The Issue Whether the Petitioner, Bethesda Memorial Hospital, Inc., (Bethesda) is entitled to a certificate of need (CON) in order to convert three general acute care beds for use as Level III neonatal intensive care unit (NICU) beds.
Findings Of Fact The Agency for Health Care Administration is the state agency charged with the responsibility of reviewing applications such as the one at issue in this proceeding. The parties have stipulated that whether or not the subject application should be approved must be decided upon a weighing and balancing of all pertinent statutory and rule criteria. Bethesda’s letter of intent and application for CON were timely filed in an appropriate batching cycle. Bethesda is a 362-bed acute care hospital located in Boynton Beach, Palm Beach County, Florida. As such, it is located within the Agency’s District 9. The approval of the CON at issue would allow Bethesda to convert three of its existing acute care beds to Level III NICU beds. This approval would expand Bethesda’s existing NICU from 12 beds, which are designated Level II NICU beds, to a total of 15 beds for the combined NICU. Bethesda received a CON for its existing NICU in 1985. From its inception, the unit has been staffed and equipped for the highest level of NICU care and, in fact, performed Level III care until 1995 when the Agency ordered it to stop admitting babies of less than 1000 grams in weight. At the time of the original approval of the Bethesda NICU, the Agency did not distinguish between Level II and Level III NICU beds. Nevertheless, Bethesda staffed and equipped its unit based upon the highest level of care because of the population it has historically served. Later, as the Agency developed more distinct guidelines between Level II and Level III NICU beds (as well as a statewide bed-need methodology), Bethesda found it could not technically continue to do what it had historically done, i.e., serve a Level III newborn. Bethesda has historically served these Level III newborns because it is under contract with the Palm Beach County Public Health Unit (PHU) to care for indigent mothers and at-risk babies. This agreement to serve indigent mothers and at-risk babies has resulted in a significant number of babies being delivered at Bethesda requiring neonatal intensive care at all levels. Until 1989, Bethesda was the only hospital to provide obstetrical care in the southern portion of Palm Beach County, much less make exceptional provision for indigent birth mothers. As it developed, Bethesda provided quality obstetrical, pediatric, and neonatology services in an area of Palm Beach County where other providers were less than enthusiastic about the market. Except for St. Mary’s Hospital in the northern portion of the county, no other provider has extended services to the indigent as demonstrated by Bethesda. Moreover, Bethesda has offered to condition its CON approval on the provision that it render a minimum of 35 percent of the facility’s entire NICU patient days, including Level II and Level III, to Medicaid/charity patients. Thus, a major emphasis of this application is care for the indigent. Of all patients cared for in the south Palm Beach County neonatal programs, ninety-nine percent are indigent. While a provider may receive reimbursement for certain services (from Medicaid or local health district funds), the patients themselves (birth mothers and babies) are indigent. Additionally, one-third of the pregnancies processed through the PHU are high-risk due to diabetes, infectious diseases, or other complications. As a logical consequence of the complications with the birth mother, the babies born through the PHU program tend to be sicker than average. While Palm Beach County has demonstrated a remarkable improvement in providing pre-natal care to birth mothers and thereby improving at-risk results, Bethesda continues to play a critical role in extending care to this needy population. Bethesda is the exclusive hospital used by the PHU in south Palm Beach County. It is utilized because it is geographically located near the patient population. Further, Bethesda’s reputation in this community makes it attractive to those in need. Bethesda is engaged in a three-way partnership with St. Mary's Hospital and the PHU to lower infant mortality in the county. They have created an integrated care plan for south Palm Beach County maternity patients. Bethesda, physicians in the community (including obstetricians, gynecologists, neonatologists and pediatricians), and the PHU have worked together for 11 years to make sure that protocols are available so that pre-natal care is available to all who need it. These parties work closely with Healthy Mothers/Healthy Babies and other voluntary organizations to bring patients to the PHU or to Bethesda. The PHU physicians and midwives deliver between 800 and 1,000 babies a year. About 25 percent of these babies from the southern portion of the county will require some kind of Level II or Level III NICU care during their stay in the hospital. Thus, 200 to 250 babies needing NICU care come through the PHU each year. It would also be expected that non-indigent mothers from the southern portion of the county would deliver babies requiring NICU care. Bethesda plans to open outlying health clinics to enhance services offered to local communities within the Bethesda zip codes. These programs or clinics are expected to result in an estimated 20 percent increase in the volume of indigent pregnant women served by Bethesda. The availability of services to the local communities may also assist patients to keep their scheduled appointments. There is a difference between the number of patients scheduled to see PHU physicians and those who actually show up, due to the inconvenience and financial burden of getting to the health unit. Having the clinic locations readily available may alleviate the inconveniences to the indigent mother. Under the present circumstances, when a Level III baby is delivered at Bethesda it must be transferred to another facility. These transfers create a major burden for the birth mother. Remembering that the mother would not typically be transferred with the child (and would not require the extended stay some neonates demand), the issue of transportation for the parent may be insurmountable. For example, in order to leave a convenient location to visit once or twice a day, an indigent mother must arrange transportation to and from the Level III facility where the baby has been sent. This may entail additional expenses for the parent such as lost wages or extending times for babysitters watching other children in the home. These additional expenses may be more than the indigent family can bear. The nearest Level III NICU provider to whom Bethesda now transfers patients is St. Mary’s Hospital. This facility is, by automobile, approximately 30-40 minutes from Bethesda depending on traffic conditions. Bus transportation directly connecting one site to the other, if it were available (which it is not), would presumably take longer. Currently, even when it is determined that a maternity patient should be sent to St. Mary's Hospital for pre-natal care, the mothers are presenting for delivery at Bethesda. This occurs because Bethesda is geographically located in the area where they live. The baby is born at Bethesda and a decision must be made how best to deal with the health issues of the child. Of the patients referred from Bethesda to St. Mary's Hospital for pre-natal care, only 5 percent deliver at St. Mary's. Ninety-five percent return to Bethesda for delivery even though they were told to go to St. Mary's. The main reason for this failure of patients to follow up at St. Mary's Hospital is the lack of affordable transportation. Many indigent women do not have cars or access to them. The existing facilities in Palm Beach County for Level III care are not reasonably available, appropriate, or accessible alternatives for these patients. AHCA District 9 has only three Level III NICU providers. They are all in Palm Beach County, with St. Mary's Hospital and Good Samaritan Hospital (now owned by the same company) in the northern part of the county (West Palm Beach) and West Boca in the southern part (Boca Raton). West Boca is not a reasonable alternative for the NICU patient population served by Bethesda. West Boca does not serve the lower income patients. In fact, West Boca transfers patients without financial resources to Bethesda. West Boca transfers indigent women in labor early enough so that COBRA regulations are met. Pertinent to this case, historically, West Boca transferred indigent Level III NICU patients to Bethesda until 1994. During the last three years, Level III NICU utilization at Good Samaritan and St. Mary's Hospital has averaged better than 90 percent. To average 90 percent means that the beds are often full or there are more patients than there are beds. Accordingly, these providers are operating at what is essentially capacity. It is, therefore, not surprising that St. Mary's Hospital supports Bethesda's CON application in this proceeding. No existing provider within District 9, including West Boca, formally opposed the instant application. A primary service area is the area from which a hospital draws the overwhelming majority of its patients for a given service and is defined by zip code level information. The primary service area of Bethesda for providing newborn and neonatal services is wholly within what has been described in this record as the southern portion of Palm Beach County. The primary service areas of West Boca and Bethesda for newborn and neonatal services do not significantly overlap. In fact, 40 percent to 45 percent of these services provided by West Boca