confirm the Department's preliminary count of the hospital's "number of licensed beds". Hialeah's planner returned the form verifying that Hialeah Hospital was licensed for 411 "acute general" beds and that it had no short or long term psychiatric beds. The answer was correct, for that is the figure which appeared on Hialeah's license at that time. The Department did not ask the hospitals for an average daily census of short-term psychiatric patients. The cover letter for the survey form told hospital administrators that the Department was seeking to verify its preliminary bed count for services for which a special bed need methodology had been established, viz., long and short term psychiatric beds, substance abuse beds and comprehensive medical rehabilitation beds. The cover letter drew attention to the Department's intention to use the data collected from the responses to the form as a beginning inventory for short-term psychiatric beds. The cover letter also cautioned hospitals that when completing the form, they should "keep in mind the service definitions". Copies of the definitions were attached to the form. The appropriate inference to be drawn from the answer given by Hialeah Hospital to the survey form was that in January, 1984, the hospital had no beds organized into a short term psychiatric unit. This is consistent with the later letter from the hospital's vice president quoted in Finding of Fact 6, above. The Department published on February 17, 1984, its base inventory of psychiatric and rehabilitation beds in the Florida Administrative Weekly. The publication stated that "any hospital wishing to change the number of beds dedicated to one of the specific bed types listed will first be required to obtain a certificate of need." 10 Florida Administrative Weekly at 493. Hialeah was shown as having no psychiatric beds. Id. at 498. The notice did not specifically inform the hospitals of the right to petition for a formal hearing to challenge the inventory figures published. 4. Licensure Files 25. Although, the Department's licensure application form listed "psychiatric" as a possible hospital bed utilization category before 1983, these categories were set up for informational purposes only. No definitions were given to hospitals describing how beds should be allocated among the categories available on the form, making those figures unreliable. Before 1980 Hialeah Hospital had listed psychiatric beds on its licensure applications, see Finding of Fact 5, above. Since 1980 it listed no psychiatric beds. 5. Physical Plant Survey The Department performed a physical plant survey in 1980 to determine the total number of beds in service at each hospital. That survey did not attempt to make distinctions between different types of services listed on the survey form. The Department's architect who performed the survey did not attempt to evaluate the quality or intensity of the psychiatric services provided at any hospital. Each of the types of information the Department examined to determine the existing inventory of short-term psychiatric beds in 1983 had weaknesses, and no single source is dispositive. It is difficult to credit the assertion that Hialeah Hospital had a distinct psychiatric unit before July, 1983 which was not reflected in any of these sources of information. The use of multiple sources of information served as a cross-check on information from each source. It is understandable that Hialeah would not have applied for a certificate of need to operate a separate psychiatric unit. Before 1983, no such application was needed if the establishment of the unit entailed an expenditure of money below a threshold amount. All of its reports to the Hospital Cost Containment Board, however, indicate that there was no separate psychiatric service at the hospital and that the hospital had no active psychiatric staff. With respect to the Department's survey letters, while the 1984 survey form itself did not specifically inform hospital administrators that their responses would be used to establish a base inventory of psychiatric beds, the cover letter did make that clear. This should have put the hospital's planner, who filled out the form, on notice that if Hialeah had a discrete, short-term psychiatric service the number of beds in that unit should be listed. What is perhaps the most significant point is that the hospital reported no psychiatric beds on its licensure application at all from 1980 to 1985. Medical doctors in general practice can and do treat psychiatric patients, in addition to doctors who specialize in psychiatry. No doubt patients commonly were admitted to the hospital who had primary diagnoses of psychiatric illnesses. The hospital's licensure filings, however, since 1979 fail to record any psychiatric beds. This is important evidence that the hospital did not regard itself as having any distinct unit organized to provide psychiatric care. The Hospital's 1985 correspondence from the Hospital's vice president to the Department, quoted in Finding of Fact 6 confirms this. The failure to list any psychiatric beds at Hialeah on the Department's 1980 physical plant survey is not significant, since determining the number of psychiatric beds was not the focus of that survey. It is true that the Department never conducted site visits at all hospitals to determine whether they had a) distinct psychiatric units, b) psychiatric medical directors, c) written psychiatric admission and treatment policies, or d) psychiatric policy and procedures manuals. The efforts the Department did make to establish the beginning inventory of psychiatric beds were reasonable, however Hialeah Hospital's Licensure History and Efforts to Obtain Grandfather Status The entries on Hialeah's applications for annual licensure from the Department are cataloged above, and need not be repeated. During the years 1980-84, after it ceased listing psychiatric beds on its licensure application, psychiatric services were still being provided to patients throughout the hospital. In 1984, the hospital engaged in correspondence with the Department over the appropriate number of licensed beds for the hospital as a whole. Ultimately the hospital and the Department agreed that 411 beds should be licensed. In its 1985 licensure application, Hialeah then requested that 20 short-term psychiatric beds be listed on the license. The Office of Licensure and Certification questioned this. Ultimately, the Office of Licensure and Certification refused to endorse those 20 psychiatric beds on the license because there was no certificate of need on file for them, nor any statement from the Office of Community Medical Facilities granting the hospital an exemption from that licensure requirement. Hialeah Hospital did not challenge that decision in a proceeding under Chapter 120, Florida Statutes. The discussions between the hospital and the Department's Office of Community Medical Facilities continued, and by late October, 1986, Hialeah requested the Department to approve 21 short-term psychiatric beds at the facility, and sent the Department backup material which it believed justified a grandfather determination. After review, the Department denied the grandfather request by letter dated December 5, 1986. The Department's Action Regarding Other Grandfathering Requests Hialeah's is not the first request the Department received for grandfathering beds. After June of 1983, when the Legislature required CON approval for hospitals to change their number of psychiatric or rehabilitation beds, a number of institutions made similar requests. 1. Comprehensive Medical Rehabilitation Beds The rule on comprehensive medical rehabilitation beds was developed by the Department at the same time as the rule on psychiatric beds. The Department used a similar process to determine the existing inventory of both types of beds. The Department determined that preexisting comprehensive medical rehabilitation units at Parkway General Hospital, Naples Community Hospital, Orlando Regional Medical Center, Holy Cross Hospital, and University Community Hospital entitled those facilities to grandfathering of their comprehensive medical rehabilitation services. The Department has also determined that a preexisting distinct psychiatric unit at Palmetto General Hospital entitled that institution to grandfather status for its psychiatric beds. Parkway General Parkway General Hospital did not specify rehabilitation beds on its licensure applications for the years 1980 through 1984. The Department denied Parkway's request for endorsement of 12 comprehensive medical rehabilitation beds on its 1985 license because Parkway had not obtained a certificate of need for them or an exemption from review. The Department thereafter determined that Parkway had been providing comprehensive medical rehabilitation services before June, 1983 in a physically distinct and separately staffed unit consisting of 12 beds. It then endorsed 12 beds on Parkway's license, even though the rule which became effective in July, 1983 would require a minimum unit size of 20 beds for any hospital organizing a new comprehensive medical rehabilitation unit. See Rule 10-5.011(24), Florida Administrative Code. Naples Community Hospital The Department granted Naples Community Hospital a grandfather exemption for its rehabilitation beds in February, 1987. In had not listed the rehabilitation beds on its license application for the years 1983-1985, had not returned the Department's bed count verification form, nor did it challenge the bed count which the Department published in the Florida Administrative Weekly. The hospital had applied for and received a certificate of need in January of 1981 to establish a 22-bed rehabilitation unit and that unit began operation in late 1982. The Department ultimately determined that the hospital had provided rehabilitation services in a physically distinct unit and the services were organized and delivered in a manner consistent with applicable regulatory standards. It granted a grandfather request in February, 1987. Orlando Regional Medical Center A grandfather exemption for 16 rehabilitation beds was granted to Orlando Medical Center in 1986. The 16-bed brain injury unit had been authorized by the Department through certificate of need number 2114 before the Department had adopted its rule governing comprehensive medical rehabilitation beds in 1983. The services were provided in a physically distinct unit. The Department determined the 20-bed minimum size for a new unit did not apply to a unit which qualified for grandfathering. Holy Cross Hospital The Department granted a grandfather exemption for comprehensive medical rehabilitation beds to Holy Cross Hospital after a proceeding was filed with the Division of Administrative Hearings to require the Department to recognize the existence of a 20-bed comprehensive medical rehabilitation center. The Department determined by a site visit that Holy Cross had established a separate unit, probably in 1974, long before the Department's comprehensive medical rehabilitation unit rule became effective in July, 1983. The unit had its own policy manual, quality assurance reports, patient screening criteria, and minutes of multidisciplinary team staff conferences. The hospital had neglected to report the unit in its filings with the Hospital Cost Containment Board but the hospital contended that it never treated the unit as a separate unit for accounting purposes, and had not understood the need to report the unit as a distinct one under Hospital Cost Containment Board reporting guidelines. The hospital corrected its reporting oversight. The grandfathering is consistent with the hospital's actual establishment of the unit long before the Department's rules went into effect. University Community Hospital A dispute over whether to grandfather a comprehensive medical rehabilitation unit which went through a Chapter 120 administrative hearing and entry of a final order involved University Community Hospital (UCH). The Department initially determined that the nine comprehensive medical rehabilitation beds at UCH had been in existence before July, 1983 and were exempt from certificate of need review. That decision was challenged in a formal administrative proceeding by a competing hospital, Tampa General. The competitor was successful, for both the Hearing Officer in the recommended order and the Department in the final order determined that University Community Hospital's 9 bed rehabilitation unit was not entitled to be grandfathered. University Community Hospital v. Department of Health and Rehabilitative Services, 11 FALR 1150 (HRS Feb. 14, 1989). In determining that grandfathering was inappropriate, the Department found that the hospital had not prepared separate policies and procedures for its rehabilitation unit before the rule on comprehensive medical rehabilitation beds became effective, and that the unit did not have a physical therapy room on the same floor as the patients. The beds supposedly dedicated to rehabilitative care were mixed with non- rehabilitative beds, so that a semiprivate room might have one bed used for rehabilitative care and another for an unrelated type of care. This conflicted with the requirement that the rehabilitation unit be physically distinct, with all patients and support services located on the same area or floor, rather than scattered throughout the hospital. The Department also determined that many hospitals offer physical therapy, occupational therapy, or speech therapy, but that to qualify as a comprehensive medical rehabilitation center, these services had to be coordinated in a multidisciplinary approach to the patient's needs, which had not been the case at University Community Hospital. The common strand running through the grandfathering decisions on comprehensive medical rehabilitation beds is that grandfathering is appropriate when a hospital demonstrates that before the comprehensive medical rehabilitation rule became effective in July, 1983, it had a separate unit which met the standards and criteria for a comprehensive medical rehabilitation unit (other than the minimum size for new units). Psychiatric Beds Tampa General Hospital Only two cases involve a decision on whether psychiatric services at a hospital qualify for grandfathering. Tampa General Hospital, which was owned by the Hillsborough County Hospital Authority, operated 93 psychiatric beds in 1981, 71 at Hillsborough County Hospital and 22 at Tampa General Hospital. A certificate of need granted in 1981 authorized the expenditure of $127,310,000 for the consolidation of both hospitals and an overall reduction of 14 psychiatric beds after the hospitals were integrated. When the Hillsborough County Hospital Authority obtained its certificate of need, it was not necessary to differentiate between general acute care beds and psychiatric beds for licensure purposes. Increased demand for acute care beds led Tampa General to close its psychiatric unit and make those 22 beds available for ordinary acute care. After the 1983 statutory and rule changes regarding the separate licensure of psychiatric beds, the Hillsborough County Hospital Authority told the Department that Tampa General had no psychiatric beds in operation. On its 1985 licensure application, the Hillsborough County Hospital Authority applied for licensure for 22 psychiatric beds at Tampa General and 77 at Hillsborough Hospital. The Department denied the request for the psychiatric beds at Tampa General. The Final Order entered in Hillsborough County Hospital Authority v. HRS, 8 FALR 1409 (Feb. 16, 1986), determined that there had been a discontinuation in the use of psychiatric beds at Tampa General, and that to allow Tampa General to add psychiatric beds after the statutory and rule changes in 1983 would frustrate the certificate of need process and would be detrimental to good health care planning. Palmetto General Hospital Palmetto General Hospital participated in an administrative hearing in 1975 regarding the disapproval of its proposed expansion, which included the dedication of one floor and 48 beds as a psychiatric unit. The Hearing Officer found that there was a need for psychiatric beds in the community and recommended that the Secretary of the Department issue a certificate of need "for that portion of the applicant's proposed capital expenditures relating to the addition of a 48 bed psychiatric unit". Palmetto General Exhibit 32, at 12, paragraph 2. The order of the Hearing Officer was affirmed by the District Court of Appeal in Palmetto General Hospital, Inc. v. Department of HRS, 333 So.2d 531 (Fla. 1st DCA 1976). The approval of the 48 psychiatric beds is clear only from a review of the Hearing Officer's order. Certificate of Need 292X was issued for the 48 psychiatric beds. Palmetto General exhibit 45. Palmetto received Medicare certification for its psychiatric inpatient unit, and listed 48 short-term psychiatric beds on its licensure applications each year from 1979 to 1983. It failed to show its psychiatric beds on the bed count verification survey form sent by the Department. Palmetto General's chief financial officer told the Department on June 10, 1983 that Palmetto General did not have psychiatric beds in a separately organized and staffed unit. This resulted in the issuance of a license which showed no psychiatric beds. The Department itself wrote to the administrator of Palmetto to learn why the 48 short-term psychiatric beds had not been listed on Palmetto's application for licensure in 1985. Palmetto wrote back and acknowledged that it did have 48 short-term psychiatric beds. A license showing those 48 beds was then issued. Thereafter, staff from the HRS Office of Comprehensive Health Planning took the position that the 48 short-term psychiatric beds should not have been listed on the license, and the Department's Office of Licensure and Certification requested that the 1985 license containing the endorsement for those 48 psychiatric beds be returned to the Department for cancellation. Palmetto then sought an administrative hearing on the attempted cancellation of the license. Palmetto and the Department entered into a Final Order dated March 9, 1986 which agreed that Palmetto met all the requirements for the designation of 48 short-term psychiatric beds on its license. Palmetto, had, in fact, operated a 48 bed psychiatric unit on its third floor since 1981, but moved that unit to the sixth floor in 1985. It was dedicated exclusively to psychiatric patients and there were specific policy and procedure manuals developed and used in dealing with psychiatric patients since 1981. The history of Palmetto's licensure is certainly one replete with contradictions. It is inexplicable that the chief financial officer of the hospital would have told the Department in 1983 that it had no separately organized and staffed psychiatric unit when, in fact, it had such a unit. It was also unclear why it would have shown no psychiatric beds on the bed count verification form returned in late December or early January, 1984, or why its April, 1983, and its 1985/1986 license application forms listed no psychiatric beds. Nonetheless, it had obtained a certificate of need for a psychiatric unit after administrative litigation and an appeal to the District Court of Appeal. The unit was opened and remained continuously in existence. It had appropriate policies and procedures in place for a distinct psychiatric unit as the 1983 statutory and rule amendments required for separate licensure of psychiatric beds. History of Psychiatric Bed Services at Hialeah Hospital Since at least 1958, Hialeah Hospital has had psychiatrists on its medical staff, and the number of psychiatric physicians on staff has increased. Thirteen psychiatrists had admitting privileges at the hospital by 1983; there are now 23 psychiatrists with privileges. As is true with most community hospitals, physicians specializing in psychiatry would admit patients to the general population at Hialeah Hospital if they needed intensive psychotherapy or medication which needed to be monitored by nurses. Patients who were homicidal, suicidal or intensely psychotic were not admitted to Hialeah Hospital. Those patients need a more intensive psychiatric environment, either in a locked psychiatric unit or in a psychiatric specialty hospital. The persons physicians placed at Hialeah through 1983 did not need the intensive services of a discrete psychiatric unit. Hialeah Hospital indicated on its licensure application to the Department that it had 21 psychiatric beds throughout the 1970's, but ceased this listing in the 1980's as set forth in Finding of Fact 5 above. The nature of the services available at the hospital had remained constant. Under the psychiatric diagnosis coding system published in the Diagnostic Statistical Manual III, (which is commonly used by psychiatrists) Hialeah Hospital had an average daily census of 25 patients with primary or secondary psychiatric diagnoses in 1980, and 18 in 1981. Only about 25 percent of those patients had a primary psychiatric discharge diagnosis. The additional patients had secondary psychiatric diagnoses. Hialeah must rely on these secondary diagnoses to argue that its average daily census for psychiatric patients approached 21 beds. It was not until 1985 that Hialeah consolidated its psychiatric services to a medical/psychiatric unit. That unit serves patients with medical and psychiatric diagnosis as well as patients with solely psychiatric diagnoses. Before 1983, there was no medical director of psychiatry at Hialeah Hospital, and no separate policies and procedures for the admission of patients to a psychiatric unit, nor any staff dedicated to the care of psychiatric patients. To be sure, the hospital was in a position to provide quality psychiatric care to patients whose needs were psychotherapy, monitored medication, or individual counseling by psychiatric physicians and nurses. This reflects the reality that not all patients who need to be placed in the hospital for psychiatric care require the services of a separate medical/psychiatric unit. Patients with more acute psychiatric illness do need interdisciplinary approaches to their care. These interdisciplinary approaches are more expensive than serving psychiatric patients in the general hospital population. This is why the Federal government provides higher, cost-based reimbursement to the hospitals with specialty psychiatric licenses. Hialeah has not proven that the psychiatric services it was providing before 1983 were significantly different from those provided in typical community hospitals which did not have distinct psychiatric units. Hialeah's long-standing relationship with the Northwest Community Mental Health Center is not especially significant. Certainly, the Center was aware that Hialeah was a potential source of psychiatric care. Baker Act patients who needed hospitalization were taken there between 1980 and 1983. There was a flow of patients back and forth between the Center and the hospital's inpatient population, and discharge plans by Hialeah's social workers included referrals back to the Mental Health Center for follow-up and outpatient care. Similarly, the Dade-Monroe Mental Health Board knew that Hialeah was a potential provider of inpatient psychiatric services. The predecessor to the current local health council, the health systems agency of South Florida, recorded that there were psychiatric admissions at Hialeah Hospital in the early 1980's, and the health systems agency recommended a conversion of existing beds to psychiatric services because of a need for additional psychiatric services in the area. None of this, however, means that Hialeah had operated a distinct psychiatric unit before 1983 which entitles it to grandfather status.
Recommendation It is recommended that the application of Hialeah Hospital for grandfather status for 21 short-term psychiatric beds, and the inclusion of those short-term psychiatric beds on its license and on the Department's bed inventory be denied. DONE AND ENTERED this 6th day of October, 1989, in Tallahassee, Leon County, Florida. WILLIAM R. DORSEY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of October, 1989.
