The Issue The issue presented by these cases is whether fines totaling $350.00 should be imposed upon the Respondent for its alleged failure to report the absence of two residents from the facility, the first occurring on December 4, 1980, and the second on January 7, 1981, to the Petitioner as required by Chapter 10A-5, Florida Administrative Code.
Findings Of Fact The Respondent Jubilee Retirement Center is licensed as an Adult Congregate Living Facility (ACLF) pursuant to the "Adult Congregate Living Facilities Act", Part II, Chapter 400, Florida Statutes. On December 4, 1980 a sixty-three-year-old female resident of the facility who was on medication left the center sometime between the lunch and evening meal. A thorough search of the Center and the immediate neighborhood by Center personnel proved fruitless and a missing person report was promptly filed by the Respondent with the City of Miami Police Department. (Case No. 339- 3748B). The resident's husband was also contacted immediately by the Respondent. On December 12, 1980, an article appeared at page 4B of the Miami Herald entitled, "Woman Walks Out 0f Nursing Home, Vanishes." The article apparently alerted the Department to the disappearance of this particular resident. Mr. Rosenfeld, Administrator of the Jubilee Retirement Center, was contacted by Mr. Alvin DeLaney, ACLF Program Specialist, on December 12, 1980, concerning this incident and at that time he informed Mr. DeLaney that the resident was located at the Miami Beach Mental Health Center and sent from there to Dodge Memorial Hospital on December 8, 1980. On December 15, 1980, the resident was transferred from Dodge Memorial to South Florida State Hospital. Following this incident, Rosenfeld discussed with DeLaney the requirements of Rule 10A-5-06, Florida Administrative Code, which requires the reporting of major incidents as defined at Rule 10A-5.01(18), Florida Administrative Code, within 24 hours following the occurrence of the incident. Rosenfeld agreed to follow the Rule in the event of any future problems. Rosenfeld was unaware of this Rule since he had not received a copy of Chapter 10A-5 which was mailed by the Department to all licensed ACLF operators in July, 1980. Following his discussion with DeLaney, Rosenfeld also believed that in computing the time limit, three working days would be allowed and weekends and holidays would be excluded. On January 12, 1981, Bill Garrett, then an ACLF Specialist with the Department, received a call from Rosenfeld concerning the disappearance on January 6, 1981, of a male resident from the Center. On January 7, 1981, Center personnel had reported the resident to the City of Miami Police as a missing person and contacted a relative of the resident. From January 17-27, 1981, Rosenfeld was in frequent contact with the Department concerning efforts to locate this resident. The resident was located through an obituary in the Miami Herald which stated that the resident passed away on January 26, 1981 following a heart attack which occurred on January 6, 1981, in a MacDonald's Restaurant near the Center. Following this incident, Rosenfeld agreed to notify the Department within twenty-four hours of discovery of any missing resident. The Center has implemented policies designed to minimize the residents' ability to leave the facility without notifying Center personnel and at the same time guaranteeing basic privacy rights of residents. A twenty-four hour a day sign-in and sign-out sheet is now located at the front desk and alarms have been installed at all other exits. Many of the residents are former mental patients and this coupled with the size and physical lay-out of the facility makes it difficult for the Center to be aware of the movement of all residents. Additionally, at the same time of these incidents the Department had no access to the Missing Persons Report Registry maintained by law enforcement agencies and could do little to assist in the search for missing residents other than contact friends or relatives who might be unknown to the ACLF operators.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the Department enter a final order assessing a $100.00 administrative fine for the failure to report a major incident which occurred on December 4, 1980 as alleged in the administrative complaint filed January 23, 1981, and dismiss the complaint filed February 27, 1981 which alleged a failure to report a major incident occurring on January 7, 1981. DONE and ORDERED this 14th day of July, 1981, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of July, 1981. COPIES FURNISHED: Martha Barrera, Esquire Department of Health and Rehabilitative Services 1320 South Dixie Highway Eleventh Floor Coral Gables, Florida 33146 Nelson Rosenfield, Administrator Jubilee Retirement Center 8000 Biscayne Boulevard Miami, Florida 33138
The Issue The issue for resolution is whether proposed amendments to Rule 10- 5.042(14)(a) and (f), F.A.C. constitute an invalid exercise of delegated legislative authority, as asserted by petitioner.
Findings Of Fact In 1987, the department began to develop a rule to govern certificates of need ("CON") for Level II and Level III neonatal intensive care services in hospitals (hereinafter referred to as "NICU"). That process ultimately led to the department's publication of Proposed Rule 10-5.011(1)(v), F.A.C. (now renumbered as Rule 10-5.042, F.A.C.) on November 3, 1989. (Joint Prehearing Stip., p.4). All pertinent provisions of the NICU Rule were upheld in a final order issued by DOAH in June, 1990, and affirmed by the District Court of Appeal, First District, in St. Mary's Hospital, Inc. v. Department of Health and Rehabilitative Services, 12 FALR 2727 (DOAH, June 12, 1990, aff'd, Baptist Hospital v. Department of Health and Rehabilitative Services, 578 So.2d 1004 (Fla. 1st DCA 1991). (Joint Prehearing Stip. p. 4). The NICU Rule became effective on August 6, 1990. (Joint Prehearing stip., p. 4). Paragraph 14 of the NICU Rule addresses the entitlement of hospitals to implement, or to continue to operate Level II or Level III NICU services. Paragraph 15 prescribes the process for creating an inventory of those hospitals authorized under the NICU Rule to provide Level II or Level III NICU services. Paragraph 15 provides that the department publish a preliminary inventory of those hospitals it has determined meet the entitlement criteria contained in Paragraph 14. It provides further that hospitals be allowed to contest the preliminary inventory. (Rule 10-5.042, F.A.C.). The department published a revised preliminary inventory on September 21, 990, in the Florida Administrative Weekly, authorizing Winter Haven to operate an 11 bed Level II NICU Unit. (Joint Prehearing Stip., p.4). Winter Haven was included in the inventory based on its documentation that the agency had approved construction plans for creation of NICU beds in an expansion project. On August 6, 1991, Hearing Officer Veronica Donnelly issued a recommended order in Lakeland Regional Medical Center, Inc. v. Department of Health and Rehabilitative Services, DOAH Case Nos. 90-7682 and 90-7683, regarding Lakeland's challenge to Winter Haven's inclusion in the preliminary inventory. Among other things, the Hearing Officer recommended that the department enter a final order excluding Winter Haven from the inventory of facilities authorized to provide Level II NICU services. (Joint Prehearing Stip., p.4). The Hearing Officer's recommended order concluded Winter Haven had not demonstrated that it complied with the grandfathering provisions of subparagraph 14 of the NICU Rule. It further concluded that DHRS lacked the authority to adopt a policy which conflicted with the plain meaning of the NICU Rule. On September 23, 1991, the department issued its final order. (Joint Prehearing Stip. p.5). DHRS' final order concurred with the Hearing Officer's recommendation that Winter Haven was not entitled to be included in the inventory of Level II NICU beds pursuant to the criteria contained in the NICU Rule. Nonetheless, the final order held that the department was estopped from excluding Winter Haven from the inventory on the theory of equitable estoppel, and, therefore, ordered that the final inventory include 11 Level II NICU beds at Winter Haven. The final order found that Winter Haven relied on representations by the department over a five-year period to establish its Level II NICU unit, hire employees and commence operation. (Lakeland composite exhibit #2). On October 14, 1991, Lakeland filed a notice of appeal appealing the portion of the final order requiring that the final inventory include 11 Level II NICU beds at Winter Haven. (Joint Prehearing Stip., p. 5). As a result of the Hearing Officer's recommended order, the department initiated the current rulemaking proceedings which culminated on December 27, 1991, when DHRS published the first version of the proposed amendments to Rule 10-5.042(14)(a) and (f) in Volume 17, No. 52, Florida Administrative Weekly. On March 13, 1992, however, the department withdrew those proposed rule amendments. (Joint Prehearing Stip., p. 5). On March 13, 1992, DHRS published a second version of the proposed amendments to Rule 10-5.042(14)(a) and (f) in Volume 18, No. 11, Florida Administrative Weekly, which were substantially identical to the first version. On May 29, 1992, the department withdrew the second version of the proposed rule amendments. (Joint Prehearing Stip., p. 5). On May 29, 1992, DHRS published a third version of the proposed amendments to Rule 10-5.042(14)(a) and (f) in Volume 18, No. 22, Florida Administrative Weekly, which were substantially identical to the first and second versions of the proposed amendments, and which are the subject of Lakeland's challenge in this proceeding. (Joint Prehearing Stip., pp. 5-6). At the time the department proposed the rule amendments that are at issue in this proceeding, there were only three providers of which the department was aware, i.e., Alachua General Hospital, Winter Park Hospital, and Winter Haven, who had construction plans deemed approved by the department allegedly authorizing neonatal intensive care beds prior to October 1, 1987. (Joint Prehearing Stip., p. 6). Alachua General Hospital and Winter Park Hospital were included in the preliminary inventory of Level II NICU beds. Their inclusion in the inventory was either not challenged, or was challenged and subsequently dismissed. Alachua General Hospital and Winter Park Hospital were also included in the final inventory of Level II NICU beds. Their entitlement to be included in the final inventory is final and is not subject to further appeal. The department is not currently aware of any other providers, who have construction documents approved by the department prior to October 1, 1987, as a basis for being included in the inventory under the proposed amendments. (Joint Prehearing Stip., p. 6). Elfie Stamm is responsible for rule development, special studies, and the development of fixed need pools at the department. Ms. Stamm was responsible for the development of the NICU Rule and the proposed amendments. She also was responsible for evaluating the information submitted to the department by providers seeking to be included in the inventory of the NICU beds under the NICU Rule. 19 . The proposed amendments merely authorize one additional basis for "grandfathering in" neonatal intensive care services at hospitals. (Ex. 1; Proposed Amendments, Florida Administrative Weekly, Volume 18, No. 22, May 29, 1992, pp. 3061-3062). The amendment is intended to allow the agency, under specified conditions, to acknowledge a type of prior departmental authorization for neonatal intensive care services which is not specified in the current rule. The proposed amendments represent the agency's current policy adopted in October of 1990, or within about two months of the effective date of the NICU rule. Knowledge about the problem first came to light within two months of the August 1990 effective date of the new NICU rule when Alachua General Hospital sought grandfathering under the new rules because of its approved construction documents. The agency believed that the construction plans that it had approved for Alachua General came under its rule. The department considered it consistent with the grandfathering provision for hospitals which had indicated on their licensure application that they provide the services. Also soon coming forward for grandfathering because of approved construction documents were Baptist Hospital in Pensacola, Winter Park Hospital in Orlando, and Winter Haven Hospital in Winter Haven, Florida. Alachua General and Winter Park were considered grandfathered. Because Baptist had not produced sufficient evidence that it had approved construction documents, it was denied. If Baptist can prove it had approved construction documents it might later be grandfathered. When the department promulgated the existing rule, had it been aware of the issue involving documents approved for NICU construction, it would have specifically written into the rule the provision it is now promulgating. The already existing grandfathering provision includes facilities and providers which had not received anything from the agency in the way of approval, including those which had not received a CON, and had no recorded NICU services on their license application. The current rule includes hospitals which had no contact with the department, no approvals, no construction plans, and no licensure application. If grandfathering a provider which established the service without any approvals of any kind is appropriate, and is now part of the rule, the department considers it should approve a hospital which affirmatively obtained approval construction documents for this service. Such facilities have proceeded in good faith, approved by the same agency that issues certificates of need, so the department believes that they should be authorized to provide the service. The department's Office of Plans and Construction had by 1987 specific construction standards for Level II and Level III NICU beds and still does. The Office of Plans and Construction in the past approved specific levels of care for NICU. In 1987 there were published standards for plans and construction that covered Level II and III neonatal care beds. The department, in its preparation of this amendment, did not analyze all factors listed under Section 381.704(3), F.S., because that statute refers to the development of need methodologies and the subject amendments are not a need methodology. They are used to establish an inventory of existing beds which inventory is a factor in the need methodology. NICU services are tertiary health care services, services which are intensive and complex, and generally present a certain degree of risk in the delivery of the service. As a result, tertiary health care services are regionalized. NICU services, therefore, are not necessarily available in every hospital which provides obstetrical services to its patients. There was no competent evidence that the proposed rule amendments will cause disruption in services. Those grandfathered in under this policy are already on inventories and in operation, including Winter Haven. Ms. Stamm testified she could not conclude from existing evidence that disruption would occur, and to the contrary, increased competition might be a result, along with the potential for improvement in service. Based on department experience, it is not likely that any hospitals remain with approved construction plans from prior to October, 1987, which would be able to come forward now to seek approval, although as found above, it remains possible. Any grandfathered facility (under the proposed amendments) must meet all licensure requirements for NICU beds, and must meet all requirements of the NICU rule within one year (Rule 10-5.042(14)(i), F.A.C.;). Medical quality is protected under licensure rules.
The Issue Whether Respondent, Agency for Health Care Administration (Agency) should have issued Petitioner, Haverhill Care Center and Beverly Health Care West Palm Beach, Beverly Enterprises-Florida, Inc., d/b/a Beverly Gulf-Coast Florida (Haverhill), a conditional license for the periods October 14, 1998, through January 3, 1999, and December 8, 1999, through February 9, 2000.
Findings Of Fact At all times material hereto, the Agency was the enforcing agency with regard to nursing home licensure law pursuant to Chapter 400, Part II, Florida Statutes. Haverhill is a nursing home located in West Palm Beach, Florida. On October 14, 1998, the Agency surveyed Haverhill and determined that the facility violated 42 CFR Sections 483.13(c), 483.25(h)(2), and 483.75 in its care of B. B., a resident at the facility who had eloped from Haverhill on September 24, 1998. The deficiencies were described by tag numbers F224, F324, and F514. The Agency determined that these deficiencies were Class II deficiencies under the state rating scheme and the Agency also assigned them a severity rating of "G", which is a determination under the federal rating scheme that the deficiency was isolated but caused actual harm to the resident. B. B. was a 78-year-old male who had dementia, congestive heart failure, hypertension, and a history of a pulmonary embolism. He was independent with his daily activities and ambulatory. From the end of 1997 through September 1998, B. B. underwent a series of admissions and discharges from different short-term and long-term care facilities. In late 1997, he went to the hospital with congestive heart failure, and while he was there, his doctor recommended that he be placed in a long-term care setting. After his discharge from the hospital, B. B. went to a nursing home known as IHS Lake Worth, where he remained until May of 1998. In May 1998, B. B. experienced a pulmonary embolism and was sent to the hospital. Staff from IHS Lake Worth sent a transfer form to the hospital that noted that B. B. was a "wanderer" and would "go outside if not monitored." When B. B. was discharged from the hospital in late May 1998, he could not go back to IHS Lake Worth because the Agency had placed a moratorium on admissions to IHS Lake Worth. B. B. was sent to a sister facility, IHS of West Palm Beach, where he remained until July 6, 1998. During his stay at IHS of West Palm Beach, staff at the facility noted that B. B. "wanders at times, needs direction." On July 6, 1998, B. B. was discharged to his home, where he remained until August 5, 1998, when his daughter S. B. determined that she was unable to care for him and readmitted him to IHS Lake Worth. While at IHS Lake Worth, B. B. was given Haldol, an anti-psychotic drug. He was also assessed by the staff on August 6, 1998, as being appropriate for a locked unit due to "wandering and confusion and past history of agitation and combativeness." During the next few days, B. B. exhibited episodes of angry outbursts and agitation, which caused staff to be fearful for others. On August 12, 1998, B. B. was transferred to Four Seasons, an assisted living facility. The record review on August 12, 1998, recorded, "Four Seasons came and evaluated and took resident upon assessment. Daughter agreeable. Doctor agreeable. Locked unit most appropriate place for this resident." Four Seasons was closed by the Agency. While the facility was being closed, B. B. got on a bus. The Delray Beach police found him and returned him to the facility After Four Seasons closed, B. B. returned home. While at home, B. B.'s behavior became erratic. He would get up at 4:00 a.m. and take a shower. B. B. was being given Ativan to calm him down. On September 16, 1998, B. B. was readmitted to IHS West Palm Beach, which had a Wanderguard alarm system designed to notify staff if a patient attempted to leave the facility. However, the Wanderguard system at IHS West Palm was not fully functional. While at IHS West Palm Beach, B. B. wandered around the facility and attempted to get out of the facility. The administrator at IHS West Palm Beach determined that B. B. needed to be transferred to another facility. At approximately two o'clock on Friday afternoon, September 18, 1998, Kit Johnson, the Social Services Director at IHS West Palm Beach, spoke with S. B. and advised her that B. B. needed to be transferred to a more secure facility. Ms. Johnson contacted several facilities in an effort to find a facility which would accept B. B. She spoke to Robb Eason, Haverhill's Admissions Director, concerning placement for B. B. She advised Mr. Eason that IHS West Palm Beach could not keep B. B. because he was a wanderer and could not be maintained safely at IHS West Palm Beach. Mr. Eason agreed to have B. B. transferred to Haverhill. Ms. Johnson called S. B. and advised her that Haverhill was willing to take B. B. S. B. indicated that she could not be there because her mother was ill. At four o'clock, nursing staff at IHS West Palm Beach were notified that B. B. would not be transferred until the next day because S. B. could not come to the facility until the next day. B. B. became very upset because his daughter was not coming and walked off the unit. A security guard had to be called to return B. B. to his room. A decision was made that B. B. would be transferred to Haverhill on September 18, 1998. At 5:00 p.m., the nursing staff at IHS West Palm Beach was notified that B. B. would be transferred. B. B.'s doctor's service was called for a discharge order. At 5:45 p.m. B. B was transferred to Haverhill by a transport service. The documents that were sent to Haverhill to IHS West Palm Beach did not indicate that B. B. was a wanderer or that he could be a candidate for elopement. Between five and six o'clock on the afternoon of September 18, 1998, S. B. telephoned Mr. Eason and advised him that she could not come to Haverhill that Friday because her mother was ill. Mr. Eason told her that he would not be back in the facility until the following Monday and suggested that she come the next day to complete the paperwork with the charge nurse. S. B. did not feel comfortable doing the paperwork with the charge nurse and told Mr. Eason that she would come on Monday. S. B. also asked Mr. Eason if he had spoken to Kit Johnson and whether he was aware that Ms. Johnson had told her that Haverhill was a locked-down facility. S. B. also asked Mr. Eason whether Haverhill could deal with her father's dementia. Eason told her that Haverhill could handle B. B. On B. B.'s first day of admission at Haverhill, September 18, 1998, he was agitated at being placed in a nursing facility. S. B. received a call from one of the nurses at Haverhill during the evening, telling her that B. B. did not know why he was at the nursing home, but that they would take care of him. A care plan was developed for B. B. on September 18, 1998, to deal with his agitation at being placed in a nursing facility. The care plan included the following approaches: Introduce yourself and knock on door prior to entering room. Orient to room and new environment. Encourage to express his feelings about nursing home placement. S/S to visit to promote conversation weekly. Activity to visit & (illegible) to activity of choice daily. Call bell within reach when in room. The care plan did not include measures to deal with B. B.'s wandering of which Mr. Eason had knowledge. On the morning of September 19, 1998, B. B. was alert and oriented to his surroundings. He told the nurse, "I really like this place, you should have seen the hell hole I came from." B. B. called his daughter on September 19, 1998, and told her that he was waiting for her and that he was ready. She explained that her mother was sick and she could not be left at that time. B. B. seemed to accept that explanation. On September 20, 1998, B. B. awoke about 4 a.m. and walked in the hall. He was angry and belligerent when his doctor visited him. He had yelled at other residents and kept asking for a sleeping pill all day. At the beginning of the 7 a.m. to 3 p.m. shift on September 21, 2000, B. B. was standing at the nurses' station and yelling at staff. He said, "I'm getting the hell out of here, they just can’t put me here and leave." He called his daughter and after hanging up, he became more agitated. Later in the morning, S. B. came to Haverhill to complete the admissions paperwork and to see her father. When she arrived B. B. was sitting on a bench outside the facility unsupervised. She took her father back inside the facility and went to find the admissions director so that she could complete the necessary paperwork. While she was completing the paperwork, she did not advise anyone that her father wandered or that he had eloped from Four Seasons. However, given the information that Kit Johnson had told Mr. Eason, he should have asked S. B. about any previous attempts by B. B. to leave home or other facilities and should have requested additional information from IHS West Palm Beach. According to the testimony at final hearing, by Monday, September 21, 1998, Mr. Eason claimed not to know that B. B. had been admitted on September 18 from IHS West Palm Beach. It can only be concluded that between Friday afternoon and Monday morning Mr. Eason had forgotten about B. B. After finishing the necessary admissions paperwork, S. B. went to her father's room to visit with him. When she was leaving the facility, her father thought that he was going to go with her and attempted to follow S. B. Haverhill staff had to intervene. B. B. became verbally and physically abusive, and the Administrator of Haverhill had to be called to assist. B. B. took a swing at the