Findings Of Fact The PROVIDER received the Final Audit Report that gave notice of PROVIDER'S right to an administrative hearing regarding the alleged Medicaid overpayment. The PROVIDER filed a petition requesting an administrative hearing, and then caused that petition to be WITHDRAWN and the administrative hearing case to be CLOSED. PROVIDER chose not to dispute the facts set forth in the Final Audit Report dated August 15, 2013. The facts alleged in the FAR are hereby deemed admitted, including the total amount of $14,569.69, which includes a fine sanction of $2,419.26. The Agency hereby adopts the facts as set forth in the FAR including the amount of $14,569.69 which is now due and owing, from PROVIDER to the Agency.
Conclusions THIS CAUSE came before me for issuance of a Final Order on a Final Audit Report (“FAR”) dated August 15, 2013 (C.1. No. 13-1386-000). By the Final Audit Report, the Agency for Health Care Administration (“AHCA” or “Agency”), informed the Respondent, Amwill Assisted Living, Inc., (hereinafter “PROVIDER’), that the Agency was seeking to recover Medicaid overpayments in the amount of $12,096.28, and impose a fine sanction of $2,419.26 pursuant to Sections 409.913(15), (16), and (17), Florida Statutes, and Rule 59G- 9.070(7)(e), Florida Administrative Code, and costs of $54.15 for a total amount of $14,569.69. The Final Audit Report provided full disclosure and notice to the PROVIDER of procedures for requesting an administrative hearing to contest the alleged overpayment. The PROVIDER filed a petition with the Agency requesting a formal administrative hearing on or about September 5, 2013. The Agency forwarded PROVIDER'S hearing request to the Division of Administrative Hearings (Division) for a formal administrative hearing. The Division scheduled a formal hearing for November 22, 2013. On November 12, 2013, the PROVIDER filed a Motion with the Administrative Law Judge, requesting AHCA vs. Amwill Assisted Living, Inc. (AHCA C.I, No.: 13-1386-000) Final Order Page 1 of 4 Filed January 2, 2014 10:59 AM Division of Administrative Hearings withdrawal of their Petition for Formal Hearing, and the Administrative Law Judge issued an Order Closing File on November 12, 2013, relinquishing jurisdiction of the case to the Agency.
The Issue The basic issue is whether the applicant meets the relevant statutory and regulatory criteria for award of a CON. In its prehearing statement and in its proposed recommended order, HRS stipulates that the following criteria are met: Section 381.705(1)(a), F.S., regarding compliance with the district health plan; Section 381.705(1)(c), F.S., regarding the applicant's capability and record of providing quality of care; Section 381.705(1)(h), F.S., regarding the sufficiency of applicant's resources; Section 381.705(1)(m), F.S., regarding the reasonableness of proposed costs and methods of construction; and Section 381.705(2)(c), F.S., regarding the consideration of alternatives to new construction. The following statutory criteria are deemed by HRS to be inapplicable to the proposed project: Section 381.705(1)(f), F.S., regarding the need for special equipment or services not available in an adjacent district; Section 381.705(1)(g) and (h), F.S., relating to the need for research, educational and training facilities; Section 381.705(1)(j), F.S., regarding the needs of health maintenance organizations. Section 381.705(1)(k), F.S., regarding entity providing most of its services to individuals residing beyond the service district; and Section 381.705(2)(e), F.S., regarding nursing homes. HRS also concedes the numeric need formulae found in the rules do not apply, and that no HRS rule is applicable to the need in this case. (HRS proposed Recommended Order, p. 2; transcript, pp 13-14.) The remaining criteria which HRS contends are not fully met relate to accessibility, efficiency, financial feasibility and cost effectiveness. HRS states in the SAAR and argued at the hearing that Holmes' application lacked information, and that attempts to supply the information were improper amendments to the application.