Findings Of Fact On April 1, 1986, a letter of intent was filed on behalf of Anthony J. Estevez to apply for a CON in the March 16, 1986, batching cycle for a 120-bed long-term psychiatric hospital in Dade County, Florida, HRS Service District XI. A long-term psychiatric hospital is defined in Rule 10-5.011(p), Florida Administrative Code, as a "category of services which provides hospital based inpatient services averaging a length of stay of 90 days." Subsequently, DHRS notified Mr. Estevez that his letter of intent was effective March 17, 1986; the application was to be filed by April 15, 1986; the application was to be completed by June 29, 1986; and the date for final department action was August 28, 1986. On April 15, 1986, Mr. Estevez filed his CON application with DHRS (designated action #4854). Anthony J. Estevez' name appeared along with Health Care Advisors Corporation on the line of the application which requested "legal name of project sponsor." Mr. Francis A. Gomez, Mr. Estevez' authorized representative, had the responsibility for the preparation and submission of the application. Mr. Estevez signed the CON application as the project sponsor. HCAC Psychiatric Hospital of Dade County was meant to be the name of the proposed facility. HCAC is an acronym for Health Care Advisors Corporation, Inc. HCAC was incorporated as of April 14, 1987, but the name had been reserved prior to that time. HCAC was initially intended to be a health care management corporation owned by Mr. Estevez. However, it is now anticipated that Flowers Management Corporation (Flowers) will manage the project under the HCAC corporate umbrella. Mr. Estevez owns 100 percent of the stock of HCAC and is also its sole director and sole shareholder. Mr. Estevez considered HCAC and himself to be one and the same for the purpose of the CON application. HCAC initially proposed to construct in Dade County, Florida, a freestanding 120-bed long-term psychiatric hospital. HCAC proposed to divide those beds into three groups: (1) 75 beds for adults; (2) 30 beds for geriatrics; and (3) 15 beds for adolescents. On May 15, 1986, DHRS requested additional information from HCAC regarding its CON application. On June 19, 1986, and June 23, 1986, HCAC in two separate filings provided DHRS with responses to its request for additional information which DHRS believed was omitted from the original application. The application was deemed complete effective June 29, 1986. On August 20, 1986, Francis Gomez, Paul McCall, a health care consultant employed by HCAC at that time, and HCAC's attorney, met with Islara Soto of DHRS regarding the CON application. At this meeting, HCAC advised DHRS of its intent to orient the facility programmatically to meet the needs of the Hispanic population of Dade and Monroe Counties. By letter dated August 29, 1986, DHRS notified Mr. Francis Gomez of its decision to deny CON application 4584. HCAC requested a formal administrative hearing to contest the denial. At the formal hearing, HCAC indicated a desire to abandon its proposal to provide 15 beds dedicated to serve adolescent patients and sought to introduce evidence relating to a down-sized 105-bed long-term psychiatric hospital serving only adult and geriatric patients. Charter renewed its prehearing motion to exclude any evidence concerning a 105-bed facility. (Approximately three or four weeks prior to the administrative hearing, HCAC had decided to go forward with a proposal for the 105-bed facility.) The undersigned ruled that HCAC would be allowed to present evidence concerning a down-sized 105-bed facility to the extent that such evidence related to a separate and identifiable portion of the original application. HCAC's Proposal The proposed building site for the facility, although not finally selected, is intended to be within the Northwest Dade Center cachement area which is in the northwest corner of Dade County. The ownership of the proposed facility will be by Mr. Estevez and/or his family or wife. The proposed area to be serviced by the facility is Dade and Monroe Counties (HRS Service District XI). HCAC proposes to offer at its facility a psychiatric inpatient unit, patient support services, diagnostic/treatment services, ambulatory care, administrative services, environmental/maintenance, educational and training services, and materials management. The HCAC facility will be managed by Flowers Management Corporation (Flowers), of which Mr. Estevez is a majority shareholder. Flowers was created approximately three and a half years ago for the purpose of providing management in the psychiatric field. Humana Hospital, a hospital chain, has selected Flowers to manage four of its facilities and is also considering Flowers for an additional two facilities. Those facilities are currently providing short-term psychiatric and substance abuse services. Nelson Rodney will be responsible for the design and implementation of the treatment programs in the HCAC facility. Rodney is employed as Regional Vice President of Flowers and is responsible for the management of the Florida hospitals affiliated with Flowers, including a chemical dependency unit at Humana-Biscayne Hospital and a psychiatric unit at Humana West Palm Beach Hospital. The HCAC facility is intended to provide specialty long-term psychiatric services for chronically mentally disturbed individuals requiring a 90-day or greater average length of stay. Many of the patients would be a danger to themselves and others and will require a very restrictive setting -- a locked facility. The programs proposed to be offered involve a range of inpatient diagnostic services, including an intensive diagnostic work-up done prior to admission for all patients. Each patient will have an individualized treatment plan updated every two weeks. The treatment program will include specialized therapy, such as art, music, milieu therapy and special education. There would also be specialized inpatient and outpatient treatment programs for family members and significant others. Discharge planning from the day of admission to assure continuity of care would be another aspect of the program. The proposed HCAC facility would offer a community-like atmosphere. It would provide both open and locked units. Flower's therapeutic model encourages patient participation in daily activities and in the many decisions of what is occurring at the hospital. One component of the project will be an initial screening process by a multi-disciplinary team who will employ a predetermined set of admissions criteria to assist in appropriate levels of care determination. The multi- disciplinary team would consist of a psychiatrist, psychologist, sometimes a neurologist, social worker, a family social assessment person, the patient, and others. The team will attempt to identify and admit only those patients who will have an expected length of stay greater than 90 days. The HCAC facility would provide seminars and workshops to practitioners in the community as well as its own staff. In-service training will also be offered. HCAC proposes to be flexible in the design of its treatment programs and allow new treatments to be utilized. A variety of therapies will be available to provide individualized treatment plans in order to optimize the chance of successful outcome in the patient's treatment. Currently, Flowers affords an in-house program of evaluation. Peer review serves this function in order to assess quality of care rendered to patients in the facility. The HCAC facility proposes to have an Hispanic emphasis. More than 50 percent of the staff will be bilingual. Upper management will consist of individuals who have an acute understanding of Hispanic culture and treatment implications of that culture. The facility will be more flexible in family visitation than is done in many facilities which is an important aspect of the Hispanic culture. The facility as managed by Flowers would have the required "patient's bill of rights" and will also seek JACH accreditation, although these items were not discussed in the application. The HCAC facility would offer each patient an attending psychiatrist who will be part of the multi-disciplinary team that will determine the individualized plan for each patient. Sufficient health manpower including management resources are available to HCAC to operate the project. Additionally, the facility will provide internships, field placements and semester rotations. PROJECT AND CONSTRUCTION COSTS HCAC's CON application, admitted into evidence as Petitioner's Exhibit 4, contains 26 tables concerning various aspects of the 120-bed project as well as Exhibit III.D.1., an operating pro forma. In response to a request for omissions by DHRS, HCAC submitted, among other things, a revised Table 7, revised Table 8, and a revised operating pro forma for the 120-bed project. The items making up HCAC's omission responses were admitted into evidence as Petitioner's Exhibit 5. In conjunction with its desire to complete a 105-bed facility only, HCAC submitted various new tables and a new operating pro forma (forecasted income statement), which were admitted into evidence as Petitioner's Exhibit 6. Table 1 - Source of Funds The estimated total project cost of the 120-bed facility would be $6,469,500. The estimated project cost of the 105-bed facility would be $5,696,940. The financing of the project is contemplated to be done through NCNB bank which has expressed its willingness to finance the project. It is reasonable to assume that HCAC would and could obtain the necessary financing for the proposed facility. Table 2 - Total Debt Table 2 for both the 120-bed project and the 105-bed project shows that 100 percent of the project costs would be financed by debt at an interest rate of 13 percent. The 13 percent interest rate was projected in 1986 and is higher than current rates. It is reasonable to assume that 100 percent of the costs can be financed at 13 percent for either the 120-bed or 105-bed project. Table 3 - New Purchase Equipment HCAC initially projected that $750,000 would be needed to equip the proposed 120-bed facility. The projected expenditure for the 105-bed facility is $500,000. The projected costs of $750,000 and $500,000 for the equipment needed for the 120-bed and 105-bed facility, respectively, are unreasonably low. For example, of the $500,000 projected for equipment costs for the 105-bed project, $80,000 is for mini-vans, $15,000 is for the security system, $40,000 is for a computerized medical records system, and $40,000 for a computerized on-line nurse care program. This would leave $325,000 for all other necessary equipment. Pharmacy, laboratory services and x-ray equipment would be on contract. The remaining $325,000 would be insufficient to equip the kitchen (which would require $80,000), furnish patient rooms (approximately $150,000) and equip the remainder of the 105-bed facility which would reasonably require housekeeping equipment, exam room equipment, chart racks for the nurses station, seclusion room beds, office furniture and equipment, laundry equipment, lockers or shelving, refrigerators, ice makers, day room furniture and lounge furniture. A more reasonable projection for equipment costs would be in the neighborhood of $850,000 to $900,000. Table 7 - Utilization by Class of Pay Tables 7 and 8 of the original application which dealt with utilization by class of pay and effect on patient charges, were revised by HCAC in their responses to DHRS' Omissions Request. Table 7 reflects estimations of the net revenues which HCAC expects to capture from specific payor mixes, namely, contract/indigent, Medicare and insurance/private pay. There is no Medicaid reimbursement available for psychiatric care rendered in a freestanding psychiatric facility. The proposed payor mix for the 120-bed facility is, in patient days, as follows: Year 1 -- Contract/Indigent 8.64 percent (1989) Medicare 26.10 percent Insurance and Private Pay 65.26 percent Year 2 -- Contract/Indigent 8.48 percent (1990) Medicare 26.15 percent Insurance and Private Pay 65.37 percent The proposed payor mix for the 105-bed facility is, in patient days, as follows: Years 1 and 2 - Medicare 3.3 percent Insurance and Private Pay 90.7 percent Indigent 6.0 percent The change in payor mix was not attributed to down-sizing of the facility, but rather was the result of HCAC's additional research and understanding of what the payor mix would most likely be. The change in payor mix does not represent a substantial change to the original application taken as a whole. Francis Gomez, who prepared the Table 7 and was designated as an expert for HCAC in the area of health care facilities management and financial and marketing operations, conceded that HCAC's Table 7 for the 120-bed facility is not reasonable. The Table 7 for the 105-bed facility is also not reasonable. HCAC's contractual allowances are not reasonable. HCAC projects 3.3 percent for Medicare and nothing for HMOs or PPOs. It is unreasonable for HCAC's proposal to make no provision for HMO and PPO type arrangements in view of its projection of 90.7 percent insurance and private pay. Because the proposed patient mix for the 105-bed project is adults and geriatrics, 20 to 25 percent would be a more reasonable Medicare projection. HCAC's projected 90.7 percent insurance and private patient days is unreasonably high in view of the project's intended emphasis of serving the Hispanic population in HRS Service District XI. In 1980, 27.8 percent of the Hispanics in Dade County had incomes less than 150 percent of the poverty level. The 1987 United States Hispanic market study establishes that 20 percent of the Hispanic adults who are heads of households are either retired, students or unemployed. These groups of individuals would not reasonably fit into the insurance and private pay category in most cases. Thus, the 90.7 percent figure for insurance and private pay would have to be reduced significantly. Table 8 - Effects on Patient Charges HCAC's revised Table 8 for the 120-bed facility lists net revenues rather than gross charges for the specific services listed. In year one (1989), the table lists the following projected charges/rates: daily room charge - $214.61; average daily ancillary charge - $25.00; contract/indigent - $125.00; and Medicare - $229.61. In year two (1990), the table lists the following projected charges: daily room charge - $223.19; average daily ancillary charge - $26.00; contract/indigent - $130.00; and Medicare - $238.79. The Table 8 for the 105-bed facility reflects an all-inclusive gross charge of $300 per day in both years (1989 and 1990) for the daily room charge, Medicaid and Medicare. The $300 per day figure would include ancillary charges but not physician fees. The projected patient charges fall within the range of charges currently in effect at psychiatric hospitals in Dade and Monroe Counties and are reasonable for both the 120-bed facility and the 105-bed project. Table 10 - Projected Utilization The financial feasibility of any proposed hospital is largely tied to the ability of the hospital to generate an adequate level of utilization. Absent an adequate level of utilization, a facility will not generate sufficient revenues to meet expenses. Table 10 for both the 120-bed facility and the 105- bed facility sets forth the projected utilization of the proposed facility, by month and year, in patient days, for the first two years of anticipated operation. Table 10 for the 120-bed facility projects the facility will exceed 80 percent occupancy for two of the last three months of the second year and be at 80 percent occupancy at the end of that year. Eighty percent occupancy of 120 beds yields an average daily census of about 96 patients. Table 10 for the 105- bed facility projects that the facility will arrive at 92 percent occupancy at the end of the first year of operation and remain at 95 percent throughout the second year. Ninety-five percent occupancy of the 105-bed facility equals an average daily census of about 99 or 100 patients. The Table 10 "fill-up" rates for both the 120-bed and 105-bed facilities are unreasonable and not practical to be achieved. There is presently an emphasis on providing psychiatric care in less restrictive settings, a trend favoring reduced lengths of stay and a trend in third-party payors to provide reimbursement for a shorter number of days. In addition, nationwide statistics show that only 4 percent of the patients admitted to psychiatric facilities require treatment longer than 90 days. Table 11 - Manpower Requirements For the 120-bed facility, HCAC projected in the Table 11 a staffing ratio of one full-time equivalent (FTE) per occupied bed of 1.625 for the first year of operation and 1.43 for the second year. For the 105-bed facility, HCAC projected in the Table 11 1.91 FTE per occupied bed ratio for the first year and 1.45 for the second year. The actual average of FTEs available for both facilities would be 1.8 to 2.0. The application figures are lower than the actual average because students and other non-paid personnel were not included. Thus, when all programmatic FTEs are included, the number of FTEs per occupied bed is higher than what is listed in the Table 11 for either project. There is a relationship between the number and quality of staff personnel and a facility's ability to provide quality psychiatric care. The industry standard for FTEs is 1.8 to 2.0 FTEs per occupied bed. HCAC's proposed staffing for both the 120-bed and 105-bed projects are reasonable. For both proposed facilities, HCAC projects 110.5 FTEs for the first year with a total annual salary of $1,932,000 which equals an average salary of approximately $17,400 per FTE. HCAC's projected total annual salary expense is unreasonably low. Specifically, the salary for the occupational therapist is too low and the nursing salaries are too low because of shortages. Table 16 - Areas and Square Feet / Table 18 - Space Requirements HCAC proposes a total 59,603 square feet of gross area for the 120-bed facility and a total of 56,050 square feet of gross area for the 105-bed facility. The decrease in size for the 105-bed facility is attributed to a reduction of the ground floor, a reduction of the second floor by removing the adolescent portion and an increase of ancillary services on the second floor for the geriatric population. HCAC projects 168 feet of net living space in the patient's bedroom for both the 120-bed facility and the 105-bed facility. HCAC's proposal of total area and square feet requirements for both the 120-bed and 105-bed facility are reasonable for the delivery of quality psychiatric care within the proposed facilities. There would be adequate land space for parking at HCAC's facility to forego the necessity of constructing a parking garage. Table 19 - Nursing Unit Area Summary HCAC proposes a total of 34,479 square feet of gross area for the nursing unit in the 120-bed facility and the 105-bed facility. The square footage figures under Table 19 for both the 120-bed facility and 105-bed facility are reasonable. Table 25 - Estimated Project Costs Project Advisors Corporation (PAC), of which Mr. Estevez is the Chief Executive Officer, will be responsible for the design and construction of the proposed facility. PAC is a design and construction company which employs a registered architect, several licensed general contractors, an engineer, two graduate architects and a registered graduate architect. The registered architect and basically 90 percent of the staff have previously been involved in the design and construction of health related facilities. HCAC's projected total cost for the 120-bed facility is $6,469,500 and the projected total costs for the 105-bed facility is $5,696,940. HCAC projected construction costs per square foot of $57.55 for the 120-bed facility and $60.00 per square foot for the 105-bed facility. Although the average construction cost of psychiatric facilities today is around $75 to $95 per square foot, HCAC's projected costs are reasonable and reflect reasonable charges given the fact that PAC, the company which would construct the facility, is controlled by Mr. Estevez. The projected costs of land acquisition are also reasonable. HCAC's projected equipment costs are contained in both Table 25 and Table 2. As previously discussed, the projected equipment costs for both projects are unreasonably low. Table 26 - Project Completion Forecast HCAC projects that construction for both the 120-bed facility and 105- bed facility would be completed approximately one year after DHRS' approval of the construction documents. The project completion forecasts for both projects are reasonable. Exhibit III.D.1.- Operating Pro Forma/Forecasted Income Statement Revised Exhibit III.D.1 sets forth the operating pro forma for the first two years of operation of the 120-bed facility (1989 and 1990). HCAC's pro forma for its 120-bed facility is not reasonable. The supplies and other expenses depicted in the pro forma (year one at $55.60 per patient day and year two at $58.10 per patient day) are unreasonably low. A more reasonable estimate would be approximately $100 per patient day. The pro forma for the 120-bed facility does not include any estimate for the Hospital Cost Containment Board (HCCB) tax. Similar facilities in Florida pay an HCCB tax which is composed of one and a half percent of net revenue. Utilizing the more reasonable estimate of $100 per patient day for supplies and other expenses, and including the appropriate HCCB tax, the total supplies and other expenses would increase approximately $1,100,000 and the HCCB tax would be approximately $85,000 in year one. Instead of showing a profit of $395,012, HCAC would potentially lose approximately $785,000 in that year. In year two, the total supplies and other expenses would increase approximately $1,400,000 and the HCCB tax would be approximately $115,000 to $117,000. Thus, in year two, instead of showing a profit of $919,036, HCAC would potentially lose approximately $617, 000. HCAC's "forecasted income statement" for the 105-bed project is also not reasonable. Specifically, the contractual allowances, the allowance for bad debt, and the salaries, wages and fringe benefits are unreasonable. Contractuals include such things as Medicare, Medicaid, HMOs and PPOs, which all generate discounts which are considered contractual allowances. HCAC estimates its bad debt factor at 1.6 percent. A more reasonable projection would be 6 to 8 percent of gross revenue. CONSISTENCY WITH THE DISTRICT XI HEALTH PLAN AND STATE MENTAL HEALTH PLAN The District XI local health council has produced the 1986 District XI Health Plan. The district plan contains the relevant policies, priorities, criteria and standards for evaluation of an application such as HCAC's. HCAC's application is consistent with some of the applicable sections of the District XI Health Plan but inconsistent with the plan taken as a whole. Policy No. 1 of the District XI health plan states that the district should direct its efforts toward a licensed bed capacity of 5.5 non-federal beds per thousand population ratio by 1989. Presently there are 11,294 beds in District XI which represents a number in excess of 5.5 non-federal beds. HCAC's application is inconsistent with this policy. Policy No. 1, Priority No. 1, states that proposals for the construction of new beds in the district should be considered only when the overall average occupancy of licensed beds exceeds 80 percent. Priority No. 1 refers to certain types of beds, specifically, acute care general beds, short- term psychiatric beds and substance abuse beds. HCAC's application is not inconsistent with this priority because long-term psychiatric beds are not mentioned. Policy No. 1, Priority No. 2 favors the encouragement of projects that meet specific district service needs through the conversion of existing beds from currently underutilized services. Because HCAC is not the operator of an existing hospital and it is not possible for HCAC to convert any beds from other services, HCAC's application is inconsistent with Policy No. 1, Priority No. 2. Policy No. 1, Priority No. 3 would only be relevant in the case of an existing hospital but not in the case of a new hospital where no comparative hearing is involved. HCAC's application is not inconsistent with Policy No. 1, Priority No. 3. Policy No. 1, Priority No. 4 allows for priority consideration for the initiation of new services for projects which have had an average occupancy rate of 80 percent for the last two years and which have a documented history of providing services to Medicaid and/or other medically indigent patients. HCAC's application is not entitled to priority consideration under Policy No. 1, Priority No. 4. Policy No. 2 is a broad policy which provides that service alternatives should be available within the district to meet the needs of community residents, while at the same time maintaining an efficient level of utilization. This policy is necessarily tied to the demonstration of overall need for the facility. If HCAC can show need for the proposed facility, its proposal would be consistent with this policy. Policy No. 2, Priority No. 1(f) (Psychiatric Bed Services) provides for priority consideration to be given to specific institutions which have achieved an 80 percent occupancy rate for the preceding year. HCAC's application is not entitled to priority consideration under Policy No. 2, Priority No. 1(f). Policy No. 2, Policy No. 3(f) states that a CON applicant should propose to provide the scope of services consistent with the level of care proposed in the application in accordance with appropriate accrediting agency standards. In the case of psychiatric bed services the appropriate accrediting agency is the Joint Commission for Accreditation of Hospitals (JCAH). Although HCAC neglected to address its ability to comply with JCAH standards in its application, it has established its intent to seek JCAH accreditation. HCAC's proposal is consistent with Policy No. 2, Priority No. 3(f). Policy No. 2, Priority No. 4 gives a preference to those applicants that propose innovative mechanisms such as various complimenting outpatient and inpatient services which are directed toward an ultimate reduction in dependency upon hospital beds. HCAC does not meet this priority because it has not proposed any mechanisms to complement outpatient services with inpatient services directed toward an ultimate reduction in the dependency on hospital beds. Policy No. 2, Priority No. 5 gives a preference to applicants who have based their project on a valid marketing research effort and have placed it in the context of a long-range plan. HCAC does not meet this priority because there was no evidence that the project was based on a valid marketing research plan or placed in the context of a long-range plan. Policy No. 2f Priority No. 6 states that existing facilities as well as applicants for new services should demonstrate a willingness to enter into cooperative planning efforts directed at establishing a system whereby duplication of specialized services is avoided while quality of such services is enhanced. HCAC presented no documentation of transfer agreements with other hospitals and did not substantiate its willingness to enter into cooperative planning efforts with letters of intent, referral agreements or memoranda of understanding. Policy No. 3 provides that services in the community should be made available to all segments of the resident population regardless of the ability to pay. HCAC's proposal is consistent with this policy because a provision for services to indigent patients has been made. Policy No. 3, Priority No. 1 provides that priority should be given to applications proposing services and facilities designed to include Medicaid (Baker Act) patients to the greatest extent possible based on documented history or proposed services. Although Medicaid does not reimburse for freestanding psychiatric services, and Baker Act is only available to short-stay facilities specifically chosen to receive a Baker Act contract, HCAC has not designed its project to include those patients to the greatest extent possible. Thus, HCAC's application is not consistent with Policy No. 3, Priority No. 1. Goal I of the 1986 District XI Goals and Policies for Mental Health and Substance Abuse Services is applicable to HCAC's application. This goal favors mental health services in the least restrictive setting possible. Long- term institutional care may be the least restrictive setting possible in the continuum of mental health care for the treatment of certain more serious types of patients. The concept of "continuum of care" means the full breadth of services available within a community, from least restrictive to most restrictive, from least intensive to most intensive. There must be settings along the full continuum of psychiatric care for patients to receive the level of care they may need. HCAC's application is not inconsistent with Goal I. Issues Relating to CON Recommendations and Priority for Inpatient Psychiatric Services (District XI Health Plan 1986, page 26). In this section of the district health plan, the Planning Advisory Committee states its recommendations and preferences for services for the comprehensive treatment of the mentally ill. The Committee recognizes that long-term hospitalization is a viable form of treatment for some mentally ill patients. However, the Committee expresses a preference for short hospital stays and applicants that project treatment modalities with an average length of stay under 20 days. In addition, the Committee emphasizes a preference for services to be obtained through the conversion of medical/surgical beds, because the district has a large surplus of such beds. Overall, HCAC's project is not consistent with the recommendations and priorities of the Planning Advisory Committee. HCAC's proposal is inconsistent with the goals, objectives and recommendations of the State Health Plan taken as a whole. The State Health Plan contains an important and significant goal that no additional long-term hospital psychiatric beds should be added in the area until the existing and approved beds in the district have achieved an 80 percent occupancy level. The existing long-term hospital psychiatric beds in the district have an occupancy level at approximately 67 percent. AVAILABILITY AND ADEQUACY OF ALTERNATIVES There are available, accessible and appropriate facilities within the service district which can be utilized for the services proposed by HCAC that are presently underutilized. Currently, there are short-term psychiatric providers, a long-term provider, residential facilities, nursing homes and adult congregate living facilities that are available as alternatives in the service district, and in many cases are significantly underutilized. Although the services to be offered by the HCAC facility would be in excess of what is provided in an adult residential treatment facility, nursing home or adult congregate living facility, those facilities could serve as viable alternatives in appropriate cases. In 1986, there were 6,513 existing nursing home beds in District XI and an additional 1,928 approved for opening. There are 24 adult congregate living facilities in District XI with 50 beds or more. The total number of beds for ACLFs in 1986 was 