administrator. B. B. was taken back to his room, where he stayed. He told staff that they could not do anything for him and to leave his room. No one at staff notified S. B. of her father's episode. B. B.'s doctor was notified of B. B.'s behavior. The doctor prescribed anti-psychotic and anti-anxiety medications and ordered a psychological evaluation. Staff placed a call to the psychological services provider, requesting an evaluation. Both the Agency's and Haverhill's expert witnesses agreed that B. B.'s attempt to leave with his daughter was a catastrophic event, which is a clinical term used to describe a level of agitation of such sustained duration that it requires intervention by the caregiver. Haverhill did provide intervention by directing B. B. back to his room and informing the doctor. Haverhill had a policy and procedure to deal with residents who displayed mental difficulty. The policy and procedure provided: POLICY To protect the resident and other residents of the facility from harming themselves or others. To ensure that the resident receives appropriate treatment and services to correct the assessed problem. PROCEDURE When a resident exhibits behavior such as trying to elope, aggressive behavior, speaking of suicide or other behaviors relating to signs of distress or depression, nursing is to: calm resident close monitoring of resident call physician call family psychological services complete documentation of incident, and interventions and responses notify social services notify Director of Nursing Haverhill did not notify S. B. of the catastrophic event and did not closely monitor as called for in its policy and procedure. On September 22, 1998, Haverhill developed a care plan to deal with B. B.'s verbal and physical abuse to staff and residents. The care plan included the following: Redirect him when he becomes aggressive. Psy consult per MD order. Medicate per doctor order. Provide quiet area to promote conversations regarding his concerns. On September 22, 1998, B. B. continued to be noticeably anxious and angry and paced the floor. He made a telephone call, and after the call, he slammed his fist on the nurses' desk and expressed anger. He was redirected to his room. His new medication was begun at 9 a.m. By 1 p.m., B. B. was calmer, walking in the hallway to the nurses station and saying, "Hi" to staff when approached. Later in the day, B. B. became drowsy and slightly unsteady on his feet. He was redirected to his room. A care plan was developed to deal with the side effects of his new medications. No one arrived to do a psychological evaluation on B. B. on September 22, 1998. The provider was again called and asked to send someone. S. B. visited B. B. on September 23, 1998. B. B. told her that he was ready to go home. She left the facility around 3 or 4 o'clock in the afternoon. According to B. B.'s roommate, B. B. went to bed around 4 p.m. Around 5 p.m., B. B. was up and his gait was unsteady. The doctor was notified of the side effects of the new medications on September 23, 1998. The doctor ordered Haverhill to withhold B. B.'s scheduled dose of Ativan. As of 6:15 p.m. on September 23, no one had shown up to perform a psychological evaluation. No nurses' notes or social service progress notes indicate that anyone came on September 23 to perform a mental evaluation of B. B. The social services progress notes indicate that on September 23, B. B. was calm and had no behaviors during the day. B. B. asked for snacks around 8 p.m. The charge nurse who admitted him, stated that at 11 p.m., he was lying on his bed fully dressed. D. D., another resident in the building, stated that he saw B. B. up around 1:30 or 2:30 a.m. on September 24, wrapped in a blanket and asking if his daughter had been by to see him. B. B. went back to bed and got up between 3:00 and 3:30 a.m. to get coffee. He walked to the nurses station and was told by staff that it was too early and that he should go back to his room. B. B went back to bed. D. D. saw B. B. get up around 4:45 a.m. and get dressed. At 5:10 a.m., while doing bed checks, the nursing staff noted that B. B. was missing and began a search for him. He could not be found, leading to the conclusion that he had eloped. On November 2, 1998, B. B.'s body was found in a drainage ditch a quarter of a mile from the facility. On October 27, 1998, Haverhill received a report on B. B.'s mental status examination from the psychological services provider. The report was typed except for the signatures and the day on the date. The date of the interview was listed as 09/23/98 with the "23" handwritten. The Agency contends that Haverhill did not provide adequate supervision to B. B. because it did not have sufficient staff on hand when B. B. eloped from the facility on September 24, 1999. The Agency bases this contention on its interpretation of a staffing summary which was prepared by Haverhill that indicated that Haverhill did not have sufficient certified nursing assistant hours to meet minimum state standards on September 24. The summary indicates the number of certified nursing assistant and licensed nursing hours hired at Haverhill for each day between September 20 and 28, 1998. Each 24-hour period represented on the summary begins with the 7:00 a.m. shift on the designated day and runs until the 7:00 a.m. shift on the following day. Accordingly, the staffing levels reflected for September 24, 1998, would be those which began at 7:00 a.m. on that day and ran until 7:00 a.m. on September 25, 1998. B. B. eloped from Haverhill around 5:00 a.m. on September 24, 1998. Since his elopement occurred prior to 7:00 a.m. on September 24, the staffing levels reflected in the summary on September 23, 1998, would cover the time period during which B. B. eloped. On September 23, Haverhill exceeded minimum state requirements for certified nursing assistants by 46.8 hours and for licensed nurses by 40.1 hours. Although Haverhill identified a care plan for B. B. upon admission, Haverhill failed to implement the care plan. Specifically no one assisted in diverting B. B.'s focus on wanting to leave the facility. No evidence was provided that organized activities oriented to meet B. B.'s needs were provided. According to the Agency's expert, B. B.'s frequent ambulating in the halls, as documented in the nurses' notes, demonstrated his lack of participation in organized activities. The Agency charges Haverhill with a violation of 42 CFR Sections 483.35(c)(1) and (2) for failure to treat pressure sores on Residents 1 and 16. The deficiency was identified as Tag F314, determined to be a Class II deficiency, and determined to have a severity rating of "G." Resident 1 was a 75-year-old female admitted to Haverhill's facility on October 6, 1999. She was diagnosed with end-stage Alzheimer's disease. Prior to admission, she had a feeding tube inserted. Upon admission Resident 1 was self-ambulating, and the nurses' notes reflect that Resident was a wanderer and walked on a regular basis. She had no skin breakdown when admitted, but she was assessed at a high risk for pressure sores, due to bowel incontinence. A pressure sore is a lesion that is caused by unrelieved pressure to an area and results in damage to underlying tissue. A care plan was developed on October 6, 1999, to address Resident 1's risk for pressure sores. The care plan included the use of pressure relieving chairs and beds; turning and repositioning with no specific times listed; ulcer care; use of cleansing agent and water to clean skin whenever soiled, and treatment of dry skin with moisturizer. According to the physician's orders on October 6, 1999, Resident 1 was to have a skin assessment with showers weekly, and a skin barrier with lantiseptic ointment applied to her buttocks every shift or three times a day, and intermittently as needed. Another care plan was developed on October 26, 1999, after a comprehensive assessment had been completed. The October 26 care plan did not include turning and repositioning. The standard of care to prevent pressure sores from developing includes regular turning and repositioning every two hours, keeping the skin clean and dry, and adequate nutrition and hydration. When a resident is ambulatory and can move herself in bed, turning and repositioning is less of a factor. According to the nurses' notes for Resident 1, she slept most of the day on October 25, 1999, and continued to be drowsy on October 26. The doctor reduced her dosage of Haldol. Resident 1 was terminally ill and was placed on hospice service on October 27, 1999. On October 29, 1999, she was drowsy but alert and ambulatory. She was walking on October 31, 1999, with a slow, steady gait. On November 2, 1999, Resident 1 had no open sores. On November 8, 1999, the treatment notes indicate no open sores on Resident 1, but there was some redness in the perianal area, which was treated with a cream. On November 8, 1999, the nurses' notes indicate that Resident 1 was ambulating with some difficulty. She was kept clean and dry, and her skin was intact. On November 10, 1999, it was noted that she was alert and turning aimlessly in bed. On November 10, 1999, she showered, and the nurses notes indicated no areas of skin breakdown. On November 14, 1999, Resident 1 was ambulating and was able to turn self. On November 16, 1999, there were no open areas on Resident 1, but she developed hives all over her body. She was given Benedryl for the rash. On November 17, 1999, Resident slept most of the day. On November 23, 1999, there were no open areas on Resident 1. She was lethargic and was turned and repositioned. On November 24 and 25, 1999, Resident 1 remained lethargic and was turned and repositioned. On November 26, 1999, she was lethargic all day. She continued to be lethargic on November 27, 1999. She was kept clean and dry and was turned and repositioned. The nurses' notes indicate that on November 30 and December 3, 1999, Resident 1 continued to be lethargic. The nurses' notes indicate that she was turned and repositioned on December 3, 1999. On December 3, 1999, a nurse noted a pressure sore on Resident 1's coccyx, measuring .5 x .25 centimeters. The initial information regarding the treatment and identification of the pressure sore was documented on the treatment sheet of another patient with a similar name. The error was corrected on December 6, 1999. No evidence showed that the incorrect charting resulted in a failure to treat the pressure sore. The pressure sore was a stage II pressure sore, which means either a blister or a shallow open area in which only the epidermis is affected. The area was cleansed and duoderm was applied. Pressure sores are staged to standardize descriptions. Staging is not a means to describe a progression from one stage to the next. Sores can appear at any stage from a I to a IV. On December 5, 1999, the pressure sore was assessed. The skin was broken, and the area was red and dry. The area was cleaned, and duoderm was applied. Resident 1 was lethargic and unresponsive to verbal stimulus. She was turned and repositioned. During a survey on December 6, 1999, a surveyor from the Agency observed the pressure sore, and described it as a shallow crater over a bony prominence. The nurses' notes on December 6, 1999, at 6:00 a.m., 12:00 p.m., and 7 p.m. indicate that Resident 1 was turned and repositioned. On December 6, 1999, two surveyors from the agency were at Haverhill. According to one surveyor numerous staff went into Resident 1's room from 6:00 a.m. to 9:00 a.m., but when she went into the room Resident 1 did not appear to have been repositioned. However, the other surveyor said that no staff went into Resident 1's room during the same time period. Between 6:00 a.m. and 9:00 a.m. on December 6, 1999, Resident 1 was turned and repositioned. On December 7, 1999, cream was applied to Resident 1's buttock area, and she was turned and repositioned. She was repositioned on December 8 and 9, 1999. By December 10, 1999, the pressure sore had closed and was healing well. On December 17, 1999, it was noted that the pressure sore was healing well and was pink in color. The Agency had cited Haverhill for not adding zinc or vitamin C to Resident 1's nutrition after the pressure sore was noted on December 3, 1999. Haverhill's dietician evaluated Resident 1 on December 5, 1999, to determine whether additional nutrition was necessary. After a thorough review of the resident's condition and history, including Resident 1's husband's concerns, the dietician specifically considered the addition of supplements and concluded that Vitamin C and zinc might be added "if wound not responding to [treatment] x 2 wks." Standard guidelines suggest adding these supplements only for more serious wound concerns. Zinc and Vitamin C did not have to be added to Resident 1's nutrition. The agency alleged that Haverhill should have done a significant change assessment based on Resident 1's decreased physical capabilities that began in October 25, 1999, her bedfast condition since November 22, 1999, and her nutritional deficits since November 22, 2000. The federal guidelines concerning significant change in status assessments are contained in HCFA's RAI Version 2.0 Manual. The guidelines provide: A 'significant change' is defined as a major change in the resident's status that Is not self-limiting; Impacts on more than one area of the resident's health status; and Requires interdisciplinary review or revision of the care plan. A condition is defined as 'self- limiting' when the condition will normally resolve itself without further intervention or by staff implementing standard disease related clinical interventions. * * * The amount of time that would be appropriate for a facility to monitor a resident depends on the clinical situation and severity of symptoms experienced by the resident. Generally, if the condition has not resolved itself within approximately 2 weeks, staff should begin a comprehensive RAI assessment. This time frame is not meant to be prescriptive, but rather should be driven by clinical judgment and the resident's needs. * * * In an end stage disease status, a full reassessment is optional, depending on a clinical determination of whether the resident would benefit from it. The facility is still responsible for providing necessary care and services to assist the resident to achieve his or her highest practicable well- being. However, provided that the facility identifies and responds to problems and needs associated with the terminal condition, a comprehensive reassessment is not necessarily indicated. A significant change assessment was not done. Based on the federal guidelines, it was discretionary for Haverhill to do a significant change assessment because of Resident 1's terminal illness. There was no evidence to link the failure to complete a significant change assessment and the actual care given to Resident 1. Nurses' notes reflect that staff was very aware of Resident 1's condition and took measures to address it. There are frequent notes, which established discussions with the concerned husband, being turned and repositioned, being kept clean and dry, being fed, obtaining lab tests, and changing medications. Resident 1 did develop a pressure sore while at Haverhill, but the treatment and care that she was provided prior to the development of the pressure sore indicate that Haverhill did what it could to prevent the development of the pressure sore and that the development was unavoidable. After the pressure sore developed, Haverhill provided the necessary treatment to promote healing and prevent infection. Resident 16 was a 66-year-old, non-ambulatory female, who was admitted to Haverhill on August 4, 1999, from the hospital where she had undergone surgeries for both a pacemaker and a gastrostomy tube. She had an indwelling catheter and bowel incontinence. Resident 16 was totally dependent on staff for all activities of daily living. When she was admitted to Haverhill, Resident 16 had a stage II pressure sore on her left buttock. She was assessed as being a high risk for pressure sores. Her preliminary care plan developed on August 4, 1999, included turning and repositioning every two hours, weekly skin assessments, cleaning for incontinence, using barrier cream, and dressing the pressure sore as ordered. She was placed on a maxi-float mattress rather than a standard mattress. By August 11, the pressure sore was only pink and had completely healed by August 30, 1999. At 9:00 p.m. on August 20, 1999, it was noted that Resident 16 had a stage II, one centimeter-sized open area at her coccyx. The area was cleaned and dressed. The doctor was notified on August 21, 1999, about the pressure sore to the coccyx. He prescribed duoderm. It was also noted on August 21, 1999, that Resident 16's shoulder blades were red and scraped and needed to be monitored. Cream was applied to the shoulder blades. Resident 16 was kept in bed rather than a geri chair on August 22, 1999, so that she could be turned from side to side every two hours. Cream was applied to the shoulder blades, and the duoderm was intact to the coccyx. Haverhill's dietician described the pressure sore on the coccyx as a stage III, measuring 4.5 cm x 4.7 cm with 35 percent necrosis and 65 percent slough. On August 23, 1999, Resident 16 was sent to physical therapy for wound care, because the physical therapist had special training in this area. The physical therapist described the pressure sore area as having a hematoma and part of the wound being yellow and brown with inherent necrotic tissue. The pressure sore had no depth, the drainage was scant, and there was some breakthrough granulation. This description indicates that the wound was covered with possible necrotic tissue underneath. When the necrotic tissue was removed, such as the physical therapist did with mechanical debridement, an opening was revealed. After the wound was cleaned and debrided, it increased in size. On August 25 and 26, 1999, wound treatment was performed on the pressure sore area at the coccyx. The dietician notes indicate that the pressure sore continued to be a stage III on August 31, 1999, and measured 4.5 cm x 5 cm with 70 percent necrosis, 20 percent slough, and 10 percent granulation. Vitamin C and zinc support was ordered for Resident 16. On September 1, 1999, Resident 16 was placed on a different pressure reduction mattress. A wound culture was sent to the laboratory. By September 2, 1999, the wound had become infected. Antibiotics were administered beginning on September 3, 1999. Wound care treatment was also performed on September 3, 1999. On September 4, 1999, the dressing was changed to the pressure sore. The nurse noted that there was a dark circle on the inner side of the right heel. Heel protectors were put on Resident 16. Resident 16's care plan was revised on September 7, 1999, to change the turning and repositioning time to once every hour. On September 9, 1999, the nurse called the doctor regarding the pressure sore and requested that the wound care center be contacted for evaluation and treatment. A call was placed to the wound care center. On September 10, 1999, the wound care center called and stated they could not treat Resident 16 because of insurance coverage. The same day a call was placed to the hospital to see if Resident 16 could be treated there for wound care. On September 13, 1999, the hospital called and advised that Resident 16 could not be treated there because of insurance coverage. On September 14, 1999, Resident 16 was placed on an air mattress to help relieve the pressure. By September 16, 1999, according to the nurses' notes, the wound consisted of "much unhealthy and necrotic tissue with very foul odor and much purulent discharge." The dietician noted that the wound was still at a stage III. On September 17, 1999, the doctor ordered that Resident 16 be sent to the hospital emergency room for wound treatment and evaluation. At 1:00 p.m. on September 17, 1999, the nurses' notes indicate that complete care was given, including cleaning after an incontinent episode, dressing change, and turning. Resident 16 left for the emergency room by stretcher at 1:30 p.m. When she seen by the doctor at the hospital, he noted that the wound was contaminated with feces. Given the resident's incontinence, this is not an unexpected condition despite her having been cleaned just prior to leaving for the hospital. She could have had an incontinent episode on the way to the hospital or while waiting in the emergency room. No evidence was provided to establish that she was dirty when she left Haverhill. The doctors at the hospital described the pressure sore as a stage IV decubitus ulcer with a 12 to 14 centimeter diameter. The ulcer was grossly contaminated and would require cleaning over the next three to four days. Her laboratory tests showed that she also had a pseudomonas urinary tract infection. It was recommended that a diverting colostomy be considered for Resident 16 to keep "the fecal stream from continually bathing this area and giving rise to a chronic septic condition for the patient." Pseudomonas in the urine is indicative of contamination in the bladder. Such contamination could come from lying in the bed in stool or from improper cleaning related to Resident 16's indwelling catheter. In Resident 16's case, the stool was brought up around the catheter, which carried the bacteria to the bladder. Resident 16 was kept at the hospital from September 17 to September 25, 1999. Based on the dietician's notes, the pressure sore was a stage IV when Resident 16 returned from the hospital. On October 6, 1999, the resident's care plan was amended. On October 9, 1999, the pressure sore was still a stage IV and measured 4.0 x 5.0 x 2.2 cm with undermining. The nutritional assessment for November 15, 1999, showed that the pressure sore was a stage IV. On November 24, 1999, the pressure sore measured 2.8 x 2.2 x 1.5 cm with undermining. At the time of the Agency's survey on December 8, 1999, Resident 16's pressure sore on her coccyx was still a stage IV, and she had developed a pressure sore on her left heel. Turning and repositioning is important in preventing pressure sores. The standard nursing practice for turning and repositioning is a minimum of every two hours. Haverhill's policy for turning was every two hours. Resident 16's care plan showed that she was to be turned every two hours until September 7, 1999, when the care plan was amended to turning every hour. The standard nursing practice for charting records depends on the condition of the patient. Resident 16 should have been charted on every shift throughout the day, based on her high-risk status, her bedfast position, her existing pressure sore, the contractures of her lower extremities, and her medical history. Based on Haverhill's nursing notes, Resident 16 was turned and repositioned 656 times, or less than a third of the total number of times required, 2,320, by Resident 16's care plan between August 4 and December 7, 1999. Based on Haverhill's charting records, Resident 16 was turned and repositioned 356 times, or less than a sixth of the number of times required by the care plan between August 4 and December 7, 1999. Haverhill's records show that the number of times Resident 16 should have been turned and repositioned, consistent with Resident 16's care plan, was significantly higher than the actual number of times that Resident 16 was turned and repositioned. The Agency claims that Haverhill failed to do skin assessments according to physicians orders during the month of September, 1999. The physician ordered a skin assessment once a week with showers. The assessments were done according to the doctor's orders. During part of September, Resident 16 was in the hospital for wound treatment; therefore, Haverhill could not have done a skin assessment at that time. When Resident 16 returned from the hospital there were only five days left in the month; thus, another skin assessment was not due to be conducted in September. Haverhill failed to turn and reposition Resident 16 as required by her care plan. Resident did develop a pressure sore, which was not unavoidable. Haverhill did not provide treatment that would promote healing of the pressure sore due to Haverhill's failure to turn and reposition Resident 16 as required by her care plan.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing Counts VIII and IX of the Administrative Complaint, upholding the conditional license for Petitioner effective October 14, 1998, through January 3, 1999, and December 8, 1999, through February 9, 2000. DONE AND ENTERED this 8th day of November, 2000, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND 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 8th day of November, 2000. COPIES FURNISHED: R. Davis Thomas, Jr. Qualified Representative Donna H. Stinson, Esquire 215 South Monroe Street Suite 400 Tallahassee, Florida 32302 Tracy S. Cottle, Esquire Agency for Health Care Administration Regional Service Center Fort Knox Building 3, Suite 3231 2727 Mahan Drive Tallahassee, Florida 32308 Sam Power, Agency Clerk 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building Three, Suite 3431 Tallahassee, Florida 32308
The Issue The issue in these proceedings is whether HRS should grant petitioners' application for a certificate of need to build a 100-bed general acute care hospital in Deltona, Florida. The parties have stipulated to the applicants' ability to staff the proposed facility and that no issue remains as to the criteria set forth in Section 381.494(6)(c)(3), (5), (6), (7), (10), (11), and , Florida Statutes (1983).