Findings Of Fact The Applicant Holmes Regional Health Care Systems, Inc. is a nonprofit corporation having among its subsidiaries a 528-bed acute-care, tertiary care non-profit hospital: Holmes Regional Medical Center (HRMC) located in Melbourne, Brevard County, Florida. HRMC is the largest hospital in the Brevard subdistrict of HRS planning district 7. It employs approximately 1900 full and part-time staff; approximately 210 physicians serve on the medical staff. It offers a wide range of services, including comprehensive cardiovascular programs, pediatrics, psychiatry, all specialties in internal medicine and surgery, and a high-risk neonatal intensive care unit. HRMC is the oldest hospital in Brevard County. It opened in 1937 with 27 beds. Although the figure fluctuates frequently, at the time of hearing approximately 480 of its licensed beds were in service. Holmes is governed by a 13-member board comprised of local business professionals who serve without compensation. The Project Holmes proposes to reduce the licensed capacity of HRMC by 60 beds and to transfer those beds to a satellite facility to be constructed south of Melbourne in Palm Bay, still within Brevard County. Total project costs for the new facility, including land (already purchased), construction and equipment is $11,656,812. The 60 beds will be acute care, "medical/surgical", in 36 private rooms and 12 semi-private rooms. Pediatric, obstetric, intensive care, and other speciality services will remain at HRMC. Access Melbourne, the site of HRMC, is in the southern end of Brevard, an elongated county on Florida's central east coast. The satellite hospital is proposed for a site approximately seven miles south and slightly west of HRMC. Palm Bay is a city which grew from five square miles to sixty-five square miles in the 1960's, when General Development Corporation (GDC) platted and began developing vast subdivisions west of the once-sleepy village lying along the Indian River. Wuesthoff, the next nearest hospital in the planning district is located north of HRMC, in Rockledge, in central Brevard County. The GDC development currently includes 74,000 or 75,000 platted lots throughout the city, although only approximately 15,000 have been built. The estimated population at full build-out in the year 2050 is projected at 257,000. In the meantime, the City of Palm Bay is the second largest city in Brevard County, population-wise, and is projected to be the largest city in the county by 1992. In 1980 the city had 18,560 persons; in 1988, the population is over 53,000. A water and sewer service agreement between Brevard County and General Development Utilities is contributing to the sprawl, as the agreement limits buildout to thirty percent of the lots on a block with wells and septic tanks. This has pushed growth from the northern and eastern boundaries of the subdivisions into the southern and western reaches of the city limits, and farther away from HRMC in Melbourne. The Palm Bay area suffers with congested traffic, as does most of South Brevard. The labyrinthine system of roads throughout the new section (the GDC development) is characterized by circles and dead end lanes calculated to promote residential integrity. An elaborate system of canals further limits access to a few through streets. The only planned major improvement to road capacity in Palm Bay is the four-laning of an approximate mile and a half strip of Babcock Street, a major north-south artery. Dr. Stanley K. Smith, an Associate Professor of Economics and Population Program Director at the University of Florida Bureau of Economic and Business Research, was qualified, without objection, as an expert in demographics, including population studies and projections. Dr. Smith and William Tipton, Holmes' traffic and transportation engineering expert, compiled data establishing that by the horizon year 1992, 14.4 percent of Palm Bay's population would live beyond a thirty minute drive to HRMC. Utilizing trips from HRMC in peak afternoon traffic, Mr. Tipton's traffic study found four 30 minute drive time points in the Palm Bay, South Brevard area, fanning out southward from HRMC along the primary roadways. Using census data and population projections developed by Brevard County planning staff, Dr. Smith calculated the population in Palm Bay that will be living beyond the 30 minute drive times in 1992. Although the drive times were established at peak hours, those hours in Palm Bay are unusually long because of the staggered work hours for Harris Corporation, which with 9,000 employees, is the largest industrial employer in Palm Bay. The Tipton study is also considered a reasonably conservative predictor of accessibility in 1992. By that horizon year the population will have expanded, and the 30-minute drive points will be closer to HRMC as a result of increased congestion and deterioration of traffic conditions. HRS' position that access to HRMC was not a problem for Palm Bay residents was based on a personal visit to the area by its staff CON reviewer, Dennis Halfhill. Mr. Halfhill drove from his motel, north along US1 to HRMC, around midmorning, and determined that his drive time was only twenty-five minutes. U.S. 1 runs north-south along the Indian River on the eastern edge of Palm Bay and South Brevard County. Unlike most of the main roads in South Brevard, US 1 is four-laned. It also is in the old established section of Palm Bay, rather than in the newer population center in the south and west. Mr. Halfhill did not travel in the