have been to residents of Broward County. In this regard, West Boca's neonatal services compete more directly with those of Broward General Hospital than Bethesda. Bethesda's NICU is currently staffed and equipped for Level III services. From a medical standpoint, the CON proposal will result in a quality 15-bed dual unit, which is very efficient from the neonatologist's standpoint. The neonatologists staffing the Bethesda NICU are associated with the same group serving St. Mary's Hospital and Broward General Hospital, both Regional Perinatal Intensive Care Centers (RPICC). This helps assure proficiency with large volumes at more than one program. The nursing staff at Bethesda all have at least two years of Level III experience, and no nurse is currently hired for the NICU without that level of experience. From a neonatal nursing care standpoint, the addition of the three Level III beds would result in quality, cost- efficient care. The proposed combined unit would allow for flexibility of making daily staff assignments and would enhance care for the babies. The combined 15-bed NICU is large enough to provide quality, cost-effective Level II and III care. Bethesda has the physician staffing, nurse and therapist staffing, equipment, facilities, and hospital services to provide proper quality tertiary care for these newborns. Since 1993, Mease Hospital in Dunedin, Florida, has operated a five-bed Level III NICU combined with a five-bed Level II NICU in one room. It has proven to be a quality program with a low mortality rate. The five-bed Level III NICU provides cost- efficient care. There is no reason Bethesda cannot duplicate the record Mease has demonstrated. High quality, neonatal intensive care may be easier to achieve with Level II and III beds in the same room than with any other configuration of beds. Bethesda will not be able to treat every sick baby. It cannot care for babies requiring open heart surgery (Bethesda does not have an open heart surgery program), for those needing extra-corporeal membrane oxygenation (ECMO), nor those seeking pediatric cardiac catheterization. None of the three existing Level III facilities in District 9, however, has open heart surgery or ECMO available. Like Bethesda they, too, must transfer out for these services. Fortunately, the Agency rule allows a provider to make written arrangements with other Level III providers to provide those services in the same or nearest service area. AHCA has stipulated that Bethesda has the appropriate written transfer agreements pursuant to Rule 59C-1.042(12), Florida Administrative Code. For the number of babies to be served by Bethesda, the ability to serve Level III babies will improve the quality of care. There are medical risks in transferring babies from one facility to another. When adequate staffing and facilities are available at the hospital of birth, transferring the infant to another provider may pose an unnecessary risk. The risks inherent in transfers do not always outweigh the benefit. For example, transferring the child may delay certain treatments such as use of "surfactants" which protect a baby's lungs. Other risks such as those associated with maintaining the infant's blood pressure or body temperature make transfers difficult and, in some instances, medically questionable. Bethesda’s application for the instant CON meets the applicable local and state health plans. Bethesda has an established record of providing quality care and will be well able to provide quality of care for the services allowed by the proposed addition of three Level III NICU beds. It is unrealistic for Bethesda to refuse admission to patients requiring Level III NICU services given the historical and current patterns of births for this District. Bethesda’s proposed addition of three Level III beds to its NICU is financially feasible both in the short- and long- term. Bethesda’s Level III NICU beds will be programmatically accessible to its patient population. Although 90 percent of the District 9 population is within two hours ground travel time of an existing Level III NICU bed, such accessibility does not consider the unique characteristics of the indigent population the proposed beds at Bethesda will serve. Moreover, the provider who would otherwise serve the Level III patient under such scenario supports this application. The existing facilities providing care to the indigent population operate at capacity and are fully utilized. The only facility not fully utilized (West Boca) has no significant history of providing care to the Medicaid/indigent population. The proposed construction or renovation of the Bethesda unit to accommodate fifteen NICU stations is reasonable. While Bethesda will have to meet certain minimum licensing standards in the configuration of the NICU, it is anticipated that such standards will be met with little difficulty or significant expense to Bethesda. The unchallenged fixed-need pool for the batching cycle applicable to this case was one Level III bed. Bethesda has met all Agency requirements regarding “Emergency Transportation,” “Transfer Agreements,” and “Data Reporting Requirements.” The Agency’s rule regarding minimum unit size for a Level III NICU has not been met. However, this requirement has not been adhered to by the Agency in several instances. In AHCA District 9, there are three hospitals with NICU Level III programs. Not one of these programs has 15 beds. St. Mary's Hospital (a RPICC) has ten beds, Good Samaritan has eight beds, and West Boca has five beds. The quality of care at these providers is presumably adequate despite the fact that they were approved and licensed by the Agency with less than fifteen beds. Moreover, the Agency has never considered the 15-bed minimum an absolute bar to the application for, or the review of, lesser-numbered beds. In fact, the Agency approved new Level III NICU beds at Mease Hospital (a five-bed unit), West Boca Hospital (a five-bed unit), and Miami Baptist Hospital (a seven-bed unit) after the rule was promulgated. Additionally, the total number of all NICU beds at Mease and West Boca is less than fifteen. Thus, as stipulated in South Miami Hospital, Inc. v. Agency for Health Care Administration, Case No. 97-04875, currently pending before the First District Court of Appeal, the Agency has “consistently interpreted those unit size rule provisions as permissive.” Bethesda has presented not normal circumstances supporting this CON application which are hereby accepted. Such circumstances include: accessibility issues for indigent or Medicaid mothers and babies; the lack of Level III beds in the southern portion of the county where 60 percent of all resident live births are delivered; the fact that approximately one-third of the low birth weight mothers reside in the service area for Bethesda yet the majority of the Level III beds are in the northern portion of the county; and the fact that 30 percent of Bethesda’s patients are clients from the PHU. The average occupancy rate for Level III NICU beds for the year applicable to this application was 80.9 percent. As a result, the rule mandated minimum average occupancy rate has been met.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That the Agency for Health Care Administration enter a final order approving CON application Number 8235 with the condition that Bethesda provide indigent/Medicaid care as proposed in the application. DONE AND ENTERED this 24th day of February, 1998, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1998. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 Paul J. Martin, General Counsel Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308-5403 Richard A. Patterson, Esquire Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3407B Tallahassee, Florida 32308-5403 Kenneth F. Hoffman, Esquire M. Christopher Bryant, Esquire Oertel, Hoffman, Fernandez & Cole, P.A. Post Office Box 6507 Tallahassee, Florida 32314-6507
Conclusions THIS CAUSE came on for consideration before the Agency for Health Care Administration which finds and concludes as follows: ORDERED: 1. The Agency issued the Petitioner the attached Notice of Intent to Deny Initial Application. (Ex.1) 2. The Petitioner has since voluntarily withdrawn its application (Ex. 2). Based upon the foregoing, it is ORDERED: 3. The Petitioner’s application is withdrawn. 4. The Notice of Intent to Deny is withdrawn. ORDERED this 7 day of Fay , 2014, in Tallahassee, Florida. Elizabeth Dudyk, Secretary alth Care Administration
Other Judicial Opinions A party that is adversely affected by this Final Order is entitled to seek judicial review which shall be instituted by filing one copy of a notice of appeal with the agency clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was the Pots ay below-named person(s) and entities by U.S. Mail, or the method designated, on this the of G_\, , 2014. Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3630 Jeffrey E. Myers, Esquire Warren J. Bird Lake Erie College of Osteopathic Medicine Assistant General Counsel 5000 Lakewood Ranch Boulevard Agency for Health Care Administration Bradenton, Florida 34211 (Interoffice Mail) (U.S. Mail) Jan Mills Carlton Enfinger, Manager Facilities Intake Unit Laboratory Licensure Unit Agency for Health Care Administration Agency for Health Care Administration (Interoffice Mail) (Interoffice Mail)
The Issue The issue in this cause is whether University Community Hospital's Certificate of Need Application to establish a new, 5-bed Level III neonatal intensive care unit in District 6 should be approved or whether St. Joseph's Hospital's Certificate of Need Application for the addition of 5 Level III beds to its existing Level III neonatal intensive care program in District 6 should be approved.