Findings Of Fact Petitioners propose to "transfer" 100 beds from Daytona Beach General Hospital (DBGH) in Subdistrict 4 of District 4 to Deltona, which lies in Subdistrict 5 of District 4; and have agreed to "delicensure" of an additional 50 beds at DBGH (for a total of 150) if their application for a certificate of need (CON) to build in Deltona is granted. Saxon General Hospital, Inc. (Saxon) is a wholly owned subsidiary of Daytona Beach General Hospital, Inc., which operates DBGH. HCA's Central Florida Regional Hospital (CFRH), is located outside of District 4 altogether in Sanford, which is in Seminole County. Baker, Clay, Duval, Flagler, Nassau, St. Johns and Volusia Counties make up HRS District 4, the domain of the Health Planning Council of Northeast Florida, Inc. District 4 as a whole has more hospital beds than it needs. The present controversy concerns medical/surgical hospital beds in the two southern subdistricts of District 4, Subdistricts 4 and 5. Flagler County and Volusia County east of Little Haw Creek and Deep Creek comprise Subdistrict 4 of District 4. Deland, Deltona, Orange City and DeBary are in Subdistrict 5 of District 4, which is congruent with Volusia County west of Little Haw Creek and Deep Creek. See Appendix. THE DISTRICT PLAN The Health Planning Council of Northeast, Florida, Inc. has adopted a district health plan, Petitioner's Exhibit No. 6, but the plan has not been promulgated as a rule. HRS, but not CFRH, has admitted that petitioners' proposal is consistent with the district health plan. Among the policies stated in the plan is the following: If the district as a whole has a surplus of acute care hospital beds but the subdistrict has a substantial shortage, or if beds are not available or accessible within 30 minutes travel time in an urban county or 45 minutes travel time in a rural county to at least 90 percent of the county's residents, the state should consider the need for more beds on a subdistrict basis. (Reference: Chapter 10-5.11(23)(i) of the Florida Administrative Code.) Given the provisions as outlined above and so long as there is an overall surplus of hospital beds in the district, it is the policy of the Health Planning Council not to support approval of additional beds within a subdistrict until it can be clearly demonstrated by the circumstances that the number of beds needed in the subdistrict is substantial. With respect to subdistrict five, the plan makes the following recommendation: Within the framework of the most appropriate planning for the entire West Volusia-East Seminole County area, the State Office of Community Medical Facilities could give consideration to the transfer of acute care beds from within the district to the Deltona area--so long as the total number of licensed beds in the district does not increase. Any applicant to open hospital beds and other hospital services in Deltona should take into consideration the general needs of the Deltona area population. The Health Planning Council of Northeast Florida, Inc. adopted this recommendation with the specific purpose of declaring itself neutral as between then competing applications to build a hospital in Deltona. BED NEED BY RULE HRS has by rule specified a need for 195 medical/surgical, 18 intensive and cardiac care, ten obstetric and eight pediatric beds in Subdistrict 4 for the year 1988. Rule 10-16.005(1)(b) Petitioner's Exhibit No. 37, codified as Rule 10-17.005(1)(b), Florida Administrative Code. This represents 23 fewer medical/surgical beds than are presently licensed or authorized, but three more medical/surgical beds than are presently available in fact; the same number of intensive and coronary care beds as are presently available; two fewer obstetric and three fewer pediatric beds than are presently available in Subdistrict 5. Excess capacity in Subdistrict 4 is even more pronounced, according to Rule 10-17.005(1)(b), Florida Administrative Code. This HRS rule specifies a need for 911 medical/surgical, 122 intensive and coronary care, 26 obstetric and 33 pediatric beds in Subdistrict 4 for the year 1988. These figures represent a projected excess of 254 medical/surgical, 14 intensive and cardiac care, four obstetric and 35 pediatric, licensed or approved beds for Subdistrict 4 in 1988, assuming no more beds are licensed, approved, delicensed or disapproved, in the interim. BEDS IN PLACE In District 4's Subdistrict 4, there are seven general acute care hospitals. Bunnell Community Hospital, with 81 licensed or approved beds, is the only hospital in Flagler County. The other six are clustered along the coast between Ormond Beach and New Smyrna Beach. Licensed and approved beds aggregate 1,165 medical/surgical, 136 intensive and cardiac care, 30 obstetric and 68 pediatric for Subdistrict4. Not all of these beds are actually available for occupancy, however. DBGH, for example, is licensed at 297 beds but had only 115 beds available for use on average between October 1, 1980, and September 30, 1981. (At the time of hearing, its average daily census was 50 patients.) There are only two existing hospitals in District 4's Subdistrict 5, Fish Memorial Hospital (Fish) and West Volusia Memorial Hospital (West Volusia), both of which are located in or near Deland, an older population center in western Volusia County to the north of Deltona. West Volusia, which is further than Fish from the emerging Deltona-DeBary-Orange City population center in the southwestern part of the county, has 162 beds, of which 128 are medical/surgical; eleven are intensive or cardiac care; twelve are obstetric and eleven are pediatric. West Volusia had a 1983 average occupancy rate, based on 139 medical/surgical and intensive and coronary care beds, of 67 percent. During fiscal year 1981, most of West Volusia's admissions were of persons from Deland, but 22.34 percent of the total came from DeBary, Deltona and Orange City. Fish has 97 licensed beds, but only 71 are available for use. Of these, 64 are medical/surgical, and the remaining seven beds are devoted to cardiac and intensive care. Fish's physical plant is older and in need of replacement or rehabilitation. The Fish Memorial Hospital physical plant is a composite structure which is the result of three decades of renovation and add-on construction. * * * As a result, much of the facility does not comply with current building codes, the recommendations of the Joint Commission for Accreditation of Hospitals (JCAH) or current patient care management practices. An internal survey was begun to identify and quantify the extent of work necessary to bring the entire physical plant into compliance with all applicable codes or standards. The survey included all major components of the physical plant or hospital-wide systems that will have to be replaced or repaired within the next three year period just to maintain the current facility operations as a comparison to the replacement cost. The survey identified over thirty projects, ranging between $4,000 and $1,500,000 each. Furthermore, these direct costs do not account for interruption of medical services to the community residents, nonproductive staff time due to phasing of renovation, and patient inconveniences during construction. Intervenor's Exhibit No. 1., p.1. Rehabilitation would involve direct costs of some $4,500,000.00. In July, August and September of 1980, Fish had 105 admissions of persons residing in the Deltona and DeBary-Orange City census division, or 22.9 percent of its total admissions. In the same months the year before 87 admissions or 23 percent of the total was attributable to the Deltona and DeBary-Orange City census divisions. The great majority of Fish's patients came from the Deland census division during both periods. Fish's 1983 average occupancy rate was 46.7 percent, but, at time of hearing, occupancy was at 80 percent. Licensed at 226 beds, CFRH had about 200 beds staffed at the time of the hearing, including ten pediatric and nine obstetrical beds. (T. 592) CFRH's average occupancy was 72 percent for January and February of 1984, down from 76.9 percent for the same period last year. During the two months preceding the hearing, CFRH was on "red flag" status. No admissions were allowed, unless approved by the chief of staff; but no true emergencies were turned away. Some 34.8 percent of CFRH's admissions are of people who reside in the Deltona- DeBary-Orange City area or elsewhere in Volusia County. CFRH meets most of the need for medical/surgical beds attributable to the population in southwestern Volusia County. (Testimony of Scott) Most people living in the Deltona-DeBary- Orange City area who need hospitalization leave the county, in order to be admitted at intervenor CFRH. ACCESSIBILITY The evidence did not establish what proportion of the population of Subdistrict 5, if any, is further than 30 minutes' driving time from the nearest hospital at present, or what proportion would be in the future. Petitioners' expert measured travel times from central points in DeBary, Orange City, Sanford and Deland to area hospitals and to the site proposed for a new hospital, with the following results: West Volusia Fish Memorial Central Florida Proposed Memorial Hospital Regional Daytona Beach TO: Hospital (Central (West Sanford) General (North Deland) (Saxon Blvd. Deland) at 1-4) (A) (B) (C) (D) DeBary 32.2 26.4 18.2 14.9 Orange 28.6 22.8 26.3 17.7 City Deltona 36.8 31.0 24.6 11.5 Sanford 51.6 44.9 17.1 33.7 Deland 20.7 14.9 41.7 32.6 In computing these averages, peak travel times were weighted equally with other travel times measured in December of 1983, and January and February of 1984. One route to Sanford and CFRH from Deltona entails crossing a drawbridge. It takes Beverly Spitz "20 minutes just to get out of Deltona," with its winding roads and abundance of elderly drivers. Mary Lou Foster takes 29 to 45 minutes to drive from her Deltona home to CFRH. John Schmeltz can do it in "about 25 minutes." In February of 1982, When Mrs. Schmeltz passed out, the ambulance he summoned took 22 minutes to arrive. John Mosley made the drive from his Deltona home to CFRH in 25 minutes, but that was the night he thought his wife had had a heart attack and he "averaged over 100 miles an hour." (T. 204) "[A]t night . . . you realize just how far it is." (T. 211) Clyde Mann's testimony to the effect that the remoteness of existing hospitals had cost lives went unchallenged. Mary Meade, a registered nurse, reported that the Deltona area "ha[s] lost several patients, several people" (T. 216) in the time it takes to get to a hospital. Bernie Levine, a public witness, testified that there were "constant people dying. They didn't make it to the hospital." (T. 210) A hospital in Deltona would significantly improve access for the people of Deltona, and would also improve access for residents of Orange City and DeBary, albeit less dramatically. FINANCIAL FEASIBILITY The parties stipulated that land is available for the project, and that projected construction costs are reasonable. Daytona Beach General Hospital, Inc. (DBGH, Inc.) plans to lend its subsidiary Saxon General Hospital, Inc. $4,159,700; and petitioners plan to borrow the remaining $12,569,000 necessary to build the hospital, at 13 percent, repayable over a 25 year period, with the new hospital serving as collateral. DBGH, Inc. had "[a]pproximately one-million-three, one-million-four" (T. 245) on hand which could be devoted to construction of a new hospital in Deltona, at the time of hearing. The remaining "equity," $2,900,000 or so, is to be raised by sales of DBGH, Inc.'s common stock. Of the 2,000,000 shares of common stock authorized, Daytona Beach General Hospital, Inc. has issued 600,000. The hope is that additional shares can be issued and sold at $15 a share, which is about five times as much as the stock is currently trading for over the counter. John E. Kaye and Jackson B. Bragg, the osteopaths who between them own 405,000 shares of DBGH, Inc. common, each plan to guarantee purchase of another $1,400,000 worth of DBGH, Inc. common stock, when it is issued. The net worth statements of each man came in as exhibits at hearing, for the purpose of showing their supposed ability to honor such a guarantee. Aside from the DBGH, Inc. stock, however, neither man had sufficient net assets, and this assumes the accuracy of their financial statements, which listed as assets $253,000 in unsecured receivables of unstated age. Cars and boats were valued at cost, as was a pick-up truck ($3,000) while real estate was apparently valued at somebody's idea of market. Between them, the two doctors purport to have $150,000 worth of household furniture. For obvious reasons, no accountant's name appeared on these documents. The doctors have an agreement between them to the effect that neither sells DBGH, Inc. stock unless the other also sells. Their unaudited statements put the value of DBGH, Inc. stock at $20 a share. A few days after the Daytona Beach News Journal reported that "HCA had lost the right to purchase Fish," (T. 264) Robert E. Hardison, Jr. of HCA spoke to Drs. Kaye and Bragg and told them "he realized it was futile to try to continue seeking a CON for Deltona adding new beds unless he could get some existing beds from [DBGH] and move them to Deltona." (T. 266) Mr. Hardison asked Drs. Bragg and Kaye what they would be willing to sell their stock for but did not offer to buy it. Shortly before the hearing they were offered $25 a share for all their holdings on condition the prospective buyer could arrange financing, and on condition that Saxon receive a certificate of need. This price is almost certainly higher than could be gotten in the market for shares which would not give the buyer a controlling interest in DBGH, Inc. One Milton W. Pepper appeared at hearing and testified without contradiction that, in the event a certificate of need issued, he was willing and able to invest approximately $1,500,000 "in the beginning. . . and make arrangements for the additional $5,000,000 if necessary." Drs. Kaye and Bragg may lose control of the corporate petitioners in the process, but there is every reason to believe that money to build a hospital would be available. After raising a quarter of the project cost, DBGH, Inc. proposes to lend that sum to Saxon, at one percent above prime. Although this arrangement would mean that the money was "debt" as between the subsidiary and its parent, outside financers would apparently treat the money as equity. Loy D. Deloney, an underwriter for Stephens, Inc., "the ninth-ranking investment banking firm in the country in terms of equity," knows "of at least 10 major financial institutions that would be interested in" providing long-term financing, if the CON issues. The future holds many uncertainties for hospitals, but whether this money could be repaid and whether a new hospital would be otherwise feasible financially depends finally on how many patients it would serve. POPULATION GROWTH FORECAST The population of census tracts 908, 909, 910.02, 910.03 and 910.04, in which Deltona, Orange City and DeBary are located, is projected to increase by some 11,000 persons between 1984 and 1989, when the population in this part of southwestern Volusia County is expected to be 48,789. Of the projected 1989 population of census tracts 908, 909, 910.02, 910.03, 910.04, eleven thousand one hundred twenty-four persons are expected to be over 65 and eleven thousand one hundred twenty-four persons are expected to be less than 65 but older than Some three fifths of Deltona's present population (about 26,000) is over 55 years old. EFFICIENT UTILIZATION LIKELY IN SUBDISTRICT Even without the lure of a hospital, physicians have opened offices in southwest Volusia County. Seven specialists on the medical staff at CFRH have part-time practices in the Deltona-DeBary-Orange City area. A half dozen family practice physicians practice in the area full-time. They admit to hospital an average of 50 patients daily, 80 percent of them to CFRH. Before HCA abandoned its application for a certificate of need to "transfer Fish's beds" and build a new 97-bed hospital in Deltona, it caused a health service study to be done by John Short & Associates. CFRH offered the study as evidence at hearing. Intervenor's Exhibit No. 1. The CFRH study looked at the western area of Volusia County, as a whole, including Deland, and concluded that 1987 would see 12,686 medical/surgical discharges of residents of western Volusia County. The CFRH study calculated the average length of a patient's stay in hospital at 7.03 days. CFRH's own evidence shows, therefore, that 89,183 medical/surgical patient days attributable to the population of the DeBary-Orange City, Deland and Deltona census districts can be expected in 1987. CFRH's administrator, James D. Tesar, predicted that CFRH "could lose 80 percent of its admissions from the area including Deltona, Geneva, DeBary, Osteen, and Orange City," if Saxon built a new hospital in Deltona. In 1983, CFRH admissions from these Volusia County communities totalled 3,150. If a new hospital in Deltona did indeed change patient flow to the extent Mr. Tesar warns is possible, there would still be 630 admissions annually to CFRH of residents leaving southwest Volusia County for hospitalization. If west Volusia Countians' admissions drop to 630 at CFRH, CFRH will be supplying only 4,429 patient days (630 X 7.03) to residents of West Volusia County. In that case, some 84,754 medical/surgical patient days will have to be accommodated in 1987 by hospitals within Subdistrict Five (or outside the subdistrict at hospitals other than CFRH). In 1987, to the extent patient days attributable to southwest Volusia County residents admitted to pediatric or obstetric beds at CFRH exceed patient days at CFRH attributable to Subdistrict Five residents living outside Deltona, Geneva, DeBary, Osteen and Orange City, 84,754 would be an understatement. Dividing patient days by the number of days in a year (84,754/365) yields an average daily medical/surgical census of 232. Medical/surgical beds are put to good use when they are full 80 percent of the time, almost all health planners agree. In order to accommodate an average daily census of 232 at an 80 percent average occupancy rate, 290 medical/surgical beds will be needed as early as 1987. Only 192 medical/surgical beds are now open in Subdistrict Five. Chances are good that 292 hospital beds in Subdistrict Five could be used efficiently long before the spring of 1989. IMPACT OUTSIDE SUBDISTRICT A new 100-bed hospital in Deltona could operate consistently with efficient utilization of the medical/surgical beds already open in Subdistrict Five, even if the new hospital achieved 80 percent average occupancy as early as 1987 but only by diverting patients from CFRH. The effect on CFRH would be significant, but temporary, since population growth would ensure its efficient utilization once again within two to four years of the 1986 opening of a 100-bed hospital in Deltona. All along, CFRH's loss of patients to a new Deltona hospital would be offset to some extent by ongoing population growth in Seminole County where CFRH is located. CFRH's own application for a certificate of need was granted on the theory that a new hospital of CFRH's size was needed just to serve the population of Seminole County. Petitioners' expert concluded that CFRH, Fish and West Volusia had had only 1,139 more medical/surgical patient days to split among themselves in 1983 than they could be expected to have in 1988, with a 100-bed hospital in its second year of operation in Deltona. DBGH's surrender of the right to open 150 additional beds would have no immediate economic impact; the effect would be to reduce excess capacity in Subdistrict Four, but on paper only. No beds would be closed, no staff dismissed, no expenses pared. But, if petitioners' efforts to obtain a CON for a new hospital in Deltona fail, they intend to expend $10,000,000 for renovation of DBGH, a project for which they already have a CON. This would inevitably mean recovering additional costs from payers for hospital care in Subdistrict Four. Like the Deltona proposal, the renovation proposal contemplates some reduction in beds in Subdistrict Four, although fewer: "50-some-odd." (T. 293) The 150 bed reduction in approved beds in Subdistrict Four contemplated by the pending application would mean that, if and when new hospital beds are needed in Subdistrict Four, they could be added wherever they are needed rather than being added at DBGH whenever management decrees.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That HRS grant petitioners' application for a certificate of need to construct a 100-bed acute care general hospital in Deltona. DONE and ENTERED this 9th day of July, 1984, in Tallahassee, Florida. ROBERT T. BENTON II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1984. APPENDIX * * NOTE: APPENDIX to this Recommended Order is a map which is available for review in the Division's Clerk's Office. COPIES FURNISHED: F. Philip Blank, Esquire 241 East Virginia Street Tallahassee, Florida 32301 Ronald L. Book, Esquire Sparber, Shevin, Shapo & Heilbroner 30th Floor AmeriFirst Building One Southeast Third Avenue Miami, Florida 33131 James M. Barclay, Esquire 1317 Winewood Blvd. Building 2, Suite 256 Tallahassee, Florida 32301 Thomas A. Sheehan, III, Esquire Jon C. Moyle, Esquire Donna Stinson, Esquire, and Thomas M. Beason, Esquire, of Moyle, Jones & Flanigan Post Office Box 3888 West Palm Beach, Florida 33402 David Pingree, Secretary Department of HRS 1323 Winewood Blvd. Tallahassee, Florida 32301
The Issue Whether the Certificate of Need (CON) applications filed by Central Florida Regional Hospital, Inc. d/b/a Central Florida Regional Hospital (Central Florida) (CON Application No. 9805) and Oviedo HMA, Inc. (Oviedo HMA) (CON Application No. 9807P) for a new, 60-bed acute care hospital in Seminole County, Agency for Health Care Administration (Agency or AHCA) acute care subdistrict 7-4, satisfy, on balance, the applicable statutory and rule review criteria sufficiently to warrant approval; and, if so, which of the two applications best meets the applicable statutory and rule review criteria for approval.