southwest area and erroneously believed he was in the center of Palm Bay along its eastern edge. He estimated the circumference of the main part of the city to be approximately five miles and believed the western city limits were east of Interstate 95, when, in fact, a vast portion, approximately 80 percent of the city's 65 square mile area, lies west of Interstate 95. Geographical access by Palm Bay residents is decidedly enhanced by the creation of a satellite hospital in that community. Efficiency Holmes can provide acute-care services in its proposed 60 bed satellite more efficiently than another free-standing facility could, and more efficiently than Holmes is currently providing those same services in its large facility. The proposed facility will share with HRMC various support and ancillary services as purchasing, patient accounts, dietary, plant engineering, data processing, pharmacy, laboratory and radiology. All of Holmes' management systems will be shared with its satellite. Some equipment and staff will be transferred to the new facility. Because some wings of HRMC are old and outdated, the relocation to a newer, better-designed facility will result in improved utilization of nursing staff and a slightly lower staffing level overall. Holmes is considering converting the transferred beds into an observation unit for outpatient surgery and increasing its number of private rooms. In addition, if the beds are transferred, Holmes anticipates the ability to move back into the hospital certain activities for which it is paying over $100,000 per year in outside rent and utilities. Financial Feasibility/Cost Effectiveness Based on its long range planning conducted in 1981, Holmes determined there would be a future need for an acute care facility in Palm Bay. It purchased land for $315,800, and is currently operating an ambulatory care center and diagnostic center at the site. The total funds required for completion of the satellite facility will come from reserves established from the operation of Holmes, the corporate holding company. No borrowing will be necessary. Initially, in the first two years of operation of the satellite, there will be a slight negative impact on HRMC, but not on Holmes, the parent company, as the negative impact will be offset by the revenues at the satellite and by the cost savings shared by the two facilities. Holmes anticipates net revenue at the satellite will be $404,891 the first year of operation and $2,052,911 for the second year. Rick Knapp, a health care consultant, was qualified without objection as an expert in hospital and health care finance. In his opinion, the pro- forma/operating statement is realistic and achievable and the financial management of the existing facility is good. This latter opinion is based on his experience that relatively low-charge hospitals which generate an attractive bottom line, such as HRMC, are well managed hospitals. HRS has acknowledged that HRAC has done well in serving medicaid patients and indigents, typically considered chronically underserved. Holmes has committed that it will continue that service with the satellite facility. John Stephen Eavenson, Vice-President of Finance at HRMC and chief operating officer for Holmes, was qualified without objection as an expert in hospital and health care finance, hospital financial administration and hospital business venture analysis. In his opinion, the Palm Bay satellite hospital proposed by Holmes represents a sound financial decision. Holmes considers South Brevard, including Melbourne and Palm Bay, as its service area. Approximately 92 percent of the population of the service area in need of hospitalization currently utilize HRMC. This figure is likely slightly lower for Palm Bay, alone, as some patients in that area use a hospital in Sebastian, in Indian River County, south of Palm Bay, and beyond the HRS planning district VII. Other patients go to Orlando. Aside from the economies already discussed relating to the new streamlined facility, Holmes' willingness to expend $11 million to transfer beds is motivated by a desire to preserve its market share by enhancing access to an expanding community. Application Content The principal reason for HRS' denial, perhaps 75 percent, according to HRS Supervisor Reid Jaffe, was the lack of documentation in Holmes' application to support the proposed transfer. This reason is reflected in the cover latter to the SAAR and in comments throughout the SAAR. HRS objected throughout the formal hearing to the introduction of evidence relating to access, arguing that transportation studies were not part of the original application and would be an inappropriate amendment to the application. Holmes provided all information requested on the CON application form; in addition it responded in full to the three brief questions in HRS' May 15, 1987, omissions letter. Holmes' application was deemed "complete" by HRS, effective June 29, 1987. With regard to availability and access, the SAAR states: ...the applicant did not present any information about the future traffic and growth management plans to determine if accessibility to services would be impaired.... Yet, the SAAR found enough information to determine compliance with the following priority of the District 7 Health Plan: Priority 4 Priority for needed acute care services should be given to those applicants who transfer unutilized beds/or establish hospital facili- ties in regions of the District where access to service can be substantially improved by