Findings Of Fact THE PARTIES Agency for Health Care Administration (AHCA) AHCA is the single state agency responsible for the administration of the CON program in Florida, pursuant to Section 408.034(1), Florida Statutes. AHCA preliminarily approved the UCH CON application to establish a new 5-bed Level III NICU and denied the application of SJH. University Community Hospital UCH is a 431-bed acute care, non-profit hospital located in northern Tampa, Florida. The hospital is licensed to operate 374 acute care beds, 10 Level II NICU beds, 20 comprehensive rehabilitation beds, and 27 skilled nursing beds. It is the third largest hospital in the Hillsborough County region and is a major tertiary institution in West- Central Florida. UCH operates six recognized "Centers of Excellence" including: The Women's Center, The Pepin Heart & Vascular Institute, The Pediatric Care Center, The Diabetes Treatment Center, The Center for Cancer Care, and The Orthopedic Center. UCH provides significant acute care services including cardiology, orthopedics, general surgery, ICU, CCU, obstetrics (OB), gynecology (GYN), emergency room, and others. In addition, UCH provides certain "tertiary" services including Level II NICU services, adult open heart surgery, angioplasty, and comprehensive rehabilitation services. UCH operates The Women's Center which was established in 1991 to address the special needs of women and respond to the growing patient demand from North Tampa and South Pasco. The Women's Center is a freestanding facility connected to the main hospital which provides a full range of OB, GYN, and newborn services. It houses delivery rooms, surgery rooms, mother/baby beds, GYN beds, an ante-partum unit for high-risk OB patients, 10 Level II NICU beds, a well-born nursery, prenatal and postnatal educational programs, and diagnostic equipment. The Women's Center operates the Advanced Reproductive Technology (ART) program which addresses infertility problems using state-of-the-art reproductive technologies. The UCH ART program is the largest of its kind in the Tampa Bay area, and draws many patients throughout West-Central Florida. In fact, the number of participating women has doubled in the last two years. Babies conceived from this program often require NICU services due to the age of participating women, increased pre- term delivery, high-risk medical conditions, and the frequency of multiple births. The facility also operates a special "high-risk" OB program designed to care for women with special prenatal needs. These women often require prior hospitalization, bed rest, extensive nursing attention, or medications, and frequently request to receive these services at UCH. As with the ART program, there is an increased chance for these high- risk mothers to give birth to babies needing NICU care. Since 1991, UCH has operated a 10-bed Level II NICU located in the Women's Center. While it was designed and equipped according to Level III NICU standards and possesses the highest quality of medical equipment available, the unit is not authorized to provide Level III NICU services. Approximately 1000 physicians hold hospital privileges at UCH. They include Board-certified physicians covering 35 medical specialties. The Women's Center employs three medical directors. Its medical staff includes 83 physicians who are specialists in OB, GYN, and/or pediatrics and six additional physicians who are specialists in maternal and fetal medicine. It provides a full range of pediatric services in its dedicated Pediatric Care Center and has physicians who are Board- certified in all pediatric specialty areas, including pediatric surgery. In addition to its extensive staff of doctors, the Women's Center also maintains a quality group of nurses in its Level II NICU, most of which are specially certified in neonatology and have significant experience in Level III units. The Women's Center was originally built to handle 2,000 - 2,200 births annually. However, due to factors including its location, population growth, and performance, the facility exceeded that capacity. In late 1999, UCH began construction of a $10 Million expansion, which was recently completed. Today, the facility has the capacity to handle 3,000 - 3,500 births annually. UCH is located in the North Tampa corridor which is experiencing a population growth. It is the northernmost hospital in Hillsborough County, and the closest tertiary hospital to Pasco County. UCH's primary service area for OB and Level II NICU patients is North Hillsborough and South Pasco. Approximately 20% of its OB and Level II NICU patient volume are residents of Pasco County. In 2000, UCH delivered 2,168 babies. The following year, in 2001, it increased to 2,269 births and the hospital reasonably projects its volume to reach 2,500 annual births in the near future. UCH's Level II NICU unit has been well- utilized over the past several years and has experienced a 16% volume increase per year since 1999. It has the highest growth rate of all Level II providers in District 6. UCH has twice previously applied for a 5-bed Level III NICU and was denied each time. The Agency's CON director stated that UCH was denied because: (a) at the time, there was no numeric need to support their proposal, (b) Tampa General had not previously supported their proposal, and (c) UCH had not previously provided written quality assurances to the Agency. St. Joseph's Hospital (SJH) SJH is a large, acute care, not-for-profit hospital, founded in central Tampa in 1934. It is licensed to operate 883 beds, including 15 Level II and 27 Level III NICU beds. SJH is fully accredited by the Joint Commission on Healthcare Organizations, and is a state-designated Level II Trauma Center. It is one of 15 hospitals nationwide designated to participate in National Cancer Research Institute clinical research protocols and provides adult open heart surgery services, and operates several major clinical institutes, including the Heart Institute, Cancer Institute, and Neuroscience Institute. SJH's licensed hospital beds are distributed among three hospital facilities located on one campus and include: St. Joseph's Women's Hospital, a 193-bed facility; St. Joseph's Hospital, a 550-bed facility; and Tampa Children's Hospital at St. Joseph's with 153 beds. Tampa Children's Hospital operates a specialty six- bed pediatric cardiac ICU, and a 16-bed pediatric ICU, and is one of the few providers in Florida offering pediatric cardiovascular surgery. In fact, it performs approximately 400 cardiac surgeries annually, with a majority performed on neonates. Twenty-seven of the 30 designated pediatric sub- specialties are represented on the hospital's active medical staff which is comprised of 200 physicians including 120 pediatric sub-specialists. In addition to its comprehensive pediatric and neonatal surgery programs, Tampa Children's Hospital participates in a fetal surgery program with St. Joseph's Women's Hospital, which involves close clinical cooperation between perinatologists specializing in high-risk obstetrics, and pediatric medical and surgical sub-specialists. Overview of CON Statutory and Regulatory Framework Sections 408.031-408.045, Florida Statutes, outline the establishment and expansion of certain tertiary health care services in the State of Florida and is known as the Health Facility and Services Development Act. Under the CON statutory framework, health care providers seeking to establish or expand certain health care services in the State of Florida must obtain CON approval prior to implementation of their proposal. Pursuant to Section 408.035, Florida Statutes, AHCA is required to review all applications in context with statutory and rule criteria and is the single state agency authorized to issue, revoke, or deny CON licensure. Overview of Level III Neonatal Intensive Care as a Tertiary Health Service Pursuant to Section 408.032(17), Florida Statutes, Level III neonatal intensive care is considered a "tertiary health service" which is defined as: health service which, due to its high level of intensity, complexity, specialized or limited applicability, and cost, should be limited to, and concentrated in, a limited number of hospitals to ensure the quality, availability, and cost- effectiveness of such service. Because of the tertiary nature of Level III NICU services, most hospitals in Florida do not offer Level III neonatal intensive care. Overview of Level