Findings Of Fact The Parties The Agency AHCA is the state agency authorized to evaluate and render final determinations on CON applications pursuant to Section 408.034(1), Florida Statutes.2 Oviedo HMA Oviedo HMA, Inc. is a start-up subsidiary of Health Management Associates, Inc. (HMA), a national for-profit hospital chain, headquartered in Naples, Florida. Oviedo HMA was formed for the sole purpose of constructing, owning, and operating a hospital in the Oviedo area. HMA traditionally develops hospitals in non-urban markets. It describes itself as a "turnaround specialist for non-urban hospitals," that "acquires and then revitalizes hospitals in growing communities with [population of] 30,000 to 400,000 that have a clear demographic need." HMA focuses on smaller-type hospitals ranging in bed size from 50 to 200 beds. HMA's ownership of hospitals has grown from 16 in 1993 to 59 hospitals in 2005. HMA owns and operates approximately 16 hospitals in Florida, all of which have come under HMA's ownership and operation by acquisition. HMA has not yet opened and constructed a new acute care hospital in Florida. HMA is building a new hospital in Collier County and has recently completed a replacement hospital in Brooksville, Florida. HMA anticipates acquiring an 80 percent interest in St. Cloud Hospital (owned by ORHS) in the greater Orlando area, with ORHS retaining a 20 percent interest. This transaction had not closed as of the final hearing. HMA owned and operated hospitals nationwide are accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and provide high quality of care to their patients. HMA has experienced financial growth in recent years; growing from approximately $250 million in net revenue in 1993 to over $3.6 billion in 2005, and growing from approximately $12 million in net income in 1993 to approximately $350 million in 2005. Its financial strength among for-profit hospitals is strong. For HMA, company-wide, over 15.4 percent of gross revenues were attributable to Medicaid in fiscal year (FY) 2005, with an additional 4.5 percent in charity care. In Florida, 9.7 percent of gross revenues of HMA were attributable to Medicaid (over $324 million) in 2005, with an additional 4.4 percent in charity care (over $147 million). In the SAAR, AHCA conditioned its approval of Oviedo HMA's project with the condition that Oviedo HMA provide "[a] minimum of 7.1 percent of the total annual patient days in the 60-bed facility . . . to Medicaid patients" and "[a] minimum of 2.9 percent of the 60-bed facility's gross revenues . . . to charity patients." OV 99 at 52. AHCA should impose these conditions if the project is approved. Oviedo HMA has committed to provide obstetrical services. In order to perfect its CON application, Oviedo HMA is relying heavily on Orlando Regional Healthcare System, Inc. (ORHS), a Florida not-for-profit corporation that owns and operates health care facilities in Orange, Seminole, Lake, and Osceola Counties. HMA would not pursue the project without a collaborative clinical and financial arrangement with ORHS. Following the filing of Oviedo HMA's letter of intent, on October 20, 2004, representatives of HMA, Inc. and ORHS, Inc., signed a letter of intent "relating to the possible formation of a joint venture or other business relationship" for the construction of a new hospital in Oviedo." Thereafter, HMA and ORHS agreed in principle that if the CON application were approved and the hospital project proceeded forward, 20 percent of the stock of Oviedo HMA will be owned by ORHS or one of its affiliates. (Stated otherwise, ORHS will contribute 20 percent of the project cost.) Losses and profits will be shared in accordance with percentages of stock ownership. Any written agreement between Oviedo HMA and ORHS is expected to be modeled after the ORHS/HMA St. Cloud Hospital agreement. See Finding of Fact 6. It is anticipated that any such agreement will contain, in part, buy-out and non-compete provisions.3 The entity that files a CON application must be the same entity that licenses and operates the CON approved project, here a hospital. OV 69 at 9-10.4 According to Mr. Gregg, "as of the [legislative] changes of 2004, if a change of ownership occurs, then that new owner acquires the certificates [sic] of need that were [sic] associated with the provider being purchased." Id. at 10. See generally § 408.036(2)(a), Fla. Stat.; Ch. 2004-383, § 6, Laws of Fla. The proposed stock purchase by ORHS does not affect the corporate status of Oviedo HMA, Inc., the applicant/entity.5 The situation would be different if the applicant/entity changed. The persuasive evidence indicates that Oviedo HMA, Inc. will own and operate the new hospital. ORHS has sufficient funds and is committed to expend between $15 and $20 million toward the Oviedo HMA hospital project, but is not willing to finance the entire cost of the project. This is one reason why ORHS did not pursue a CON application for a similar project as it had done in a prior batching cycle. The ORHS hospitals/health care facilities provide high quality of care to their patients. ORHS uses an enterprise-wide health information system which is complemented by other systems. ORHS physicians can access patient clinical information at an ORHS facility or remotely. PACS is a picture, archiving, and communications system. PACS provides the user with the ability to view images digitally, e.g., X-rays can be transmitted electronically and can be viewed remotely. With the design and structural cabling system in place, the PACS system can be used by the Oviedo HMA hospital and OHRS. The anticipated collaboration between the entity systems will afford the ability to tie the computer systems together. This system is available among collaborative hospitals and by credentialed staff who are given access to the system.6 Generally, physicians who do not have privileges at an ORHS facility would not be able to access the information unless given permission, which is not done on a standard basis. Hospital facilities with a "business relationship" with ORHS facilities can access the information. However, federal confidentiality requirements must be followed. Unaffiliated hospitals, such as CFRH, could be provided access to the information. See Endnote 6. Central Florida Central Florida Regional Hospital, Inc. (Central Florida), a for-profit corporation, is an applicant in this proceeding and will own the new hospital proposed in its CON application. If approved, the new hospital will have a separate management team charged with running the day-to-day operations of the new hospital. Central Florida is an indirect wholly-owned subsidiary of HCA Inc. (Health Corporation of America), a national for- profit corporation with hospitals distributed throughout the United States, including the State of Florida, and abroad. HCA's health care services include physician practices, ambulatory surgical centers, community hospitals, and large tertiary referral centers. Central Florida owns and operates Central Florida Regional Hospital (CFRH), a general acute care hospital with 226 licensed beds, consisting of 208 acute care beds and 18 skilled nursing unit beds (a separate unit within the hospital). CFRH is located at 1401 West Seminole Boulevard, Sanford, Florida, and is accredited by the JCAHO. Osceola Regional Medical Center, in Osceola County, Florida, is also an HCA facility in District 7. Central Florida will transfer (and delicense) 60 acute care licensed beds from CFRH to effectuate the CON application. CFRH asserts that it can maintain an appropriate census with the remaining bed complement. If the reduced bed complement is insufficient in number, CFRH can add new acute care beds without obtaining a CON. Ch. 2004-383, § 6, Laws of Fla., amending Section 408.036(1)(a) and (d), Florida Statutes (2003). CFRH's geographic service area is predominantly north Seminole County and west Volusia County. CFRH provides inpatient and outpatient services, including obstetrics, and has the only adult open-heart surgery and interventional cardiology program in Seminole County. CFRH's OB department averages 80 to 100 OB deliveries a month. CFRH does not operate a Level 2 or Level 3 Neonatal Intensive Care Unit (NICU). Orlando Regional Medical Center and Florida Hospital operate these units. CFRH has a history of providing health care services to Medicaid patient and indigent patients. CFRH expects to implement otolaryngology services, as well as a neurosurgery program that will include state-of-the- art "cyberknife" technology, a surgical tool that can also be used in cancer and tumor treatment in areas of the body other than the brain. (CFRH has not offered neurosurgery for some time, but signed a contract with a neurosurgeon that starts March 1, 2006, and is recruiting for a second neurosurgeon.) The hospital will be offering a 64-slice CAT scanner, which is a state-of-the-art imaging system. It is used for ruling out the necessity of a cardiac intervention procedure. CFRH has two OB/GYN physicians in Oviedo who are employed by the hospital. One works part-time. CFRH is recruiting for additional OB physicians for CFRH. CFRH has a reputation for providing high quality of care to its patients. This includes but is not limited to CFRH's cardiovascular and interventional programs. (For calendar year 2004, there were 300 open heart surgery discharges from CFRH. In 2004, CFRH ranked 40 out of 73 Florida hospitals with interventional cardiology programs in the number of open heart surgery discharges.) CFRH uses an electronic medical administration record (eMAR) system, which increases patient safety. Each patient's arm band is coded and can be scanned for, in part, drug compatibility. Nurses are alerted if there are any abnormalities. This particular system is unique to HCA hospitals. CFRH also uses a PACS system to transmit images to other facilities. Central Florida enjoys an excellent reputation as a corporate citizen in the Sanford community and Seminole County generally. Central Florida makes annual monetary contributions to a number of local organizations, including, for example, Seminole Community College for the purpose of expanding their nursing program. ORHS and Florida Hospital also contribute to this project. On September 7, 2004, the City of Oviedo issued a letter of support of Central Florida's application "for a 60 bed satellite facility in Oviedo, Florida."7 On November, 15, 2005, The Greater Oviedo Chamber of Commerce passed a resolution favoring Central Florida's application over Oviedo HMA's application. Until Central Florida filed its CON application, Central Florida had not begun to aggressively consider a greater presence in the Oviedo area. Central Florida expects to recruit in the area (and build a medical office) if its CON application is approved. CFRH has approximately 164 doctors on staff with active privileges (or active provisional) and requires its physicians to be board certified in order to be a part of the medical staff, unless the physician provides a specialty service for a limited period of time. CFRH will support the new hospital and provide any necessary training. CFRH expects to be the referral hospital for the new hospital, as opposed to a Florida Hospital or ORHS facility. Health Services in Orange and Seminole Counties Within District 7 Agency health planning service District 7 consists of Brevard, Orange, Osceola, and Seminole Counties. § 408.032(5), Fla. Stat. For acute care beds, each of the four counties is treated as a separate "subdistrict" by AHCA. Fla. Admin. Code R. 59C-2.100(3)(g). Both applications were filed to construct a new, acute care hospital in Seminole County, subdistrict 7-4. Specifically, each application proposes a new, 60-bed hospital in Oviedo, in Seminole County. At present, Seminole County has three acute care hospitals: CFRH is located in Sanford, near the Volusia County line in north Seminole County; Florida Hospital-Altamonte, located in Altamonte Springs, in south Seminole County to the west of Oviedo; and ORHS South Seminole Hospital, also located in south Seminole County to the west of Oviedo. For the period January, 2003, through December, 2003, CFRH reported 55.82 percent occupancy in its 208 acute care beds. By comparison, Florida Hospital-Altamonte reported 72.40 percent occupancy in its 258 acute care beds and ORHS South Seminole Hospital reported 53.80 percent occupancy in its 126 acute care beds. See CF 12 at Table 1-20. Florida Hospital-Altamonte and ORHS South Seminole Hospital are each a part of large hospital organizations that collectively dominate the market for hospital services in Seminole County and District 7. Both applicants propose to address the maldistribution of existing licensed acute care beds in Seminole County, with the greater need for acute care beds in south Seminole County. There are approximately 2,470 acute care beds in Orange County and approximately 600 acute care beds in Seminole County. Adventist Health System/Sunbelt, Inc., owns and operates seven general acute care hospitals under the "Florida Hospital" name in the greater Orlando area: Florida Hospital- Altamonte (258 acute care beds) in Seminole County; Florida Hospital-Orlando (702 acute care beds), Florida Hospital-East Orlando (144 acute care beds), Winter Park Memorial Hospital,8 and Florida Hospital-Apopka (50 acute care beds) in Orange County; and Florida Hospital-Celebration and Florida Hospital- Kissimmee in Osceola County. See Orlando Regional Healthcare System, Inc. vs. Agency for Health Care Administration, Case Nos. 02-0448CON and 02-0449CON, 24 FALR 714, 720 (DOAH November 18, 2002; AHCA December 31, 2002). In 2001, Florida Hospital and ORHS filed competing CON applications to build a 60-bed hospital in Oviedo, and each was preliminarily denied by AHCA. Both organizations challenged AHCA's determination, and, following an administrative hearing, AHCA awarded the CON to Florida Hospital. See Orlando Regional Healthcare System, Inc., supra. However, Florida Hospital never implemented its proposal, and the CON lapsed. ORHS is a large tertiary health care system in the greater Orlando area comprised of several health care facilities and one additional facility which will be opening this year, the Winnie Palmer Hospital for Women and Babies (Winnie Palmer), a 273-bed facility. It is anticipated that obstetrical and women services and infant care will relocate from the Arnold Palmer Hospital for Children and Women (Arnold Palmer) to Winnie Palmer in May 2006. ORHS and Florida Hospital offer outstanding cardiovascular services. (For calendar year 2004, Florida Hospital-Orlando and Orlando Regional Medical Center had 1,759 and 898 open heart surgery discharges, respectively, and rank one and four, respectively, among open heart surgery providers statewide.) ORHS owns and operates several general acute care hospitals in the greater Orlando area. South Seminole Hospital in Longwood, Seminole County, is a 206-bed hospital with approximately 126 acute care beds, and 80 psychiatric beds in a detached facility. Several ORHS facilities are located in Orange County. Orlando Regional Medical Center (ORMC), located in downtown Orlando, is a 600-bed general acute care hospital that provides tertiary care services and serves as a teaching hospital. ORMC is the only Level 1 trauma center in the greater Orlando area. M.D. Anderson Cancer Center is physically attached to ORMC and functions as the medical-surgical and radiation/oncology program for ORMC. Arnold Palmer is a 275-bed specialty hospital that provides subspecialty pediatric care, neonatology, and obstetrics. A $50 million construction project is underway. Lucerne Hospital is a 275-bed general acute care hospital, a few miles away from ORMC. Sand Lake Hospital is a 150-bed general acute care hospital (located near Disney). ORHS previously owned St. Cloud Hospital in Osceola County, but sold an 80 percent interest in St. Cloud to HMA in November, 2005. See Findings of Fact 6 and 13. South Lake Hospital is a smaller, 100-bed general acute care hospital located in Lake County, Florida, that is digitally linked to ORMC. ORHS owns a 50 percent interest in and manages this hospital. The South Lake Hospital District owns the remaining interest. ORHS has approximately 40 physicians who practice or have offices within the Oviedo market. CFRH has one full-time physician practicing within the area. See Finding of Fact 30. Approximately 1,700 physicians have privileges at ORHS facilities. If the Oviedo HMA project is approved, ORHS expects to regain tertiary care referrals now lost to the Florida Hospital system. Florida Hospital and ORHS healthcare facilities dominate the market for hospital services in Orange and Seminole Counties. The Oviedo area: demographics, utilization of existing providers, and applicant service area and occupancy projections The City of Oviedo is located in south Seminole County, east of Longwood (where South Seminole Hospital is located) and Altamonte Springs (where Florida Hospital-Altamonte is located), and approximately 10 to 15 miles from downtown Orlando. The City of Oviedo is included within zip codes 32765 and 32766, although there are other adjacent zip codes to the northeast 32732 (Geneva) and to the west 32708 (Winter Springs). See CF 80. The Oviedo area is growing. In 2004, the total population for the four zip codes was 106,789 and projected to increase 12.6 percent (to 120,227) by 2009. (The population is projected to increase 9.3 percent statewide and 11.2 percent in Seminole County by 2009.) The population in zip code 32765 was 49,985 in 2004, projected to grow to 57,742 in 2009, or 15.9 percent. In zip code 32766, the population was 9,068 in 2004, projected to grow to 11,302 in 2009, or 24.6 percent. Population in the Winter Springs and Geneva areas are projected to increase 7.1 percent and 8.5 percent, respectively, by 2009. The Oviedo area is described as "a young, family oriented suburb of Orlando" or more generally as a suburban community. The parties have stipulated to the need for a new, 60- bed acute care hospital in Oviedo. Oviedo HMA proposes to serve a four zip code area, i.e., zip codes 32765, 32766, 32708, and 32732 and projected that 95 percent of its utilization will come from within these zip codes. OV 27. Oviedo HMA projects occupancy levels to be 57.9 and 75 percent for Years 1 and 2, respectively. (Central Florida's expert opined that Oviedo HMA's occupancy levels for Years 1 and 2 would be 54 and 60 percent, respectively. CF 25-15.) Oviedo HMA's projected occupancy levels for Year 2 may be optimistic for a start-up hospital, but nevertheless appear achievable, in part, in light of the collaborative arrangement. Oviedo HMA excluded from its market area, zip code 32773 because of its proximity to CFRH and zip code 32792 because of its proximity to Florida Hospital-Winter Park Memorial Hospital in Orange County. The southernmost zip codes, 32817, 32826, and 32820 (east of zip code 32792) were excluded because of current patient travel patterns. At present, the Oviedo area is served almost exclusively by either Florida Hospital or ORHS. Oviedo area residents are out-migrating to Orange County for obstetrical and emergency room services. (For calendar year 2003, approximately 44 percent of Seminole County residents received acute care services outside of Seminole County.) Florida Hospital and ORHS serve the majority of the out-migrating residents. In 2004, for the four zip codes of Oviedo HMA's proposed service area (32765, 32766, 32708, and 32732), Florida Hospital facilities had a combined 61.7 percent non-tertiary market share, and ORHS facilities had a combined 30.9 percent non-tertiary market share. Winter Park Memorial Hospital provided the most non-tertiary discharges (1,771 or 20.7 percent), followed by Florida Hospital-Orlando (1,647 or 19.2 percent), Florida Hospital-Altamonte (1,335 or 15.6 percent), and South Seminole Hospital (1,183 or 13.8 percent). CFRH accounted for 309 or 3.6 percent of the discharges. CF 25-6 and 25-9. In 2004, Florida Hospital facilities had a combined 18,701 or 54.1 percent of the "non-tertiary" discharges of patients residing in Seminole County, and ORHS facilities had a combined 9,473 or 27.4 percent of such discharges. By comparison, CFRH had 5,131 or 14.8 percent of such discharges. CFRH 25-2 and 25-3. Central Florida proposes to serve a ten zip code service area. Central Florida's primary service area consists of four zip codes in Seminole County, 32765 (Oviedo), 32766 (Oviedo), 32708 (Winter Springs), 32773, just south of CFRH and northeast of ORHS South Seminole Hospital, and zip code 32792 in Orange County. (Other cases from Seminole County are also included.) OV 23 and 26; CF 12, Table 1-15, at 1-25. Central Florida's secondary service area consists of two Seminole County zip codes 32707, south of zip code 32708 and just east of Florida Hospital-Altamonte, and zip code 32732 (Geneva and in the northeastern portion of Seminole County, and Orange County (bordering Seminole County to the north) zip codes 32817, 32826, and 32820, running west to east from zip code 32792. (Other cases from Orange County are also included.) Id. In five zip codes (out of ten) of Central Florida's proposed primary service area (32708, 32765, 32766, 32773, and 32792, which includes Winter Park Memorial Hospital on the western edge), see OV 27 and CF 12 at 1-28, in 2004, Florida Hospital facilities had a combined 63.9 percent non-tertiary market share and ORHS facilities had a combined 25.0 percent non-tertiary market share. Winter Park provided the most non- tertiary discharges (4,037 or 26.7 percent), followed by Florida Hospital-Orlando (2,961 or 19.6 percent), Florida Hospital- Altamonte (1,938 or 12.8 percent), and ORHS South Seminole Hospital (1,619 or 10.7 percent). CFRH's market share was 9.2 percent or 1,389 discharges. CF 25-7, 25-8, and 25-11. For Years 1 (2008) and 2 (2009), Central Florida projects that it will receive approximately 83 percent of its total cases from its primary service area, including cases from other Seminole County zip codes, of which approximately 75 percent are expected from the five zip codes, and approximately 17 percent from its secondary service area. CF 12 at Table 1- 15. Central Florida's projected occupancy levels for Years 1 and 2 were approximately 60 and 63 percent, respectively, and approximately 75 percent by Year 5 (2012). CF 12, Tables 1-15 and 1-16 at 1-25, 1-26, and 1-28; CF 42. Central Florida also provided adjusted numbers (downward) for Years 1 and 2 to account for the start-up phases of opening the new hospital, which yielded projected occupancy levels of approximately 45 and 55 percent, respectively. Central Florida's revenue projections were based on these adjusted occupancy levels. Central Florida also projected 66.4 percent occupancy for Year 3. Id. See also CF 12, Schedules 5 and 7A and CF 42. (Oviedo HMA's expert projected 61 percent occupancy for Year 5 for Central Florida.) Central Florida's projected occupancy levels for Year 5 appear reasonable. If Oviedo HMA's CON application is approved, the market share for Oviedo HMA's primary service area for the new Oviedo HMA hospital, in conjunction with ORHS facilities for 2009 (Year 2), is projected to be approximately 50 to 54 percent, with Florida Hospital facilities market share reduced to approximately 41 to 45 percent.9 For 2009 (Year 2), if Central Florida's CON application is approved and the five zip codes are used to determine market share, the market shares for Florida Hospital, ORHS, CFRH, Central Florida/Oviedo, and other facilities are projected to be 55.5 percent, 21.4 percent, 6.6 percent, 13.5 percent, and 3.0 percent, respectively. CF 25-13. The Proposals and applicants' commitment Central Florida's proposal Central Florida proposes to build a new, 60-bed hospital in Oviedo (on a purchased site) through the transfer (and delicensure) of 60 acute care beds from its existing hospital. The proposed hospital is modeled after and is an enlarged version of West Marion Community Hospital, a licensed and operational HCA facility in Ocala, Florida. The proposed hospital is made up of 173,335 gross square feet, with a projected construction cost of $36,400,350 or $210 per gross square foot. The total project cost is $93,630,559. The licensed bed complement includes 48 general medical-surgical beds and 12 Intensive Care Unit (ICU) beds. An obstetrics unit comprised of six labor-delivery-recovery (LDR) rooms will be located on the second floor (LDRs are not licensed beds). The twelve medical-surgical beds adjacent to the LDR rooms are "swing" beds that may be used for either general medical-surgical patients or as post-partum beds, as the need may require. All patient rooms in Central Florida's proposed hospital will be private rooms. In addition to general medical services and obstetrics, the services to be provided by the hospital will include emergency services, imaging, diagnostic cardiac catheterization, mammography, radiology, ultrasound, nuclear medicine, bone density imaging, surgery (including general and orthopedic surgery), and endoscopy. The design accommodates horizontal expansion of departments on the first floor by using "soft space," and the addition of 12 beds on both the second and third floors. The hospital can also be expanded vertically. A medical office building is planned to be phased in during construction. As a condition of its CON, Central Florida agreed to provide 7.8 percent of total patient days to Medicaid patients and 1.74 percent of total patient days to charity patients. Central Florida intends to provide OB services, but not as a condition of approval. Central Florida's proposal has the support of its parent organization, HCA Inc. The project involves a capital expenditure of greater than $10 million and is subject to formal approval by HCA following the award of the CON. However, Chuck Hall, President of HCA's North Florida Division, stated that HCA's senior management understands the Central Florida proposal, and Central Florida can be confident of approval. Oviedo HMA contends that Central Florida did not address in its CON application the impacts (loss of cases or cannibalization) to CFRH if Central Florida's CON application is approved. There is evidence that the loss of 60 beds could require CFRH to add back beds or run in excess of capacity and that the loss of cases, such as OB cases, could have an impact on CFRH. During the hearing, Central Florida persuasively proved that, if its CON application is approved, the overall impact on CFRH would be minimal.10 Oviedo HMA's proposal Oviedo HMA proposes to build a new, 60-bed acute care hospital in Oviedo. The project involves 133,081 square feet at a construction cost of $26,616,200, or $200 per gross square foot. The total project cost is $62,734,334. HMA is committed to fund the project, even if it is as high as $82 million, so long as ORHS provides its financial and collaborative commitment as reflected herein. Oviedo HMA proposes to offer a full range of primary and secondary non-tertiary hospital services, such as medical- surgical care, emergency room case, ambulatory surgical care, cardiac catheterization laboratory services, outpatient