at least 25 minutes for 10 percent of the popula- tion of the subdistrict or a minimum of 35,000 residents. Joint Exhibit #1, p. 3 The SAAR comments provides: Priority 4-Applicant complies, Holmes Regional proposes to transfer underutilized beds. Although the area might now be within 25 minutes of Holmes and Humana Sebastian, increased congestion is expected as Palm Bay and the area along US1 are developed. Joint Exhibit #1, p. 4 The foregoing comment possibly reflects Mr, Halfhill's personal tour of Palm Bay, a tour which the record amply reveals missed the truly congested and developed areas of this deceptively vast community. An HRS reviewer with personal knowledge of a geographical area will bring his or her experience to the application review process and will not question the lack of such information in the packet, according to Reid Jaffe. In other instances the reviewer uses the omissions process to question presumptions or to flesh out the necessary information. For example, in March 1988, HRS approved a CON for the transfer of 100 beds from Martin Memorial Hospital in Martin County to create a satellite facility in Port Salerno. Prior to that approval Martin Memorial submitted a revised application, responding to at least 17 omission questions, including such questions as: Omission #10 What accessibility problems were experienced by residents of the proposed satellite area in obtaining acute inpatient services? How far is it to Okeechobee and Stuart? Northern Palm Beach County? and Omission #11 What is the breakdown of the 100 med/surg beds to be transferred from Martin Memorial and the breakdown established at the satellite facility; i.e. ICCU, pediatrics, OB, etc.? How will the transfer affect health services at Martin Memorial? How will vacated space be utilized? Petitioner's Exhibit #15 In another similar case involving a transfer of beds by Lee Memorial Hospital, which CON application was in the same batching cycle as Holmes, HRS permitted the applicant to submit an extensive packet of information in March 1988, addressing the questions and issues raised by the SAAR. The packet included a travel time study completed well after the SAAR was issued. The Lee Memorial project was approved. Holmes also attempted to present additional information, including its travel time study prepared in December 1987. It was told that additional information would be considered an inappropriate amendment to the application. Although the travel time study was not included in Holmes' application, access was discussed throughout the application with references to the high growth portions of the service area, the inadequate roads and traffic congestion, and Dr. Smith's projections of population increases. The application was complete, as its narrative, tables and attachments sufficiently addressed the relevant criteria of the statute and rules. Weighing the Criteria The parties agree that numerical need is not an issue when no net increase in beds is proposed. HRS has no rule specifically governing the transfer of beds and, according to Sharon Gordon-Girvin, the HRS Administrator of Community Health Services and Facilities, the agency policy was still under consideration at the time that Holmes' current application was being reviewed. A policy framework had been discussed, but HRS conceded that the policy required patient origin data that was not available to the applicant or the department. In the absence of a specific rule or policy, HRS' review and comments on the Holmes application reflect a general concern that, if no additional services are being offered, and no additional beds are needed or proposed, there must be some direct, positive health care benefit to be derived from the expenditure of $11 million to transfer beds. Concomitantly, there should also be no negative effect on the existing services. These general concerns must still be translated into the statutory criteria found in section 381.705, F.S. The SAAR found that Holmes' proposal at least partially met every relevant criteria. In its evidence explaining and supporting its application, Holmes proved that its satellite project will significantly improve access to the population of a phenomenally fast-growing community. The reduction in beds at HRMC will increase the utilization rate at that facility, which, although underutilized at less than 80 percent, is experiencing a constant increase and a better rate than the other area hospitals. The loss of revenue will not negatively impact HRMC in the long-term and will positively impact the parent company, Holmes. HRMC and Holmes have a reputation for quality care, reasonable costs and a commitment to serve the indigent and underserved patients in South Brevard. The same management will assure these attributes are maintained at the satellite facility. Holmes' forecasts for patient mix and utilization rates are based on a long experience in providing wide range health care services in South Brevard. Its management decision to utilize $11 million of on hand resources to create the satellite is a sound business decision based on a projected need for the horizon year 1992, the growth patterns in the south west county, and a calculated desire to maintain its market share. The shared services and resources make the satellite facility economically preferable to a new separate free-standing facility of 60 beds. The removal of beds from HRMC will result in more efficient use of space in that hospital. In summary, there is a need for the facility proposed by Holmes.