2,620. In addition, Grant Center Hospital has 140 existing and 20 approved long-term psychiatric beds; its occupancy rate is low. THE ABILITY OF THE APPLICANT TO PROVIDE QUALITY OF CARE AND THE APPLICANT'S RECORD OF PROVIDING QUALITY OF CARE The "Flowers Model," made a part of the application, is a description of how, from a clinical perspective, the proposal will be managed. Although Flowers does not presently operate any long-term psychiatric facilities, the Flowers Model is appropriate for a long-term psychiatric care facility. From a clinical and programmatic perspective, the HCAC facility would provide good quality of care. PROBABLE ECONOMIES AND IMPROVEMENTS IN SERVICE WHICH MAY BE DERIVED FROM OPERATION OF JOINT, COOPERATIVE OR SHARED HEALTH CARE RESOURCES HCAC has not demonstrated that there will be any improvements in service which may be derived from operation of joint, cooperative or shared health care resources. The Northwest Dade County proposed location of the HCAC facility would place the project within two hours travel of 90 percent or more of District XI population. Nevertheless, HCAC's facility would increase the number of people who would be within two hours of long-term adult psychiatric facilities by less than 1 percent. The patients in District XI will not experience serious problems in obtaining inpatient care of the type proposed in the absence of the service proposed by HCAC. There is presently adequate and accessible long-term hospital inpatient services for District XI population based on the existing and approved facilities in District X (Southwinds Hospital, Florida Medical Center) and District XI (Grant Center). There are two approved but not yet open long-term psychiatric facilities in District X, Broward County. Florida Medical Center holds a CON for 60 long-term adult psychiatric beds to be located in Lauderdale Lakes and Southwinds Hospital holds a 75-bed CON with 60 beds counted for long-term treatment of adult and geriatric patients to be located in Andy Town. In addition, there are 238 long-term state hospital beds at South Florida State Hospital in Broward County. Although the need for long-term psychiatric beds is assessed on a district-wide basis, it is reasonable to consider psychiatric beds in Broward County (District X) as an alternative to HCAC's proposal because they are within two hours access of individuals within the two counties. Likewise, it is reasonable to consider approved beds because need is projected for a future date. Not counting approved beds would overestimate need and result in duplication of services. FINANCIAL FEASIBILITY HCAC has not demonstrated that the 120-bed project or the 105-bed facility is financially feasible in the short or the long term. The projection of revenues and expenses in the pro forma (120-bed project) and the forecasted income statement (105-bed project) were flawed to such an extent that financial feasibility of the project was not shown. IMPACT ON COSTS AND COMPETITION If HCAC's project were to be built, a likely result is increased charges for the provision of services in the area. HCAC's proposed facility would negatively impact the availability of psychiatric nurses. There is a shortage of psychiatric nurses in Dade County and it is difficult to recruit and hire R.N.s with psychiatric experience. In order to hire nurses in a time of shortage, hospitals must recruit staff from other facilities. Shortages can increase the cost of recruitment and the cost of salaries. Charter is a hospital located in District XI and consists of 88 beds, 80 of which are licensed as short-term psychiatric beds and eight of which are licensed as short-term substance abuse beds. Short-term psychiatric inpatient care is defined in Rule 10-5.011(1)(o), Florida Administrative Code, as "a service not exceeding three months and averaging a length of stay of 30 days or less for adults." HCAC's proposed facility, if approved, would have a negative economic impact on Charter. It is very likely that many of the patients at the proposed HCAC facility would experience lengths of stay between 45 and 60 days. Charter treats a significant number of patients (approximately 15 percent) who stay longer than 30 days. Because of the difficulty of initially identifying patients who would require either short or long-term stays, many of Charter's patients could be lost to the HCAC project. Charter could suffer a loss of up to 657 patient days per year if HCAC's proposed facility is approved. This loss of patients would impair Charter's ability to have certain types of programs, equipment and staff. PROVISION OF HEALTH CARE SERVICES TO MEDICAID PATIENTS AND THE MEDICALLY INDIGENT HCAC's project does not propose a significant amount of indigent care and HCAC has no history of providing health care services to Medicaid patients and the medically indigent. OCCUPANCY RATE FOR EXISTING LONG-TERM HOSPITAL PSYCHIATRIC BEDS Grant Center Hospital is the only existing long-term psychiatric facility in District XI. It has 140 beds and specializes in treating children and adolescent patients. Its occupancy rate at the time of review for the preceding year was approximately 67 percent. The appropriate period to calculate occupancy rate of existing facilities in this case is July 1985 to July 1986 because this is the most recent 12-month period preceding application decision. The occupancy rate of all psychiatric beds within District XI was below 80 percent. HCAC'S PROPOSED NEED METHODOLOGY At the hearing, W. Eugene Nelson testified on behalf of HCAC on the need for the proposed long-term adult psychiatric beds. Mr. Nelson was accepted as an expert in the field of health care planning, including psychiatric bed need assessment. Mr. Nelson performed his analysis in District XI using the Graduate Medical Educational National Advisory Committee (GMENAC) methodology. The need methodology proposed by HCAC is inappropriate to adequately and accurately predict need for long-term adult psychiatric beds in District XI. The GMENAC study is a national study based on national data developed to determine physician requirements in 1990 for 23 medical specialities. GMENAC estimates the prevalence of certain psychiatric disorders among the general population and estimates the number of those persons who need care for their conditions in differing treatment settings ranging from outpatient services to 24-hour institutional care. HCAC's methodology, utilizing the GMENAC study, predicted a gross need of 895 beds in District XI in the applicable horizon (July 1991). The total number of existing long-term psychiatric beds in the entire State of Florida is only 836 beds, and the majority of those beds are experiencing occupancy levels under 65 percent. Many of these long-term facilities have been around for a period of at least three years and are still experiencing low occupancy. Therefore, the low levels are probably not based on the fact that the facilities are in a start-up mode. HCAC's bed need computation is as follows: Adult Long Term Psychiatric Bed Requirements (Excludes Alcohol, Drug Abuse, Mental Retardation, Organic Brain Syndrome and "other" Conditions) District XI: July 1991 Condition Admission Rate Schizophrenia & Other Psychoses 99 Affective Disorder Psychosis 20 Affective Disorder Neuroses 60 Neuroses and Personality Disorders 199 20 Projected 1991 Population Age 18+ 1,459,437 Total Projected Admissions 2,904 Average Length of Stay 90 Projected Patient Days Target Occupancy 80.00 261,385 percent Total Beds Required 895 Beds Currently Available 438 South Florida State Hospital (450 X .48) Residential Treatment Facilities 216 233 Net Beds Needed 496 The projected 1991 population for District XI for age 18 and above is 1,459,473. The population projections were received from the Office of the Governor. The anticipated admissions per 100,000 is calculated to be 199 for the conditions listed. The total projected admissions for 1991 is 2,904. The 2,904 projected long-term care admissions when multiplied by the average length of stay of 90 days generates 261,385 projected patient days in the 1991 horizon period in District XI. The 261,385 patient days is then divided by 365 days in the year, and then by 80 percent, the latter of which is contained in the rule as the optimum or desired occupancy for long-term psychiatric beds. This yields a total gross long-term psychiatric bed requirement for adults and geriatrics of 895 beds. In performing his analysis, Mr. Nelson used Table 4, page 22 of the GMENAC Study which lists information for mental disorders requiring care by treatment setting. The prevalence rate of 199 admissions per 100,000 population was based on the study's projection of the mental disorders listed requiring a "24-hour" treatment setting. Nelson used a projected 90-day length of stay in his computations. There is nothing in the GMENAC document that sets forth the average length of stay of persons reflected in the 24-hour column. Therefore, it is misleading to assume that persons admitted subject to the 199 per 100,000 admissions rate will actually experience an average length of stay as long as 90 days. For HCAC's admission rate to be valid, all of the facilities in District XI would have to average a 90-day length of stay. This is an unreasonable assumption. Nationwide, only a small percentage of all psychiatric admissions experience a length of stay as long as 90 days. In computing beds currently available in District XI, Mr. Nelson did not consider nursing home beds, adult congregate living facility beds, or the 135 long-term psychiatric beds that have been approved for two facilities in District X (Broward County). Nelson also did not consider whether short-term facilities were capable or willing to take additional patients for long-term treatment. Thus, the computation of beds currently available in the HCAC methodology is unreasonably low. HCAC's need methodology generated a long-term psychiatric bed to population ratio of .61 per thousand. DHRS' rule for short-term psychiatric beds was a population ratio of .35 per thousand. Short-term care facilities have admission rates two to three times greater than long-term facilities and nationwide statistics establish that only 4 percent of all psychiatric patients stay longer than 90 days. It is not reasonable for the bed rate for long-term adult psychiatric beds to be higher than the rate for short-term psychiatric beds. Mr. Nelson excluded organic brain syndrome diagnosis from his analysis and admission rate based on an assumption that many of those patients are in nursing homes. Nelson did not use nursing home beds in computing his need methodology because he believed that eliminating the organic brain syndrome category from the Table 4, page 22, 24-hour column in the GMENAC study eliminates the need for considering nursing home beds in the inventory. For that approach to be valid, the number of organic brain syndrome patients that go to long-term psychiatric facilities would need to cancel out the number of patients in other diagnostic categories who go to nursing homes. Nelson did not consult or review any data concerning the number or percentage rates of schizophrenics and other mentally ill patients in nursing homes or the number of organic brain syndrome people being treated in long-term psychiatric facilities. In addition, Nelson did not know what percentage, if any, of the GMENAC projected admissions were nursing home admissions. In computing existing beds, Nelson listed two types of facilities previously existing in District XI which were applicable to his methodology: the state hospital (216 beds) and residential treatment facilities (233 beds). The correct number of beds available for adults from District XI in the state hospital is 238. The actual number of beds for residential facilities is 335. Dr. Howard Fagin testified as an expert in health planning and feasibility analysis, including psychiatric bed need assessment and feasibility. In Dr. Fagin's opinion, Nelson's bed need methodology is incorrect and the conclusions drawn are wrong because Nelson used an inappropriate length of stay based on the GMENAC study and also incorrectly identified the applicable beds which should be considered for comparable facilities under the GMENAC study and, therefore, his total numbers in terms of gross and net beds needed are incorrect. Dr. Fagin's critique of Mr. Nelson's bed need methodology is persuasive and credible. HCAC has failed to show that its proposed need methodology could accurately project the need for long-term psychiatric beds in District XI.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that CON Application No. 4854 by Health Care Advisors Corporation, Inc. be DENIED. DONE and ORDERED this 1st day of March, 1988 in Tallahassee, Leon County, Florida. W. MATTHEW STEVENSON 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 1st day of March, 1988. COPIES FURNISHED: Lesley Mendelson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services Fort Knox Executive Center 2727 Mahan Drive, Suite 308 Tallahassee, Florida 32308 H. Darrell White, Esquire Gerald B. Sternstein, Esquire Post Office Box 2174 Tallahassee, Florida 32302 William E. Hoffman, Esquire 2500 Trust Company Tower 25 Park Place Atlanta, Georgia 30303 George N. Neros, Jr., Esquire 101 North Monroe Street Monroe-Park Tower Suite 900 Tallahassee, Florida 32301 Donna H. Stinson, Esquire The Perkins House Suite 100 118 North Gadsden Street Tallahassee, Florida 32301 R. S. Power, Esquire Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue At issue in this proceeding is whether Petitioner is liable for overpayment of Medicaid claims for the period of January 1, 2000, through December 31, 2001.
Findings Of Fact Based upon the stipulations of the parties and the evidence presented at the hearing, the following relevant Findings of Fact are made: AHCA is the state agency charged with the regulation of the Medicaid program in the State of Florida, and has the authority to perform Medicaid audits and recover overpayments, pursuant to Section 409.913(2), Florida Statutes (2001). Petitioner is a Florida, not-for-profit corporation that was enrolled as a Medicaid provider during the audit period of January 1, 2000, through December 31, 2001. At all times relevant to this proceeding, Petitioner was authorized to provide medical services to Medicaid recipients. The selection of records for and the conduct of the audit was not a matter of controversy between the parties. The records in this case were requested within the five-year window for record retention and agency investigation provided by Section 409.913(8), Florida Statutes (2001). Medicaid pays a per diem rate for inpatient hospital care and treatment. This per diem payment covers all services and items furnished during a 24-hour period. The audit in this case dealt exclusively with inpatient services at Florida Hospital Orlando. Deborah Lynn, a medical health care program analyst for AHCA, reviews the agency's inpatient hospital audits. The agency selects a hospital for audit on a random basis, then selects for review, a random sample of that hospital's patients admitted during the audit period. AHCA sends a demand letter to the hospital, which then sends the relevant patient records to AHCA. Florida Hospital Orlando had to be granted a 30-day extension, but eventually provided, to AHCA, all of the requested patient records. The hospital's records were first provided to a nurse consultant, who reviewed the records and made a suggestion as to the number of days for which Medicaid reimbursement should be denied for each patient. The nurse consultant's suggestions were then calculated into an initial overpayment amount and included in the PAAR that was sent to Petitioner on January 20, 2005. Ms. Lynn acknowledged that the PAAR constituted the first notice to Petitioner that AHCA disputed the length of stay for some patients based on medical necessity. After receipt of the PAAR, Petitioner was given the opportunity to examine the days that AHCA preliminarily questioned and to provide additional information in defense of its Medicaid billings. Petitioner did, in fact, submit additional documentation. The records, the additional documentation, and the nurse consultant's recommendations were then forwarded to a peer reviewer; a physician who uses his or her medical expertise to determine the medical necessity of the services provided. In this case, AHCA employed the services of two peer reviewers. Dr. Laura Machado was the peer reviewer for the inpatient medical cases, and Dr. Rahul Mehra was the peer reviewer for the inpatient psychiatric cases. The peer reviewers prepared reports that offered their opinion as to which days of the patients' stays were medically necessary. Ms. Lynn then calculated the amount of the alleged overpayment and communicated that number to Petitioner in the FAAR on August 20, 2005. General issues regarding patient discharge Ms. Lynn emphasized that the peer reviewer's job is simply to determine medical necessity, not to base coverage decisions on the convenience of the patient or provider. She rejected the suggestion that it was any part of the peer reviewer's task to consider what medical facilities and services are actually available in Orlando, at the time that Florida Hospital Orlando is contemplating the discharge of a Medicaid patient. Ms. Lynn reiterated that hospital services under Medicaid are governed by the Hospital Services Coverage and Limitations Handbook, the January 2001 edition, of which sets forth the following "Service Requirements": Medicaid reimburses for services that are determined medically necessary, do not duplicate another provider's service, and are: individualized, specific, consistent with symptoms or confirmed diagnosis of the illness or injury under treatment, and not in excess of the patient's needs; not experimental or investigational; reflective of the level of services that can be safely furnished, and for which no equally effective and more conservative or less costly treatment is available statewide; furnished in a manner not primarily intended for the convenience of the recipient, the recipient's caretaker, or the provider. The fact that a provider has prescribed, recommended, or approved medical or allied care, goods, or services does not, in itself, make such care, goods or services medically necessary or a covered service. Dr. Ross Edmundson, Florida Hospital Orlando's medical director for health care management, agreed that a clinically stable patient can be sent home or to a skilled nursing facility "in the best of all worlds." However, Dr. Edmundson pointed out that a safe discharge plan is the primary consideration for the treating physician, and that a safe discharge plan may render things "medically appropriate" that might not be found "medically necessary" in purely clinical terms. For example, if the Medicaid patient has no home, and the physician knows full well that the patient will be living under a bridge if he is discharged to the street, then it would be grossly negligent to discharge that patient without a plan to get better care. If the patient requires $500.00 worth of medications for the next month, and has no way of obtaining them, it may be grossly negligent for the physician to send that patient out the hospital door. The InterQual Products Group's "ISD" (Intensity of Service, Severity of Illness Discharge Screens) is a nationally recognized set of utilization guidelines that are used by hospitals, Medicare and Medicaid. Dr. Edmundson believed that these discharge guidelines take into account factors beyond the purely clinical: You have to have a discharge treatment plan. If you have a place to follow up, if you have [an] accepting physician, if you have a plan, if you know that they can make it there in the next three days and they require follow up in three days, that is clinically appropriate. If you know that they're going to live in a box and you have no assurance that this patient is going to make it back for any follow up, then that is not a safe discharge plan, it is not medically appropriate. The criteria really has that built in. There are barriers that may prevent the hospital from discharging the patient to an alternative location. Even if the hospital has met the patient's immediate medical needs and the patient's condition is stable, the patient's financial situation may present an obstacle to placement in a skilled nursing facility or to obtaining home health care. Petitioner has access to "a very limited number" of providers who will give follow up care to Medicaid and self-pay patients. Most nursing homes in central Florida have a set number of Medicaid beds for which they will accept patients. Medicaid will not pay a sub- acute facility or a nursing home any additional money for expensive medications, such as intravenous (IV) antibiotics, which further discourages those facilities from accepting patients upon their discharge from the hospital. Florida Hospital Orlando has severe capacity problems. The hospital has about 1,800 beds on its seven campuses, and these beds are almost always full. It is not unusual for the hospital's daytime census to be above 100 percent, with patients backed up in the emergency room waiting for beds to become available. Given the hospital's capacity problems and the low reimbursement rates of Medicaid, there is no motive for Petitioner to keep Medicaid patients in the hospital any longer than is absolutely necessary. Tammy Rikansrud is Florida Hospital Orlando's director of case management, utilization management, and denial management. According to Ms. Rikansrud, the hospital begins discharge planning within 24 hours of a patient's admission, and immediately begins seeking referrals as soon as its knows the patient will be discharged to a sub-acute facility. A major problem is that many facilities limit the number of beds for Medicaid patients, if they accept Medicaid patients at all. Robert Fleener is Petitioner's director of case management. Based on Mr. Fleener's testimony, the impediments to placing a patient in a nursing home from the hospital include rejection of the patient for "payer constraints," meaning that the Medicaid system does not reimburse the nursing home enough to cover its costs. Petitioner seeks placement for its Medicaid patients throughout the state of Florida and beyond, if necessary. Aside from nursing homes, Petitioner uses Shands Teaching Hospital in Gainesville, and long-term acute care hospitals such as those operated by Kindred Healthcare. Petitioner always assesses the practicality of home care for its patients. Petitioner also seeks to place its patients at outpatient clinics when appropriate, but there are few clinics in Orlando, and they are not required to accept Petitioner's discharged patients. The usual practice with ambulatory patients is to discharge them from the hospital, then have them come back on an outpatient basis for follow up treatment. Petitioner always assesses its patients to achieve discharge to the least restrictive setting. If the patient is ambulatory, the hospital will seek to place the patient in an assisted living facility. If the patient is not ambulatory, the hospital will look to a skilled nursing facility that is able to provide the necessary level of service. As also noted by Dr. Edmundson, a patient's need for expensive medicines can make it difficult to place the patient in a nursing home because of reimbursement problems. According to Mr. Fleener, nursing homes look very closely at accepting homeless patients, because they assume that if they accept a homeless person, they will have that patient for the rest of his life. Petitioner has "unavoidable" inpatient days for its Medicaid patients, where the care could have been provided in a nursing home but the hospital was unable to place the patient, due to lack of beds, patient behavior problems, age, or the cost of clinical care. Stephen William Bailey is the clinic coordinator for Petitioner's department of psychiatry. Petitioner has a 76-bed psychiatric inpatient unit and a medical psychiatric unit for patients with a psychiatric diagnosis and co-morbid medical problems. The hospital must obtain state approval to place a psychiatric patient in a nursing home, assuming it is possible to find a nursing home that is equipped to handle psychiatric issues and is willing to take the patient. It is not uncommon for Petitioner to admit a patient with behavior disturbances from a nursing home, stabilize the patient's medications and treatment, then have the nursing home refuse to take the patient back. Petitioner has no incentive to prolong inpatient stays. Patients are waiting to be admitted on a regular basis, and there are, at times, as many as 20 psychiatric patients in the emergency room waiting for admission. Cara Lee Staples is a social worker at Florida Hospital Orlando. She attends treatment team meetings, assesses patients for discharge needs, researches placement availabilities, and meets with families to plan care after discharge. Based on Ms. Staples' testimony, many of Petitioner's Medicaid patients have chronic mental illnesses and often have no involvement with their families. As soon as a patient is admitted, Ms. Staples seeks to obtain a psychosocial history of the patient, which includes where the patient came from and whether the patient can return upon discharge. If the patient cannot return to, for example, the assisted living facility from which he was admitted to the hospital, then Ms. Staples must attempt to find an appropriate placement for the patient so that he may be safely discharged once he is stabilized. According to Ms. Staples, there is a range of alternative placements she may explore, depending on the patient's circumstances. Those persons who do not need structured care may be placed in a boarding home. Those requiring minimal care may be placed in an assisted living facility or a retirement home. The next level of care would be provided by an extended care facility, which Ms. Staples described as an intermediate facility between an assisted living facility and a skilled nursing facility. Other placement options include substance abuse rehabilitation facilities, halfway houses, 28-day programs, and shelters. The hospital faces some placement problems. Assisted living facilities tend not to accept patients with recent histories of drug abuse. Some assisted living facilities will not accept patients who are incontinent and unable to change themselves. Assisted living facilities without locked units will not accept Alzheimer's patients who tend to wander. Nursing homes will often reject young psychiatric patients in need of skilled nursing services because of their age. Nursing homes are generally reluctant to accept Medicaid patients, particularly those who are homeless, because of the difficulty they will face in placing the patient after the need for skilled nursing services has passed. Nursing homes will decline to accept a patient once they learn he is on a psychiatric unit because they "cannot meet their needs," which Ms. Staples described as a global catch-all phrase for their general desire not to accept psychiatric patients. Acute Care Inpatient Hospital Stays By the time of the hearing, the acute care inpatient hospital stays of 16 patients remained at issue. The findings below are set forth in the order that the patients were listed in AHCA Exhibit 6, the recipient spreadsheet indicating the dates of the patients' stays, the dates denied by the peer reviewers, and the amount of claimed overpayment. Patient #1 R.B. R.B. was admitted on March 30, 2001, and was discharged on April 8, 2001. Peer reviewer Dr. Machado determined that two days, April 6 through 8, should be denied due to lack of medical necessity