II and Level III NICU Services Rule 59C-1.042, Florida Administrative Code, provides the specific requirements for Level II and Level III NICU programs. Pursuant to Section 59C-1.042(2)(g), Florida Administrative Code, Level II neonatal intensive care is restricted to neonates who weigh 1000 grams or more at birth and require at least 6 hours of nursing care per day. Ventilator services may be provided in certain circumstances. Level III care includes the treatment of neonates who weigh less than 1000 grams at birth and require at least 12 hours of nursing care per day. Level III neonates often have complex major congenital anomalies and require continuous cardiopulmonary support. Level II NICU providers are prohibited from providing Level III NICU services and are required to transfer all neonates of 1,000 grams or less to a Level III provider. Level III NICUs that do not provide treatment of complex major congenital anomalies are required to enter into a written agreement with another Level III provider for those services and transfer the neonate patient, if necessary. Although all Level II and Level III NICUs treat severely ill babies, Level III care involves heightened complexity and intensity due to the volatility of the Level III neonates. Their vital signs and medical status are subject to more rapid fluctuation and they usually require longer periods of respiratory support and mechanical ventilation which can result in the scarring, leakage, rupture or deterioration of the lungs. Existing Level III NICU Providers in District 6 Currently, there are three Level III NICU programs in District 6 including SJH which operates 27 beds, Tampa General which operates 21 beds and Brandon Regional Medical Center which operates an 8-bed Level III unit. Pre Hearing Stipulation Agreement Prior to hearing, the parties stipulated that certain provisions of the 12 CON statutory review criteria found in Section 408.035, Florida Statutes, were not in dispute while others remained in dispute. Specifically, the parties agreed to the following: The need for the health care facilities and health services being proposed in relation to the applicable district health plan is IN DISPUTE; The availability, quality of care, accessibility, and extent of utilization of existing health care services in the service district of the applicant is IN DISPUTE; The ability of the applicant to provide quality of care and the applicant's record of providing quality of care is IN DISPUTE. (However, both applicants' record of providing quality of care was stipulated as not in dispute); The need in the service district of the applicant for special health care services that are not reasonable and economically accessible in adjoining areas is IN DISPUTE; The needs of research and educational facilities, including, but not limited to, facilities with institutional training programs and community training programs for health care practitioners and for doctors of osteopathic medicine and medicine at the student, internship, and residency training levels is NOT IN DISPUTE; The availability of resources, including health personnel, management personnel, and funds for capital and operation expenditures, for project accomplishment and operation is NOT IN DISPUTE; The extent to which the proposed services will enhance access to health care for residents of the service district is IN DISPUTE; The immediate and long-term financial feasibility of the proposal is IN DISPUTE. (However, only as to whether the applicants could achieve their respective projections of utilization). The extent to which the proposal will foster competition that promotes quality and cost effectiveness is IN DISPUTE. The costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction is NOT IN DISPUTE. The applicant's past and proposed service to Medicaid patients and the medically indigent is IN DISPUTE. The applicant's designation as a Gold Seal program nursing facility pursuant to s. 400.235, when the applicant is requesting additional nursing home beds at that facility is not applicable and NOT IN DISPUTE. As to AHCA Rule 59C-1.042, Florida Administrative Code, the parties agreed that only the following criteria remain in dispute: (3)(h) Whether the proposal is consistent with the applicable district health plan as required in Section 408.035(1), Florida Statutes; (3)(k) The extent to which the applicant intends to serve the Medicaid and indigent population as found in Section 408.035(11), Florida Statutes; and (5) Whether the applicant has met the Minimum Unit Size requirement set out in Rule 59c-1.042(5), F.A.C., which states that an applicant "shall propose a Level III NICU of at-least 15 beds and should have 15 or more Level II NICU beds.." The NICU Proposals UCH Proposal UCH proposes to convert 5 of its acute care beds to 5 Level III NICU beds. The 5 Level III beds will be integrated into its 10-bed Level II NICU thereby creating a 15-bed combined NICU. UCH, in its proposal, agrees to provide the full range of Level III NICU services with the exception of pediatric cardiac catheterization and pediatric open heart surgery which require separate licensure. UCH intends to provide 24-hour, 7 days/week physician coverage of its Level III NICU. In certain circumstances, the hospital proposes to follow the practice followed at All Children's Hospital, Brandon Hospital, and Mease Hospital in Dunedin and have neonatologists "on call" and not physically present at UCH. AHCA supports their plan. As a condition for AHCA's approval, UCH agrees to commit at least 29.09% of its total Level III NICU patient days to Medicaid babies and at least 1% to indigent babies. In addition, UCH agrees to follow specific procedures to ensure high quality and consents to routine inspections by the Agency. There is significant medical/professional support for UCH's proposal. Several OB physicians in the Tampa area provided testimony favoring the proposal. They indicate that the UCH plan will improve the District's quality of health care and benefit mothers, babies, and families. Moreover, Tampa General Hospital, a local competitor, supports the project. In fact, Dr. Robert Nelson, the medical director of Tampa General, testified that despite the fact that most UCH newborns requiring Level III NICU care are transferred to his hospital, those babies would be better served by UCH. In addition, East Pasco Medical Center (EPMC), a large provider of extensive OB services within District 6 located directly to the geographic north of UCH, favors the plan. Given the fact that there is no Level III NICU provider in Pasco county, UCH is the closest major hospital to EPMC and would provide tremendous benefit to Pasco county's rapidly- growing patient population. Dr. Jeffery Angel, who serves as the medical director for perinatology at SJH, Brandon Hospital, and UCH, and heads the major perinatology group in Hillsborough County also supports the UCH proposal. He provided expert testimony and opined that Level III NICU services at UCH would greatly benefit neonate patients due to the obvious risks associated with their transport. Through implementation of its proposal, UCH purports to improve and promote continuity of care, patient and physician choice, patient access, quality of care, patient satisfaction, and competition. SJH NICU Proposal SJH also proposes to add 5 Level III NICU beds by converting 5 acute care beds. SJH, however, currently operates 27 of the 53 Level III NICU beds within District 6. While its existing Level III NICU unit provides excellent care, it has historically experienced peaks and valleys in utilization over the course of days or weeks within any given month, and it's occupancy rate has consistently been under 80%. Section 408.035(1), Florida Statutes, and Rule 59C- 1.042(3)(h), Florida Administrative Code. There is a need for the Level III health care facility and health service being proposed in relation to the District 6 Local Health Plan. Pursuant to Section 408.035(1), Florida Statutes, AHCA performed a bed need methodology for Level III NICU services and, notwithstanding SJH's occupancy rate, determined that District 6 required 5 additional Level III NICU beds in the January 2004 planning horizon. AHCA's projection of fixed need creates a rebuttable presumption of need that no party challenged. There is insufficient evidence to modify the fixed need determination. The evidence did, however, demonstrate that