Recommendation Based on the foregoing, it is, hereby RECOMMENDED: That HRS award a Certificate of Need to Holmes Regional Healthcare Systems Inc., for a 60-bed satellite hospital in Palm Bay, Florida, by virtue of a transfer of 60 licensed beds from Holmes Regional Medical Center in Melbourne, Florida. DONE and RECOMMENDED this 8th day of November, 1988, in Tallahassee, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-0394 The following constitute my specific rulings on the findings of fact proposed by the parties. Petitioner's Proposed Findings Adopted in paragraphs 1 and 5. Adopted in paragraph 22. 3-7. Rejected as unnecessary. 8. Adopted in the background statement and in summary in paragraph 21. 9-10. Rejected as unnecessary. 11-13. Adopted in substance in paragraph 26, although the fact that the Lee application was originally denied was not clearly established. 14-15. Addressed in the background statement. 16. Addressed in the statement of issues. 17-18. Adopted in paragraph 31. Adopted in paragraph 9. Adopted in substance in paragraph 7. Adopted in paragraph 8. 22-24. Adopted in substance in paragraph 9. 25. Adopted in substance in paragraph 23. 26-28. Adopted in paragraph 10 and paragraph 24. Rejected as argument. Rejected as unnecessary. Addressed in the statement of issues. Adopted in paragraph 31. Addressed in the statement of issues. Rejected as unnecessary. Adopted in substance in paragraphs 15 and 18. 36-37. Rejected as unnecessary. 38. Adopted in paragraph 16. 39-40. Rejected as unnecessary. Adopted in substance in paragraph 20. Rejected as cumulative and unnecessary. Rejected as unnecessary. Adopted in substance in paragraphs 12 and 13. Adopted in paragraph 21. 46-47. Rejected as unnecessary. Adopted in substance in paragraph 22. Rejected as unnecessary. Adopted in paragraph 25. 51-52. Rejected as argument. 53-55. Rejected as unnecessary. 56. Adopted in part in paragraph 26, otherwise rejected as unnecessary. 57-59. Rejected as argument. Respondents Proposed Findings 1. Adopted in Paragraphs 1 and 3. 2-3. Addressed in background statement. 4-5. Addressed in statement of issues. Rejected as unnecessary, although the access issue is addressed in paragraphs 6-11 and paragraph 23. Rejected as unsubstantiated by the evidence. Rejected in part as unnecessary. No criteria requires proof that the population is not predominately located within an average 30-minute drive time. Also rejected as inconsistent with the evidence. The study involved two-way drives (see transcript pp 309-310). The cited portion of the transcript does not support the finding suggested, that the study was manipulated. 9-10. Rejected as unnecessary. Rejected as unnecessary. This was not an issue in the proceeding. Adopted in part in paragraph 5. 13-19. Rejected as unnecessary or irrelevant. 19-21. Rejected as contrary to the weight of evidence. 22-23. Rejected as unnecessary. Rejected as immaterial. The application was not amended at hearing. Addressed in conclusions of law, paragraph 4. Rejected as immaterial. Occupancy rates are not at issue. 27-28. Rejected as contrary to the weight of evidence. Rejected as unnecessary. Rejected as cumulative and unsupported by the evidence. Rejected as immaterial. The witness was credible. 32-34. Rejected as unnecessary. 35. Rejected as contrary to the weight of evidence. 36-39. Rejected as immaterial. 40. Rejected as contrary to the weight of evidence. COPIES FURNISHED: Lee Elzie, Esquire MacFarlane, Ferguson, Allison & Kelly 215 South Monroe Street Tallahassee, Florida 32302 E. G. Boone, Esquire Jeffrey A. Boone, Esquire Boone, Boone, Klingbeil & Boone, P. A. Post Office Box 1596 Venice, Florida 34284 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, Esquire Acting General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, Florida 32399-0700