services, etc., and expressly agrees to "provide Obstetrical Services." The floor plan for the hospital is taken from the replacement facility for Heart of Florida Regional Medical Center in Haines City, Florida, which HMA constructed in 1997. The design includes 47 medical-surgical beds, eight ICU beds, and five dedicated post-partum beds. The hospital will also have four LDR beds. The project includes 12 emergency treatment rooms and two non-licensed observation beds. All patient rooms will be private rooms. The hospital is designed to be expanded horizontally (for example, expanding the Emergency Department), and to be expanded vertically from three to five floors. While disputed by Central Florida, the proposed hospital, with surface parking, can be constructed on 15 to 20 acres, which can also accommodate future expansion. Additional acreage may be needed to accommodate a full build-out of a five- story hospital and additional surface parking. There are currently no plans for a medical office building on-site and additional acreage would be needed. Oviedo HMA did not propose a specific provision of health care services to Medicaid patients and the medically indigent. Rather, Oviedo HMA "commits to accept all Medicaid and Indigent [sic] patients that are clinically appropriate for services offered by Oviedo HMA, Inc." Oviedo HMA's proposal does not enjoy the unconditional support of its parent organization. Rather, the proposal is contingent upon a collaborative effort between Oviedo HMA and ORHS, whereby ORHS has agreed to contribute 20 percent of the project cost of Oviedo HMA's proposal and, in turn, receives 20 percent of the profits of the proposed hospital. HMA formed the belief that the Oviedo market cannot be penetrated by a hospital provider not affiliated with either Florida Hospital or ORHS, and HMA would not attempt to enter the Oviedo market on its own. Each applicant's experts found flaws with the competing applicant's plans for their respective hospitals. Each of the flaws can be remedied prior to construction. Land for the proposals Central Florida In June 2005, Central Florida purchased approximately 27 acres for its proposed hospital, at a cost of $7,864,439, within the $8.2 million budgeted for land in its CON application. The site comprises seven contiguous parcels centrally located in the Oviedo area (within zip code 32765), situated between State Road 417 and State Road 426 and between Red Bug Lake Road and Oviedo Marketplace Boulevard (south-to- north). Four of the seven parcels are currently within the City of Oviedo and Central Florida has requested the City of Oviedo to annex the remaining parcels. The proposed site is approximately ten miles from CFRH. While the subject of some criticism by Oviedo HMA, the site does not pose any significant road access issues which can not be reasonably cured. An amendment to the City of Oviedo's comprehensive plan is required before the site can be developed for hospital use. Central Florida filed its application in October, 2005, and a decision is expected in August or September, 2006. Having a hospital on the site proposed by Central Florida would provide the residents of the Oviedo area with a centrally located hospital site. Central Florida's budget for land costs and site preparation are reasonable. Oveido HMA Oviedo HMA budgeted $5.5 million for the acquisition of the hospital site in the Oviedo area. $3.4 million has been allocated for site development. Oviedo HMA does not anticipate purchasing any land for the project unless its CON application is approved. Oviedo HMA's experts reviewed several sites, which may be potentially suitable for the hospital. See OV 17A and 17-1 through 17-10. Mr. Harling, an expert in civil engineering and commercial site development, and Mr. Axel, an expert in commercial real estate sales, were quite familiar with the real estate market and development potential (for the proposed Oviedo HMA hospital) of several parcels in the Oviedo area. They did not perform a formal feasibility study or an estimate of the probable cost of site development for the sites. Mr. Harling was aware of the nature of the project, a 60-bed hospital, and some details regarding the parcels he examined, such as the existence of utilities and drainage outfall systems, but was not aware of the square footage of the proposed hospital and had not reviewed a site or floor plan. Despite challenges for the development of specific sites, such as the existence of wetland areas, and challenges in purchasing a site within the budgeted amount, based upon his review of the sites and assumptions regarding, in part, the amount of impervious coverage required, he opined that one or more of the parcels was suitable for the planned hospital and that $170,000 per acre for 20 acres was reasonable. The uncertainty regarding the location of the hospital site raises some concerns given Oviedo HMA's primary service area. A new hospital centrally located within the Oviedo area would be optimal to meet the needs of those residents. There was persuasive evidence that Oviedo HMA will be able to purchase a suitable hospital site at the cost reflected in the CON application. However, there are reasonable concerns whether a 15 to 20-acre site can accommodate a fully-expanded hospital with five floors, a medical office building, and any required additional parking. (Oviedo HMA does not have plans to build a medical office building on the 15 to 20-acre site. Such a building would require additional acreage.) Central Florida's proposal receives an edge here because it has already purchased a site which is centrally located for a hospital to serve the Oviedo area. Section 408.035(1), Florida Statutes - The need for the health services being proposed The parties stipulated to the need for a new, 60-bed acute care hospital in Oviedo, Seminole County, Florida, AHCA District 7, subdistrict 7-4. Section 408.035(2), Florida Statutes - The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the district of the applicant Quality health care services proposed by the applicants are available to the residents of District 7, Seminole County, and in particular, the Oviedo area. As noted herein, the health care market in Orange and Seminole Counties is dominated by Florida Hospital and ORHS. The utilization of existing facilities in Seminole County is acceptable notwithstanding the maldistribution of acute care beds in Seminole County. Seminole County residents will continue to outmigrate from Seminole County to Orange County for tertiary care services if Oviedo HMA's project is approved. This outmigration may continue even if Central Florida's project is approved, although some curtailment would be expected in time. Neither applicant is favored by this criterion. Section 408.035(3), Florida Statutes - The ability of the applicant to provide quality of care and the applicant's record of providing quality of care Central Florida (specifically CFRH) has a history of providing high quality of care to its patients. CFRH has received awards for its health care services. Central Florida has the ability to provide quality of care should its project be approved. HMA hospitals have also been honored with several awards and recognitions for quality of care. Oviedo HMA, by virtue of its affiliation with HMA-affiliated hospitals and collaboration with ORHS, has the ability to provide high quality of care should its project be approved. Oviedo HMA proposes to develop its hospital through a clinical and financial collaborative effort with ORHS using ORHS as a tertiary care referral partner and incorporating ORHS' resources in developing a quality program. Both applicants expect that any patients needing tertiary care will be sent to ORHS (for Oviedo HMA hospital patients) or to CFRH (for Central Florida patients). It is anticipated that if certain tertiary care services are not offered at CFRH, Central Florida hospital patients would be referred to Florida Hospital or ORHS. The Oviedo HMA/ORHS collaborative effort offers advantages over the Central Florida/CFRH (or elsewhere) referral network. There is some evidence that hospital transfers within affiliated systems may be quicker and easier than from competing systems. Another advantage is the ability of using an integrated IT system among ORHS affiliated hospitals. It is often cumbersome for non-affiliated hospitals to exchange patient data electronically. Conversely, the transfer of patient information to and from CFRH and the new Central Florida hospital, if approved, will facilitate patient care between these hospitals. Certain tertiary services offered by and through ORHS may afford Oviedo residents a greater range of services than those offered by CFRH. This criterion favors Oviedo HMA in light of its collaborative arrangement with ORHS. Section 408.935(4), Florida Statutes - The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation The parties stipulated that the applicants have sufficient funds available for capital and operating expenses, for project accomplishment and operation. Central Florida questioned the reasonableness of Oviedo HMA's land cost projection. The parties also stipulated that the applicants' proposed staffing is adequate and that the proposed average annual salaries are reasonable for their respective hospitals. Oviedo HMA questions whether Central Florida's CON application failed to include the appropriate Schedule 6, whereas Central Florida reserved the right to question whether Oviedo HMA accurately reflected proposed staffing expenses in Schedule 8A. The ability of each applicant to attract the necessary medical and clinical staff necessary to implement their respective hospitals is also is dispute. Both applicants have the ability to recruit and retain nursing and other related medical personnel, including physicians. Oviedo HMA has an edge in recruitment of physicians and nurses by virtue of its collaboration with ORHS and given existing physician referral patterns. Central Florida has identified a need to recruit additional physicians in several practice areas, although they appear to have been recently successful in recruiting physicians for specialty services such as neurosurgery. Both applicants can appropriately manage and operate their respective hospitals. Central Florida's proposed hospital will have its own management team and will be administered separate and apart from CFRH. Oviedo HMA will also operate the proposed hospital notwithstanding the intended collaboration with ORHS. Oviedo HMA's projected land cost is reasonable. Also, Central Florida's Schedule 6 and Oviedo HMA's Schedule 8A are appropriate. By stipulation, the applicants have the ability to fund their respective projects and their construction and equipment costs are reasonable. This criterion is neutral except for Central Florida's purchase of a centrally located site. See Finding of Fact 173. Section 408.035(5), Florida Statutes - The extent to which the proposed services will enhance access to health care for residents of the service district The parties stipulated that the hospitals proposed by the applicants will enhance health care for residents of the Oviedo area. At issue was which hospital project will better enhance such access. Both applicants proposed similar health care services, which are needed in the Oviedo community. As noted elsewhere in this Recommended Order, approval of the Central Florida proposal would afford patients and physicians with another choice of health care provider. It is expected that patients receiving health care services at a Central Florida hospital in Oviedo will be able to access certain tertiary care services (such as open heart surgery) at CFRH, and other tertiary care facilities. On the other hand, the Oviedo HMA proposal does not afford another choice to patients and physicians in the area in any meaningful way, given the current market share of ORHS in the Oviedo area and the expected collaborative effort. This negative is out-weighed by the prospect that patients accessing an Oviedo HMA hospital would be expected to access a full array of tertiary care services at ORHS facilities given the collaborative nature of the relationship. Both proposals would enhance access to health care for residents of the Oviedo area. But the Oviedo HMA project has a significant comparative edge, and it is this edge which ultimately favors approval of the Oviedo HMA project when all statutory and rule criteria are considered. Section 408.035(6), Florida Statutes - The immediate and long-term financial feasibility of the proposals Immediate or Short-term financial feasibility 129. Generally, immediate or short-term financial feasibility refers to the ability of the applicants to fund construction and start up of the proposed project. Each applicant has this ability. Long-term financial feasibility Long-term financial feasibility refers to the ability of the project to break even or show a profit within a reasonable period in the future. There is no AHCA rule that states profitability must be shown within a specific period of years. Generally, applicants project financial feasibility within two years of operation. This may be due, in part, because AHCA requires detailed financial projections, including a statement of the projected revenue and expenses for the first two years of operation after completion of the proposed project. See § 408.037(1)(b)3., Fla. Stat. CON applicants define their financial projections within these general parameters. Where there are two or more competing applicants and one demonstrates financial feasibility within two years and the others do not demonstrate financial feasibility until subsequent years, the competitive advantage often goes to the applicant showing a profit in year two, although AHCA has approved CON applications which projected profitability in later years. OV 69 at 34; CF 84 at 25. The financial projections of each applicant were based upon the hospital utilization projections discussed previously. To the extent the utilization projections were overstated, this would of course effect the financial projections. Each applicant presented evidence to demonstrate the reasonableness of their own financial projections, and offered criticism of the financial projections of the other applicant. A. Oviedo HMA Projections Oviedo HMA projects that it will achieve a net profit in Year 1 of operation of $82,000 (after taxes) and a net profit in Year 2 of $2.4 million (after taxes). The payor mix assumptions in Schedule 7A were derived from existing (historical) discharges generated from the zip codes in the primary service area. Oviedo HMA used three HMA hospitals in Florida, i.e., Brooksville Regional Hospital, Pasco Regional Medical Center (120-bed, excluding newborn nursery, hospital), and Sebastian Hospital, as proxy or target hospitals for the basis of the expense projections in the financial pro formas. (Brooksville and Spring Hill report on a consolidated basis.) Fiscal year 2003 financial data on these proxy hospitals was taken from AHCA Prior Year Actual Reports. See Ov 38. This was the most recent data available to Oviedo HMA's expert at the time the financial portions of the CON application were prepared. These reports are a detailed source of data submitted to AHCA and certified as accurate.11 Each of the three hospitals was profitable for the reporting fiscal year. A hospital's occupancy refers to the average head county divided by the number of days. Average daily census refers to the average number of patients in the facility over the year on average, generally a year. The projected occupancy for the Oviedo facility is 57.9 percent in Year 1 (2008) and 75.1 percent in Year 2 (2009). The average occupancy for the three proxy hospitals was between 55 and 59 percent. Central Florida's expert estimated occupancy levels (for the Oviedo HMA project) of 54 and 69 percent for Years 1 and 2. Compare OV 12, Schedule 5 - Projected Utilization Assumptions with CFRH 25-15. (In Year 2, the occupancy for the Oviedo HMA hospital is projected to be higher than the three proxy hospitals.)12 Central Florida criticized the use of the three proxy hospitals as not appropriate, in part, because one of the hospitals did not include a cardiac catheterization lab, and another did not have an OB program, which are services that will be available at the Oviedo HMA hospital. However, the evidence demonstrates that the three proxy hospitals were reasonable, as these hospitals included one hospital (Pasco Regional Medical Center) which was at the highest end of HMA's cost experience, and two hospitals that were in the middle of HMA's overall cost experience. It does not appear that HMA attempted to choose hospitals with lower- cost experience in an effort to overstate the expected profits. Use of "proxy hospitals" for cost experience is a common methodology, and the hospitals selected appear reasonable. Central Florida also claimed that Oviedo HMA's projected costs were understated because there was not a specific allocation for "fringe benefits" (estimated at 22 percent of salaries) added to the salary costs extrapolated from the FTE and salary projections in Schedule 6.13 Oviedo HMA's financial planner agreed that the financial model he utilized did not make a "straight line" mapping of the Schedule 6 FTEs and salary projections into Schedule 8A statement of expenses. However, an accounting of all salary and wages, as well as fringe benefits, was included in Oviedo HMA's Schedule 8A, based on the actual experience of the three proxy hospitals as reflected in the Prior Year Actual Reports. Each of the proxy hospitals is required to report all of its hospital costs, including salaries and fringe benefits, in the Prior Year Actual Reports, and all costs from these proxy hospitals were included in Oviedo HMA's financial model. Although the Prior Year Actual Reports do not have a specific "fringe benefits" line item, these expenses are included in the reports either under the columns for "salary and wages" or for "other" expenses. All of the costs were carried over into the financial model. The applicant also conducted a reasonableness test when the financial model and Schedule 8A were prepared, by comparing the total salaries and wages from the three proxy hospitals ($15.7 million) versus the extrapolation of total salary and wages from Schedule 6 ($15 million). The amount allocated in the model and placed on Schedule 8A for salaries and wages was more than sufficient to cover all salaries and wages on Schedule 6. Additional allocation for fringe benefits was included within the "other" cost centers in the Prior Year Actual Reports which also carried over to Schedule 8A. Oviedo HMA's expert also conducted a series of other "sensitivity analysis" verifying that the costs included on Schedule 8A for salaries and wages and fringe benefits, and other expenses were reasonable. Central Florida criticized the "sensitivity analysis" claiming one year of inflation for expenses was omitted in the analysis. However, even if accepted as true, applying an inflation adjustment of 3.5 percent for one additional year of expenses, does not materially change any of the sensitivity analysis, because revenues would also have to be inflated forward for the additional year. Further, Oviedo HMA's Schedule 8A included $15.7 million for salary and wage expenses, and included additional costs for fringe benefits in other line items. Central Florida also criticized Oviedo HMA for not including any interest expense to account for financing the proposed project. However, no interest is anticipated, as the project will be funded by the parent company through cash on hand and operating cash flow without borrowing; the company does not charge interest to its affiliates (even though for tax accounting and external audit reports it may impute interest to the affiliates). Moreover, to the extent any interest would be hypothetically imputed to the project as overall corporate overhead, it is captured in the financial pro formas through the management fee which was allocated as an expense in the pro formas. Moreover, even if Central Florida's claims of over $1 million in omitted expenses are accepted as valid, the project is likely to show a profit in the second year of operation. In sum, the financial model utilized by Oviedo HMA was a reasonable approach to financial forecasting. Given the Oviedo HMA's occupancy projections, the hospital is likely to be financially feasible in the long-term and likely show a profit by the second year of operation. B. Central Florida's Projections The revenues and expenses projected for the proposed hospital are based on the experience of CFRH's existing facility, with adjustments made to reflect the service lines and payor mix of the proposed hospital. Based on this record, in the past, it appears that CON applicants for a new hospital generally have projected financial feasibility by the first two or three years of operation. This does not necessarily mean that they have been successful at achieving these projections, only that the projections have been made. Central Florida projected that the proposed hospital, before taxes, will have net income losses before taxes of: $8,978,068 in Year 1; $6,641,454 in Year 2; $3,318,963 in Year 3; and $1,140,062 in Year 4 of operation. In Year 5, Central Florida projects a profit (net income before taxes) of $1,970,340 and a profit (net income after taxes) of $1,162,501 at 75 percent occupancy. CF 12 at Table 8A-2. (Central Florida projected profitable years (Years 1 through 5) on an EBDITA (earnings before depreciation, interest, taxes, and amortization) basis. Id.) Despite the projected losses for the first four years of operation of the project, HCA, by its representatives, considers the project to be financially feasible in the long- term and is committed to the project. The assumptions made for the revenue and expense projections are reasonable, notwithstanding criticisms by Oviedo HMA which have been considered. It is concluded that Central Florida's proposed hospital is likely to be financially feasible in the long-term and by Year 5.14 This criterion is neutral. Section 408.035(7), Florida Statutes - The extent that the proposal will foster competition that promotes quality and cost- effectiveness The greater Orlando area is a competitive market. Nevertheless, Mr. Gregg, for AHCA, stated that he would want to see more diversity in the greater Orlando market. ORHS and Florida Hospital are large health care provider systems. Notwithstanding the potential improvement of the delivery of health care services to the residents of the Oviedo area, the net impact of a 60-bed acute care hospital is going to be minimal when compared to these systems. Currently ORHS, Florida Hospital, and to a much lesser extent CFRH compete for patients from the Oviedo area. ORHS and Florida Hospital are the dominant providers. If Oviedo HMA were sponsoring the project alone, it could be said that approval of its project would bring a new provider to the market. However, this is not the case. Notwithstanding the day-to-day management of the new hospital by Oviedo HMA, the expected collaborative arrangement between Oviedo HMA and ORHS, discussed in Oviedo HMA's CON application and presented as a significant feature at the final hearing, negates the suggestion that Oviedo HMA will be a new provider. This is especially so given the expected referrals to ORHS. Central Florida argues that its proposal would release the strangle-hold of Florida Hospital and ORHS on the greater Orlando area, including the Oviedo area. The presence of Central Florida would give the Oviedo area residents (and physicians) another choice for acute care related health care services and, in time, could be expected to cause a re-direction of patients needing certain tertiary care services away from ORHS and Florida Hospital, to CFRH. Nevertheless, the applicable statutory review criteria specifically states that it applies to competition that promotes "quality" and "cost effectiveness." ORHS and Florida Hospital provide high quality of care. No persuasive evidence was presented that either Oviedo HMA's or Central Florida's proposal will foster competition that will promote quality of care to any significant degree. As to cost-effectiveness, while there is an argument that having additional choices will enhance cost-effectiveness, it was not demonstrated by either applicant in this case. There was no persuasive analysis offered of the current costs of healthcare in the Oviedo area and what impact, if any, the addition of Oviedo HMA or Central Florida would have on those costs. The best that can be said about enhancement in competition is that another provider might have some impact on managed care rates. Without specific detailed analysis, this evidence can be given very little weight. Also, there is insufficient evidence to say which applicant would more likely impact managed care rates. In light of the statutory criterion, Central Florida and Oviedo HMA did not demonstrate that their proposals should be given any advantage under this criterion. Section 408.035(8), Florida Statutes - The costs and methods of proposed construction, including the costs and construction of energy provision and the availability of alternative, less costly, or more effective methods of construction The parties stipulated that each party meets this criterion and that costs are not in dispute in this proceeding. However, each party reserved the right to argue their design was better and the impact of cost on financial feasibility. Central Florida also reserved the right to argue that its proposal should be more favorably reviewed comparatively because it has purchased land in the Oviedo area and because Oviedo HMA cannot purchase enough land in the Oviedo area at the price reflected in the CON Application. Both applicants project reasonable costs and methods of construction and satisfy this criterion. Regarding this criterion, despite some criticism, Central Florida should receive an edge because it has purchased a desirable site, which is centrally located in the Oviedo area. Section 408.035(9), Florida Statutes: Applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent The parties stipulated that HMA's Florida hospitals and Central Florida have historically provided significant health care services to Medicaid patients and the medically indigent. Central Florida proposes to provide 7.8 percent of total patient days to Medicaid patients and 1.74 percent of total patient days to charity patients, as a condition of its CON. By comparison, Oviedo HMA did not propose a specific percentage of patient days dedicated to Medicaid or charity patients. Rather, Oviedo HMA commits to accept all Medicaid and indigent patients that are clinically appropriate for services offered by Oviedo HMA. Central Florida should receive a comparative edge regarding this criterion. Section 408.035(10), Florida Statutes - The applicant's designation as a Gold Seal Program nursing facility pursuant to Section 400.235, Florida Statutes, when the applicant is requesting additional nursing home beds at that facility The parties stipulated that this criterion is not applicable.