for continued inpatient care.3 Dr. Machado's peer review report stated that R.B. was a 46-year-old female with scleroderma. She was admitted with chest tightness and found to be in near end-stage renal failure. Standard enzyme testing ruled out a heart attack. Her renal function continued to deteriorate and it became clear she would soon need dialysis. R.B. underwent placement of a Tessio catheter on April 3, and arrangements were begun for her to receive dialysis at an outpatient center in her hometown of Pensacola. Dialysis could not be arranged at the outpatient center until after she underwent dialysis at the hospital on April 4 and 5. Dr. Machado agreed that it would not have been safe to discharge her until adequate arrangements had been made for her outpatient dialysis, but that she was medically stable and ready for discharge by April 5 with an outpatient treatment plan in place. The care R.B. received in the hospital after April 5, including two blood transfusions on April 7, could have been provided on an outpatient basis. Petitioner's expert witness, Dr. Yithak Daniel Haim, testified that R.B. was not discharged as scheduled on April 6, because of changes in her mental status. She had nausea and episodes of confusion. On April 7, her medications were reviewed in light of their propensity to cause confusion in persons with poor kidney function. It was thought that her confusion could be due to OxyContin. Dr. Haim also noted that R.B.'s hemoglobin dropped on April 7, and she required a transfusion. Treating physician Dr. Daniel Tambunan confirmed that R.B. was kept in the hospital after April 6 due to her mental status, which developed into hallucinations on April 7. Dr. Tambunan also noted that R.B. had developed tachycardia on April 5 probably due to low hemaocrit, which was measured at 22.3 on April 7. Dr. Haim stated that a normal hematocrit is between 39 and 45. Dr. Haim agreed with Dr. Machado that dialysis can usually be done on an outpatient basis, but that he decided to keep her in the hospital due to the combination of the tachycardia, low hematocrit necessitating a transfusion, and the need to ascertain whether the hallucinations were caused by medications or by the dialysis. The greater weight of the evidence supports Petitioner's position that April 6 through April 8 should not have been denied. Dr. Machado's opinion was supportable regarding the ability of the patient to receive transfusions and dialysis on an outpatient basis. However, Dr. Machado's testimony ignored R.B.'s hallucinations and the reasonableness of keeping her in the hospital until the treating physician could ascertain their cause. Therefore, AHCA offered no evidence to conflict with the testimony of Dr. Haim that it was medically necessary to keep R.B. in the hospital until her discharge on April 8. Patient #2 F.C. F.C. was admitted on March 5, 2001, and was discharged on March 12, 2001. Peer reviewer Dr. Machado determined that the admission should be denied and a 23-hour observation should be approved.4 Dr. Machado's peer review report stated that F.C. was a 43-year-old female smoker with high blood pressure. She was admitted with chest pain for 3 days and by some notes was chronic over the last year. An electrocardiogram (EKG) did not show ischemia, and serial enzyme tests ruled out a heart attack. A spiral computer tomography (CT) scan was negative for a pulmonary embolism, i.e., a blood clot in the lung. Dr. Machado wrote that F.C.'s vital signs were stable, and that an outpatient work-up of her chest pain would have been appropriate. Instead, she had a stress test on March 7. The results were still "pending," according to a note on March 11. She also underwent work-up of abnormal findings on her abdominal CT/ultrasound, all of which could have been accomplished safely in the outpatient setting. Petitioner's physician expert, Dr. Haim, concurred with Dr. Machado's denial of this admission. The treating physician, Dr. Ashok Khanna, offered plausible reasons for keeping the patient in the hospital, including the fact that F.C. was a drug addict who could not be relied upon to comply with testing required to rule out coronary artery disease on an outpatient basis. However, the greater weight of the evidence supports Dr. Machado's denial of the admission. Patient #3 J.C. J.C. was admitted on July 6, 2000, and was discharged on July 12, 2000. Peer reviewer Dr. Machado determined that five days, July 8 through July 12, should be denied due to lack of medical necessity for continued care on the medical ward. Dr. Machado's peer review report stated that J.C. was a 55-year-old male initially admitted to the psychiatric unit due to depression and suicidal gesture. Psychiatric notes indicate that J.C. complained of three weeks of exertional chest pain and fatigue. On July 6, he was transferred to the medical ward for further evaluation. Serial enzyme tests ruled out a heart attack, and he was hemodynamically stable. He underwent a stress test on July 6, with no chest pain and no EKG changes. Dr. Machado concluded that a transfer back to the psychiatric unit or to home would have been appropriate, with follow-up. She believed it was not medically necessary to keep J.C. on the medical ward while awaiting the nuclear images of the stress test, as he was chest pain free and hemodynamically stable after July 7. Treating physician Dr. Luis Allen testified that he was called in on a psychiatric consultation on J.C. while he was in the medical unit. Dr. Allen found that J.C.'s depression was significant and that he would be in need of inpatient psychiatric treatment. Dr. Allen therefore followed J.C. until he was transferred to the inpatient psychiatric unit. The transfer was delayed while the cardiac workup was completed, so that the physicians could be confident that J.C. was medically stable before his transfer back to the inpatient psychiatric unit. Dr. Allen noted that J.C. had a history of depressive disorder and experiencing feelings of helplessness, hopelessness, that his level of depression was significant, and that he had been admitted for a suicidal gesture. Dr. Allen testified that J.C.'s psychiatric symptoms were too marked to be treated on an outpatient basis. Dr. Allen believed that his stay through July 12, was necessary when the combination of the patient's medical and psychiatric conditions are considered. Petitioner's medical expert, Dr. Haim, disagreed with Dr. Machado that J.C. could have been transferred from the medical ward on July 7, because the results of his cardiac stress test did not come back until July 9. Dr. Haim agreed that J.C. could have then been transferred off the medical ward on July 9. However, there was no bed available on the psychiatric floor on July 9. J.C.'s condition indicated a need for acute psychiatric hospitalization, meaning that he could not be discharged home. Thus, he remained on the medical ward until a psychiatric bed became available. Dr. Haim agreed that this was not strictly a medical reason, but contended that the lack of beds constituted a "reality reason" that justified the full admission. Petitioner's expert psychiatrist, Dr. Alan Berns, agreed with Dr. Allen and Dr. Haim that the full stay was justified. The greater weight of the evidence supports AHCA's denial of the last five days of J.C.'s admission. The record established that J.C. ceased to meet the criteria for inpatient admission in the medical unit on July 7. The reason for keeping J.C. on the medical unit after July 7 was administrative convenience, not medical necessity.5 Patient #4 P.C. P.C. was admitted on July 9, 2000, and was discharged on July 17, 2000. Peer reviewer Dr. Machado determined that six days, July 11 through July 17, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that P.C. was a 64-year-old female with a history of leg cellulitis treated with IV antibiotics. She was admitted through the emergency room with increased swelling of her lower left leg, which raised concerns about deep vein thrombosis (DVT), compartment syndrome, or progression of her cellulitis. P.C. also had chronic anemia, which had worsened. DVT was ruled out and she was continued on IV antibiotics. She had a blood transfusion due to her anemia. P.C. declined inpatient gastrointestinal (GI) work for her anemia, so the hospital planned to schedule the GI work after her discharge. Dr. Machado concluded that the remainder of her hospital stay could have been outpatient. She did have one further transfusion of packed red blood cells (PRBCs) on July 12, but she did not need to remain in the hospital for this, as she continued to refuse further workup and was asymptomatic. Dr. Machado testified that the physician's note on July 10 stated that the patient "looks and feels better, no complaints," and that P.C. was sufficiently improved to be discharged on that date. She could have been continued on IV antibiotics at home through home health care, or could have received the treatment at a skilled nursing facility. Dr. Machado acknowledged that the patient received a blood transfusion on July 12, but stated that this could have been provided on an outpatient basis. Blood could have been drawn after the transfusion for lab testing, and there would have been no need to call P.C. back in unless there was a problem with the labs. Dr. Haim testified that P.C. was diabetic, had kidney problems, peripheral vascular disease, and congestive heart failure. As of July 11, the status of her infection had improved, but she was still on IV antibiotics and her hematocrit had dropped. Because P.C. had several chronic medical problems, it was important to raise her hematocrit. She was given the transfusion on July 12, but her hematocrit continued to drop. Dr. Haim testified that this raised intense concerns as to "where is this blood going to." A CAT scan of her abdomen revealed no internal bleeding. Her release was planned for July 15, but blood testing on that date showed that her kidney function had deteriorated. It was feared that one of her IV antibiotics, Vancomycin, was affecting her kidney function. Dr. Haim concluded that her drop in hemoglobin and kidney function necessitated keeping her in the hospital until July 17. J.C.'s treating physician, Dr. Sidiab Elalaoui, testified that he could not have given the patient transfusions in his office. He disagreed with Dr. Machado that J.C. could have been seen in an outpatient setting as of July 11. Dr. Elalaoui noted that J.C. had been getting IV antibiotics at home, but that her condition nonetheless worsened to the point where she had to be brought to the emergency room on July 9. Dr. Elalaoui stated that J.C. did not have a simple infection. She had a bacteremia, a bacteria that went from the skin into the blood of a patient with diabetes and high blood pressure. Dr. Elalaoui could not be sure if her condition was life- threatening, but confidently stated that it was "severe." The greater weight of the evidence supports Petitioner's position that July 11 through July 17 should not have been denied. Dr. Machado's opinion was supportable regarding the ability of the patient to receive a transfusion and IV antibiotics on an outpatient basis. However, Dr. Elalaoui's testimony as the treating physician, in combination with Dr. Haim's expert testimony, credibly established that, whatever the patient's theoretical ability to receive transfusions and IV antibiotics on an outpatient basis, under the actual circumstances, it was medically necessary to keep J.C. in the hospital through July 17. Patient #5 A.F. A.F. was admitted on November 30, 2000, and was discharged on December 7, 2000. Peer reviewer Dr. Machado determined that four days, December 3 through December 7, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that A.F. was a 32-year-old female admitted with a severe headache and apparent new onset seizures. She underwent a CT scan, magnetic resonance imaging (MRI), and an electroencephalogram (EEG), all of which reported negative. She had undergone a lumbar puncture previously for the severe headaches, which was also negative. Dr. Machado concluded that A.F. could have been discharged with oral medications and outpatient follow-up for treatment of her apparent migraine headaches. Instead, A.F. underwent further testing for low back pain, depression, and substance abuse. Dr. Machado believed that the treating physicians allowed the patient's subjective complaints to outweigh the objective clinical findings, noting that A.F. had been seen sitting up and talking on the phone during the time when she was complaining of a severe headache. Petitioner's expert, Dr. Haim, agreed with Dr. Machado that the days denied were redundant. Thus, it is found that the greater weight of evidence supports AHCA's denial of four days of A.F.'s inpatient stay. Patient #6 C.G. C.G. was admitted on May 3, 2001, and was discharged on May 14, 2001. Peer reviewer Dr. Machado determined that eight days, May 5 through May 14, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that C.G. was a 47-year-old female admitted with increasing chest pain and numbness in her left arm. She was found to have a mass in the middle of her chest and possible early superior vena cava (SVC) syndrome. Serial enzymes and a CT scan respectively ruled out heart attack and pulmonary embolism as the cause of her chest pain. She was started on steroids and pain medication, with satisfactory pain relief. Dr. Machado concluded that the remainder of her stay focused on a workup on the mediastinal mass, which could have been done on an outpatient basis. The steroid and pain medications she was receiving through IV, could have been given orally. None of the progress notes documented sufficient evidence for inpatient workup. In her deposition, Dr. Machado explained that the SVC is the large blood vessel that returns blood from the heart to the upper portion of the body. When there is a mass in that area of the chest, it can compress the SVC and cause swelling from the backing up of the blood. Dr. Machado believed that once immediate life-threatening diagnoses such as heart attack and pulmonary embolism were ruled out, and C.G.'s pain was managed with medication, the matter of determining the nature of the mediastinal mass could have been handled on an outpatient basis. Treating physician Dr. Vajihuddin Khan, an internal medicine specialist at Florida Hospital Orlando, testified that he kept C.G. in the hospital until May 14 to complete the workup and perform all the necessary investigations of the mediastinal mass. Dr. Khan noted that C.G. could not have been released and observed daily on an outpatient basis because of transportation or financial problems. The patient lacked outside support. If she had gone out of the hospital with no place to stay and no friends to support her, the workup might never have been completed. C.G. was ultimately diagnosed with Hodgkins lymphoma. Dr. Haim testified that on May 7 the patient was ordered NPO (nothing by mouth) for a biopsy to be performed the next day. She had a swollen face, neck, and arm, with a large, undiagnosed mass in her chest. The chest pain and shortness of breath had not gone away. Dr. Haim believed it would be irresponsible to discharge C.G. in that condition without a diagnosis. The biopsy was performed on May 8 and showed cancer. The pathology report on May 9 was inconclusive, but her physicians knew it was "something bad," either lymphoma or a small cell carcinoma of long standing. Dr. Haim testified that it was important to differentiate the type of cancer because the treatments would be different for each. Therefore, it was necessary to perform surgery to obtain a larger sample of the mass. Dr. Haim noted that the surgery was not performed prior to C.G.'s discharge on May 14, due to the surgeon's unavailability. Dr. Haim agreed that reimbursement for the dates of May 10 through May 14 were "somewhat questionable" because C.G. was, in essence, sitting in the hospital waiting for a surgeon. The record did not disclose why she was forced to wait for a surgeon. The greater weight of the evidence supports AHCA's denial of the last eight days of C.G.'s admission. The record established that C.G. ceased to meet the criteria for inpatient admission in the medical unit on May 5. Patient # 7 C.G. C.G. was readmitted on May 25, 2001, and was discharged on June 3, 2001. Peer reviewer Dr. Machado determined that the last day should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that C.G. was a 47-year-old female admitted for elective mediastinoscopy to diagnose a mediastinal mass. The procedure was attempted but was unsuccessful due to a large goiter. A thoroactomy was performed that diagnosed lymphoma. C.G. did fine postoperatively but her discharge was delayed after an episode of chest pain, determined to be non-cardiac. When the oncologist saw her on May 30, he felt that she had SVC syndrome and called for an urgent radiation oncology consult. She was started on IV Decadron and improved dramatically by June 2, when she received her first radiation treatment. Dr. Machado saw no reason to keep the patient in the hospital for an extra day, until June 3. Dr. Haim testified that it was reasonable to wait for hours after the radiation treatment to note any improvement or adverse reaction. The greater weight of the evidence supports Dr. Haim's opinion that it was medically necessary to keep C.G. in the hospital through June 3. Patient #8 THE. THE. was admitted on April 3, 2001, and was discharged on April 9, 2001. Peer reviewer Dr. Machado determined that three days, April 6 through April 9, should be denied due to lack of clear documentation showing medical necessity for continued inpatient care. Dr. Machado's peer review report stated that THE. was a 21-year-old pregnant patient admitted with dehydration from hyper emesis gravid arum (the nausea and vomiting commonly called "morning sickness"). She had lost 14 pounds in the week prior to admission. This was the only abnormal vital sign, as she was not hypertensive or tachycardia and her electrolytes were not abnormal. No blood urea nitrogen (BUN) or cretonne was documented, indicating normal kidney function. She had two previous admissions for hyper emesis. She received sufficient IV hydration by April 4 for a 10 pound weight gain and was documented by nursing notes as feeling better and tolerating oral medications. She did have an increase in vomiting on April 5, but by April 6 this was much less and her weight was stable. Most of her anti-emetics were switched from IV to oral, and her IV was locked off for the remainder of her hospital stay. Her vital signs remained stable throughout her hospital stay, and there were no new labs to document continuing dehydration. Dr. Machado testified that the record showed no treatment after April 6 that necessitated a hospital stay. She believed THE. could have been discharged on April 6, with outpatient oral anti-nausea medications in a trial to see how she would do. Treating physician Dr. Andre Jakubowski testified that he saw THE. in his office on April 2, for an obstetrical visit. She was about 12 weeks pregnant and complaining of nausea, vomiting and the inability to keep down fluids. At her March 26, visit, she had weighed 134 pounds. On April 2, she weighed 120 pounds, a loss of 14 pounds. Dr. Jakubowksi immediately admitted T.H. to the hospital. For the first few days of T.H.'s hospitalization, Dr. Jakubowski gave her IV hydration in order to correct her electrolytes. On April 6, the IVs were discontinued and T.H. was placed on oral medications and food. Between April 6 and 7, she lost two and one half pounds. Dr. Jakubowski testified that he could not send T.H. home because she was still vomiting and was generally "not in good shape." He started her on IV hydration again and adjusted her medications. She began to eat and was able to go home on April 9. Dr. Jakubowski testified that it is not within the standards of practice to discharge a patient who has been taken off IV hydration without observing for 24 hours to be sure the patient is taking food and/or liquids orally and keeping them down. On April 8, the IV hydration was stopped for the second time. This time, T.H. was able to keep down some oral foods and liquids. Dr. Jakubowski watched her for 24 hours, then sent her home on April 9. Dr. Haim testified that laboratory testing is not necessary to document continued dehydration when the patient continues to vomit. With a weight loss of 14 pounds in a woman who was 12 weeks pregnant, this was clearly more than ordinary morning sickness. T.H. could not be discharged when she could not keep food on her stomach. The greater weight of the evidence supports Petitioner's position that April 6 through April 9 should not have been denied. Dr. Jakubowski's testimony as the treating physician, in combination with Dr. Haim's expert testimony, credibly established that, although T.H. showed some improvement and was taken off IV fluids on April 6, it was reasonable to wait 24 hours to make sure that she could keep down oral nutrition. When she was unable to do so, the IV hydration was resumed and it was reasonable to keep her in the hospital until she was able to keep some food on her stomach. Under all the circumstances, it was medically necessary to keep T.H. in the hospital through April 9. Patient #9 J.H. J.H. was admitted on July 7, 2001, and was discharged on August 7, 2001. Peer reviewer Dr. Machado determined that 21 days, July 17 through August 7, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that J.H. was a 63-year-old female lung transplant candidate with end-stage pulmonary fibrosis. She was admitted with a cough, low-grade fever, and increased shortness of breath. She also appeared to have a postoperative wound infection from recent vascular surgery in the right groin. A CT scan was negative for pneumonia or pulmonary embolism and her respiratory symptoms stabilized and, fairly quickly, returned to their concededly poor baseline. The infected right groin area was the cause for J.H.'s extended stay. The wound was debrided on July 14, following treatment with IV antibiotics and wound care. The infectious disease consultant agreed on July 16 that home IV antibiotics would be appropriate. However, the patient declined a PICC line (peripherally inserted central catheter, a long–term catheter that is inserted into the arm and threaded into central circulation) due to a past poor experience. She therefore, continued to get IV antibiotics in the hospital until July 26, when she was changed to oral Keflex. Dr. Machado found that the reasons for her continued hospital stay were unclear, except for wound care. On August 3, J.H. left the hospital for a few hours on a day pass. During her stay, she underwent other tests that are required for lung transplant evaluation, but weren't necessary during this hospitalization. In her deposition, Dr. Machado testified that J.H.'s lung condition stabilized, but the groin became the problem. The treating physician initially thought the problem was fluid collection, but the increased white blood cell count indicated an infection. J.H. was given proper wound care, but Dr. Machado could not see anything done in the hospital during the last 21 days of J.H.'s stay that required an inpatient stay. Dr. Machado concluded that IV antibiotics and wound care could have been given in a sub-acute skilled nursing facility or with home health. Treating physician Richard Young Feibelman is board certified in internal medicine and pulmonary medicine. He is a pulmonary physician, and was J.H.'s primary physician during this admission. In his deposition, Dr. Feibelman testified that he had followed this patient for some time prior to this admission. J.H.'s primary underlying problem was severe and progressing idiopathic pulmonary fibrosis, a scarring debilitation of the lungs causing progressive shortness of breath and requiring increasing oxygen. It typically results in death within two to three years of the diagnosis. Dr. Feibelman testified that J.H. had recently been evaluated at the University of Miami for a lung transplant, which she desperately wanted despite the high risk of death associated with this surgery. J.H. had been undergoing workup in Miami, about two weeks before this admission, including a carotid artery angiogram and cerebral angiogram. After the angiogram, she developed a pseudo aneurism or partial false leak of the puncture site from the catheter insertion. She then developed a hematoma in that area, with wound infection and fever that made necessary her admission to the hospital. Dr. Feibelman testified that at the time of admission, it was difficult to tell whether the infection came from her groin, or whether it was a superimposed respiratory infection on top of her underlying pulmonary fibrosis. Dr. Feibelman testified that J.H. was extremely sick, near the end stage of chronic fibrotic lung disease. He stated that this was an important hospitalization, because J.H.'s infection had to be under control to ensure she could make it to Miami, and survive the lung transplant. Before her admission, she was on immunosuppressive therapy, which increases the risk of infection. Dr. Feibelman treated her with IV antibiotics, and he described the wound care as "aggressive," an effort to heal the wound before the lung disease killed her. The wound was debrided, and J.H. was seen by an infectious disease consultant and vascular surgery consultant. There was difficulty with her blood pressure, and an episode of arm and leg numbness that required a neurological consultation to rule out a transient ischemic attack or pulmonary embolus. Dr. Feibelman testified that J.H. was still getting IV antibiotics to almost the end of her hospitalization. She was on high flow oxygen. The pain in her wound was such that she required intravenous morphine to change her dressings. Dr. Feibelman concluded that any additional setback for J.H. would have been fatal. Her disease has a fairly rapid stair- step pattern, in which there is a drop-off, then stabilization, then a further drop-off, then stabilization. Dr. Feibelman stated that J.H. could not afford a further drop-off before her lung transplant. Dr. Feibelman testified that J.H. was allowed to leave the hospital for two hours on a day pass. He stated that this was in all likelihood her last chance to go home, and he thought it was worth letting her go. Dr. Haim disagreed that the last 21 days of J.H.'s stay should be denied, but agreed that the last week or two were debatable, depending on the support system she had at home and the possibility of giving her IV antibiotics at home. Dr. Haim stated that she could have had IV antibiotics at home with a PICC line. However, J.H. had prior poor experiences with PICC lines and told her physicians they were not going to "torture" her again. She would also have needed assistance with her oxygen tanks if she went home. Dr. Haim stated that J.H. needed help with all of her activities of daily living (ADLs), as would any patient requiring six liters of oxygen every day. The greater weight of the evidence supports AHCA's denial of the last 21 days of J.H.'s admission. Dr. Machado correctly observed that the patient could have received IV antibiotics, oxygen, and wound care in a skilled nursing facility. She conceded that it would have been correct to keep the patient in the hospital if no skilled nursing facility was available. Petitioner offered no evidence that it attempted to place J.H. in a skilled nursing facility. Dr. Feibelman's concerns about J.H.'s precarious condition are fully credited, but the record as presented established that C.G. ceased to meet the criteria for inpatient admission in the medical unit on July 16. Patient #10 C.J. C.J. was admitted on March 31, 2001, and