Conclusions Having reviewed the administrative complaint dated August 17, 2009, attached hereto and incorporated herein (Exhibit 1), and all other matters of record, the Agency for Health Care Administration ("Agency") has entered into a Settlement Agreement (Exhibit 2) with the other party to these proceedings, and being otherwise well-advised in the premises, finds and concludes as follows: ORDERED: The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. Filed February 12, 2010 12:46 PM Division of Administrative Hearings. Upon full execution of this Agreement, the parties agree to the following: The administrative complaint is deemed superseded by this Settlement Agreement. The Petitioner's request for a formal administrative hearing is withdrawn. Respondent will pay a fine of $500.00 for violating Rule 59A-8.003(10)(c), Florida Administrative Code. This fine is due and payable within thirty (30) days of the entry of the Final Order. A check should be made payable to the "Agency for Health Care Administration." The check, along with a reference to this case number, should be sent directly to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS # 14 Tallahassee, Florida 32308 Unpaid amounts pursuant to this Order will be subject to statutory interest and may be collected by all methods legally available. Respondent's petition for a formal administrative proceeding is hereby dismissed. Each party shall bear its own costs and attorney's fees. The above-styled case is hereby closed. DONE and ORDERED this _!}_day of , 2010, in Tallahassee, Leon County, Florida. I Ith Care Administratio A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW OF PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Lawrence R. Metsch, Esq. The Metsch Law Firm, P.A. 20801 Biscayne Blvd. Suite 307 Aventura, Florida 33180 (U. S. Mail) Lourdes A. Naranjo, Esq. Assistant General Counsel Agency for Health Care Administration 8350 N. W. 52 Terrace - Suite 103 Miami, Florida 33166 (Interoffice Mail) Finance & Accounting Patricia M. Hart Agency for Health Care Administrative Law Judge Administration Division of Administrative Hearing 2727 Mahan Drive, MS # 14 1230 Apalachee Parkway Tallahassee, Florida 32308 Tallahassee, Florida 32399 (Interoffice Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was served on the above-named person(s) and entities by U.S. Mail, or the method designated, on this the ay of rCLa.r Y" , 2010. 7 Richard J. Shoop Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308 (850) 922-5873
The Issue The issues in this case are (1) whether the methodology for grouping hospitals adopted by the HCCB pursuant to Sections 4D-1.03, 4D-1.12(1) and 4D-1.12(2), F.A.C., constitutes an invalid exercise of delegated legislative authority as being arbitrary or capricious and whether the gross revenue per adjusted admission screen should be adjusted by the geographic price level index adjustment factor? Mercy has also raised an issue as to whether the grouping methodology is violative of constitutional guarantees of administrative equal protection and due process. This issue, however, is beyond the jurisdiction of the Division of Administrative Hearings.