AHCA, using the Rule formula, rarely computes a numeric need for additional Level III NICU beds, and when need is determined, 1-3 beds are usually required. In fact, in District 6, the Agency has calculated a numeric need on one occasion in the past 12 years when it determined that 1 additional bed was necessary. Interestingly however, Rule 59C-1.042(5), Florida Administrative Code, states that hospital applicants "shall propose a Level III NICU of at-least 15 beds," which under the existing need formula, is mathematically impossible to generate within District 6 today or in the foreseeable future. As a result, under a strict and dispositive interpretation of that rule, all new applicants would automatically be locked out of the Level III NICU market. Recognizing that new Level III NICU programs could rarely, if ever, be established in Florida under that strict interpretation, AHCA has long interpreted the minimum size rule to be only one of the many review criteria which are weighed in evaluating the overall merits of a NICU proposal. Section 408.035(1), Florida Statutes, and Subparagraph 59C-1.042(3)(h), Florida Administrative Code, further require the Agency to consider the applicant's CON proposal for Level III NICU beds in relation to the applicable district health plan. The District 6 Local Health Plan includes two "preferences" for evaluating proposals for Level III. The first factor gives preference to Applicants who commit to provide the most Level III care to Medicaid and indigent patients. While Tampa General is the largest provider, UCH, in its proposal, agreed to commit 29.09% of the total Level III days to Medicaid patients and 1% to the indigent. SJH agreed to commit 25% of its aggregate patient days to Medicaid and/or indigent care. The second preference requires Applicants to analyze the need for more Level III beds and address the impact on existing providers. UCH comprehensively assessed both need and adverse impact, and demonstrated that its approval would not adversely affect the existing providers. Given the unchallenged published need and the District 6 Health Plan, and considering UCH's experience operating a quality, expanding OB program with an existing Level II unit in an overall growing OB market, the new bed need presents a unique and timely opportunity for UCH to enter the Level III NICU market. The UCH proposal will satisfy the Level III bed need in a manner that is consistent with the District Health Plan. Section 408.035(2), Florida Statutes. A UCH Level III unit will improve the availability, quality of care, accessibility and extent of utilization of existing health care facilities and health services in District 6. Pursuant to Section 408.035(2), Florida Statutes, the Agency properly considered the availability, quality, accessibility, and extent of utilization of Level III NICU providers in District 6. The evidence demonstrates that the UCH plan increases availability, ensures quality and continuity of care, promotes access, provides patient and physician choice, supports competition, and provides a better distribution of Level III services in District 6. The SJH plan, given the facility's existing number of Level III NICU beds and occupancy rate, would not improve availability, quality, access, or utilization, and would stifle competition. Availability and Accessibility of Quality Care AHCA is responsible for ensuring that each district maintains sufficient providers of quality care. While the parties agree that UCH provides excellent care to its Level II patients, SJH argues that there are sufficient providers of quality Level III care within District 6. Given the variables of the district, it is questionable whether SJH, Tampa General and Brandon Hospital provide quality care that is sufficiently accessible to all residents of the district. The experts agree that the field of OB medicine is largely unpredictable. As Dr. Angel explained, most high-risk and/or pre-term deliveries cannot be predicted; therefore, it is extremely difficult to determine, prior to birth, whether a baby will require NICU services. In fact, Dr. Dillon suggested that OB doctors correctly identify less than half of the women who will develop pre-term labor, pre-term delivery, or obstetric complications. And Dr. Greenberg admitted that only 15% of pre-term deliveries are accurately predicted. Complicating matters at certain hospitals, including UCH, some women fail to receive prenatal care, and simply appear for delivery. These high-risk, "walk-ins" are often drug-users and prostitutes that present significant risks of complications and problems to their babies. Frequently, they deliver pre-term infants who need the services of a NICU. The experts agree that it is generally preferable for high-risk mothers to give birth at a hospital with a Level III NICU. Given the indigent and Medicaid patient load as well as the increasing deliveries and significant Level II NICU utilization at UCH, it is determined that UCH presents a need for Level III beds in District 6. While transporting fragile neonates remains an option, there are many problems associated with newborn and maternal transports to other facilities. Some women are too medically unstable to be transported. Dr. Angel explained that although some transfers are reasonably safe, complications arise in neonatal and maternal transport and removing the risk improves the Level III care. SJH admits that separating mothers from their babies who are commonly suffering from a broad array of concurrent medical problems is not preferred. The ability to treat all medical issues in one setting by a coordinated network of medical professionals provides sick babies with an enhanced probability of survival and development. It allows a qualified hospital to successfully treat many babies which otherwise would be required to be removed from their mothers and transferred to another facility or another city. Under the UCH plan, the facility will be capable of treating all critically ill newborns. Doctors who serve at UCH will be able to maintain the continuity of care to the mother and newborn which is important in hospitals with large OB volume and an established Level II unit. In addition, patients in north Hillsborough and south Pasco counties will have access to a closer provider without the fear of transfer, separation anxiety or unnecessary risk. As previously indicated, UCH is a major provider of OB services in the northern section of Hillsborough county where the population is rapidly growing. And although UCH is less than a 2 hour drive from all other Level III providers in District 6, the closest Level III provider north of UCH is located in Gainesville. Given the county's expanding population base in the north and the level of traffic in the downtown Tampa area, the UCH proposal improves and promotes availability, accessibility and quality of care. Utilization The issue of utilization provides additional support for UCH to add Level III services. The NICU Rule calls for a facility to have at least 1500 annual births prior to developing a Level III unit and UCH delivers over 2,200 babies each year. In fact UCH currently has a higher birth volume than many Florida hospitals with Level III units. The Level III NICU utilization rate at SJH does not warrant 5 additional beds. Since 1998, SJH has operated below 80% occupancy for each year except 2000. In 2001, according to its internal data, SJH recorded 7,698 Level III patient days which equates to 78% occupancy with approximately 6 unused Level III beds per day. In the first quarter of 2002, SJH's occupancy rate fell to 76.5%. In addition, the birth volume at SJH appears to be decreasing. For example, its birth volume in the first quarter of 2002 was 4% less than its birth volume in the first quarter of 2001. If, in the future, SJH's birth volume rises and it increases its Level III occupancy to 90%, pursuant to 59C-1.042(3)(g), Florida Administrative Code, SJH can automatically demonstrate a need for additional Level III beds without showing any numeric need in District 6. Section 408.035(3), Florida Statutes. UCH can provide high quality care. While SJH argues that UCH lacks the depth of medical experience and resources necessary to operate a Level III NICU program, the evidence suggests otherwise. It is generally agreed that the components of high quality Level III care are quality physicians, quality nurses, and quality unit design