was discharged on April 9, 2001. Peer reviewer Dr. Machado determined that six days, April 3 through April 9, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that C.J. was a 67-year-old female admitted with abdominal pain, nausea, and vomiting, two days after a colonoscopy. She also had poorly controlled diabetes. The nausea and vomiting resolved quickly after admission, and she was hemodynamically stable throughout her stay. A CT scan of the abdomen and pelvis was performed, which showed a large pelvic mass (likely the recurrence of a previous cancer) with accompanying hydronephrosis (swelling of the kidney caused by obstruction of urine flow). The gastroenterologist cleared C.J. for discharge on April 2. The remainder of her stay involved consultations with urology and oncology specialists regarding the pelvic mass, which could have been accomplished in the outpatient setting. She did not have a ureteral stent (a surgical device implanted to hold the ureter open so that urine can flow freely from the kidneys to the bladder) placed until April 6. Dr. Machado wrote that it was unclear from the notes what was keeping her in the hospital after April 6. In her deposition, Dr. Machado testified that C.J. should have been discharged on April 3 with arrangements for an outpatient workup of the pelvic mass, which was likely a recurrence of the cancer that C.J. had ten years previously. Dr. Machado testified that the placement of the stent was necessary, either during the hospitalization or as an outpatient, and noted that if it had been an emergency, the stent would have been placed sooner in C.J.'s stay. The stent was actually placed one week after C.J.'s admission. Treating physician Dr. Alan Varraux, a specialist in pulmonary medicine, testified that C.J. was weak and somewhat frail, but underwent a colonoscopy because of gastrointestinal symptoms. The procedure caused her much nausea and vomiting. Her complaints and Dr. Varraux' concerns about dehydration led to her hospitalization on March 31. On admission, she was kept NPO and IV fluids were started. She was allowed to start eating on April 1. A GI specialist saw her on April 2 and performed an upper GI endoscopy and a colonoscopy. A consulting oncologist saw the patient on April 3. Dr. Varraux stated that an X-ray showed hydronephrosis, a blockage of the ureter system causing urine to back up into and dilate the kidney. The stent could not be placed on an outpatient basis because C.J. was a debilitated, immuno-compromised cancer patient who could be killed by a urinary tract infection. She was a high risk patient and needed to be cleared by a urological specialist before discharge. The urologist planned to place the stent on April 6, after which C.J. could be discharged if all went well. Dr. Haim testified that the stent was actually placed on April 7 and that C.J. needed to stay in the hospital for an additional 24-to-48 hours to ensure that she had adequate urine output, and that her fever was going down, and that her subjective feelings were improved. After reviewing the depositions of Dr. Varraux and Dr. Haim, Dr. Machado testified that she saw no reason to change her opinion. Dr. Machado stated that the medical record showed C.J.'s cancer was 10 years prior to this admission. This led Dr. Machado to disagree with Dr. Varraux's assumption that C.J. was immuno-compromised and unable to fight infections normally. Dr. Machado also did not see anything in the medical record to support the concerns about a urinary tract infection. C.J.'s urinalysis was normal on admission. There was glucose in her urine, which was consistent with her diabetes. On April 3, her white blood count was normal, indicating that if there was an infection, it had been treated adequately. No culture or urinalysis was performed on that date. Dr. Machado opined that the patient's low grade fever throughout her stay was not a reason to keep her in the hospital, as evidenced by the fact that she was still running a low grade fever on the day she was discharged. She was treated with antibiotics that can be given orally, but that they chose to give via IV. Dr. Machado could find no notes from the primary treating physician from April 6, until his discharge note on April 9. Dr. Machado found nothing in the medical record to support the view that the stent had to be placed in the hospital. The stent certainly needed to be placed, to allow urine to drain properly from the kidney. However, this is not always an inpatient procedure. Dr. Machado noted that the urologist's post-operative orders were written as outpatient orders. The greater weight of the evidence supports AHCA's denial of the last six days of C.J.'s admission. The record as presented established that C.J. ceased to meet the criteria for inpatient admission in the medical unit on April 3. Patient #11 G.M. AHCA Exhibit 6 indicates that G.M. was admitted on July 6, 2000, and was discharged on July 20, 2000. However, Dr. Machado noted that the records provided by the hospital indicate that this patient was admitted directly to a rehabilitation facility, and was never an acute medical admission. Therefore, Dr. Machado determined that the entire 14-day stay should be denied. Dr. Haim testified that his own abbreviated notes show that the patient came into the hospital, was in respiratory failure, had shortness of breath, coded with cardiac arrest, and was intubated. However, the lack of medical records provided by the hospital to AHCA require that Dr. Machado's denial determination be sustained. Patient #12 N.P. N.P. was admitted on January 8, 2000, and was discharged on January 14, 2000. Peer reviewer Dr. Machado determined that two days, January 13 through January 14, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that N.P. was a 46-year-old male with cardiomyopathy and poorly controlled diabetes. He was admitted with increasing shortness of breath, fever, cough, and chest pain. He was started on antibiotics, diuretics, and respiratory treatments, and his symptoms improved rapidly. Serial enzyme tests ruled out a heart attack and his chest pain was not thought to be cardiac in nature. On January 11, his IV medications were changed to oral, and it was felt he was near ready for discharge. Though he felt better, his oxygen saturations were slow to improve and he was still saturating in the high 80's on room air, which was not his baseline. Dr. Machado found it reasonable to monitor him for one more day in the hospital to see if this would improve before sending him home with oxygen. The saturations stayed the same the following day, and he continued to feel better. Dr. Machado concluded that discharge would have been safe on January 12, with home oxygen and close outpatient follow-up. Dr. Haim testified that N.P. could have probably been discharged on January 13 on oxygen, with outpatient follow-up. He noted that N.P. was started on a new medication on January 12, and that it is reasonable to keep the patient for an additional 24 hours to gauge his response. However, Dr. Haim also noted that the medication was a diuretic, not an antibiotic. The greater weight of the evidence supports AHCA's denial of the last two days of N.P.'s admission. The record, as presented, established that N.P. ceased to meet the criteria for inpatient admission in the medical unit on January 13. Patient #13 T.S. T.S. was admitted on September 18, 2001, and was discharged on October 16, 2001. Peer reviewer Dr. Machado determined that 12 days, October 4 through October 16, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that T.S. was a 55-year-old man with cirrhosis and a history of drug abuse and hypertension. He was admitted for treatment of a non-healing venous ulcer that had failed outpatient therapy. T.S. was also experiencing uncontrolled pain despite oral pain medications. He was started on broad-spectrum antibiotics and underwent debridement of the wound on September 21. Plans were made to discharge him to a skilled nursing facility for several weeks of wound care and IV antibiotics. On September 22, his pain continued to be poorly controlled. On September 25, he had a fever of 101 degrees and diarrhea, which prompted further work- up. Cultures of the wound continued to show a polymicrobial infection that also had a fungal component. Oral Sporanox was added to his medications to address the fungal component. On September 27, a pain management consultation was requested due to his continued uncontrolled pain, mostly during dressing changes. T.S. was placed on a Dilaudid PCA (patient controlled analgesic) pump, which did control his pain. During this time, T.S. had waxing and waning mental status due to the pain medications. Because of T.S.' increasing lethargy, the PCA was discontinued on October 3, and T.S. was thenceforth maintained on oral medications. The patient also had chronic anemia on admission that slowly worsened during his stay. He was found not to be acutely bleeding and was transfused PRBCs with improvement in his hematocrit level. Dr. Machado agreed that it would have been difficult to discharge T.S. to a skilled nursing facility for dressing changes and IV antibiotics if he was unable to tolerate dressing changes without a PCA pump for pain. Therefore, she would allow the hospitalization through October 3, when T.S. was switched to oral pain medications and could have gone to a skilled nursing facility. Treating physician Dr. Pradeep Vangala testified that he saw T.S. in his office, prior to his hospital admission. T.S. came in with what appeared to be cellulitis in his legs, and was treated with oral antibiotics. When the condition failed to respond to treatment, Dr. Vangala admitted T.S. to the hospital. Dr. Vangala stated that T.S. was kept in the hospital after October 4 because his cellulitis had not resolved and the patient was not stable enough to be changed to oral antibiotics. Dr. Vangala testified that it was not a simple decision to send T.S. home with IV antibiotics because of complicating issues. Secondary to his cirrhosis, T.S. had significant edema in most of his body in general, and his legs in particular. Dr. Vangala stated that T.S. required close observation of his skin integrity and his cellulitis, and that his cirrhosis was the cause of the edema. Though T.S. had a lot of excess fluid, most of it was in the subcutaneous tissues rather than the blood vessels. This means that his fluid status had to be closely monitored, because of the danger that he might become intravascularly volume depleted, which could affect renal function. Dr. Vangala stated that the cirrhosis had altered T.S.'s mental status for a significant portion of his stay, and that an acutely confused patient is not a candidate for discharge because he is not able to follow discharge instructions. T.S. also had significant anemia, which meant that his hemoglobin had to be watched. Dr. Haim testified that during all 12 days denied by Dr. Machado, T.S. was still running a fever and had a depressed mental status. He was still receiving IV medications, and had a significant swelling of the abdomen that required drainage. His mental status was abnormal, and physicians were having a very difficult time titrating his pain medications. A neurologist was called in on October 4 because of T.S.'s impaired mental status. The gathering fluids in his body were causing swelling and making it difficult for him to breathe. Dr. Haim testified that the IV antibiotics that T.S. was receiving after October 4 had to be closely supervised, though he conceded that a skilled nursing facility could handle their administration. The greater weight of the evidence supports AHCA's denial of the last twelve days of T.S.'s admission. Dr. Machado's opinion that the medications administered via IV after October 4 could have been given outside of the inpatient hospital setting was uncontradicted. Dr. Vangala's concerns were genuine, but mostly consisted of monitoring actions he wished to perform as a precaution, rather than acute care needs. The record as presented established that T.S. ceased to meet the criteria for inpatient admission in the medical unit on October 4. Patient #14 & 15 (two denials) F.T. F.T. was admitted on March 27, 2000, and was discharged on May 13, 2000. Peer reviewer Dr. Machado determined that: March 27 through April 4, should be approved for treatment of coagulopahty, subdural hematoma, and evaluation of the patient's near-syncopal episode; April 14 through May 7, should be approved for chemotherapy and treatment of neutropenic fever; and that April 5 through April 13 (nine days) and May 8 through May 13, (five days) should be denied because the treatment during those periods could have been administered on an outpatient basis. Dr. Machado's peer review report stated that F.T. was a 49-year-old female with metastatic breast cancer admitted with a coagulopathy and near-syncope (almost fainting). She was found to have new subdural hematomas and a new pathologic fracture of the left femur. Her coagulopathy was reversed and she was evaluated by neurosurgery and radiation oncology. No surgery was recommended. She began palliative radiation therapy to the brain and left femur on March 29. She remained hemodynamically and neurologically stable, and neurosurgery signed off on the case on April 4. Her pain responded well to radiation. Between April 4 and April 14, F.T.'s hospital care involved continued radiation therapy and the biopsy of a left auxiliary lymph node (on April 11) to determine the receptor status of the breast cancer, which would enable the oncologist to decide if chemotherapy would be of benefit. Dr. Machado concluded that this evaluation and the radiation therapy could have been done on an outpatient basis. On April 14, F.T. began chemotherapy over two days and very soon began experiencing fever and neutropenia (an abnormally low level of neutrophils, the white blood cells produced in the bone marrow) and then respiratory distress. She was started on IV antibiotics and IV diuretics. She was also started on a feeding tube due to poor oral food intake. The fevers and neutropenia were resolved by April 25, but she continued to decline, with increased shortness of breath requiring more diuresis to clear fluid from the lungs. It became evident she was deteriorating and her feeding tube was discontinued by May 4. By May 8, comfort measures only were initiated, and evaluation for inpatient hospice care was requested. In her deposition, Dr. Machado testified that between April 4 and April 14, F.T. was receiving radiation as her main treatment, as well as further evaluation to determine whether anything more could be done for her cancer. Everything she received during this period, including the lymph node biopsy, could have been done on an outpatient basis. On April 14, she started chemotherapy, which was reasonable to perform in the hospital. By May 8, the medical chart notes indicate the initiation of "comfort only" measures. At that point, she could have been sent home with hospice care or to a hospice house. Dr. Machado conceded that some patients do receive inpatient hospice care, but she testified that this should have been done in a hospice bed, not an acute care medical bed. Dr. Haim testified that during the period of April 5 through April 13 F.T. was receiving radiation to the fractured femur and awaiting a lymph node biopsy. The initial pathology report did not have sufficient material for receptor studies, so a surgical biopsy would need to be performed. On April 5, the hospital social worker was awaiting orders to transfer F.T. back to the nursing home from which she had been admitted. However, F.T. had an episode of nausea and vomiting. Dr. Haim stated that nausea and vomiting in a patient who has metastasis is extremely serious because it could indicate more brain swelling or bleeding in the brain. She was started on IV Decadron, a steroid given to combat nausea and vomiting in chemotherapy patients. Dr. Raul Castillo, F.T.'s oncologist, met with a pathologist on April 7 to discuss the need for an open biopsy of F.T. On April 8, F.T. was receiving radiation and was started on a new chemotherapy drug, IV Aredia. She was monitored closely for side effects. Pain management was a persistent problem. On April 10, she was given the open biopsy under a local anesthetic. On April 13, an orthopedist saw her and ordered a specially fitted brace, because she had difficulty sitting due to her spinal problems. Dr. Haim concluded that, because of all the treatments F.T. was undergoing, including IV chemotherapy, it was mandatory for her to stay inpatient from April 5 through April 13. She could not get the chemotherapy in a non-acute care facility. The hospital was the only place she could get IV Aredia, the brace hadn't arrived until April 13, and she had multiple problems that required monitoring, including advanced cancer and bleeding in the brain. Dr. Haim did not believe that a skilled nursing facility had the capacity to handle F.T. As to F.T.'s second stay, Dr. Haim testified that from May 8 to May 13 F.T. was very weak. Her abdomen was markedly distended, which could have meant that her bowels weren't working well. The abdomen was X-rayed. Her platelet count was dangerously low. An oncology note dated May 9 stated that she was a full code (meaning that all resuscitative efforts must be attempted), by her own choice. Her full code status forced the doctors to plan the performance of tests on her abdomen. On May 10, F.T. voluntarily changed her instructions to DNR (do not resuscitate). Comfort measures were instituted and hospice was consulted. However, when the hospice nurse arrived, F.T. was out having an ultrasound preparatory to having the abdominal fluid drained. The hospice decided not to see her, because she was getting a procedure. The hospice nurse never saw the patient on that day. F.T. was admitted to hospice on May 13. The oncologist, Dr. Castillo, testified that his medical group first saw F.T. in March 2000. F.T. had been diagnosed with breast cancer in 1988, and treated in Puerto Rico, with a left mastectomy and chemotherapy. After she completed the chemotherapy, she had radiation. She indicated that in December 1999, she was told she had metastatic cancer in her bones. In 2000, she developed pain over her hips and legs. She had a fracture over her left femur and a prosthesis over her left leg. She had been taking Coumadin, and Dr. Castillo became involved when F.T. presented with bleeding secondary to Coumadin toxicity. Dr. Castillo described this as a very complex and emotional case in which a few strands of information had to be pieced together to determine the best case management. F.T.'s case history was incomplete because she spoke only Spanish, creating a big language barrier with most of the hospital staff. Dr. Castillo speaks Spanish, and was able to get a "full but scattered history" from F.T. F.T. had metastatic disease. Dr. Castillo testified that it is extremely important to determine if the patient has an estrogen receptor or hormonally positive tumor. Patients who are hormonally sensitive have a much higher probability of responding positively to therapy. To make things more difficult, F.T. developed a subdural hematoma, for which the medical team had to correct her coagulation. Dr. Castillo testified that they felt uncomfortable discharging F.T. while treatment planning was underway. Because of her previous exposure to chemotherapy and radiation, F.T. was at high risk for complications such as the sepsis that eventuated. Dr. Castillo emphasized that this was a complex case, and that the treatment team lacked all the information necessary to make rapid and clear decisions. One event followed another, and the team concentrated on trying to catch up and get the patient somewhat stable. Dr. Castillo stated that a problem with treating a patient this sick on an outpatient basis is the lack of supervision by a specialist. Such a patient will not have access to a site where she is going to get one-to-one care from the oncological standpoint. Dr. Castillo agreed that radiation is commonly done on an outpatient basis, but he noted that this was a patient who had bleeding on the brain and was getting radiation to the brain. If she was in a skilled nursing facility and had a subdural hematoma, she would probably have died on her way to the hospital. Dr. Castillo stated this his group's philosophy is to discharge a patient when they consider the patient stable, and not to leave a patient in the hospital for a mere workup. However, this was a patient who could become a neurosurgical emergency case at any moment. Dr. Castillo concluded that he would not have done anything different in the management of this patient. The greater weight of the evidence supports Petitioner's position that April 5 through April 13 and May 8, through 13 should not have been denied. Dr. Castillo's testimony as the treating oncologist, in combination with Dr. Haim's expert testimony, credibly established that F.T.'s condition was so precarious that her entire inpatient stay was medically necessary. Patient #16 J.Y. J.Y. was admitted on March 3, 2001, and was discharged on March 21, 2001. Peer reviewer Dr. Machado determined that five days, March 16 through March 21, should be denied due to lack of medical necessity for continued inpatient care. Dr. Machado's peer review report stated that T.S. was a 39-year-old female admitted due to swallowing a dental appliance that had become lodged in her esophagus. She underwent an endoscopy on March 3, and the foreign body was removed with some difficulty. Her esophagus was perforated due to the foreign body. She began having fever and pain. A CT scan on March 6 showed extensive edema and air tracking compatible with esophageal perforation. She was kept NPO, hyperalimentation (feeding tube) was started, and IV antibiotics were continued. Clinically, she improved and conservative treatment was continued, as the patient wished to avoid surgery. Dr. Machado believed that it was still prudent to monitor and treat the patient in the hospital, due to the possibility of serious complications from this type of injury. A barium swallow was performed on March 12, which showed that a leak persisted in the esophagus. Because she was clinically so much better, it was decided to repeat the CT scan of the neck on March 14 to check for improvement. The scan showed that soft tissue gas and swelling had decreased considerably. By March 16, her IV antibiotics were discontinued and it was decided to give her a trial of fluids by mouth. She was hemodynamically stable and afebrile. Dr. Machado concluded that she should have been discharged with home health and hyperalimentation, with an outpatient swallowing study and close follow-up, rather than waiting in the hospital until March 19. Dr. Haim testified that the March 12 barium swallow results led to J.Y.'s being kept on no food by mouth and total parenteral nutrition (TPN, another term for a feeding tube). On March 16, J.Y. was noted to be clinically stable, but her liver function tests were noted to be high. Dr. Haim noted that the TPN itself could be causing the liver problems, so there was a GI consult. The gastroenterologist recommended a change of antibiotics as a possible solution to the increase in her liver enzymes. Contrary to Dr. Machado's statement, no trial of fluids by mouth was done on March 16. As of March 17, J.Y.'s orders were still nothing by mouth and TPN, and her liver enzymes continued to rise. On March 18, there were no major interventions and J.Y. was scheduled for a swallow study. Her liver enzymes were noted to be decreasing for the first time. Her swallow study results were pending on March 19. Also on March 19, a pulmonary note indicated phlebitis in J.Y.'s arm, in the area of the IV feeding. An order to replace the PICC line was written. On March 20, J.Y. was started on an oral diet and her PICC line was replaced. The gastroenterologist recommended a liquid diet for several weeks. On March 21, the patient was discharged home on IV TPN and a liquid diet. Dr. Haim concluded that the acute care setting was required for the denied days. Treating surgeon Dr. Stephen Huber testified J.Y. came in having swallowed her partial plate, which had become lodged in her esophagus. The emergency room physicians could not get it out, and so J.Y. was taken to surgery. Dr. Huber kept her NPO because he was afraid she might have torn her esophagus. He placed her on IV antibiotics and ordered a swallow study, which revealed a small leak. Dr. Huber called in an infectious disease specialist to manage J.Y.'s antibiotics because he was worried about contamination from the leak spreading into her neck. She was started on IV feedings and the medical team watched for an abscess to develop in her neck. A few days later, another swallow study was performed, which indicated the leak was smaller but still persistent. J.Y. was kept NPO and kept on IV antibiotics. A third swallow study showed the leak had resolved, and she was started on regular food the next day. Once she was cleared by all her specialists, she was discharged from the hospital. Dr. Huber testified that he kept J.Y. in the hospital after March 16 mainly to watch her. Even after the last swallow study, there was still a small leak in the esophagus. J.Y. had not eaten for a couple of weeks, but she was getting better clinically, and Dr. Huber decided to feed her. He started with clear liquids, then advanced her diet slowly over the next few days. Dr. Huber testified that J.Y. had to be watched for fevers and neck swelling caused by her eating, and that he could not evaluate her progress if she was at home. J.Y. did not speak English, and there would have been difficulty monitoring her condition if she were not under direct observation. Seeing her on an outpatient basis might prove harmful if she developed an abscess in her neck, or sepsis. J.Y. remained on IV antibiotics until she was discharged. The greater weight of the evidence supports AHCA's denial of the last five days of J.Y.'s admission. Dr. Huber's concerns were genuine, but mostly consisted of monitoring actions he wished to perform as a precaution, rather than acute care needs. The record as presented established that J.Y. ceased to meet the criteria for inpatient admission in the medical unit on March 16. Psychiatric Inpatient Hospital Stays By the time of the hearing, the psychiatric inpatient hospital stays of 13 patients remained at issue. The findings below are set forth in the order that the patients were listed in AHCA Exhibit 6. Patient #1 H.A. H.A. was admitted on February 20, 2001, and was discharged on February 26, 2001. Peer reviewer Dr. Rahul Mehra determined that three days, February 23 through February 26, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that H.A. was a 57-year-old female with a diagnosis of schizophrenia. She was admitted, involuntarily, under the Baker Act on February 20, for reasons unclear in the medical record. As of February 23, the patient was not actively suicidal, homicidal, manic, or in complicated withdrawal. The patient's psychotic symptoms may have persisted, but these symptoms appeared to be baseline. As of February 23, she did not need 24-hour nursing care. She was discharged on the same dose of anti-psychotic medication she was taking upon admission. Dr. Mehra concluded that, as of February 23, outpatient was the appropriate level of care. Generally the Medicaid standards for whether a patient requires an inpatient psychiatric bed are as follows: whether the patient is actively suicidal or homicidal; whether the patient is so acutely psychotic that her ability to care for herself is impaired; whether the patient is physically aggressive or manic; and whether the patient is having a "complicated