Findings Of Fact As a part of its responsibilities, the HCCB is required to specify a uniform system of financial reporting for Florida hospitals. Section 395.507(1), Florida Statutes (1984 Suppl.). So that meaningful comparisons of data reported can be made, the HCCB is required by Section 395.507(2), Florida Statutes (1984 Suppl.), to provide a method of grouping hospitals. Pursuant to Section 395.509(1), Florida Statutes (1984 Suppl.), every Florida hospital is required to file a budget with the HCCB for approval. Section 395.509(2), Florida Statutes (1984 Suppl.), requires that the budgets of certain hospitals be automatically approved based upon a comparison of the gross revenue per adjusted admission of hospitals within groups established pursuant to Section 395.509(4)(a), Florida Statutes (1984 Suppl.). The language of Section 395.509(4)(a), Florida Statutes (1984 Suppl.), which requires the HCCB to establish a method of grouping hospitals, is identical to the language of Section 395.507(2), Florida Statutes (1984 Suppl.). The grouping methodology required by Sections 395.507(2) and 395.509(4)(a), Florida Statutes (1984 Suppl.), is included in Chapter V, Section B of the Hospital Uniform Reporting System Manual (hereinafter referred to as the "Manual"). This methodology has been incorporated by reference in Sections 4D-1.03 and 4D- 1.12(1) and (2), F.A.C., as the method of grouping hospitals for purposes of the uniform system of financial reporting under Section 395.507, Florida Statutes (1984 Suppl.), and the comparison of gross revenue per adjusted admission for purposes of budget review under Section 395.509, Florida Statutes (1984 Suppl.). After hospitals are grouped, Chapter V, Section C of the Manual provides that the screens used to identify hospitals subject to further review are to be adjusted by adjustment factors. Two adjustment factors are provided; one is a geographic price level index adjustment factor. Mercy is a not-for-profit corporation which operates a general acute care hospital with 550 licensed beds located in Dade County, Florida. Based upon the application of the HCCB's grouping methodology as contained in Chapter V, Section B of the Manual, Mercy was assigned to group 9. Mercy was notified of its assignment by a memorandum dated October 10, 1984. Mercy challenged its group assignment by letter dated November 13, 1984. In its letter, Mercy challenged the grouping methodology used by the HCCB and requested a "more relevant and objective method of establishing the weights utilized in the grouping methodology . . . be developed." Further, Mercy requested that "new weights be applied and that the groups be reformulated," and that "the screening value, Gross Revenue per Adjusted Admission, be adjusted for geographic influences prior to ranking, as has been done in previous budget reviews." Mercy presented its reassignment request before the HCCB on December 13-14, 1984. The HCCB orally rejected Mercy's request. By memorandum dated December 19, 1984, the HCCB denied in writing mercy's request for reassignment. Whether Mercy should be reassigned to a reformulated group depends upon whether Mercy's challenge to Sections 4D-1.03 and 4D-1.12(1) and (2), F.A.C. is successful. If that challenge is not successful, the grouping methodology was properly applied to Mercy. The Final Order issued simultaneously with this Recommended Order holds that the grouping methodology is not arbitrary and capricious and therefore, the HCCB's adoption of Sections 4D-1.03 and 4D-1.12(1) and (2), F.A.C., does not constitute an invalid exercise of delegated legislature authority. Mercy's assignment to group 9 was therefore proper. Based upon the evidence presented at the hearing, it does not appear that the point at which the geographic price level index adjustment factor is to be applied to Mercy has been reached. Despite the fact that the evidence shows that the HCCB has decided not to apply this adjustment factor, even though it is specifically provided for in the HCCB's own Manual, the HCCB has not yet failed to do so in Mercy's case. Therefore, the question of whether the geographic price level index adjustment factor should be applied to Mercy's 1985 budget is premature.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the request for reassignment to a reformulated hospital group and the request to adjust the gross revenue per adjusted admission screen for the geographic price level index adjustment factor be denied. DONE and ENTERED this, 28th day of June, 1985, in Tallahassee, Florida. LARRY J. SARTIN 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 28th day of June, 1985. COPIES FURNISHED: John H. Parker, Jr., Esquire PARKER, HUDSON, PAINER DOBBS & KELLY 1200 Carnegie Bldg. 133 Carnegie Way Atlanta, Georgia 30303 James J. Bracher Executive Director Hospital Cost Containment Board Woodcrest Office Park 325 John Knox Road, Building L, Suite 101 Tallahassee, Florida 32303 Douglas A. Mang, Esquire Charles T. Collette, Esquire MANG & STOWELL, P.A. P.O. Box 1019 Tallahassee, Florida 32302 Robert A. Weiss, Esquire PARKER, HUDSON, RAINER, DOBBS & KELLY The Perkins House, Suite 101 118 N. Gadsden Street Tallahassee. Florida 32301