and equipment. UCH possesses these components. UCH is a relatively new facility that utilizes the most recent medical equipment available. The hospital maintains a cadre of highly-trained, Board-certified doctors and nurses with extensive experience in Level III units. It currently provides quality care to its OB and Level II NICU patients and as Drs. Kanarek, Sosa, Angel, Hyatt, and Greenberg agreed, it is certainly capable of providing high quality Level III care. In addition, UCH has a proven track record of developing new services and expanding existing services in a high quality manner and possesses an experienced management team. Moreover, Dr. Kanerek, a Board-certified neonatologist who initiated Tampa General's Level III unit and managed it for several years, will continue to serve as the UCH NICU director. SJH further argues that UCH is less capable of providing quality care since mortality rates are better in high volume Level III facilities. The evidence suggests otherwise. Dr. Shiono, an expert in biostatistics and epidemiology testified there is no statistical correlation between NICU volume and patient outcome. In fact, she recently published a professional article entitled "Hospital and Patient Characteristics Associated with Variation in 28- day Mortality Rates for Low Birth Weight Infants," after comparing mortality rates of low birth weight infants with hospital characteristics. Her study concluded that there is no relationship between a hospital's volume of Level III babies and their mortality rates. The evidence in this case suggests the same. SJH has no better mortality rate for its Level III babies than the three 5-bed Level III units in Florida. In fact, between July 1997 and June 2001, their average mortality rates were as follows: St. Joseph's - 9.4%; West Boca Medical Center - 7.7%; Mease Hospital Dunedin - 3.0%; and North Shore Medical Center - 9.8%. Section 408.035(4), Florida Statutes. There is a need for special health care services in District 6 that are not reasonably and economically accessible in adjoining areas. The Agency is required to evaluate the need for Level III services in District 6 that are not reasonably accessible in adjoining areas. Undoubtedly, the UCH proposal will promote needed and improved accessibility to Level III NICU services for the residents of Pasco County. As discussed earlier, Pasco County is experiencing growth in population and there is no Level II or Level III NICU provider. UCH currently provides significant OB and Level II NICU care to the residents of Pasco since it is the closest major hospital to residents of East Pasco County. East Pasco Medical Center strongly supports the UCH proposal and Pasco patients will benefit from the plan. Section 408.035(5), Florida Statutes. The parties stipulated that the need for research and educational facilities is not at issue in this matter. Section 408.035(6), Florida Statutes. The parties stipulated that the availability of resources, including health personnel, management personnel and funds for capital and operating expenditures is not at issue in this matter. Section 408.035(7), Florida Statutes. The extent to which the proposed services will enhance access to health care for residents of District 6 has been discussed above. Section 408.035(8), Florida Statutes. The immediate and long-term financial feasibility of the UCH proposal is sound. While the parties agree that the immediate financial feasibility of the proposals is not in dispute, each party challenges the long-term feasibility and utilization projections of the other. As previously discussed, SJH has experienced consistent unused capacity. Smaller Level III providers, however, appear to maintain occupancy rates at 90% or greater. Over the past 5 years, Level III units with fewer than 15 beds have averaged 94.54% occupancy while larger units report 81.24%. In 2001, smaller units averaged 98.18%, while larger units averaged 81.97%. In District 6, between 1996-2000, Brandon Hospital, a 5-bed Level III provider, reported that its occupancy exceeded 94% each year and led the district average of all Level III providers. The long-term feasibility of the UCH proposal is sound. For further discussion, please see the discussion above regarding the issue of utilization. Section 408.035(9), Florida Statutes. The UCH proposal will enhance, foster and increase Level III NICU competition and improve quality and cost-effectiveness. SJH is the dominant Level III provider in District It currently operates 27 of the 53 Level III NICU beds in the district, however as previously described, SJH has plenty of unused Level III bed capacity. Its existing 27 beds can accommodate substantially more patient days than are currently being used. Adding 5 Level III beds to an already under- utilized provider will stifle competition. Moreover, the SJH proposal calls for higher Level III charges than UCH. In 2004, SJH proposes an average gross charge per patient day of $2,994, while UCH suggests $2,493. SJH's projected reimbursement rates from insurance and managed-care companies is higher as well. While the Medicaid program pays hospitals a flat fee for Level III care per day, regardless of gross charges, insurance and managed care companies negotiate reimbursement rates. In 2004, UCH proposes to be paid an average of $1,513 per day from insured patients while SJH proposes $2,898 per day. UCH proposes an average of $1,277 per day from managed care patients while SJH proposes $1,421 per day. In addition to its proposed net charges, SJH proposes a questionable increase in net revenues per day. In 2001, SJH received an average of $917 per day. In 2004 however, SJH proposes to increase its collection to $1,137/day, or 7.4 % per year. Since Medicaid reimbursement increases approximately 2%-3% per year, SJH must significantly increase its reimbursement from insurance and managed care companies to achieve their proposed net revenues. The evidence demonstrates that the SJH proposal does not promote competition or cost-effectiveness. Their proposed increases suggest that SJH operates as the dominant Level III provider in a non-competitive environment and may, unilaterally, be able to control pricing. The UCH plan, on the other hand, creates an environment and potential for price competition. Section 408.035(10), Florida Statutes. The costs and methods of the proposed construction are not at issue in this matter. Section 408.035(11), Florida Statutes. Both UCH and SJH have a long history of providing health care services to Medicaid and indigent patients and propose to continue their commitment. SJH and UCH treat all patients regardless of ability to pay, including OB patients and newborns. As a CON condition, UCH commits to provide a minimum of 29.09% of total Level III days to Medicaid patients and at-least 1% to indigents. SJH currently commits 25% of its Level III NICU volume to Medicaid and indigent patients combined and agrees to continue. Section 408.035(12), Florida Statutes. The applicants' designation as a Gold Seal program nursing facility pursuant to Section 400.235, is not at issue in this matter.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: UCH CON Application No. 9492 is recommended for approval, and SJH's CON Application No. 9493 is recommended for denial. DONE AND ENTERED this 14th day of January, 2003, in Tallahassee, Leon County, Florida. ___________________________________ WILLIAM R. PFEIFFER 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 14th day of January, 2003. COPIES FURNISHED: James C. Hauser, Esquire Metz, Hauser & Husband, P.A. Post Office Box 10909 Tallahassee, Florida 32302-2902 Michael P. Sasso, Esquire Agency for Health Care Administration 525 Mirror Lake Drive, North Suite 310-G St. Petersburg, Florida 33701 Robert A. Weiss, Esquire Parker, Hudson, Rainer & Dobbs, LLP 118 North Gadsden Street The Perkins House, Suite 200 Tallahassee, Florida 32301 Lealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop 3 Tallahassee, Florida 32308 Valda Clark Christian, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3431 Tallahassee, Florida 32308 Rhonda M. Medows, M.D., Secretary Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building, Suite 3116 Tallahassee, Florida 32308
The Issue Whether Petitioner should be granted CON No. 6606 to convert 10 medical/surgical beds to 10 neonatal intensive care beds to create a Level II neonatal intensive care unit (NICU).