withdrawal" from alcohol or drugs that might cause a seizure or other acute health problem. Dr. Mehra testified that it was appropriate to admit H.A. because of her family's concerns that she might have a handgun and was threatening self-harm. At admission, she was having some psychotic symptoms, displaying disorganized thoughts. However, as of February 23, she was no longer actively suicidal or homicidal, which was the reason she was admitted. She did have psychiatric symptoms, such as visual and auditory hallucinations, but these seemed to be her baseline level of functioning. No changes were made to her medications. Dr. Mehra's recommendation would have been to transfer H.A. to an outpatient setting or a nursing home. Petitioner's psychiatric expert, Dr. Alan S. Berns, testified that H.A. was admitted through the emergency room for increasing auditory hallucinations and religious preoccupation. She had a history of non-compliance with her outpatient treatment, mood swings, and unpredictable impulse control. She denied hallucinations, but was noted to talk to herself as a religious preoccupation. The diagnostic impression was of acute exacerbation of chronic undifferentiated schizophrenia, and rule out schizoaffective disorder. The psychosocial note on admission stated that the patient is talking to God and dead relatives. The emergency room nursing notes stated that the patient wanted to hurt an unidentified person with a handgun. She was labile, crying and laughing. H.A. had been admitted to Lifestream, a mental health center in Lake County, three times since November 2000. She had a history of "cheeking" her medications. She required assistance with her ADLs and ate poorly. The social worker reported that she did not attend group therapy sessions, and that she heard God talking to her all the time. By February 24, H.A. showed an improved mood and affect, with no overt agitation. She was observed talking to herself and appeared to be responding to internal stimuli. She also demonstrated some looseness of association. On February 25, she denied auditory or visual hallucinations and any suicidal or homicidal ideations. However, she remained seclusive, with pressured speech and a depressed, blunted affect. She refused to participate in groups. She was discharged on February 26 with improved mood and affect, no evidence of delusions, and denied hallucinations and suicidal or homicidal ideations. She was diagnosed with schizoaffective disorder and discharged with prescribed Seroquel and Paxil, the same medications she was taking on admission. Dr. Berns concluded that H.A. warranted another day or two past the February 23 discharge authorized by Dr. Mehra. The nursing notes from February 23 show the patient alert and oriented times three (time, place and person), and indicate that she was cooperative, pleasant, and denied suicidal ideation. However, H.A. also stated that God talks to her and she sees the Holy Spirit. On February 24, she was still exhibiting some looseness of association, indicating that her thinking was not organized, which could in turn affect her ability to perform her ADLs. At this point, she did not appear a danger to herself in terms of intentionally inflicting harm. Dr. Mehra agreed that the symptoms cited by Dr. Berns, such as looseness of association, loose thoughts and disorganization, can be indicative of the need for a longer inpatient stay. However, loosening of associations is a common finding in a patient with schizophrenia, which is a lifelong disorder. Looseness of association in a schizophrenic patient does not, in and of itself, invoke the Medicaid guidelines that the patient is acutely and gravely psychotic. Dr. Mehra reasoned that if her acute condition had been such a great concern, then her antipsychotic medication could have been increased to effect a change in the observed loosening of associations. Her subtherapeutic dosage was never changed during her inpatient stay. Dr. Mehra concluded that just having loosening of associations is not sufficient, under the Medicaid guidelines, to continue an inpatient level of care. The greater weight of the evidence supports AHCA's denial of the last three days of H.A.'s admission. The record as presented established that H.A. ceased to meet the criteria for inpatient admission in the psychiatric unit on February 23. Patient #2 T.E. T.E. was admitted on March 19, 2001, and was discharged on March 27, 2001. Peer reviewer Dr. Mehra determined in his report that three days, March 25 through March 27, should be denied due to lack of medical necessity for continued inpatient care. However, in his deposition, Dr. Mehra testified that he now agreed with the hospital that the entire stay should be approved.6 Patient #3 S.G. S.G. was admitted on October 25, 2001, and was discharged on November 1, 2001. Peer reviewer Dr. Mehra determined in his report that four days, October 28, through November 1, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that S.G. was a 42-year-old male with diagnosis of schizophrenia admitted, involuntarily under the Baker Act from Orange County Jail, for psychotic symptoms and homelessness. The patient had a previous admission to Florida Hospital Orlando's psychiatric unit, having been discharged on October 8, 2001. Dr. Mehra found that as of October 28, the patient was not actively suicidal, homicidal, manic, or in complicated withdrawal. The patient's psychotic symptoms were still present but improved. The patient was cooperative, directable, and interacting with some peers. His delusions appeared to be chronic. He did not require seclusion or restraints and was not a management problem on the unit. His vital signs, appetite, mood and sleep were stable. Placement became an issue during his inpatient stay. Dr. Mehra concluded that the appropriate level of care as of October 28, was outpatient, with closely supervised living arrangements. In his deposition, Dr. Mehra testified that S.G. was admitted with auditory hallucinations and delusions, reaching the level of psychotic behavior. During his stay, S.G.'s speech and thought became more organized. His psychotic symptoms became less intrusive. By October 28, he was not a danger to himself or others and was ready to move into a sub-acute setting. Dr. Mehra conceded that S.G. was probably still delusional on October 28, but noted that his delusions were probably chronic and at this time were not interfering with his ability to perform his ADLs. Treating physician Dr. Rex A. Birkmire testified that S.G. was initially very psychotic, delusional, and disorganized. He had not been taking his prescribed medications. S.G. thought that one of the his nurses was the Queen of England. He heard voices and had a religious preoccupation about Satan, aliens and dragons. Staff at the jail believed S.G. needed a higher level of care, and therefore had him admitted to the hospital under the Baker Act. Dr. Birkmire testified that as late as October 31, S.G. was still so psychotic, he thought the medication Artane was a "gasoline pill." His conversation continued to be irrelevant and rambling. He said that "people see the smell but they don't see me." On October 31, S.G. was so disorganized that he could not identify the medications he would need to stay stable, and hospital staff felt he could not maintain his basic ADLs. Dr. Birkmire noted that by October 28, S.G. was "passively compliant" with his medications, meaning that he would take them when the nurses gave them to him. Dr. Birkmire stated that S.G. could have been managed in a skilled nursing facility with a 24-hour nursing staff. Dr. Berns testified that S.G.'s prior admission on October 8 raised questions as to the adequacy of his prior treatment, his compliance upon discharge, and his stress level during the interval between admissions. The notes for the current admission stated that S.G. was readmitted due to medication noncompliance. The admission note stated that the patient was psychotic and disorganized, with jumbled thoughts, and had ideas of reference as to the television, i.e., that it was sending him special messages. S.G. was reported to be hyper-religious, and carried a Bible. He had a history of hearing voices and was diagnosed with chronic undifferentiated schizophrenia. A note from Dr. Luis Allen stated that on October 28 the patient was still "very loose," meaning his thoughts were disorganized and psychotic. Hospital staff reported that S.G. remained delusional, and there was concern from the social worker that he might be responding to internal stimuli. On October 29, a note reported that S.G. was psychotic and manic, though starting to make more sense. On October 30, the notes stated that S.G. was still rambling and tangential, and that his ADLs were not good. Staff was concerned that S.G. was not committed to taking medication as an outpatient. Dr. Birkmire recommended the decanoate form of antipsychotic medicine, a long-acting intramuscularly administered form. Dr. Berns stated that some of these medications can be injected such that a dose can last from two- to-four weeks, which can improve patient compliance. A November 2 note from an advanced registered nurse practitioner stated that the patient seemed confused when given discharge instructions to follow up at Lakeside Alternatives. Dr. Berns testified that such confusion can be a red flag that the patient is not ready for discharge. Dr. Berns stated that S.G.'s chronic schizophrenic condition could deteriorate if he were discharged without being well stabilized and not committed to following through with his medications. Dr. Berns concluded that the length of stay was appropriate, and that he might have kept S.G. in the hospital even longer if he appeared confused on the day of discharge. In response, Dr. Mehra testified that the psychotic symptoms, including delusions that his nurse was the Queen of England, did not mean that S.G. must remain in the hospital. Dr. Mehra stated that the note in the chart that the patient believed Artane was a "gasoline pill" was not necessarily a delusion, but could have been an uneducated patient's way of saying that the pill peps him up. Dr. Mehra argued that if the medical concern was persistent psychotic symptoms so severe that he needed hospitalization, then the medical team needed to make dosage adjustments. However, no such adjustments were made after October 26. Dr. Mehra's opinion remained that S.G. did not meet Medicaid guidelines as of October 28. The patient was cooperative on the unit, not a management problem. He could live outside the hospital and still have delusions that someone was the Queen of England. Dr. Birkmire testified that S.G. was rambling, disorganized, and thought the nurse was Queen even after October 28, but that does not necessarily mean he should be in the hospital. Dr. Mehra pointed out that plenty of people walking the street have schizophrenia, are psychotic, and ramble. Dr. Mehra stated that one possible reason S.G. was kept in the hospital was concern as to where he would go upon discharge, because he came from jail and was homeless. Dr. Mehra testified that Medicaid does not cover the period of time when someone is needing placement. Dr. Mehra agreed that S.G. showed psychotic symptoms, but stated that the psychotic symptoms should affect the patient's ability to function in order to justify inpatient treatment. This patient was taking his medications, eating, participating in activities on the unit, and was directable. He did not require any means of seclusion or physical restraints and did not demonstrate aggressive behavior. Dr. Mehra agreed with Dr. Berns that it is a concern any time a patient is readmitted, because it speaks to the chronic nature of schizophrenia and psychoses, and how the symptoms persist over a period of time. "Loose" symptoms probably continued until the day he left. Dr. Mehra also agreed with Dr. Berns that schizophrenics can stabilize and have their thoughts become more organized, depending on the patient and his response to medications. One patient can be loosely organized and live on the street, and another may regain full control of his thoughts. However, Dr. Mehra saw no reason to amend his original opinion. A patient with loose thinking, who is psychotic and disorganized, may need hospitalization, if he is not taking his medicine, not eating, not sleeping appropriately, or is being aggressive. Otherwise, those symptoms may be as good as things are going to get for this patient, given that he has been in jail, has had frequent inpatient hospitalizations, and is homeless. Again, Dr. Mehra noted that S.G. remained in the hospital for several days with no changes to his medications. The greater weight of the evidence supports AHCA's denial of the last four days of S.G.'s admission. The record as presented established that S.G. ceased to meet the criteria for inpatient admission in the psychiatric unit on October 28. Patient #4 C.M. C.M. was admitted on March 2, 2001, and was discharged on March 10, 2001. Peer reviewer Dr. Mehra determined in his report that four days, March 6 through March 10, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that C.M. was a 16-year-old male admitted, involuntarily, under the Baker Act from the Orange County jail, where he was banging his head on the wall. Hospital records indicated concerns by hospital staff that C.M. was malingering in an effort to avoid his pending legal woes. Dr. Mehra found that, as of March 6, C.M. was not actively suicidal, homicidal, grossly psychotic, manic, or in complicated withdrawal. Dr. Mehra concluded that the patient should have been discharged to the juvenile detention center, with psychiatric consultation. In his deposition, Dr. Mehra testified that the hospital had a range of diagnoses for this patient, from "malingering," meaning that he was intentionally inventing his symptoms, to a concern about schizophrenia. Dr. Mehra's review of the hospital records led him to conclude that C.M. was malingering, based primarily on C.M.'s statement to his grandmother that he would get himself placed in the psychiatric unit anytime he went to jail. The record stated that C.M. said the devil was telling him to kill himself, but the physician and staff all thought C.M. was malingering. C.M.'s statement about killing himself led to no increase in precautions, and his medications were not increased until the next day. By the end of C.M.'s hospitalization, the physician was talking about tapering the boy completely off of Respiradol, an anti- psychotic, and was convinced that C.M. was feigning his symptoms. Attending physician Scott D. Farmer7 contended that C.M. remained very dangerous on March 6, because he was still complaining of command hallucinations. "Command hallucinations" cause the patient to believe there are voices telling him to act in a dangerous way, and are recognized as a "unique risk factor" justifying inpatient care. On March 6, C.M. was hearing the voice of his grandfather reassuring him, but he was also hearing the voice of the devil telling him to kill himself. Dr. Farmer testified that patients have been known to kill themselves when they have persisting command hallucinations, and this was a patient who bangs his head against a brick wall. This was an indication that his medications had not been properly adjusted, and that they could not be so adjusted on an outpatient basis. Dr. Farmer's opinion was that it was "ludicrous" to think this patient could be placed in a more complex environment and get better. To discharge C.M. on March 6, would have constituted "abandonment." Dr. Farmer contended that it is a "glib assumption" to say that C.M. was faking his illness, and it is not within the spirit of psychiatry to prejudge that a patient is falsifying his expressed distress. The tradition in medicine is to compassionately adjust medication to remedy the symptom complex, which in this case pointed toward schizophrenia. Dr. Farmer stated that the faking allegation is "a reflection of the lowest form of psychiatric practice. It is a departure from the Hippocratic oath to do no harm. It is an assumption that you can climb inside of somebody else's head and then make conclusions that are a distinct departure from what the patient is saying." Dr. Farmer pointed out that C.M. had been treated at least once for a prior suicide attempt. He also pointed out that a "first break" psychotic episode is the best opportunity for treatment to have a favorable impact in the case of a patient with command hallucinations. Subsequent episodes require more aggressive treatment and higher doses of medications. C.M. was being treated with antipsychotic and antidepressant medications. On March 6, he was taking Wellbutrin, an antidepressant that has the lowest likelihood of triggering manic-type symptoms, and Risperdal. His medications were increased on March 6 and March 7. On March 8, C.M. was still responding to internal stimuli, carrying on a conversation with an internal voice. Dr. Farmer agreed that C.M. was stabilized by March 9 and should have been discharged on that date rather than on March 10. Dr. Berns noted the suspicions of malingering, but also considered that jail staff could not handle C.M., that he appeared to be in imminent danger of harming himself, and he had been treated for at least one suicide attempt in the past. These factors raised concerns as to how much of C.M.'s behavior was malingering and how much indicated genuine illness. Dr. Berns was influenced by the fact that C.M. requested an increase in his dosage of Risperdal, which is not a medication that can be abused or used for intoxication. Dr. Berns acknowledged that C.M. lost some credibility with his statement that he would continue getting Baker Acted if incarcerated. He also acknowledged that C.M.'s age and impulsiveness made it harder to determine the extent of his malingering, but that there was undoubtedly some malingering present in this case. Dr. Berns concluded, as did Dr. Farmer, that C.M. could have been discharged a day or two earlier than March 10. Dr. Mehra replied that it was the treating physician, Dr. Birkmire, who concluded that C.M. was malingering. The auditory hallucinations on March 6 were not sufficient to keep him in the hospital where the treating physician and the medical team believed he was making up the symptoms. Nothing in the testimony of Dr. Farmer or Dr. Berns caused Dr. Mehra to change his opinion. Both doctors referred to this patient's having a diagnosis of schizophrenia. Dr. Mehra called this a "serious and unusual diagnosis" for a 16-year-old, similar to a diagnosis of cancer in that the patient will have to live with it for the rest of his life. Dr. Mehra would expect that such a diagnosis would have led the treatment team to meet with C.M.'s family to offer the appropriate treatment planning and education regarding schizophrenia, but the record indicated that no such meeting occurred. Dr. Mehra believed that there was cause to admit C.M. for evaluation, because he was only 16 years old. Even if it turned out he was malingering, it was prudent to admit him for four days to evaluate him. The greater weight of the evidence supports AHCA's denial of the last four days of C.M.'s admission. The record as presented established that C.M. ceased to meet the criteria for inpatient admission in the psychiatric unit on March 6. Patient #5 L.M. L.M. was admitted on May 16, 2001, and was discharged on May 22, 2001. Peer reviewer Dr. Mehra determined in his report that three days, May 20 through May 22, should be denied due to lack of medical necessity for continued inpatient care. Florida Hospital Orlando did not contest Dr. Mehra's denial of three days for this admission. Patient #6 H.P. H.P. was admitted on March 7, 2001, and was discharged on March 14, 2001. Peer reviewer Dr. Mehra determined in his report that four days, March 10 through March 14, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that H.P. was a 34-year-old female admitted, involuntarily, under the Baker Act for "suicidal ideation and auditory hallucinations." As of March 10, H.P. was not actively suicidal, homicidal, psychotic, manic, or in complicated withdrawal. Her sleep, vital signs, and appetite were stable. Dr. Mehra concluded that the patient no longer needed 24-hour psychiatric nursing care and could have gone back to the skilled nursing facility on March 10. Outpatient was the appropriate level of care. In his deposition, Dr. Mehra testified that H.P.'s improvement was such that she could have been discharged on March 10. There was no deterioration in her condition after March 10. She denied suicidal or homicidal ideations, hallucinations, and delusions throughout the day. Dr. Mehra noted that H.P. was HIV-positive and obese, and would therefore chronically be at risk for suicidal ideation. She had been hospitalized many times for suicidal ideation and auditory hallucinations. H.P. claimed to have jumped from a five-story building when she was 18 years old. Dr. Mehra did not think H.P. was schizophrenic, though her attending physician was concerned about major depression with psychotic features. Attending physician Dr. Luis Allen testified that H.P. was admitted from a skilled nursing facility. She had had multiple psychiatric hospitalizations, and on this admission was presenting with psychotic symptoms, hearing voices and having suicidal thoughts. Dr. Allen conceded that there was one day during her stay when H.P. reported not having suicidal thoughts, but he added that these thoughts resumed the next day. Given that H.P.'s history made her a higher risk for suicide, Dr. Allen felt that he had to ensure she was stable psychiatrically before she could return to the skilled nursing facility. Dr. Berns testified that the March 7 admission note indicated that H.P. had a history of depressive disorder and multiple psychiatric admissions to Florida Hospital Orlando. H.P. reported insomnia and auditory hallucinations, which were mostly command and derogatory hallucinations, voices calling the patient "stupid" and a "dummy" and saying that she should kill herself. H.P. had a history of several suicide attempts and had been taking Risperdal, Prozac, and Remeron. She reported suicidal thoughts, but no plan, and was alert times three. The admitting diagnosis was major depressive disorder, recurrent with psychotic features, and rule out mood disorder secondary to medical condition with depressive-like features. Dr. Berns agreed that the March 10 notes showed that H.P. was depressed with blunted affect, and that she denied suicidal ideation. On March 11, the notes indicated that H.P.'s mood was improved, that she slept better during the night, that her suicidal thoughts were significantly decreased, and that she was compliant with her medications and reported no auditory hallucinations or delusions. However, the attending physician continued to note that she was depressed and hopeless, and the social worker reported that H.P. discussed having no desire to live any more and be a burden to her children. On March 13, her behavior was improved, she had a very good appetite, and she had no hallucinations, delusions, or suicidal thoughts. On March 14, she denied suicidal ideation and hallucinations and was discharged back to the skilled nursing facility. Dr. Berns testified that H.P.'s stay was necessary, and disagreed that she could have been discharged to a skilled nursing facility on March 10. She had a previous suicide attempt, and she had suicidal thoughts and heard voices telling her to harm herself. Dr. Berns agreed that many people express thoughts such as those H.P. expressed to the social worker on March 11, but Dr. Berns pointed out that many people do not also have previous attempts or voices telling them to kill themselves. H.P. was showing improvement by March 11, but her symptoms were still present. Dr. Berns did not agree with Dr. Mehra that suicidal ideation, without the means to carry out a plan, is never sufficient to keep a patient in the hospital. Dr. Berns stated that if the patient is having thoughts of suicide and staff is documenting that the patient is helpless and hopeless, the suicide risk may be sufficient to hospitalize the patient, particularly where there have been previous hospitalizations and suicide attempts. After reviewing the testimony of Dr. Allen and Dr. Berns, Dr. Mehra maintained his opinion that H.P. should have been discharged on March 10. Dr. Mehra pointed out that no physician saw the patient on March 10, probably because it was a Saturday.8 Regardless of the day of the week, if the patient's condition is so acute that it is necessary to hospitalize her with a risk factor of attempted suicide, then she should be seen by a doctor. The unit notes for March 10 indicate she was showing no evidence of psychoses or suicidal ideation. Dr. Mehra noted that even H.P.'s mental status exam at the time of admission showed no active suicidal plan. If the patient is sick enough to be in the hospital, then she should have been seen by a physician. Dr. Mehra concluded that there appeared no need for H.P. to be seen by a doctor on March 10. The greater weight of the evidence supports AHCA's denial of the last four days of H.P.'s admission. The record as presented established that H.P. ceased to meet the criteria for inpatient admission in the psychiatric unit on March 10. Patient #7 J.R. J.R. was admitted on March 2, 2001, and was discharged on March 15, 2001. Peer reviewer Dr. Mehra determined in his report that ten days, March 5 through March 15, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that J.R. was a 46-year-old female admitted from a skilled nursing facility under the Baker Act for being "suicidal." As of March 5, the patient was not actively suicidal, homicidal, psychotic, manic, or in complicated withdrawal. She needed intensive outpatient treatment to address her depressive symptoms, eating issues, and possible addiction to narcotics. J.R. refused to see a chronic pain specialist while in the hospital. Dr. Mehra's report also raised a "serious quality of care concern" in the fact that the patient was immediately referred for electroconvulsive therapy ("ECT") treatment based on "unclear, poorly documented reasons." The physician's decision to use ECT was based purely on the patient's report, without documentation, of failed past treatments. The patient reported that she had not had psychotherapy in years. In his deposition, Dr. Mehra testified that the admitting concern was that the patient was suicidal in her skilled nursing facility, and Dr. Allen had her Baker Acted into the hospital. Dr. Farmer performed the psychiatric evaluation on admission and stated that the patient was not actively suicidal, not psychotic, and was angry with Dr. Allen for Baker Acting her. Dr. Farmer diagnosed J.R. with major depression and anorexia nervosa. Dr. Mehra concluded that J.R. should have been discharged on March 3, because the initial admission evaluation did not establish medical necessity for an inpatient psychiatric hospitalization. Dr. Mehra testified that it was difficult to determine why the patient was at this level of care because Dr. Farmer found that J.R. was not suicidal, actively suicidal with a plan, or psychotic, had no form of auditory or visual hallucinations, and was not manic or involved in a complicated withdrawal. Dr. Mehra stated that, while he did not come out and say that J.R. should not have been Baker Acted, Dr. Farmer did repeatedly note the patient's anger at being Baker Acted, which is highly unusual in a psychiatric evaluation report. Dr. Mehra also observed that the Baker Act documents were not dated, and, thus, there was no way of saying they were completed on the day of J.R.'s admission. A Baker Act is an involuntary commitment of a patient, and it