Findings Of Fact UCH is a licensed acute care hospital with 404 authorized beds. A number of these beds were transferred to the Women's Center, which was exempted from CON review by DHRS. (Exhibit 8) The Women's Center involved the expenditure by UCH of some $11,000,000 to construct and equip a separate building adjacent to the existing hospital. The Women's Center was completed and became operational in September 1991. Accordingly, at the time the Application for NICU beds was submitted through the processing of the Application by DHRS, no births were experienced at this facility. For the first two months the Women's Center was operational, the Women's Center experienced 107 births of which 1 required transfer to a hospital providing Level II neonatal intensive care services. At the time the batching cycle for the September 27, 1990 deadline and January 1993 planning horizon was published (Exhibit 18), the NICU inventory was in litigation, and DHRS did not publish a fixed bed need pool for that batching cycle. Instead, in Florida Administrative Weekly, Vol. 16, No. 34, dated August 24, 1990 (Exhibit 18), an estimated inventory of existing beds was used in the bed need formula calculation. This showed for District VI zero need for additional NICU Level II beds. Subsequent to the issuance of the State Agency Action Report (SAAR), in this case litigation was complete, and DHRS entered a Final Order on September 15, 1991 establishing the bed inventory for neonatal intensive care beds Level II and Level III in District 6. That Order increased the NICU Level II bed inventory by 15 beds by adding four beds to Lakeland Regional Medical Center (LMRC) NICU and 11 beds to Winter Haven's NICU. These additions increased the NICU Level II inventory in District VI from the 61 shown on Exhibit 18 to 76. The SAAR (Exhibit 6) used an inventory of 77 Level II NICU beds in District VI to determine no need after application of the bed need formula showed a need for 70 Level II NICU beds in District VI. Changing the inventory from 77 to 76 NICU beds does not affect this conclusion. Occupancy rates used in the bed need calculation were taken from the reports hospitals are required to submit to local health councils. In some instances in the batching cycle here involved, the hospitals had failed to report to the local health councils their occupancy rate for the period required by the bed need formula, and DHRS contacted these hospitals in District VI for the data needed. Petitioner contends that the occupancy rate data relied upon by DHRS in calculating the need for NICU beds for the 1993 planning horizon is inaccurate and that more reliable data is obtained from using different reports that the hospitals are required to submit to the Hospital Cost Containment Board (HCCB). Petitioner's expert witness opined that the information hospitals are required to submit to the HCCB provides a more accurate method of determining the occupancy rate of the Level II NICU beds at each hospital. Petitioner also contends that at the time the Level II occupancy rates were provided to DHRS there was no finite definition, by rule, of the differences between Levels I, II and III NICUs, and the hospitals did not submit accurate data. However, credible evidence was presented that a proposed definition of Levels I, II and III NICUs had been promulgated to all of the hospitals and, when enacted as a rule, this proposed definition was adopted verbatim or nearly so. Intervenors' witnesses pointed out that the hospital reports to HCCB are based on DRG's (diagnostic related groups), and the same DRG is frequently used on a Level I, II or III NICU admission. Accordingly, from those reports to the HCCB an accurate determination of the Level II occupancy rate cannot be made. Furthermore, the patient, during the hospital stay, is frequently moved from Level III to Level II to Level I care, and this data cannot be obtained from the reports submitted to the HCCB. Accordingly, it is found that the reports submitted by hospitals to the local health councils provide more accurate occupancy rates than can be gleaned from the reports submitted to the HCCB, and the occupancy rate utilized by DHRS to calculate NICU bed need is correct. The average occupancy rate for District VI hospitals providing NICU Level II beds was approximately 70 percent during the most recent 12 months prescribed for this batching cycle. Although discrepancies were noted in the patient days at Humana and Tampa General during this period, when these discrepancies were corrected, the district occupancy rate remained in the vicinity of 70 percent. Rule 10-5.042(3)(d), Florida Administrative Code, provides that regardless of bed need shown (by using the bed need formula) the establishment of new Level II NICU beds within a district shall not normally be approved, unless the average occupancy rate for Level II beds in the district equals or exceeds 80 percent for the most recent 12 month period ending 6 months prior to the beginning date of the quarter of the publication of the fixed bed need pool. Petitioner submitted no evidence to demonstrate a not normal situation existed to waive the 80 percent average District VI occupancy rate required before additional Level II NICU beds will be approved. Petitioner principally relied upon the admissions in Hillsborough County to demonstrate an 80 percent occupancy rate. However, the rule specifically refers to a district rate rather than to a subdistrict or one-county rate. In several areas, Petitioner's estimates used to determine the anticipated number of patients to be served in the proposed NICU are not realistic. To determine the ratio of Level II patients to the number of births, Petitioner relied on data from Lakeland Regional Medical Center (LMRC) as a comparable hospital. However, LMRC is not comparable to UCH in patient payor mix. In excess of 40 percent of LMRC obstetrical cases are Medicaid patients, while UCH projects only 6 percent Medicaid births. A lower income payor such as Medicaid patients have a much higher ratio of ill babies at birth than do more affluent mothers who generally receive better prenatal care. Consequently, the percentage of births needing Level II care in the payor mix expected at UCH is more comparable to the percentage experienced by Humana Women's Hospital, an Intervenor herein. At Humana the percentage of births requiring Level II care is on the order of 6 percent as compared to 15.6 percent at LMRC. This lower ratio is more consistent with UCH experience in its first two months of operations where out of 107 births only 1 required transfer to a Level II NICU. Some question was raised regarding the accuracy of Petitioner's estimate of 1500-1700 births during the first full year of operation. While it would be expected that admissions to a new facility would be lower the start-up year than in subsequent years, hard evidence to support the proposed number of births or a lessor number was not presented. In either case, Petitioner has failed to meet the birth requirement of a minimum of 1000 live births for the most recent 12 month period ending 6 months prior to the beginning date of the quarter of the publication of the fixed need pool needed to qualify for this CON. Petitioner presented no evidence to support the not normal conditions that would provide an exemption to this requirement in Rule 10-5.042(6), Florida Administrative Code, other than the fact that it is patently obvious that a hospital that commenced operations 6 months after submitting its CON application could not demonstrate 1000 live births in the 12 months preceding its application. The protesting providers of Level II neonatal care are both located within one hour driving time of the site of UCH as is All Children's Hospital in St. Petersburg. The other hospitals in District VI providing Level II neonatal care, to wit Manatee Memorial Hospital, Winter Haven Hospital and LMRC, are also within two hours driving time of UCH which is the geographical access guideline established by rules for NICUs. Although UCH contends that its application meets all eight preference items prescribed by the state health plan, the evidence presented established its application conclusively meets only one of these preferences, number 6. Absent a showing of need for the proposed facility as found in finding 6 above, granting this CON will increase the excess NICU beds in District VI and adversely impact existing providers. This includes Tampa General which is a disproportionate share provider (of Medicaid and indigent care). It appears from the evidence presented, that in constructing the Women's Hospital, space for an NICU was provided in the plans and, while awaiting a CON to provide a 10 bed Level II ICU, the space is used for storage. No structural changes will be required to operate a NICU at this location, and costs are related primarily to the equipment that will be needed. Whether the installation of a NICU in this space will improve the physical plant of the Women's Center depends on from which advantage point one looks. From Petitioner's point of view, the NICU would improve the physical plant and comply with Preference 3 of the state health plan. Based upon the premise that the proposed NICU beds will be used at an occupancy rate of 70 percent or greater, the conversion of 10 acute care beds currently operating at less than 50 percent occupancy to NICU beds, the overall occupancy rate will increase and Preference 4 would be met. However, no credible evidence was presented that the proposed 10 bed Level II NICU will operate at 70 percent capacity. If initial utilization of Level II care continues and less than 1 percent of UCH live births require Level II care, this Preference will not be met. Although Petitioner did not address Preference 5 in its application, the SAAR notes that HCB reports show of the three hospitals with a grouping of "05" UCH has lower gross revenues per adjusted admission. Petitioner meets Preference 6. Preference 7 of the State Health Plan pertains to applicants who propose to provide neonatal intensive care services to Children's Medical Services (CMS) and non-CMS patients who are defined as charity care patients. Although UCH proposes to provide 6 percent Medicaid and 5 percent indigent care, past history does not support this level of indigence or low pay care. Under Preference 8 of the State Health Plan, preference is given to applicants who propose to serve substance abuse, pregnant and postpartum women, and coordinate their services with other appropriate social agencies. Although UCH stated in its application that it has developed a referral relationship with the Teen Mom's Program, it did not specifically address coordination of its services with substance abuse, pregnant and postpartum women. The local health plan for District VI provides preference shall be given to an applicant who provides the department with documentation that they provide, or propose to provide, a disproportionate share of Medicaid and charity care patient days in relation to other hospitals in the subdistrict. UCH is not a disproportionate share provider and does not propose to become one. Accordingly, it does not comply with this preference item in the district health plan.
Recommendation It is, therefore, recommended that a Final Order be entered denying the application of University Community Hospital for Certificate of Need No. 6606 to establish and operate a 10 bed Level II neonatal intensive care unit. RECOMMENDED this 16th day of January, 1992, in Tallahassee, Florida. K. N. AYERS 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 16th day of January, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5720 Proposed findings submitted by Petitioner are accepted, except as noted below. Those not noted below and not contained in Hearing Officer findings were deemed not necessary to the conclusions reached. 22. Accepted as the testimony of Hopes, but not as a fact. Accepted only insofar as not in conflict with HO #5. Rejected. 32. Rejected. 34-35. Accepted insofar as not inconsistent with HO #7. 36. Same as 34. Accepted as testimony of witnesses. However, ultimate finding in HO #7 is that when these numbers were corrected, no change in bed need resulted. Rejected. 42. Rejected that Hopes utilization statistic more accurately reflects true utilization of NICU beds. 53-55. Rejected. 56. Rejected as outside the time period here involved. 58-59. Rejected. 62. Rejected insofar as inconsistent with HO #10. Rejected. Second sentence rejected as in conflict with HO #9. 75. Ultimate sentence rejected. 85. Rejected. 92. Accepted, except for the connotation that these patients have geographical access problems to existing facilities. 95. Accepted merely as the testimony of this witness who is currently an employee of UCH. 97-118. Although these preference items were discussed in HO findings #12-19, absent a comparative review these preferences were not considered in determining that a need for 10 more Level II NICU beds did not exist in District VI. Proposed findings submitted by Respondent and the Intervenors are accepted. Those not included in HO findings were deemed unnecessary to the conclusions reached. COPIES FURNISHED: Cynthia S. Tunnicliff, Esquire W. Douglas Hall, Esquire Post Office Drawer 190 Tallahassee, FL 32302 Richard Patterson, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive Tallahassee, FL 32308 James C. Hauser, Esquire Post Office Box 508 Tallahassee, FL 32302 John Radey, Esquire Post Office Drawer 11307 Tallahassee, FL 32302 Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Slye General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue At issue in this proceeding is whether Memorial West should be issued CON 7249 to establish a 10-bed Level II NICU program at its facility in southwest Broward County based on "not normal circumstances." Also at issue is whether the Intervenor, Plantation General Hospital, L.P., has sufficiently demonstrated standing, based on whether its existing NICU service will be substantially adversely affected if Memorial West's proposed project is approved.
Findings Of Fact The agency hereby adopts and incorporates by reference the findings of fact set forth in the Recommended Order except where inconsistent with the rulings on the exceptions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Plantation General Hospital, L.P. be dismissed as a party to these proceedings based upon its failure to demonstrate standing, and That Certificate of Need No. 7249 be granted to South Broward Hospital District, d/b/a Memorial Hospital West to establish a 10-bed Level II Neonatal Intensive Care Unit at its Pembroke Pines facility. DONE and ORDERED this 20th day of January, 1995, in Tallahassee, Florida. JAMES W. YORK 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 20th day of January, 1995.