involves a patient's rights. Dr. Mehra stated that because the papers must be completed within a specified period of time of having face-to- face contact with the patient, they must note the date and time. The failure to fill out the papers completely causes a concern about the appropriateness of the patient's admission. Dr. Mehra believed that the indication for ECT was not clear. There are specific criteria to initiate a patient on ECT, and the medical record here did not support it. One of the ECT criteria is that the patient must have failed a minimum of three antidepressants at adequate doses for an adequate length of time. The only documentation in the record was the patient's own report that medications had not worked. There was no objective data in the record regarding her medication history. Dr. Mehra found it very significant that J.R. had no prior psychiatric hospitalizations, especially in the context of her being given ECT. There was not adequate medical confirmation that she had failed previous antidepressant therapy. Dr. Mehra noted that J.R. had a history of a cervical spinal fusion and issues of lumbar back pain, which should have raised concerns about inducing a grand mal seizure by way of ECT. Dr. Mehra saw no MRI or CAT scan of the brain, which is usually done prior to the administration of ECT in order to rule out a mass in the brain. Dr. Allen testified that J.R. had a history of recurrent depression with psychotic features and an eating disorder. During her initial visit to the skilled nursing facility, she was found to be anxious, depressed, and experiencing some suicidal thoughts, and was referred for inpatient treatment. She had experienced significant weight loss and had issues of untreated depression. ECT was initiated and performed three times a week. Dr. Allen conceded that ECT may sometimes be done on an outpatient basis, but stated that J.R.'s history of psychiatric symptoms and the low level of support she had in the community necessitated inpatient placement. She was at a nursing home and would have had to be transported at 5:30 every morning for the treatment. There was no transportation available for her to come in as an outpatient. Dr. Allen also felt that she needed to remain inpatient because of the confusion and disorientation that she was developing with each treatment. Dr. Allen stated that the primary reason for keeping J.R. as an inpatient was to give the ECT treatment. He decided to complete the course of ECT treatment and discharge her back to the nursing home. Dr. Farmer was the second opinion doctor who actually performed the ECT treatment. Dr. Allen stated that ECT is usually reserved for patients who are considered treatment intolerant or "refractory" to treatment, with a history of failing different trials of medications or having developed side effects, or patients who had a very high risk of suicide. With J.R., it was not clear how much the eating disorder was playing into her depression, but Dr. Allen believed that her inner functions were clearly deteriorating, as evidenced by the fact that she was in a nursing home at age 45. The ECT was to address her primary mood symptoms and appetite. At the nursing home, she was only eating percent of her meals. She was eating 50 percent of her meals when she left the hospital, and she continued to show improvement at the nursing home. Dr. Berns testified that J.R. showed a history of cervical spinal cord injury. J.R. was a nurse, and an aggressive patient had caused her injuries when she worked in the emergency room. She had a history of anorexia, depression, and alcohol abuse. She was agitated in the emergency room during admission. J.R. claimed she had had trials on all available antidepressants, which were only partially helpful or failed. She had insomnia and took Klonopin for restless legs. On admission, she was also taking OxyContin, Wellbutrin, Flomax, Trazedone, and Zofran. Her mental status examination indicated lethargy and monotone speech. She was depressed, helpless, and hopeless, but denied suicidal ideation. J.R. stated that she had an overdose of medications at age 16. On March 5, she was withdrawn, depressed, and complained of anergia (lack of energy) and anhedonia (inability to experience pleasure). She also complained of dizziness. She showed the same symptoms on March 6, hopeless and helpless but denying suicidal thoughts. She again complained of feeling weak and dizzy, and she had low blood pressure, 73 over 53. Because of concerns that her medications may have been the cause of her medical complaints, the treatment team decided to withhold all psychiatric medicines and initiate ECT. J.R.'s first ECT treatment was on March 7. On that date, she was depressed, withdrawn, had anergia, but no suicidal thoughts. Her dose of Klonopin was lowered. On March 8, her mood was depressed and she showed anergia, anhedonia, and a variable appetite. A trial of a new anti-depressant, Remeron, was commenced, and J.R. was given an Ambien sleeping pill at bedtime. Her blood pressure was still low, 70 over 50, and the treatment team decided to withhold the OxyContin. J.R. refused to see the psychiatrist and stayed secluded in her room. By the second ECT treatment on March 9, J.R.'s mood was improving and her blood pressure was up to 90 over 57. ECT was scheduled for three days during the next week. On March 10, J.R. complained of depression and suicidal thoughts, and stayed alone in her room most of the day. On March 11, she again stayed secluded in her room, depressed and with flat affect. On March 12, she slept fairly well and ate 75 percent of her meals. Her mood was improving and suicidal thoughts decreased. She had ECT in the morning then rested in bed most of the day. She was depressed and anxious, with poor insight and judgment. On March 13, her mood was improving and she denied suicidal ideation. J.R. was more goal oriented and showed less psycho- motor retardation. She was scheduled for discharge on March 14, after her ECT treatment. She had the treatment, but her discharge was placed on hold because the skilled nursing facility did not want to accept her. Dr. Berns was not sure why the facility did not want to take J.R. back, unless they considered her a problem patient or didn't want to handle a depressed patient. Such problems can hold up discharge. Dr. Berns testified that it would not be acceptable to discharge this patient to the street, and that the length of stay was medically necessary. Dr. Mehra countered that feeling depressed, helpless and hopeless is not enough to justify an inpatient admission. On J.R.'s mental status exam upon admission, Dr. Farmer documented no suicidal ideation, no psychotic symptoms, and patient anger at being Baker Acted. She was given ECT for reasons that Dr. Mehra thought were not very well documented in the medical record. Dr. Mehra stated that it is a complex question as to whether giving her the ECT treatment is reason enough for an inpatient admission. J.R. was taking a heavy narcotic medication, OxyContin, which can make one depressed, withdrawn, and isolative. Dr. Mehra could find in the medical record no real theory as to why J.R. was still taking these medications. For reasons unclear to Dr. Mehra, there seemed to be an immediate desire to give her ECT. Dr. Mehra believed that March 2, should be authorized just to see what was going on with her, given that she had been Baker Acted by a physician. However, as far as the record indicated, J.R. had no history of inpatient psychiatric treatments. Dr. Mehra found it very unusual that ECT treatments would be given on a patient's first inpatient stay. ECT is routinely performed on an outpatient basis. Dr. Mehra acknowledged that where patient compliance is a problem, it may be proper to keep the patient in the hospital. However, this did not seem to be the case with J.R. One of the cornerstones of the decision process leading to ECT is a documented failure of past antidepressant therapy, and Dr. Mehra found no such documentation in the medical record. Lack of support in the community or transportation problems are not reason enough, standing alone, to keep someone in the hospital. The greater weight of the evidence supports AHCA's denial of the last ten days of J.R.'s admission. The record as presented established that J.R. ceased to meet the criteria for inpatient admission in the psychiatric unit on March 3. Patient #8 J.R. J.R. was admitted on March 16, 2001, and was discharged on March 27, 2001. Peer reviewer Dr. Mehra determined in his report that six days, March 21 through March 27, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that J.R. was a 24-year-old male with a diagnosis of schizoaffective disorder, who was admitted for symptoms of agitated, psychotic behavior. As of March 21, the patient was not actively suicidal, homicidal, manic, or in complicated withdrawal. J.R. may have still been psychotic, but the symptoms had improved. The patient's vital signs, sleep, and appetite had stabilized. He no longer needed 24-hour psychiatric nursing care. Dr. Mehra concluded that sub-acute treatment was the appropriate level of care as of March 21. In his deposition, Dr. Mehra testified that J.R. met discharge criteria on March 21, and could have gone into a sub- acute setting such as a skilled nursing facility or group home. Dr. Mehra could not recall whether there was a problem with bed availability in the skilled nursing facility, but added that after a patient meets discharge criteria, it is not Medicaid's responsibility to pay for a longer hospital stay while the patient awaits placement. Once the schizophrenic's acute crisis is resolved, he no longer meets the criteria for medical necessity. Dr. Birkmire was the treating physician, and his notes indicated compliance and improvement on March 20, and 21. J.R. was having some religious preoccupation, which was probably a baseline issue for him. Religious preoccupations in people with schizophrenia are sometimes chronic and never go away. Dr. Mehra testified that being psychotic and having auditory hallucinations do not alone establish grounds for remaining inpatient. Such symptoms are consistent with a diagnosis of schizophrenia, which is chronic. Dr. Mehra stated that J.R. would probably display these symptoms no matter how long he was kept in the hospital. Dr. Mehra testified that there is a vast difference between J.R.'s having an auditory hallucination and his having a command auditory hallucination to harm himself or someone else. Treating physician Dr. Birkmire testified that J.R. was very disorganized on admission, with a grandiose religious preoccupation that indicated he was in a manic stage. J.R. was also sexually inappropriate with some of the other patients and staff. On March 21, he was inappropriate, grandiose, and sexually preoccupied. On March 22, he was still very psychotic, hearing the voice of Britney Spears, with whom he had delusions of being married. He had sexually explicit conversations with other patients and staff. On March 23, he was severely agitated, requiring staff intervention. He was illogical and bizarre, talking to himself in the hallway, reporting that he heard voices and remaining delusional. He was hearing the voice of the devil and having paranoid thoughts about people around him. On March 24, he was unchanged, still delusional and still hearing voices, though they were becoming less intense and he was becoming less manic. Dr. Berns testified that schizoaffective disorder is an illness with symptoms of psychosis in the absence of symptoms of a mood disorder such as mania or depression. It is a chronic mental illness. Dr. Berns agreed with Dr. Mehra that the presence of a chronic illness is not grounds for hospitalization. It is only when the condition becomes acute, where the patient presents a danger to himself or others, that an inpatient psychiatric hospital may be the option. J.R.'s admission note stated that he was previously hospitalized in January 2001, for agitation, bizarre delusions, and concerns about violent behavior. He stated dead people were talking to him. On March 17, the psychiatrist noted marked auditory hallucinations, grandiosity, paranoid delusions, and tangential thought processes. The plan was to keep him on Risperdal, an antipsychotic, and Lithium, which is a mood stabilizing, anti-manic medication. Dr. Berns testified that the usual practice with these medications is to start with a low dose and build it up slowly and gradually. If the patient is in the hospital, the physician can be more aggressive because he can closely monitor blood work and vital signs. Lithium takes seven to ten days to build up to a therapeutic level. The medical notes from March 22 showed that J.R. remained psychotic, had auditory hallucinations, had delusional thoughts regarding Britney Spears and Judy Garland, was responding to internal stimuli, and was sexually preoccupied. On March 23, he was agitated and illogical with bizarre ideation. On March 24, he continued to report auditory hallucinations and was labile and agitated about his upcoming discharge. On March 25, he was still having auditory hallucinations, but less of the manic behavior. On March 26, there was some improvement in his mood and his auditory hallucinations were resolving, but he was still having problems in a group situation. Dr. Berns noted that on March 17, J.R. tried to kiss a nurse, then called her a "bitch with an attitude." There were concerns about his impulse control and potential for committing a sexual offense if released before he was fully stabilized. Dr. Berns agreed with the length of hospitalization, because J.R. had shown poor impulse control and sexually inappropriate behavior on admission, had been admitted two months earlier, and there were concerns about psychosis and violent behavior. The greater weight of the evidence supports AHCA's denial of the last six days of J.R.'s admission. The record as presented established that J.R. ceased to meet the criteria for inpatient admission in the psychiatric unit on March 3. Patient #9 N.R. N.R. was admitted on March 4, 2001, and was discharged on March 16, 2001. Peer reviewer Dr. Mehra determined in his report that three days, March 13 through March 16, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that N.R. was a 21-year-old female admitted, involuntarily, under the Baker Act for psychotic agitation and delusions. The authorization was based on the patient's presenting symptoms, diagnosis of intrauterine pregnancy, and a positive test for syphilis. As of March 13, the patient was not actively suicidal, homicidal, manic, or in complicated withdrawal. Her vital signs, sleep, and appetite were stable. She was taking prescribed medications and following unit rules. Her psychosis had decreased and she was not an immediate danger to herself or others. She appeared to have support from her mother. Dr. Mehra concluded that outpatient was the appropriate level of care. In his deposition, Dr. Mehra testified that the physician's note of March 13 stated that N.R. had no recent episodes of bizarre behavior, and no episodes of agitation or aggressive behavior. The physician progress notes for March 14 say the same thing. N.R.'s initial evaluation was for a psychotic disorder, and she was diagnosed with schizophrenia, a chronic condition. Dr. Mehra noted that the hospital did not obtain N.R.'s previous psychiatric history and that her mother could have been contacted about N.R.'s medical records. The treating physician, Dr. Allen, testified that N.R. was psychotic and grandiose on admission, and was noted at the jail to be head-banging, smearing feces, and playing in the toilet. She was pregnant with an unknown gestational age, and had a positive Rapid Plasma Reagin ("RPR") test for syphilis. She needed a lumbar puncture to determine if she had some form of neurosyphilis or another disorder that could influence her psychiatric behavior. Dr. Allen testified that she lacked the social network for the lumbar puncture to be done on an outpatient basis. He conceded that on March 13 she was compliant with her medication, but stated that she was still disorganized. The initial RPR was performed on March 4, but it took an additional ten days for the lumbar puncture to be successfully performed. One puncture was performed on March 10, but the specimen was not good, so another puncture was performed on March 14. Dr. Allen testified that the lumbar puncture requires the patient to remain very quiet in a hunched position as the needle is going through her back. An agitated, restless patient could cause problems. N.R. needed to be stabilized before the puncture could be performed. N.R. was found positive for syphilis and was discharged to her mother's home rather than to the jail. A visiting nurse went to the home to give the treatments. Dr. Allen explained that N.R. was not released to her mother between lumbar punctures because the mother had a history of depression, according to the history provided by N.R., which Dr. Allen conceded may not have been accurate. Dr. Allen also noted that N.R.'s mother was very difficult to contact. Dr. Berns testified that N.R. was psychotic on admission. At the jail, she was stripping off her clothing and hearing voices telling her that her husband was messing around with other women. She was hitting her head against the wall to get rid of the voices. Dr. Berns concluded that the length of stay was medically necessary and reasonable. N.R. was a pregnant female from the jail, psychotic, with self-destructive behavior. Her physician wanted to be extra careful in view of N.R.'s being pregnant. She was placed on antipsychotic medication. N.R. was eventually going back to the jail, and they wanted to stabilize her condition as much as possible, because the jail is a very stressful place to be. Dr. Berns agreed that, as of March 13, N.R.'s psychosis had decreased and she was not an immediate danger to herself or others. The greater weight of the evidence supports AHCA's denial of the last three days of N.R.'s admission. The record as presented established that N.R. ceased to meet the criteria for inpatient admission in the psychiatric unit on March 13. Patient #10 R.S. R.S. was admitted on May 19, 2001, and was discharged on May 30, 2001. Peer reviewer Dr. Mehra determined in his report that nine days, May 22 through May 30, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that R.S. was a 38-year-old female diagnosed with schizophrenia who was admitted, involuntarily, under the Baker Act for worsening of her psychotic symptoms. As of May 22, the patient was not actively suicidal, homicidal, manic, or in complicated withdrawal. The patient was still psychotic but the symptoms were not worsening and appeared to be at baseline, given that they remained unchanged even at discharge. After May 22, the record disclosed no evidence that R.S. required seclusion or emergency treatment orders to force her to take medications. She voluntarily took medications and followed unit rules, and no longer needed 24-hour nursing care. Dr. Mehra concluded that sub-acute treatment was the appropriate level of care as of May 22. Dr. Mehra testified that his main concern with the length of R.S.'s stay was that she persisted with active psychotic symptoms even up to the day of discharge. There was not much difference in her symptoms between May 22 and May 30. After May 22, she received no medication on an "as needed" ("PRN") basis and required no seclusion or restraints. Despite her other noted symptoms, if she was not having command hallucinations telling her to hurt herself, she could have been treated as an outpatient. Dr. Mehra agreed that if she expressed a desire to hurt herself after May 22, then any such days should be authorized. Dr. Mehra did not have the benefit of R.S.'s past medical records and stated this made it difficult to determine if R.S. was a patient whose baseline level of functioning is so low that she could never care for herself. He agreed that the attending physician had the advantage of having seen the patient in person. Attending physician Dr. Birkmire testified that R.S. had just been discharged from a medical psychiatric unit but had to be readmitted on a Baker Act because she was not taking her medications and was psychotic again, hearing and responding to voices and unable to communicate in a meaningful manner to staff. On May 22, she was noted as unchanged from admission, still psychotic, disorganized, hearing voices, depressed, and oriented only to person and place, not date and time. She was secluded in her room, not going to any treatment groups. Dr. Birkmire testified that his greatest concern was that R.S. was so psychotic and disorganized that she would probably not take her medications and would not be not able to care for herself. On May 23, she remained regressed, bizarre and psychotic. She was "dirty and careless" in her ADLs, and was complaining of suicidal command ideations, voices telling her to hurt herself by taking an overdose. On May 24, she was showing mild signs of improvement and was a little less reclusive and bizarre. She was still hearing voices and claimed they were telling her to be a friend to everybody, but she also admitted to suicidal ideations. On May 25, R.S. was still psychotic with suicidal ideations, disorganized, and paranoid. By this time, the voices were telling her to do more good things than bad, but she needed more time to stabilize on her medications. She was still dirty and careless in her appearance, and depressed with a flat affect. On May 26, she showed further mild improvement, was less paranoid, and reported that the voices were less intense. She remained in her room most of the time, and her ADLs were still careless. On May 27, R.S. was now oriented to person, place and time. The treatment team still thought she would stop taking medications on release, and made, further, two more medication changes. On May 28, the hallucinations had resolved. She was more logical and organized and less paranoid, though her ADLs were still poor. By May 29, she was safe to go home, but her appearance was still disheveled, she had poor concentration and hygiene, still heard voices, and was depressed and anxious. She went to group therapy, but was distracted by auditory hallucinations. Dr. Birkmire believed that May 29 or May 30, would be an appropriate discharge date. Dr. Berns testified that R.S.'s diagnosis was schizophrenia. He acknowledged that R.S.'s suicidal ideations on May 22 did not indicate a plan. However, in the hospital setting, a patient may not always reveal her plans for fear of prolonging the hospitalization. On May 23, she was having command auditory hallucinations to hurt herself with a plan to overdose. Dr. Berns found this very serious, because patients have been known to hoard medications in the hospital in order to take an overdose. After reciting the same day-by-day review conducted by Dr. Birkmire, Dr. Berns concluded that he concurred with the length of stay. Noting that she was still psychotic, mumbling and hallucinatory at the time of discharge, Dr. Berns testified that he did not necessarily agree that R.S. should have been released even on May 30. In response, Dr. Mehra testified that he agreed with many of the concerns expressed by Dr. Birkmire, but did not see them evidenced in the medical record. Dr. Birkmire testified that as of May 22, R.S. was so psychotic and disorganized that she would probably not take her medications after discharge. Dr. Mehra agreed this is grounds for keeping someone in the hospital, but did not see this concern noted in the medical record. Dr. Mehra also found nothing in the medical record to indicate she was having command auditory hallucinations to hurt herself with a plan to overdose. Dr. Mehra stated that the record did show that on May 23 she was regressed, bizarre and psychotic, but he noted that those symptoms were also present at the time of R.S.'s discharge. However, the psychiatry unit patient notes do indicate that R.S. told a student nurse on May 23, that "she was having suicidal ideations and a plan to overdose." The other notations cited by Dr. Birkmire, with the exception of the May 22 notation regarding staff's suspicions regarding R.S. medication compliance, were all found in the psychiatry unit patient notes. It must be concluded that Dr. Mehra simply overlooked this section of the record, and that if he had seen that the record supported Dr. Birkmire's concerns, Dr. Mehra would have authorized the full stay for R.S. The greater weight of the evidence supports Petitioner's position that May 22 through May 30, should not have been denied. Dr. Mehra's reason for denying these days was not that he disagreed with Dr. Birkmire's concerns regarding the patient, but that he could not find those concerns reflected in the record. In fact, the record supported Dr. Birkmire's concerns and rendered R.S.'s entire inpatient stay medically necessary. Patient #11 D.T. D.T. was admitted on May 9, 2001, and was discharged on May 21, 2001. Peer reviewer Dr. Mehra determined in his report that nine days, May 12, through May 21, should be denied due to lack of medical necessity for continued inpatient care.9 Dr. Mehra's peer review report stated that R.S. was a 14-year-old female with an extensive psychiatric history who was voluntarily admitted from a community mental health center for mood swings, violent tendencies, and a report of auditory hallucinations. As of May 12, the patient was not actively suicidal, homicidal, grossly psychotic, manic, or in complicated withdrawal. The patient was taking her medications, following unit rules, and participating in activities. The patient's sleep, vital signs, and appetite were stable. Dr. Mehra concluded that she did not require 24-hour nursing care as of May 12 and that outpatient was the appropriate level of care. Dr. Mehra testified that D.T. was admitted for mood swings, a history of violence, and some personality issues. She was diagnosed as bipolar, though Dr. Mehra was not clear as to what features led to that diagnosis. She was also diagnosed with post traumatic stress disorder. Further, she was diagnosed under Axis II of the DSM-IV, which includes personality disorders. Dr. Mehra found this significant because personality disorder symptoms are treated differently than bipolar disorder. Dr. Mehra found no indication in the record that D.T.'s history records were ordered or reviewed for purposes of continuity of care and current treatment. She was admitted and served on the inpatient unit, and her medications were continued: such as Wellbutrin, Topamax, and Risperdal. She was started on Geodan, an antipsychotic, which was then changed to Seroquel, and then back to Risperdal. Dr. Mehra concluded that D.T. met discharge criteria as of May 12. Nothing remarkable happened between May 12, and the date of her discharge. She continued to have some difficulties on the unit, but nothing that warranted inpatient care. She could have been sent to outpatient and returned to foster care. Given her documented history, return to a stable group home or foster home would be appropriate to help her engage with her symptoms. For someone with a personality condition to be on an inpatient psychiatric unit can worsen the symptoms. Dr. Mehra believed that D.T. needed an environment with a lot less stimulation and less potential for her to become agitated and act out. Dr. Mehra acknowledged that the records do show serious medication side effects on May 15, such as akathisia, but he stated that people have these symptoms frequently as outpatients. Dr. Mehra was curious as to why D.T. was on three different antipsychotic drugs. Three different psychotropic medications is a concern because there is insufficient clinical and medical data to use them in children when the diagnosis is not clear. They have potential long-lasting side effects, such as tardive dyskinesia, where the patient develops permanent tic- like movements of the lips, mouth and jaw. Cogentin is a medication for side effects from antipsychotics, and its use caused Dr. Mehra to question whether research was done as to whether this child had been on such medications before. Dr. Mehra stated that such research is essential, especially when the patient starts showing side effects. Treating physician Dr. Scott Farmer testified that all of the denied dates represented necessary periods of care to stabilize D.T. and make her discharge safe. On May 15, she was still experiencing severe mood swings and dissociative symptoms, which Dr. Farmer described as "a watershed between normal and neurotic." In a spectrum moving toward psychosis, dissociative thinking has features of both psychotic and neurotic thinking. Dr. Farmer explained that if a physician has a patient in his office who is disassociating, the physician must watch the patient until the patient has demonstrated several hours of improved functioning. If a patient drifts into a dissociative state during psychotherapy and becomes agitated, the patient requires hospitalization. Dr. Farmer stated that D.T. could not have been released on May 15. She was still requiring Haldol due to episodes of anger, and due to her inability to recognize people who are caring for her and distinguish them from threats. Her agitation was so extreme that Dr. Farmer had to change the dose of Haldol. This was complicated by the fact she was having side effects of the antipsychotic medication. Akathisia is an acute dystonia, a side effect of these powerful medications. It is a restlessness, an inability to sit still. The patient wants to stretch her legs and flex her muscles to relieve tension that feels like an unrelenting, very slowly developing cramp. Dr. Farmer testified that akathisia is not as dramatic as other side effects because it looks like the disease itself: the patient is restless, can't sit still, and wants to walk around. There is a ramping up in the intensity of treatment for akathisia, culminating in Propranolol, which itself causes 40 percent of users to have a new onset of major depression within a year. Dr. Farmer stated that D.T. was so resistant to taking medications that at times intramuscular medications were required. Geodon was the medicine initially chosen to treat D.T.'s psychotic features because it has the least likelihood of causing weight gain. By May 15, Dr. Farmer had deemed it a failure and was in the process of replacing it with Seroquel. On May 16, D.T. remained actively psychotic with visual and auditory hallucinations, side effects of the medication. Dr. Farmer testified that the dosages of medicine that could possibly make the hallucinations go away, had the side effect of incapacitating her. D.T. could not sit in group and match her mood and comments to the group process. She was too lethargic to function. Dr. Farmer believed that as of May 16, D.T. could not be anywhere but an acute care setting, with nurses and physicians monitoring her response to medications. On May 17, D.T. reported seeing what she described as flashing lights. She moved out of her lethargy into accelerated speech. She was irritable and paranoid, different from the day before when she appeared overdrugged and lethargic. On May 18, she had a severe reaction to the Seroquel, active symptoms of delusional, confused and agitated behavior. Seroquel was discontinued and a new antipsychotic, Restoril, was introduced. On that day, D.T. was noted to be crying and hallucinating. She saw a man in her room and held so fast to the idea of being in danger that she required additional medication, Ativan PRN, to make her relax. On May 19, her Risperdal had to be further adjusted because she was overly sedated. She was disheveled, easily agitated, and still required PRN medications in addition to her standard medicines. On May 20, she remained labile, easily upset and crying. Dr. Farmer concluded, by stating, that this case involved a very complex juggling of medications to get control of auditory hallucinations with other medications striving to compensate for side effects. Dr. Berns testified that D.T. had an extensive psychiatric history and was admitted for mood swings, violent tendencies, and report of auditory hallucinations. The admissions note stated that D.T. was depressed and angry, "ready to kill everybody." She was having problems with flashbacks regarding her history of fights with her father, and was fearful that her mood changes and lability would cause her to lose her foster placement. She had been in foster care since January 2001. D.T. had a history of arrests for fighting, breaking and entering, grand theft auto, and battery. She had a decrease in appetite with a four-pound-weight-loss in the past week. She said that she felt paranoid a lot, and she overreacted to intrusions into her physical space. She heard voices with command features telling her to cut her arms instead of battering her father, and admitted to some prior plans of killing her father. The May 15 notes showed severe mood swings and unspecified dissociative symptoms. She received Haldol for anger episodes. Dr. Farmer discontinued Geodon and began Seroquel, another antipsychotic also used in the treatment of bipolar disorder. She was also given Cogentin intramuscularly, because she had tremors and akathasia. On May 16, D.T. was anxious with sleep disturbance, undescribed auditory and visual hallucinations, and said she was lethargic. On May 17, she was reporting flashbacks about "angel trumpet," which may have been a psychedelic drug. She was observed to have accelerated speech, irritable, perseverant and loquacious. Dr. Farmer raised the level of the Seroquel. D.T. was incoherent from midnight to 6:30 a.m., with auditory and visual hallucinations. She was seeing people, carrying on conversations, making and unmaking her bed, trying to open a window, and mumbling. At times she was manic, hyper-verbal, crying and laughing. She said she was high on her medications. The Cogentin was discontinued. They raised the Seroquel and put her on intramuscular injection of Ativan. On May 18, she had a severe reaction to Seroquel. She was delusional, confused and agitated, but showed no aggression. Dr. Farmer stopped the Seroquel and started Risperdal. She hallucinated seeing a man in her room. On May 19, she was anxious and irritable, having non-command hallucinations. Her Risperdal dosage was increased. On May 20, she was upset and emotional. She requested Haldol and Ativan to calm herself down. On May 21, she was organized, with no flight of ideas or loose associations, and was discharged. Dr. Berns noted that Dr. Mehra found that by May 12, D.T.'s sleep, vital signs and appetite were stable, that she was following unit rules of participating in activities, and that she was not actively suicidal, homicidal, psychotic, manic or in withdrawal. Dr. Berns disagreed with this assessment. On May 16, D.T. still had active psychotic symptoms. On May 17, she was paranoid and irritable, carrying on conversations with unseen people. On May 18, she had visual hallucinations. On May 19, she was disheveled and easily agitated. On May 20, she was labile, and very easily upset. Dr. Berns agreed with Dr. Farmer that the entire stay was medically necessary. In response, Dr. Mehra testified that he was aware of Dr. Farmer's statement that on May 15 D.T. was still experiencing severe mood swings and disassociative symptoms, "which are a watershed between normal and neurotic." Dr. Mehra did not know what that means in terms of the issues in this case, because disassociation is not sufficient to warrant keeping her in the hospital. Visual and auditory hallucinations, in and of themselves, are not sufficient to keep her in the hospital unless they are command hallucinations. Dr. Mehra pointed out that the treating physician's own discharge summary stated that D.T. has personality issues of concern. "Personality issue" means that a lot of the symptoms do not necessarily indicate a major, Axis I diagnosis such as schizophrenia or major depression, but are more about the patient's character and how she relates to people. Dr. Farmer noted on May 16 that, due to side effects of medication, D.T. was lethargic and could not function. Dr. Mehra stated that this might be sufficient to keep her in the hospital, though, again, the treating physician must keep the treatment options in mind and distinguish between someone with a personality disorder who is experiencing hallucinatory symptoms and someone who is schizophrenic. Dr. Mehra was concerned that the physicians were injecting this 14-year-old child with potent anti-psychotic medications and that she was having an adverse reaction. He was further concerned that she was not having much of a response to the medications, which Dr. Mehra found would not be unusual if the diagnosis were inaccurate. Based on the documentation in the record, Dr. Mehra could not be sure that D.T. had a true psychotic disorder that would respond to anti-psychotic medications. Because D.T. was in the custody of the Department of Children and Family Services, Dr. Mehra believed there was "a great likelihood" that she had been physically and/or sexually abused. Many of her symptoms would be easier to understand in the context of past abuse rather than as a diagnosis of schizophrenia. Dr. Mehra found the record confusing as to the rationale for this hospitalization. In the admission mental status exam, the physician documented no well formulated plan for the patient to harm herself. No psychotic symptoms were noted in the admission mental status exam. However, because the patient was presenting with symptoms such as auditory hallucinations, Dr. Mehra authorized and approved a three-day evaluation period. Dr. Mehra stated that he would authorize less time for an adult, but with a child it is important to take sufficient time to obtain a good history. What confused Dr. Mehra was that the medical record showed no clear documentation of collateral information regarding D.T.'s past to understand why she may be disassociating or having mood swings. The greater weight of the evidence supports AHCA's denial of the last six days of D.T.'s admission. The record as presented established that D.T. ceased to meet the criteria for inpatient admission in the psychiatric unit on May 12. However, as stated in note 10, AHCA's recovery is limited to May 14 through May 21. Patient #12 S.T. S.T. was admitted on March 7, 2001, and was discharged on March 17, 2001. Peer reviewer Dr. Mehra determined in his report that eight days, March 9 through March 17, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that S.T. was a 34-year-old female admitted, involuntarily, under the Baker Act for violent, agitated, self-harming behavior in a community services van. The patient had a history of moderate mental retardation, cerebral palsy, seizure disorder, and abnormal EEGs. The patient was prescribed Haldol PRN, but required none on March 9, 10, or 11. As of March 10, the patient was not actively suicidal, homicidal, grossly psychotic, or manic. Later in her hospitalization, the patient did require Haldol/Ativan PRN on several days, though no adjustments were made to her routine antipsychotic doses. Dr. Mehra noted that the only adjustment made to S.T.'s psychotropic dosing was on March 8, when her Depakote was increased. Dr. Mehra also noted that the patient was allowed to sign a voluntary consent for treatment, when her legal guardian should have been involved in the consent process. Dr. Mehra found in the record no informed consent for psychotropic medications. Dr. Mehra found that the diagnostic studies performed on S.T. could have been done on an outpatient basis. Dr. Mehra concluded that, as of March 10, outpatient treatment with a return to the group home setting was the appropriate level of care. Dr. Mehra testified that S.T. was admitted through the emergency room under the Baker Act when she became violent and agitated in a van operated by Spectrum Community Services, the group home where S.T. lived. Her admitting diagnosis was mental retardation in the moderate range, as well as organic mood disorder. Dr. Mehra found no physician's notes in the record for March 8 or 9, which indicated that S.T. must not have many problems. The nurse's notes for March 9 indicated that S.T. was sleeping through the night. The unit notes from three different shifts on March 9 indicated that her behavior was under control and that she denied hallucinations. All of the above findings in the record, coupled with a lack of physician notes, led Dr. Mehra to conclude that S.T. should be discharged. Dr. Mehra stated that everything relative to making a medical decision must be documented in the record. If something is not in the record, then a peer reviewer must assume it did not happen. In this connection, Dr. Mehra noted there was no indication in the record that the hospital contacted S.T.'s group home for a treatment history and status before initiating invasive diagnostic procedures. On March 8, S.T. had a fall on the unit, hitting and cutting her head on the cinderblock wall. Dr. Mehra stated that a patient with cerebral palsy and mental retardation, who is having acute psychological problems and has fallen, is a grave concern, yet he could find no record that she was seen by a physician on March 9. He did find a March 9, note calling for a consultation with Dr. Henry Comiter regarding S.T.'s fall, but no actual physician's visit on that date. The record indicated that S.T. was placed in restraints on March 13 and engaged in threatening behavior on March 14. However, Dr. Mehra noted there had been no such incidents on March 11 through 12. He testified that, if a patient with these underlying medical and psychiatric conditions is kept long enough, she will probably act out. The incident on March 13, alone, was not enough to keep her without getting a legal guardian involved to continue her voluntary legal status in the hospital. This was a great concern to Dr. Mehra because the hospital appeared to be relying on a voluntary consent form signed by S.T. on March 10. S.T. was mentally retarded and possibly incompetent to admit herself to the hospital. Treating physician Dr. Farmer described S.T. as a 34- year-old mild-to-moderately retarded woman living in a group home. The incident that led to her admission was her deteriorated impulse control, agitation, and aggression directed toward the van and toward the staff and other peers during a van ride on an outing. She struck at her peers and the van driver, bit herself on the hands and arms, and stated that she wanted to hurt herself. S.T. was already scheduled to have an outpatient neurology consultation in late March with Dr. Comiter, out of concern for a seizure disorder that was not adequately managed. Because of her agitation, S.T. was sent to the psychiatric unit, which began the process of adjusting her medications. The adjustments were ongoing on March 8. She was seen by Dr. Comiter on March 8, as indicated by a consultation note in the record.10 Dr. Comiter ordered an EEG and CT scan of the head. The CT brain scan was scheduled for March 9, but S.T. was too agitated to undergo the procedure. On March 10, S.T. remained agitated. She refused a shower and was generally careless with regard to her ADLs. On March 11, Dr. Farmer reduced S.T.'s dosage of Ativan in order to calm her and make her more manageable for the CT scan. On March 12, she was less agitated, but not calm enough for the CT and EEG to be completed. She was too agitated to go for the CT study, but too fatigued from the medications to be functional on the psychiatric unit. The reduction in her Ativan dosage did enable her to respond more promptly to questions. On March 13, staff attempted to transport S.T. in the van for her EEG, but she began swinging her arms and had to be placed in seclusion and restraints. On March 14, Dr. Farmer characterized S.T. as naïve regarding her manic grandiosity, unable to recognize that her reactions are disproportionate to the circumstances. Her vocal volume was threatening and her intrusiveness was with ominous import, but she believed she was justified in her reactions. She was paranoid and misreading the likelihood of danger and pain, and so was attempting to intimidate people away from her. By this time, Dr. Farmer believed that she was reacting well to the adjusted medications. However, when the medications got her to the point at which she was not threatening others, she began having balance problems and falling again. On March 15, the medications had slowed S.T.'s psychomotor skills, and she was not assaultive. She was taking her medicines by mouth. S.T. was beginning to return to baseline and Dr. Farmer began considering discharging her back to the group home. She was denying any suicidal or homicidal ideation and denying hallucinations. She was able to be redirected from biting her hand, which was a continuing problem for S.T. She was able to participate in group therapy without disruption, though her ADLs remained careless. On March 16, she remained restless, distractable, impulsive, and aggressive, though the hospital did manage to complete the EEG on that date. The EEG showed no evidence of a seizure disorder. On March 17, S.T. was discharged back to the group home. Dr. Farmer concluded that it was in the best interest of S.T.'s care to keep her through March 17. It was best to accomplish all the needed adjustments to her anticonvulsant medications on an inpatient basis, especially since there were no EEG results until March 16. Those results could have required further adjustments, and Dr. Farmer believed that relying on the group home to make the changes in her medications might not work and could result in her readmission. Dr. Berns agreed with the length of stay because the attending physicians were not only trying to make sure that S.T. was no longer suicidal, they were trying to decrease her agitation and aggression while completing important diagnostic tests. Dr. Berns thought that authorizing her stay only through March 10 would be premature. The greater weight of the evidence supports Petitioner's position that March 10 through March 17, should not have been denied. Dr. Mehra's opinion in this instance was at least partly based on a misreading of the record, i.e., that S.T. was not seen by a physician on March 8 or 9. Dr. Mehra's concerns regarding S.T.'s consent to treatment are serious, but cannot be resolved on this record and do not appear relevant to the question of the medical necessity of S.T.'s hospital stay. Dr. Farmer's testimony as the treating psychiatrist credibly established that S.T.'s entire inpatient stay was medically necessary. Patient #13 W.W. W.W. was admitted on June 17, 2001, and was discharged on June 28, 2001. Peer reviewer Dr. Mehra determined in his report that five days, June 23 through June 28, should be denied due to lack of medical necessity for continued inpatient care. Dr. Mehra's peer review report stated that W.W. was a 43-year-old female admitted to the psychiatric unit after an intentional overdose of psychotropic medications. Dr. Mehra wrote that his authorization was based on continued documentation of the patient's having command auditory hallucinations to hurt herself. As of June 23, the patient was not actively suicidal, homicidal, psychotic, manic, or in complicated withdrawal. Her sleep, appetite, and vital signs were stable. She was not a management problem on the unit. Dr. Mehra concluded that, as of June 23, the patient no longer required 24-hour nursing care and that outpatient treatment was the appropriate level of care. In his deposition, Dr. Mehra testified that W.W. was on the medical floor, then transferred to the psychiatric floor after two days. On discharge, her Axis I diagnosis was alcohol abuse, history of cocaine abuse, and rule-out schizoaffective disorder. The hospital's discharge summary stated that the reason for admission was severe depression, no psychotic features, and having suicidal thoughts. She was integrated into the milieu of the inpatient psychiatric unit and prescribed antidepressant medication. Dr. Mehra believed W.W. should have been discharged on June 23. He stated that, even on the psychiatric unit's admission mental status exam, dated June 17, Dr. Allen noted that W.W. was slightly more cooperative than on the previous day's consult, meaning that Dr. Allen probably saw her on the medical floor after her overdose. Dr. Allen noted there was no active suicidal ideation with a plan. Dr. Mehra testified that this admission psychiatric exam, standing alone, would indicate that W.W. did not need to be admitted at all. However, the totality of her presentation and history showed numerous overdoses on psychotropic medications. Based on her history and the mental status exam showing her mood was still depressed, her admission through June 22 was approved. Attending physician Dr. Birkmire testified that, in the weeks before the overdose, W.W. described becoming increasingly depressed with feelings of helplessness and hopelessness. Her history showed at least eight or nine other psychiatric hospitalizations. She indicated a history of being sexually abused by her father at age 12. Her admitting diagnosis was schizoaffective disorder, depressed, subtype provisional, depressive disorder not otherwise specified, alcohol abuse and history of cocaine abuse. W.W.'s global assessment of functioning ("GAF") upon admission was 35. Dr. Birkmire testified that a GAF below 50 indicates that a patient should be in a residential program, at least, and that a GAF below 40-to-45 indicates the patient should be on an inpatient unit. On June 23, the medical notes show she was still somewhat confused. Her mood had improved but she still had suicidal ideations. The hospital was holding her in part to see if the blood test for syphilis was negative. She felt better but complained about mood swings. On June 24, a Sunday, there were no notes. Dr. Birkmire explained that the physicians who take rounds on the weekends are required to see each patient on either Saturday or Sunday, but not both days. On June 25, W.W. was less psychotic. Her auditory hallucinations were present but decreased, and she was taking her medications. On June 26, she continued to have auditory hallucinations. She was disorganized, paranoid, and isolating herself. She reported fear in being released because she might make another suicide attempt. She was given Ativan PRN to treat reported anxiety. On June 27, her mood was euthymic (normal, neither depressed nor highly elevated in mood). She showed no psychotic symptoms, denied suicidal ideations, and felt safe for discharge. However, hospital staff said that W.W. still seemed to be responding to voices. Dr. Birkmire stated that he had reservations about releasing W.W. on June 27 because she seemed to be telling the staff she was doing better than she really was. The voices had played a role in her suicide attempt, and, thus, the knowledge that she was still hearing them would be a strong factor in deciding to keep W.W. hospitalized. In Dr. Birkmire's opinion, W.W.'s problems could not be addressed in a skilled nursing facility. Dr. Birkmire testified that, with the exception of psychiatrists who perform peer reviews and medical authorizations, there is not one psychiatrist in the country who would say that a patient should not be in an acute care setting unless she has a definite plan for suicide or the means to complete the plan. Dr. Birkmire stated that no doctor is going to risk his license in that fashion. Whole books are written on how to perform a suicide assessment, and the assessment is based on much more than what the patient tells the physician. It is based on the patient's history, her degree of hopelessness, degree of disorganization, degrees of psychosis, and her access to the means of doing the suicide. Dr. Birkmire stated that one of the best predictors of suicidality is past attempts. Dr. Berns testified that W.W.'s history of multiple psychiatric hospitalizations indicated a probability of chronic illness. He stated that the number of prior hospitalizations automatically raises the question of past suicide attempts, and noted that her history indicated three attempts prior to this one. She was diagnosed with "depressive disorder" but not otherwise specified, as well as alcohol and cocaine abuse. She took an overdose of Haldol, Cogentin, and Sinequan. Dr. Berns explained that Sinequan is an older antidepressant, a tricyclic, with which a higher number of suicides occur. Thus, an overdose of this medication is more serious than overdoses of other medicines. There were concerns about neurosyphilis because she had a positive RPR. Her physicians were concerned that inadequate treatment for this condition would complicate her psychiatric course as well as cause physical complications leading to dementia and death. Dr. Berns concluded that W.W.'s stay was medically necessary. Her physicians were trying to stabilize her condition and treat a gradual illness that can become fatal. In response, Dr. Mehra testified that the evaluation for neurosyphilis on June 23 and 24, was not, standing alone, a ground for keeping the patient in the hospital. Dr. Mehra also stated that the suicidal thoughts, hallucinations, and psychotic disorganized paranoia are not grounds to keep the patient in the hospital, unless she was actively suicidal with a plan and unless her psychoses were causing imminent danger to herself or others, or she was aggressive or noncompliant. W.W. was taking her medications, eating, and sleeping and was not requiring seclusion or restraints on the unit, which meant that she was, at some level, functioning. Dr. Mehra was adamant that Medicaid and InterQual guidelines require more than a suicidal ideation; they require a plan. The greater weight of the evidence supports Petitioner's position that June 23 through June 28, should not have been denied. Dr. Birkmire's testimony as the treating psychiatrist, as well as Dr. Berns' expert testimony, credibly established that W.W.'s entire inpatient stay was medically necessary. Summary of Findings At the time of the hearing, AHCA sought from Petitioner overpayments in the amount of $198,582.54 for 29 patients who stayed at Florida Hospital Orlando between January 1, 2000, through December 31, 2001. The findings of fact above upheld AHCA's denial of days for the following: Acute Care Inpatient Hospital patients 2, 3, 5, 6, 9, 10, 11, 12, 13, and 16; and Psychiatric Inpatient Hospital patients 1, 3, 4, 5, 6, 7, 8, 9, and 11. The findings of fact above found that the greater weight of the evidence supported Petitioner's position that AHCA should not have denied the days for the following: Acute Care Inpatient Hospital patients 1 (2 days x reimbursement rate of $1,168.38 = $2,336.76), 4 (6 days x $1,206.42 = $7,238.52), 7 (1 day at $1,168.38), 8 (3 days x $1,168.38 = $3,505.14), 14 (9 days x $919.27 = $8,273.43), and 15 (5 days x $919.27 = $4,596.35); and Psychiatric Inpatient Hospital patients 10 (9 days x $1,168.38 = $10,515.42), 12 (8 days x $1,168.38 = $9,347.04), and 13 (5 days x $1,168.38 = $5,841.90). The total dollar figure for days that should not have been denied is $52,822.94, reducing the total overpayment due AHCA from Petitioner to $145,759.60.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that: Respondent, Agency for Health Care Administration, enter a final order revising its Final Agency Audit Report as directed herein. DONE AND ENTERED this 5th day of March, 2007, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 2007.