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 Oviedo HMA, Inc.'s CON application No. 9807P and denying Central Florida Regional Hospital, Inc. d/b/a Central Florida Regional Hospital's CON application No. 9805. DONE AND ENTERED this 23rd day of August, 2006, in Tallahassee, Leon County, Florida. S CHARLES A. STAMPELOS 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 23rd day of August, 2006.
The Issue Whether the Petitioner must reimburse the Respondent for Medicaid overpayments as set out in the Final Agency Audit Report ("FAAR") dated May 8, 2003.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: At all times material to this proceeding, AHCA has been the state agency charged with responsibility for overseeing the Florida Medicaid system, including the recovery of overpayments to Medicaid providers. § 409.913, Fla. Stat. (1996-2000).1 Dr. Lee was an authorized Medicaid provider during the Audit Period, having been issued provider number 377123700. Dr. Lee had valid Medicaid Provider Agreements with AHCA during the Audit Period. Pursuant to her Medicaid provider agreement, Dr. Lee agreed to: (1) retain for five years complete and accurate medical records "that fully justify and disclose the extent of the services rendered and billings made under the Medicaid program"; (2) bill Medicaid only for services or goods that are medically necessary; and (3) "abide by the Florida Administrative Code, Florida Statutes, policies, procedures, manuals of the Florida Medicaid Program and Federal laws and regulations." AHCA audited the Medicaid claims Dr. Lee submitted for certain specified procedures during the Audit Period. After AHCA issued its Preliminary Agency Audit Report on September 6, 2000, Dr. Lee provided AHCA additional documentation, which was reviewed and which resulted in the issuance of a FAAR dated May 8, 2003, which included an adjustment of the overpayment claimed by AHCA from $131,177.64 to $129,148.49 for services provided between January 1, 1996, and January 9, 1998.2 As a result of adjustments made after issuance of the FAAR on May 8, 2003, AHCA now seeks to recover from Dr. Lee $109,439.77. Dr. Lee is an osteopathic physician who is board- certified in internal medicine by the American Academy of Internal Medicine; three years ago, she earned a sub-specialty in HIV/AIDS medicine from the American Academy of HIV Medicine. During the Audit Period, Dr. Lee specialized in HIV/AIDS, with 85 to 90 percent of her practice devoted to the treatment of patients diagnosed with HIV/AIDS. At the times material to this proceeding, Dr. Lee's offices were located in Ft. Lauderdale, Florida. Joseph W. Shands, M.D., conducted the peer review of the documentation provided by Dr. Lee for purposes of the audit conducted by AHCA. Dr. Shands first reviewed documentation provided by Dr. Lee in 1999; he reviewed additional documentation provided by Dr. Lee subsequent to his deposition in October 2003. Dr. Shands graduated from medical school in 1956, trained in internal medicine, and worked as a microbiologist for approximately 15 years. He served as Chief of Infectious Diseases at the University of Florida for 23 years and also treated patients through the Alachua County Public Health Department and Shands Hospital at the University of Florida. Dr. Shands' practice was devoted almost entirely to the treatment of patients diagnosed with HIV/AIDS. Dr. Shands treated virtually all of the HIV/AIDS patients in Alachua County and the surrounding counties. The area from which Dr. Shands drew his patients is primarily rural, and he has treated approximately 1,000 HIV/AIDS patients. Dr. Shands retired from the practice of medicine in May 2002. For three years prior to his retirement, Dr. Shands practiced medicine part-time. The Medicaid payments sought to be recovered by AHCA for services deemed by Dr. Shands to be medically unnecessary relate primarily to Dr. Lee's use of intravenous immunoglobulin ("IVIG") in the treatment of Patients #4, #5, #6, #7, #9, #13, #15, #16, #21, and #24. All of these patients had been diagnosed with HIV/AIDS prior to the Audit Period, and Dr. Lee prescribed IVIG for these patients based on her diagnoses of either deficiency of humoral immunity ("DHI"), which carries the diagnosis code 279.09, or demyelinating neuropathy, which carries the diagnosis code 357.0. DHI IVIG consists of immunoglobulin precipitated out of human blood and reconstituted for intravenous infusion. IVIG is administered to persons who have low antibodies in an attempt to boost the antibodies in their systems to fight certain diseases, including DHI. There are two immune systems at work in the human body, humoral immunity that is provided by antibodies and cell- mediated immunity that is provided through cells, such as CD4 and CD8 cells. The infusion of IVIG is not covered as a treatment for HIV/AIDS under Florida's Medicaid program because HIV/AIDS compromises a person's cell-mediated immunity by infecting and killing CD4 cells. The use of IVIG to treat properly diagnosed and documented cases of DHI is considered medically necessary and is covered by Florida's Medicaid program. When a person has DHI, the body's antibody-producing cells do not differentiate properly, and the body produces fewer antibodies. As a result, the total level of immunoglobulin, or the level of one or more of the five subclasses of immunoglobulin, is depressed. The infusion of IVIG raises the level of immunoglobulins in the body. A person suffering from DHI must have a history of chronic, severe sinopulmonary infections3 that have persisted over a long period of time and that are so serious that pulmonary function becomes insufficient and death would result without treatment. Even though a person's medical history and symptoms are relevant to a diagnosis of DHI, a confirmed diagnosis of DHI requires documentation of a deficiency in the total level of immunoglobulin in the body or a deficiency in at least one of the five subclasses of immunoglobulin, which are known as IgG, IgM, IgA, IgF, and IgD. Such a deficiency is established by a blood test that measures the total immunoglobulin level in the body, as well as the level of immunoglobulin in the five subclasses. This test was available during the Audit Period and was covered by Florida's Medicaid program. Dr. Lee diagnosed DHI in her patients by relying solely on her training, experience, and diagnostic abilities as a physician. She considered the patient's history of recurring sinopulmonary infections, the results of previous treatment with IVIG, and the status of the patient's CD4 cells as shown by a blood test.4 She did not order tests for any of her patients to determine the level of their total immunoglobulin or the level of the five subclasses of immunoglobulin because she believed that the tests were too expensive. In diagnosing sinusitis, Dr. Lee considered the patient's symptoms and the results of her physical examinations of a patient. Symptoms of sinus congestion, facial pain, and nasal drip do not, however, support a diagnosis of sinusitis; a diagnosis of acute, chronic sinusitis requires that the patient have a chronically stuffy nose with purulent drainage, sinus tenderness, and, perhaps, a high fever. If a patient exhibits these symptoms, the diagnosis could be confirmed with an X-ray of the sinuses, although the test that most accurately established the presence of sinusitis during the Audit Period was a CT scan of the sinuses. In addition, even an appropriate diagnosis of acute, chronic sinusitis does not support a diagnosis of DHI. Acute, chronic sinusitis must be accompanied by severe, chronic pulmonary infections such as frequent episodes of bronchitis, the presence of sputum containing puss, fevers, and occasional episodes of pneumonia. In reviewing Dr. Lee's medical records to evaluate the medical necessity for IVIG treatments for patients diagnosed by Dr. Lee with DHI, Dr. Shands looked first at the patient's symptoms and the results of a physical examination that would show the presence of acute, chronic sinopulmonary infections; he then looked for the results of laboratory tests that would confirm that the patient had a deficiency in total immunoglobulin or a deficiency in one or more of the five subclasses of immunoglobulin. Demyelinating neuropathy Demyelinating neuropathy is a neurological condition in which the peripheral nerves fail to conduct electrical pulses in a normal fashion due to the deterioration or loss of the myelin sheath surrounding the peripheral nerves. General neuropathy, that is, a disruption in the peripheral nervous system, does not respond to IVIG; but neuropathy which involves demyelination, or the loss of the myelin sheath, improves with IVIG treatments, and the use of IVIG to treat properly diagnosed and documented cases of DHI is considered medically necessary and is covered by Florida's Medicaid program. Demyelinating neuropathy is characterized by ascending motor weakness and decreased reflexes. There are several types of neuropathy in addition to demyelinating neuropathy, including sensory neuropathy, which does not respond to treatment with IVIG, and Guillain-Barre, a rare autoimmune neuropathy producing paralysis that starts in the feet and moves up the body, which does respond to treatment with IVIG. Back pain or pain in the legs does not, of itself, support a diagnosis of demyelinating neuropathy, and the neuropathy must be severe in order to support a diagnosis of demyelinating neuropathy. Medical necessity for IVIG treatments Patient #4 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #4 for DHI on September 24, 1997. As a result of the audit, AHCA denied Dr. Lee's Medicaid claims for the IVIG treatment. At the times material to this proceeding, Patient #4 was a 38-year-old man suffering from HIV/AIDS. The medical records provided by Dr. Lee's office cover the period from May 20, 1997, to September 25, 1997, and show that Patient #4's first visit to Dr. Lee's office during the Audit Period was a scheduled visit on May 20, 1997. Although Dr. Lee stated in the medical records of this visit that Patient #4 "denie[d] any recent fevers. Pt state[d] sinus congestion cleared up on Friday - therefore, he didn't need to take Biaxin," Dr. Lee noted in the record that Patient #4 was "complaining once again of sinus congestion, fevers, cough with yellow sputum." The record of the examination of Patient #4's nose indicates "nasal mucosa moist, errythematous [sic], edematous turbinates"5; the record of the examination of Patient #4's lungs indicates "breath sounds are clear to auscultation bilaterally, no rales or rhonchi." In addition to Patient #4's diagnosis of HIV/AIDS, Dr. Lee diagnosed Patient #4 on May 20, 1997, as having acute sinusitis, chronic sinusitis, and DHI, and she noted that "[t]his patient needs IVIG. Sinus infections resolved with increased immunoglobulins by infusion when given in past. Insurance however, refuses to supply this med to the patient. Will continue to treat infections on a PRN basis." Dr. Lee prescribed Rocephin and Biaxin, two antibiotics, for Patient #4 on May 20, 1997. There is no indication in the record of the May 20, 1997, visit that Patient #4 had any pulmonary infection, and there is nothing in the medical records provided to support the notation that IVIG treatments had resolved previous sinus infections. At his scheduled office visit on June 12, 1997, Patient #4 reported sinus congestion and nasal scabbing; Dr. Lee's physical examination of Patient #4's nose again revealed that his "nasal mucosa [were] moist, [with] errythematous [sic], edematous turbinates." The examination of the lungs again did not reveal any abnormalities. On June 17, 1997, Patient #4 visited Dr. Lee's office for a sick visit, reporting "general malaise with diarrhea, night sweats, productive cough." The examination of the nose and lungs did not reveal any abnormalities. On June 26, 1997, Patient #4 visited Dr. Lee's office and complained of boils under both arms. Dr. Lee's physical examination of Patient #4's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the examination of the lungs again revealed no abnormalities. Patient #4 next visited Dr. Lee's office on September 15, 1997, for a sick visit. Among other complaints, Patient #4 reported that he "is still suffering with chronic sinusitis with increase noted this past week of congestion and post nasal drip. Also noted to be small amount of bleeding from nose." Among the symptoms noted for Patient #4 were "sinus congestion severe, increase in nasal discharge, epistaxis occasionally. . . . Denies fevers or chills." The report of Dr. Lee's physical examination of Patient #4's nose indicated "nasal mucosa moist, extremely errythematous [sic], edematous turbinates, increased nasal discharge, tenacious and greenish"; the examination of the lungs again revealed no abnormalities. Dr. Lee noted on the record of Patient #4's September 15, 1997, office visit that she would "schedule for IVIG monthly." Patient #4 visited Dr. Lee's office on September 24 and 25, 1997, for the infusion of IVIG, but Dr. Lee submitted a Medicaid claim for the IVIG infusion only for September 24, 1997. The diagnoses noted for these visits were DHI and HIV/AIDS. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #4 that tests were done to measure the level of Patient #4's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee for Patient #4 do not support Dr. Lee's diagnosis that Patient #4 suffered from DHI. Although the medical records substantiate that Patient #4 had recurrent sinus infections, there was no evidence establishing that Patient #4 had bronchitis or any pulmonary infections; rather, Patient #4's lungs were clear at each of the documented visits to Dr. Lee's office. Dr. Lee testified that she had seen Patient #4 prior to the time covered by the Audit Period and that his history included chronic, recurrent sinus infections and chronic bronchitis. Dr. Lee did not provide documentation of Patient #4's history in the medical records provided by her office, and her testimony is not sufficient, standing alone, to establish that Patient #4 suffered from the severe, chronic sinopulmonary infections necessary to support a diagnosis of DHI. The medical records provided by Dr. Lee fail to support her diagnosis of DHI and, therefore, fail to establish that the infusion of IVIG was medically necessary. The claim submitted to Medicaid for the IVIG infusion given on September 24, 1997, should be denied. Patient #5 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #5 for demyelinating neuropathy and DHI on April 17, 1997, April 18, 1997, and June 11, 1997. As a result of the audit, AHCA denied Dr. Lee's Medicaid claims for these three IVIG infusions. At the times material to this proceeding, Patient #5 was a 31-year-old man suffering from HIV/AIDS. The medical records provided by Dr. Lee cover the period from February 19, 1997, to June 11, 1997, and show that Patient #5's first visit to her office during the Audit Period was a post-hospitalization visit on April 14, 1997. The medical records provided by Dr. Lee do not support a diagnosis of DHI. Patient #5 visited Dr. Lee's office for examination on April 14, 1997, and June 3, 1997. Patient #5 did not complain at either of these visits of a sinopulmonary infection, and the results of the physical examinations of Patient #5's nose and lungs performed during these visits did not reveal any abnormalities: The reports of the examinations of Patient #5's nose indicated that "nasal mucosa moist, normal turbinates," and the reports of the examinations of Patient #5's lungs indicated that "breath sounds are clear to auscultation bilaterally, no rales or rhonchi." In addition, the only dates on which a diagnosis of DHI appeared in Dr. Lee's medical records for Patient #5 were April 17, April 18, and June 11, 1997, the dates on which Patient #5 received infusions of IVIG. The medical records provided by Dr. Lee also fail to support a diagnosis of demyelinating neuropathy. Dr. Mayur Maniar performed a lower extremity nerve conduction study on February 19, 1997, almost two months before Patient #5's first reported visit to Dr. Lee. Dr. Maniar's report contains the following: "IMPRESSION: This is mildly abnormal nerve conduction study of lower extremities, which demonstrates mild sensorimotor, predominately demyelinating type of peripheral neuropathy in lower extremities. Please correlate clinically." The medical records provided by Dr. Lee do not include anything to indicate that a neurological study of Patient #5 was performed. There is no indication in the medical records provided by Dr. Lee documenting Patient #5's April 14, 1997, office visit that Patient #5 complained of weakness in his extremities, and no weakness was noted in Dr. Lee's physical examination performed by Dr. Lee during that office visit. The next two office visits, on April 17, 1997, and on April 18, 1997, were exclusively for the infusion of IVIG. Patient #5 reported at his scheduled office visit on June 3, 1997, that, among other things, that he was experiencing "fatigue, generalized weakness and 'tingling' over all body." Dr. Lee noted that Patient #5's "[n]europathy persists, slight short term improvement with rehab. Will receive second dose of IVIG this month." Patient #5's next visit to Dr. Lee's office, on June 11, 1997, was exclusively for the infusion of IVIG. The medical records she provided to AHCA do not support Dr. Lee's testimony that Patient #5 had "severe profound neuropathy with weakness," and her testimony, standing alone, is not sufficient to establish that Patient #5 suffered from the severe demyelinating neuropathy that responds to IVIG treatment. The medical records provided by Dr. Lee establish only that Patient #5 suffered from mild demyelinating neuropathy. The records, therefore, fail to establish that the infusion of IVIG was medically necessary, and the claims to Medicaid for the IVIG infusions given on April 17 and 18, 1997, and June 11, 1997, should be denied. Patient #6 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #6 for DHI on January 20 and 21, 1997; February 24 and 25, 1997; March 24 and 25, 1997; and April 22 and 23, 1997. As a result of the audit, AHCA denied Dr. Lee's Medicaid claims for these eight IVIG infusions. Dr. Lee's first contact with Patient #6 was on June 5, 1996, when she was asked by another physician to consult as a HIV/AIDS specialist. There is nothing in the record of this consultation to support Dr. Lee's contention that Patient #6 suffered from chronic, recurrent sinusitis and had been previously treated with IVIG. Rather, Dr. Lee noted in the record of the June 5, 1996, consultation that "the patient has had essentially no medical care. He moved from Tennessee in December and had been doing well until then." There is also nothing in the medical records provided by Dr. Lee to confirm that Patient #6 had previously been treated for chronic sinusitis. Patient #6 saw Dr. Lee in her office for a scheduled visit on January 13, 1997. Patient #6 did not complain of sinus or pulmonary problems; the report of Dr. Lee's physical examination of Patient #6's nose and lungs did not reveal any abnormalities. Dr. Lee's diagnoses for the January 13, 1997, office visit did not include DHI or chronic sinusitis. Patient #6 was treated with IVIG on January 20, 1997, with diagnoses that included DHI; Patient #6 was treated with IVIG on January 21, 1997, and the diagnoses for that visit included DHI and both chronic and acute sinusitis. Patient #6 visited Dr. Lee's office on January 27, 1997, with complaints of, among other things, "sinus, nose bleed," and the complaint that "sinus congestion persists." Dr. Lee's physical examination of Patient #6's nose and lungs did not reveal any abnormalities. The diagnoses for the January 27, 1997, office visit included DHI and both chronic and acute sinusitis. Dr. Lee wrote in the record of Patient #6's January 27, 1997, office visit that she would "continue IVIG monthly." Patient #6 visited Dr. Lee's office on February 6, 1997, but the medical records for that visit do not indicate that Patient #6 complained of sinus or pulmonary problems. Dr. Lee's physical examination did not include an examination of Patient #6's nose, but her examination of his lungs did not show any abnormalities. On February 24, 1997, Patient #6 visited Dr. Lee's office for both a physician visit and the infusion of IVIG. Patient #6 complained of "some sinus congestion," and Dr. Lee's physical examination of Patient #6's nose revealed moist nasal mucosa, with erythematous, edematous turbinates. Dr. Lee's physical examination of the lungs did not show any abnormalities. In addition to the physician visit with Dr. Lee, Patient #6 was treated with IVIG on February 24, 1997, with diagnoses that included DHI and chronic sinusitis; Patient #6 was also treated with IVIG on February 25, 1997, with diagnoses that included DHI and chronic sinusitis. Patient #6's next visit to her office was on March 24, 1997, and was solely for infusion of IVIG, with diagnoses that included DHI. On March 25, 1997, Patient #6 visited Dr. Lee's office for a physician visit and for the second infusion of IVIG for the month. Patient #6 reported that his "sinuses [were] better 'already' since IVIG." Dr. Lee's physical examination of Patient #6's nose on March 25, 1997, indicated that he had moist nasal mucosa, with "slightly edematous turbinates"; the examination of Patient #6's lungs did not show any abnormalities. Patient #6 visited Dr. Lee's office on April 1, 11, and 17, 1997. Patient #6 did not complain of any problems with his sinuses or lungs, and no examination was done of Patient #6's nose or lungs on April 1, 1997. Dr. Lee's physical examination of Patient #6's lungs on April 11, 1997, did not reveal any abnormalities; there is no record that Dr. Lee examined Patient #6's nose during the April 11, 1997, office visit. Dr. Lee's physical examination of Patient #6's nose and lungs on April 17, 1997, did not reveal any abnormalities. Patient #6 next visited Dr. Lee's office on April 21, 1997, solely to receive an infusion of IVIG. The nurse was unable to obtain access to Patient #6's vein, and he returned to the office on April 22, 1997, for a physician visit and for the infusion of IVIG. Patient #6 did not complain of any sinopulmonary problems on April 22, 1997, and Dr. Lee's physical examination of Patient #6's nose and lungs did not reveal any abnormalities. IVIG was administered on April 22, 1997, and the following note was included in the record of the April 22, 1997, visit: "IVIG for chronic sinusitis and decreased humoral immunity." Patient #6 returned to Dr. Lee's office on April 23, 1997, solely for the infusion of IVIG. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #6 that tests were done to measure the level of Patient #6's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office for Patient #6 do not support her diagnosis of DHI. A diagnosis of DHI requires severe, chronic sinopulmonary infections, together with a deficiency in total immunoglobulins or in a subset of immunoglobulins. Dr. Lee did not test Patient #6's total immunoglobulin level or the level of any of the five subclasses of immunoglobulin, and he complained of sinus problems at only two office visits, on January 27, 1997, six days after he received IVIG, and on February 24, 1997, when he complained of "some sinus congestion."6 Additionally, there is nothing in the medical records provided by Dr. Lee to support her testimony that Patient #6's history prior to her treatment of him included chronic recurrent signs of sinus infection or that previous treatment with IVIG had improved his sinus infections. The medical records provided by Dr. Lee, therefore, fail to establish that the infusion of IVIG was medically necessary. The claims to Medicaid for the IVIG infusions given on January 20 and 21, 1997; February 24 and 25, 1997; March 24 and 25, 1997; and April 22 and 23, 1997, should be denied. Patient #7 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #7 for DHI on August 5 and 6, 1997; September 2 and 3, 1997; September 30 and October 1, 1997; and January 8 and 9, 1998. As a result of the audit, AHCA denied the Medicaid claims for these eight IVIG infusions. At the times material to this proceeding, Patient #7 was a 43-year-old man diagnosed with HIV/AIDS. According to the medical records provided by Dr. Lee's office, Patient #7's first office visit of the Audit Period was July 22, 1997. Patient #7 complained of "some cough, but is smoking more." Dr. Lee's physical examination of Patient #7's nose revealed moist nasal mucosa, with "pale, errythematous [sic] turbinates"; the examination of the lungs revealed no abnormalities. Patient #7 next visited Dr. Lee's office on August 4, 1997, when he complained of worsening sinus congestion but denied having fevers. Dr. Lee's physical examination of Patient #7's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the physical examination of his lungs revealed no abnormalities. Dr. Lee noted in the medical record that she would "start IVIG monthly," and she included diagnoses of chronic sinusitis and DHI. Dr. Lee's office did not provide any medical records documenting Patient #7's August 5, 1997, office visit or the IVIG treatment for which she claimed payment from Medicaid. Patient #7 visited Dr. Lee's office on August 6, 1997, solely for an IVIG infusion. Patient #7's next visits to Dr. Lee's office were on September 2 and 3, 1997. On September 2, 1997, Patient #7 visited Dr. Lee's office for a physician office visit and the infusion of IVIG. Patient #7 reported that his "sinuses are better"; that he was "using saline nasal spray with good results"; and that he had no fevers. Dr. Lee's examination of Patient #7's nose and lungs did not reveal any abnormalities. Dr. Lee's diagnoses included chronic sinusitis and DHI. On September 3, 1997, the only service was the infusion of IVIG, and DHI was among the diagnoses noted in the medical records. Patient #7 next visited Dr. Lee's office on September 30, 1997, to receive an infusion of IVIG, and he was also examined by Dr. Lee. Patient #7 reported "great improvement in sinus congestion since start of IVIG"; Patient #7 denied having any fevers or headaches. Dr. Lee's physical examination of Patient #7's nose and lungs did not reveal any abnormalities, and her diagnoses included DHI and acute sinusitis. Patient #7 returned to Dr. Lee's office on October 1, 1997, solely for the infusion of IVIG; no diagnosis was included in the medical record of this visit. Patient #7 visited Dr. Lee's office on October 28, 1997, for a scheduled visit. He was to receive an infusion of IVIG, but this was not possible, according to Dr. Lee's notes, because of a shortage of the drug. Patient #7 reported "increased sinus congestion for past week." Dr. Lee's physical examination of Patient #7's nose revealed erythematous turbinates; the physical examination of his lungs revealed no abnormalities. Patient #7's next visit to Dr. Lee's office was a follow-up visit on November 11, 1997. Patient #7 reported no major complaints, and Dr. Lee's physical examination of his nose and lungs did not reveal any abnormalities. Neither sinusitis nor DHI was included among the diagnoses. Patient #7 also visited Dr. Lee's office on November 25, 1997, for infusion of "W/B complex." On December 9, 1997, Patient #7 visited Dr. Lee's office for a scheduled visit. He did not complain of sinus problems and denied having any fevers. Dr. Lee's physical examination of his nose and lungs did not reveal any abnormalities. On December 11 and 12, 1997, Patient #7 received only IVIG infusions at Dr. Lee's office; the diagnoses included DHI and chronic and acute sinusitis. Patient #7 also visited Dr. Lee's office on January 8, 1998, solely to receive an infusion of IVIG; the diagnoses for this visit included DHI and chronic and acute sinusitis. On January 9, 1998, Patient #7 visited Dr. Lee's office for a physician's visit and for the infusion of IVIG. The medical records reflect that Patient #7 had been hospitalized on December 23, 1997, "after an acute anterior wall mi[ocardial infarction]" and that he had developed chest pain after increasing his dosage of Zyban. Patient #7 voiced no complaints about his sinuses or lungs during this visit, and Dr. Lee's physical examination of Patient #7's nose and lungs did not reveal any abnormalities. IVIG was infused on January 9, 1998, and the diagnoses included DHI. Dr. Lee also provided medical records documenting Patient #7's office visits prior to the Audit Period to support her diagnosis of DHI: In December 1994, Patient #7 was diagnosed with sinusitis and severe bronchitis, though he denied having fevers; in June 1995, Patient #7 reported no complaints; in September 1995, Patient #7 reported that he had severe pain in his feet and hands, that a physical examination revealed that his "nasal mucosa [was] errythematous [sic], [and] slightly edematous" and that his lungs were clear; in November 1995, Patient #7 reported nasal discharge, and Dr. Lee noted that Patient #7 had chronic sinusitis "resolving with Becanase AQ spray"; in December 1995, Patient #7 reported intermittent sinus congestion but no fevers, and Dr. Lee noted that he had "[c]hronic sinusitis treated with Vancanase." There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #7 that tests were done to measure the level of Patient #7's total immunoglobulin or the level of any of the subclasses of immunoglobulin. Dr. Lee's testimony that she diagnosed Patient #7 with DHI because of his recurrent, chronic sinusitis is not supported by the information in Patient #7's medical records. First, the medical records for office visits and treatments during the Audit Period establish that Patient #7 complained only a few times of sinus congestion that responded well to other, traditional, treatments both before and after Dr. Lee began treating Patient #7 with IVIG infusions. Furthermore, except for the reported bronchitis in December 1994, there is no indication in the medical records that Patient #7 complained of or suffered from any pulmonary infections; all of the physical examinations of Patient #7's lungs done both before and during the Audit Period revealed no abnormalities. Finally, Dr. Lee testified that she based her diagnosis of DHI partly on Patient #7's complaints of headaches, but the only mention of headaches in the medical records is in the record of Patient #7's September 30, 1997, office visit, in which he denied having headaches. The medical records provided by Dr. Lee's office fail to support Dr. Lee's diagnosis of DHI and, therefore, fail to establish that the treatment of Patient #7 with IVIG infusions was medically necessary. The claims to Medicaid for the IVIG infusions given on August 5 and 6, 1997; September 2 and 3, 1997; September 30 and October 1, 1997; and January 8 and 9, 1998, should be denied. Patient #9 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #9 for DHI on July 16 and 17, 1996; August 14 and 15, 1996; September 16 and 17, 1996; October 10 and 11, 1996; November 6 and 7, 1996; December 4 and 5, 1996; December 26 and 27, 1996; January 16 and 17, 1997; February 10 and 12, 1997; March 10 and 11, 1997; April 7, 1997; June 10 and 11, 1997; July 10 and 11, 1997; September 18 and 19, 1997; and January 7 and 8, 1998.7 As a result of the audit, AHCA denied the Medicaid claims for these 29 IVIG infusions. At the times material to this proceeding, Patient #9 was a 30-year-old man who had been HIV positive since 1984. Dr. Lee first saw Patient #9 on May 1, 1996. In the record of Patient #9's May 1, 1996, office visit, Dr. Lee noted that he had a recent history of fungal pneumonia, which resulted from a deficiency in his cell-mediated immunity caused by HIV/AIDS. Patient #9 reported that he was experiencing some shortness of breath with a cough but no sputum, a recurrent sore throat, and chest congestion. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities, and Patient #9's history, as noted by Dr. Lee, did not include recurrent sinusitis or recurrent pulmonary infections. Dr. Lee diagnosed Patient #9 on May 1, 1996, with HIV/AIDS, gastritis, hypogonadism, weight loss, vitamin B12 deficiency, and fatigue. Patient #9's next office visit was on July 3, 1996, at which time Patient #9 complained of chest congestion with an unproductive cough. Dr. Lee's diagnoses at this office visit were HIV/AIDS and fever. Patient #9's next office visit was on July 15, 1996, at which time he complained of having had a fever above 100 degrees, a cough with blood in the phlegm, and increased sinus drainage. Dr. Lee's physical examination of Patient #9's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; Dr. Lee's physical examination of Patient #9's lungs revealed a scattered respiratory wheeze, but no rales or rhonchi. Dr. Lee diagnosed Patient #9 with bronchitis and chronic sinusitis, and she stated in her treatment plan that she would "start IVIG Q [each] month as soon as possible." Patient #9 visited Dr. Lee's office on July 16 and 17, 1996, solely to receive infusions of IVIG. The diagnoses for these office visits included DHI, bronchitis, and chronic sinusitis. Patient #9 visited Dr. Lee's office on July 18, 1996, complaining of diarrhea, a persistent cough, and a sore throat but no sinus congestion or pulmonary problems. Dr. Lee's physical examination of Patient #9's lungs revealed "slight rhonchi left lung fields. Slight expiratory wheeze"; there is no indication that Patient #9's nose was examined. Dr. Lee saw Patient #9 for a routine office visit on August 1, 1996. Patient #9 reported that he felt fine and had had no fevers. Dr. Lee's physical examination of Patient #9's nose revealed erythematous, edematous turbinates; the examination of his lungs did not reveal any abnormalities. Dr. Lee noted in the medical records of this office visit that Patient #9 needed a full dose of IVIG in 2 weeks for sinusitis. Patient #9 received only infusions of IVIG at the office visits on August 14 and 15, 1996. At his office visit on August 29, 1996, Patient #9 reported no physical complaints, and Dr. Lee's physical examination of his nose and lungs did not reveal any abnormalities. Patient #9 received only infusions of IVIG during the office visits on September 16 and 17, 1996. Dr. Lee examined Patient #9 on September 24, 1996, as a follow-up to surgery to place a port in his chest. He complained of a cough with white sputum, but Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Dr. Lee examined Patient #9 at his October 8, 1996, monthly office visit, and her physical examination of his nose and lungs did not reveal any abnormalities. Nonetheless, Dr. Lee noted that she would continue IVIG monthly. Patient #9 received infusions of IVIG at office visits on October 10 and 11, 1996. On October 29, 1996, Dr. Lee saw Patient #9 at her office for a sick visit and a post-hospital visit. Patient #9 complained of congestion and fevers. Dr. Lee's physical examination of Patient #9's nose revealed moist nasal mucosa, with erythematous turbinates; the physical examination of his lungs did not reveal any abnormalities, although an occasional expiratory wheeze was noted. Dr. Lee's diagnoses included chronic sinusitis and acute sinusitis. Patient #9 returned to Dr. Lee's office on November 6 and 7, 1996, solely to receive infusions of IVIG. Dr. Lee examined Patient #9 on November 19, 1996, and there were no abnormalities of the nose and the lungs noted. Patient #9 was treated with an IVIG and Vitamin C infusions on December 4, 1996; he received no other service. The next office visit documented by the medical records provided by Dr. Lee's office was on July 11, 1997, when Patient #9 visited Dr. Lee's office solely for the infusion of IVIG. Patient #9 also visited Dr. Lee's office on August 14, 1997, for a sick visit, when he reported that he was feeling well but was concerned about his quality of life. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Dr. Lee appended the following note to the record of the office visit of August 14, 1997: "Schedule IVIG as soon as possible in light of worsening bleeding gums and rectal bleeding." Patient #9 visited Dr. Lee's office on August 18 and 19, 1997, and on September 18 and 19, 1997, to receive infusions of IVIG. Dr. Lee also saw Patient #9 on September 19, 1997, when Patient #9 reported that he was feeling fairly well, with no fevers or cough. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. On September 30, 1997, Patient #9 visited Dr. Lee's office to have a molluscum removed from his face. Patient #9 reported that he was feeling well, with no fevers. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. On October 6, 1997, Patient #9 visited Dr. Lee's office for a sick visit. He complained of fever with nasal and chest congestion, sinus congestion for the previous two days, and sneezing clear fluid. Dr. Lee's physical examination of Patient #9's nose revealed moist nasal mucosa, with erythematous turbinates; the physical examination of the lungs did not reveal any abnormalities. Dr. Lee's diagnoses did not include DHI or sinusitis but only HIV/AIDS and "URI." Patient #9 visited Dr. Lee's office on October 16 and 17, 1997, solely for the infusion of IVIG, and the diagnoses for these visits include DHI and chronic and acute sinusitis. Patient #9 visited Dr. Lee's office on October 31, 1997, for a scheduled visit. He reported feeling well, with no fevers; Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Patient #9 visited Dr. Lee's office on December 15, 1997, for a doctor's visit and for the infusion of IVIG. Patient #9 reported a tight feeling in his chest with a sore throat and a dry cough for the previous six days. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Patient #9 visited Dr. Lee's office on December 30, 1997, for a "laboratory review." He complained of joint and muscle aches and burning on urination. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. Patient #9 visited Dr. Lee's office on January 7 and 8, 1998, for the infusion of IVIG. Dr. Lee also examined Patient #9 on January 8, 1998, at which time he reported that he was feeling fairly well but had esophageal pain. Dr. Lee's physical examination of Patient #9's nose and lungs did not reveal any abnormalities. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #9 that tests were done to measure the level of Patient #9's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee do not support her testimony that she prescribed IVIG for Patient #9 because of recurrent sinusitis and bronchitis. Dr. Lee formulated the plan to treat Patient #9 with monthly infusions of IVIG on July 15, 1996, at the time of his third office visit. At that visit, Dr. Lee observed that Patient #9 had a productive cough with flecks of blood and increased sinus drainage, but there is nothing in the records of his May 1, 1996, or July 3, 1996, office visits to indicate that he had sinusitis or bronchitis or anything more than one episode of fungal pneumonia unrelated to DHI. Most of Dr. Lee's physical examinations revealed no abnormalities in Patient #9's nose and lungs, and, contrary to Dr. Lee's testimony, there is nothing in Patient #9's medical records to establish that Patient #9 had a history of recurrent purulent drainage, bloody nose, congestion, or bronchitis. Rather, the medical records for Patient #9 indicate that he was in the advanced stage of AIDS at the time of his first visit to Dr. Lee and that he suffered from numerous infections related to a deficiency of cell-mediated immunity; that he complained of congestion periodically and had a non-productive cough from time to time; that he occasionally had erythematous, edematous nasal turbinates; and that, at a few office visits, Dr. Lee's physical examinations revealed an occasional respiratory wheeze in the lungs. These symptoms are not sufficient to support a diagnosis of DHI, and, therefore, the medical records provided by Dr. Lee's office fail to establish that the infusion of IVIG was medically necessary.8 The claims to Medicaid for the IVIG infusions given on July 16 and 17, 1996; August 14 and 15, 1996; September 16 and 17, 1996; October 10 and 11, 1996; November 6 and 7, 1996; December 4, 1996; June 11, 1997; July 11, 1997; September 18 and 19, 1997; and January 7 and 8, 1998, should be denied because the treatments were not medically necessary. Dr. Lee also submitted claims to Medicaid for infusions of IVIG that purportedly were done on December 5, 1996; December 26 and 27, 1996; January 16 and 17, 1997; February 10 and 12, 1997; April 7, 1997; June 10, 1997; and July 10, 1997. Dr. Lee's office did not provide any medical records to document that IVIG was infused on these dates. Accordingly, Dr. Lee is not entitled to payment for the infusion of IVIG on these dates because of this lack of documentation.9 Patient #13 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #13 for DHI on August 22 and 23, 1996; September 16 and 17, 1996; October 28 and 29, 1996; November 26 and 27, 1996; January 6 and 7, 1997; February 6 and 7, 1997; March 14, 1997; April 8 and 11, 1997; May 12 and 15, 1997; June 10, 1997; July 8 and 9, 1997; August 12 and 13, 1997; and September 10, 1997.10 As a result of the audit, AHCA denied the Medicaid claims for these 23 IVIG infusions. At the times material to this proceeding, Patient #13 was a 39-year-old man who had been diagnosed with HIV/AIDS. The medical records provided by Dr. Lee's office show that Dr. Lee first examined Patient #13 during an office visit on July 26, 1996, when Patient #13 complained of severe fatigue and mild headaches. Dr. Lee's physical examination of Patient #13's nose and lungs did not reveal any abnormalities. Not including the office visits during which Patient #13 received only infusions of IVIG, Patient #13 visited Dr. Lee's office and was examined on August 2 and 20, 1996; September 5 and 24, 1996; October 1 and 24, 1996; November 12, 19, and 26, 1996; December 9, 1996; January 24 and 27, 1997; February 6, 11, and 25, 1997; March 25, 1997; April 15 and 29, 1997; May 20, 1997; June 3 and 24, 1997; July 22, 28, and 31, 1997; August 14 and 18, 1997; September 15 and 29, 1997; October 13, 1997; and November 6 and 20, 1997. On September 24, 1996, Patient #13 complained of headaches, fullness in his ears, and a cough with yellow sputum. On November 12, 1996, Patient #13 complained of an increase in post-nasal drip. On November 26, 1996, Patient #13 reported that he had a cold, with no fever or chills. On February 6, 1997, Patient #13 advised Dr. Lee that he was going to an ear, nose, and throat specialist for hearing tests. On February 25, 1997, Patient #13 reported that he had "sinus symptoms" before his monthly IVIG infusion that were resolved after the second infusion. On July 28 1997, Patient #13 was diagnosed and treated for an infection around the port inserted into his chest; he was also treated on July 31, 1997, and on August 14 and 18, 1997, for the chest-port infection, and the chest port was flushed on September 29, 1997. Dr. Lee's physical examinations of Patient #13's nose on September 24, 1996, and on November 26, 1996, revealed moist nasal mucosa with erythematous turbinates; the physical examinations of Patient #13's lungs on these dates did not reveal any abnormalities. Dr. Lee's physical examinations of Patient #13's nose and lungs conducted at all of the other office visits revealed no abnormalities. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #13 that tests were done to measure the level of Patient #13's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office do not support her diagnosis that Patient #13 suffered from DHI. None of Dr. Lee's examinations of Patient #13's lungs indicated that that she found any abnormalities, and her physical examinations of Patient #13's nose revealed no abnormalities except on September 24, 1996, and on November 11, 1996, when Dr. Lee found that Patient #13 had erythematous turbinates. Although the medical records do establish that Patient #13 had recurrent infections and extremely low T-cell levels, a diagnosis of DHI must be supported by severe, chronic sinopulmonary infections and low levels of total immunoglobulin or of any of the five subclasses of immunoglobulins. The symptoms and complaints reported by Dr. Lee are not sufficient to support Dr. Lee's diagnosis that Patient #13 suffered from DHI, and, therefore, the medical records provided by Dr. Lee's office fail to establish that the infusion of IVIG was medically necessary. The claims to Medicaid for the IVIG infusions given on August 22 and 23, 1996; September 16 and 17, 1996; October 28 and 29, 1996; November 26 and 27, 1996; January 6 and 7, 1997; February 6 and 7, 1997; March 14, 1997; April 8 and 11, 1997; May 12 and 15, 1997; June 10, 1997; July 8 and 9, 1997; August 12 and 13, 1997; and September 10, 1997, should be denied. The records provided to AHCA include a claim that was submitted to Medicaid for an infusion of IVIG that was purportedly done on June 9, 1997. Dr. Lee's office did not provide any medical records to document that Patient #13 received an infusion of IVIG on this date, and, accordingly, Dr. Lee is not entitled to payment for an infusion of IVIG on June 9, 1997. Patient #15 According to the medical records provided by her office, Dr. Lee treated Patient #15 with IVIG for DHI on February 27 and 28, 1997. As a result of the audit, AHCA denied the Medicaid claims for these 2 IVIG infusions. At the times material to this proceeding, Patient #15 was a 39-year-old female who had been HIV positive since 1991. The medical records provided by Dr. Lee's office establish that Dr. Lee examined Patient #15 once, on January 7, 1997. At that visit, Patient #15 complained of headaches associated with sinus congestion and shortness of breath, which were relieved with nasal steroids. Patient #15 denied that she had fevers, a cough, or sputum production. Dr. Lee's physical examination of Patient #15's nose revealed moist nasal mucosa, with erythematous, edematous turbinates. Dr. Lee's physical examination of Patient #15's lungs revealed no abnormalities. Patient #15 provided Dr. Lee with a history at the January 7, 1997, office visit that included chronic "sinusitis with headaches," but there is no documentation to support this history. Dr. Lee did not include a diagnosis of DHI, but she did recommend treatment for Patient #15 with IVIG "for chronic sinusitis and DHI." Dr. Lee submitted claims to Medicaid for the treatment of Patient #15 with infusions of IVIG on February 27 and 28, 1997, but Dr. Lee's office did not produce any medical records to establish that Patient #15 actually received the infusions. Accordingly, Dr. Lee is not entitled to payment for the infusions of IVIG on these dates. Patient #16 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #16 for DHI on September 3 and 4, 1996; October 2 and 3, 1996; November 4 and 5, 1996; December 9 and 10, 1996; January 7, 1997; February 10 and 11, 1997; and March 17, 1997.11. As a result of the audit, AHCA denied the Medicaid claims for these 12 IVIG infusions. At the times material to this proceeding, Patient #16 was a 35-year-old male who had been HIV positive since 1989. According to notes made by Dr. Lee, she first saw Patient #16 in February 1995, and the first office visit documented by the medical records provided by Dr. Lee's office was on February 9, 1995, which is not within the Audit Period. In the record of that visit, Dr. Lee noted no past history of sinopulmonary infections, and her physical examination of Patient #16's nose and lungs revealed no abnormalities.12 At an office visit on November 27, 1995, Patient #16 complained of "cough, greenish sputum, increased congestion in the sinus region and sinus headaches," but he reported only a low-grade fever. Dr. Lee's physical examination of Patient #16's nose revealed that his nasal mucosa were moist but extremely erythematous and edematous and that there was a "slight increase in nasal discharge"; Dr. Lee's physical examination of Patient #16's lungs revealed that the "[l]ung sounds are clear to auscultation with some scattered faint rhonchi." Sinusitis was included among Dr. Lee's diagnoses, and she prescribed the antibiotic Biaxin, to be taken for 10 days. Patient #16 visited Dr. Lee's office on December 12, 1995. He complained of increased nasal discharge that was clear, and Dr. Lee's physical examination of Patient #16's nose revealed erythematous nasal mucosa, with a "slight increase in post nasal discharge which is clear." Dr. Lee's physical examination of Patient #16's lungs revealed no abnormalities. Dr. Lee's diagnoses included "[m]ild sinusitis, noninfective. Probably allergic rhinitis," and she prescribed Claritin D. Patient #16 visited Dr. Lee's office on January 8, 1996, which is the first documented office visit of the Audit Period. Although Patient #16 did not complain of sinus problems, Dr. Lee's physical examination of Patient #16's nose revealed erythematous nasal mucosa; the physical examination of Patient #16's lungs revealed that they were "clear to auscultation." An X-ray taken on January 9, 1996, indicated that Patient #16's lungs were clear, and a CT scan of Patient #16's head taken the same day was normal. At an office visit on January 15, 1996, Patient #16 complained of a clogged feeling in his ears and increased sinus congestion. Dr. Lee's physical examination of Patient #16's nose revealed that the "[n]asal mucosa is erythematous with edematous turbinates"; the lungs were "clear to auscultation." Dr. Lee's diagnoses on January 8, 1996, did not include sinusitis, but the diagnoses on January 15, 1996, included chronic sinusitis. Dr. Lee examined Patient #16 on February 26, 1996, and on March 18, 1996. Patient #16 did not complain of any sinopulmonary problems at these office visits, and Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. On April 19, 1996, Dr. Lee completed a form in which she identified Patient #16's diagnoses as including chronic sinusitis, reported that his medical history included chronic sinusitis and DHI, and indicated that Patient #16's treatment included IVIG "once a month." Patient #16 received infusions of IVIG at Dr. Lee's office on June 11 and 12, 1996, but Patient #16 furnished the IVIG, and Dr. Lee did not submit claims to Medicaid for these infusions. Patient #16 visited Dr. Lee's office on June 17, 1996, and reported that his sinuses were "less bothersome" since IVIG treatments had been "restarted." Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities; Dr. Lee's diagnoses did not include sinusitis or DHI. Patient #16 received infusions of IVIG at Dr. Lee's office on July 8 and 9, 1996, and on August 5 and 6, 1996, but Dr. Lee did not submit claims to Medicaid for these infusions. Dr. Lee also examined Patient #16 on August 6, 1996, and he complained of a sore throat and fever but no cough. Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. Patient #16 received infusions of IVIG at Dr. Lee's office on September 3 and 4, 1996. During the September 3, 1996, office visit, Dr. Lee also examined Patient #16. Patient #16 had no complaints about his sinuses, and the report of a chest X-ray taken that day revealed that Patient #16's lungs and pleural spaces were clear. Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. At office visits on September 9 and 24, 1996, Patient #16 had no complaints about his sinuses, and Dr. Lee's physical examinations of Patient #16's nose and lungs revealed no abnormalities. Dr. Lee noted in the treatment plan developed September 24, 1996, that she would "continue IVIG monthly for chronic sinus complaints." Patient #16 received infusions of IVIG at Dr. Lee's office on October 2 and 3, 1996; November 4 and 5, 1996; and December 9 and 10, 1996. Dr. Lee examined Patient #16's nose and lungs on October 3, 1996; November 8, 1996, November 22, 1996; and December 10, 1996. Even though Patient #16 did not complain of sinus problems during the November 22, 1996, office visit, Dr. Lee noted that she would continue to treat Patient #16 with IVIG monthly, but Dr. Lee did not include in the diagnoses for that visit a diagnosis of sinusitis or of DHI. The physical examinations performed by Dr. Lee on all but one of these office visits revealed no abnormalities. During the December 10, 1996, office visit, Patient #16 complained of some increase in sinus pressure with ringing in his ears; Dr. Lee's physical examination revealed that Patient #16's nose had "moist nasal mucosa with erythematous turbinates" and increased nasal discharge that was yellowish- green in color. Dr. Lee's physical examination of his lungs revealed no abnormalities. Dr. Lee submitted claims to Medicaid for IVIG infusions given to Patient #16 on January 7, 1997; February 10 and 11, 1997; and March 17, 1997. Dr. Lee also examined Patient #16 on January 7, 1997, January 20, 1997; February 3, 1997; February 11, 1997; and March 13, 1997. Dr. Lee's physical examination of Patient #16's nose on January 7, 1997, moist nasal mucosa, with erythematous, edematous turbinates, and Dr. Lee's physical examination of Patient #16's lungs during that office visit revealed no abnormalities. On January 20, 1997, Patient #16 reported continued "sinusitis," and Dr. Lee's physical examination of Patient #16's nose on January 20, 1997, revealed that moist nasal mucosa, but with only slightly erythematous turbinates; Dr. Lee's physical examination of Patient #16's lungs on January 20, 1997, revealed no abnormalities. Dr. Lee's physical examinations of Patient #16's nose and lungs on February 3 and 11, 1997, and on March 13, 1997, revealed no abnormalities. Dr. Lee continued to see Patient #16 after March 17, 1997, the date of the last IVIG infusion for which Dr. Lee submitted a claim to Medicaid. On April 3, 1997, Dr. Lee's physical examination of Patient #16's nose revealed moist nasal mucosa, with erythematous turbinates and a large amount of whitish nasal discharge; Dr. Lee's physical examination of Patient #16's lungs revealed no abnormalities. Dr. Lee noted in the medical record of an office visit by Patient #16 on May 1, 1997, that Patient #16's sinus congestion had improved "with IVIG and Claritin D"; Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. Dr. Lee noted in the medical record of an office visit by Patient #16 on June 17, 1997, that Patient #16 continued to have sinus drainage, but she attributed this to an error by the pharmacy in giving Patient #16 Claritin Plain rather than Claritin D, resulting in Patient #16's not having taken a decongestant for the previous few weeks. Even so, Dr. Lee's physical examination of Patient #16's nose and lungs revealed no abnormalities. Patient #16 complained of sinus congestion during office visits to Dr. Lee on June 30, 1997; July 15, 1997; and August 12, 1997. The medical record for the August 12, 1997, office visit reflects that Patient #16 reported that his sinus congestion was worsening and that he had had a cough with yellowish sputum for the previous week; Dr. Lee's physical examination of Patient #16 on August 12, 1997, revealed that Patient #16 had moist nasal mucosa, with erythematous, edematous turbinates, and that the breath sounds in Patient #16's lungs were "mildly rhonchorous to auscultation bilaterally, no rales, occasional expiratory wheeze." Patient #16 reported no sinus problems at his visit to Dr. Lee's office on August 29, 1997, and Dr. Lee's physical examination of his nose and lungs revealed no abnormalities. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #16 that tests were done to measure the level of Patient #16's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office do not support her diagnosis that Patient #16 suffered from DHI. Although Patient #16 routinely complained of sinus congestion from his first documented visit to Dr. Lee on February 9, 1995, through the last documented visit on August 29, 1997, Dr. Lee's medical records contained a diagnosis of acute sinusitis only six times during the Audit Period, on November 4 and 5, 1996, when Patient #16 was not examined but only received infusions of IVIG at Dr. Lee's office; on December 10, 1996, when Patient #16 reported sinus pressure, and Dr. Lee observed a yellowish-green nasal discharge; on March 17, 1997, when Patient #16 was not examined but only received an infusion of IVIG at Dr. Lee's office; on April 3, 1997, when Dr. Lee observed a large amount of whitish nasal discharge; and on August 12, 1997, when Patient #16 reported a cough with yellowish-green sputum. Dr. Lee's notes reflect, however, that Patient #16's sinus congestion was improved when he took a decongestant. Even if these instances of sinusitis could be termed severe and recurrent, there is no evidence in the medical records provided by Dr. Lee's office that Patient #16 suffered from severe, recurrent pulmonary infections. In fact, Dr. Lee's physical examinations of Patient #16's lungs revealed abnormalities only on August 12, 1997, when she observed an occasional expiratory wheeze and mildly rhonchorous breath sounds. Dr. Lee's medical records fail to establish that Patient #16 suffered from the severe, chronic sinopulmonary infections necessary to support a diagnosis of DHI or to establish that Patient #16 had the low levels of total immunoglobulin or of any of the five subclasses of immunoglobulin that are also necessary to support a diagnosis of DHI. Therefore, the medical records provided by Dr. Lee's office fail to establish that the infusion of IVIG was medically necessary, and the claims to Medicaid for the IVIG infusions given on September 3 and 4, 1996; October 2 and 3, 1996; November 4 and 5, 1996; December 9 and 10, 1996; January 7, 1997; February 10 and 11, 1997; and March 17, 1997, should be denied. Patient #21 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #21 for DHI on February 11 and 12, 1997; March 17 and 18, 1997; and April 16, 1997.13 As a result of the audit, AHCA denied the Medicaid claims for these five IVIG infusions. At the times material to this proceeding, Patient #21 was a 38-year-old male who reported that he had contracted HIV in the 1970's. The medical records provided by Dr. Lee's office contain the Progress Report of an emergency visit to Patient #21 on April 29, 1996, by Dr. Allan J. Stein. Dr. Stein noted in the Progress Report that he had first seen Patient #21 on July 7, 1995, and then at a follow-up visit on July 17, 1995, but that he had not seen Patient #21 again until the April 29 1996, visit. Patient #21 reported to Dr. Stein on April 29, 1996, that he had had seven or eight episodes of bronchitis between August and November 1995, while he was living in Tampa, Florida; that he had not received regular medical care while living in Tampa; and that he had been treated for bronchitis with multiple courses of Zithromax prescribed at a hospital emergency room in Tampa. Patient #21 also reported to Dr. Stein that he had been treated by a "Dr. Elbert" in Tampa and had been diagnosed with pneumonia four times between January and April 1996, which was treated each time with various antibiotics. Patient #21 also reported to Dr. Stein that he had never had a bronchoscopy and that he smoked at least one pack of cigarettes per day. The physical examination of Patient #21's nose and lungs performed by Dr. Stein on April 19, 1996, did not reveal any abnormalities. Dr. Stein recommended that Patient #21 arrange to be seen by Dr. Lee because her office was closer to Patient #21's residence than Dr. Stein's, and Dr. Stein ordered a chest X-ray. The report of a chest X-ray signed by Stephen Edelstein, M.D., on July 29, 1996, indicated that Patient #21's lungs were clear and that his chest was normal. Dr. Lee conducted a 23-hour observation of Patient #21 at Pompano Beach Medical Center August 5, 1996, and Dr. Lee noted in the report of that observation that Patient #21 had been "complaining intermittently for the past month of shortness of breath, fevers and chills, [and] sinus congestion." Patient #21 also reported to Dr. Lee on August 5, 1996, that he had chronic bronchitis that usually occurred in the spring and summer of each year. Dr. Lee's physical examination of Patient #21 revealed that he had "tender sinuses in the frontal and bilateral maxillary sinuses," and her physical examination of Patient #21's lungs indicated that they were "[c]lear to auscultation with slightly prolonged expiratory phase. No rhonchi, rales or wheezes." Dr. Lee's diagnoses included "[a]cute severe sinusitis versus bronchitis."14 Patient #21's medical records also include an incomplete report of a consultation with Peter Namnum, M.D., on August 20, 1996,15 in which Dr. Namnum stated that Patient #21 had been ill for the previous six weeks, reporting sweats, fever, chills, and hot flashes, with a cough productive of green sputum and about a tablespoon of blood each day. Dr. Namnum noted that Patient #21 was admitted to Pompano Beach Medical Center about two weeks prior to the consultation and was treated with "broad spectrum intravenous antibiotics" but showed no improvement. Dr. Namnum also reported that Dr. Lee had treated Patient #21 with multiple courses of outpatient antibiotics but that Patient #21 had not responded. Patient #21's first documented visit to Dr. Lee's office was on December 6, 1996, at which time Patient #21 reported symptoms of a cold, with a cough, stuffy head, and congestion but no fever. Dr. Lee's physical examination of Patient #21's nose and lungs revealed no abnormalities. Dr. Lee's diagnoses included "allergic rhinitis." Patient #21 next visited Dr. Lee's office on January 3, 1997, complaining of an ear infection. Dr. Lee observed some congestion in Patient #21's ears, but Dr. Lee's physical examination of Patient #21's nose and lungs revealed no abnormalities. Dr. Lee's diagnoses, however, included chronic sinusitis and allergic rhinitis. Dr. Lee changed Patient #21's prescription from Claritin to Claritin D. On January 21, 1997, Patient #21 visited Dr. Lee's office and reported that he had had a fever of 102 degrees, chills, sweats, nausea, vomiting, a productive cough with green sputum, and wheezes on inspiration and expiration. Patient #21's temperature at the time of the office visit was recorded as 95.8 degrees. Dr. Lee's physical examination of Patient #21's nose revealed no abnormalities, but the physical examination of Patient #21's lungs revealed "scattered wheezes and rhonchi, no rales." Dr. Lee prescribed Rocephin, and her diagnoses included bronchitis, acute sinusitis, and allergic rhinitis. Patient #21 received an infusion of IVIG at Dr. Lee's office on February 11, 1997, at which time he was distraught, complaining of pain "everywhere," and demanding pain medication. Dr. Lee's physical examination of Patient #21 revealed no abnormalities, although the diagnoses for the February 11, 1997, visit included DHI and chronic sinusitis. Patient #21 also received an infusion of IVIG on February 12, 1997, at which time he reported to Dr. Lee that he felt relief after his first dose of IVIG; no physical examination was done during this visit. The diagnoses for the February 12, 1997, visit included DHI, chronic sinusitis, and acute sinusitis. Patient #21 was infused with IVIG at Dr. Lee's office on March 17 and 18, 1997, and on April 16, 1997. The diagnoses for each visit included acute sinusitis, chronic sinusitis, and DHI. There is, however, no record that Dr. Lee performed any examinations of Patient #21 on those dates. Patient #21's last documented office visit was on August 12, 1997. He reported the "usual summer bronchitis" and a cough with clear sputum. Dr. Lee's physical examination of Patient #21's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the physical examination of Patient #21's lungs revealed no abnormalities. Patient #21 received an infusion of IVIG on August 12, 1997, and the diagnoses included DHI, bronchitis, acute sinusitis, and chronic sinusitis, and Dr. Lee noted that she would continue IVIG monthly. There is no indication in any of the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #21 that tests were done to measure the level of Patient #21's total immunoglobulin or the level of any of the subclasses of immunoglobulin. Dr. Stein noted that Patient #21's "past medical problems" included negative CMV and toxoid IgG titers, but this was not confirmed by any laboratory tests ordered by Dr. Lee at or about the time she commenced infusion of IVIG. The medical records do not support Dr. Lee's diagnosis that Patient #21 suffered from DHI because there is no documentation of severe, recurrent sinopulmonary infections and low levels of total immunoglobulin or of one of the five subclasses of immunoglobulin. Although Patient #21 reported a history of bronchitis and pneumonia and complained routinely of a cough, the chest X-ray done in July 1996 revealed that his lungs were clear, and abnormalities in Patient #21's lungs were noted on only two occasions, on August 5, 1996, and on January 21, 1997, when wheezing was noted. On August 12, 1997, when Patient #21 reported a cough and his "usual" summer bronchitis, Dr. Lee's physical examination of Patient #21's lungs revealed no abnormalities. Even if the two instances in which Dr. Lee found abnormalities in Patient #21's lungs could be considered indicative of severe, recurrent pulmonary infections, the medical records fail to establish that Patient #21 suffered from severe, chronic sinusitis. The physical examinations done by Dr. Lee establish only that, on August 5, 1996, Patient #21 had tender sinuses and that, on August 12, 1997, four months after the last documentation of an infusion of IVIG, Patient #21 had erythematous, edematous turbinates. The medical records of Patient #21's January 21, 1997, office visit, which took place only a few weeks before the first infusion of IVIG, do not reflect that Patient #21 complained of sinus congestion, and Dr. Lee's physical examination of Patient #21's nose done at that office visit revealed no abnormalities. The medical records provided by Dr. Lee's office, therefore, fail to establish that the infusion of IVIG was medically necessary, and the claims to Medicaid for the IVIG infusions given on February 11 and 12, 1997; March 17 and 18, 1997; and April 16, 1997, should be denied. Patient #24 Dr. Lee submitted claims to Medicaid for IVIG infusions received by Patient #24 on January 9 and 10, 1997; February 6 and 7, 1997; March 6 and 7, 1997; April 7 and 8, 1997; June 16 and 17, 1997; July 14 and 15, 1997; August 11 and 12, 1997; September 8 and 9, 1997; and January 6 and 7, 1998, for DHI and demyelinating neuropathy.16 As a result of the audit, AHCA denied the Medicaid claims for these 18 IVIG infusions. At the times material to this proceeding, Patient #24 was a 32-year-old male who reported that he had been HIV positive since March 1989. Patient #24's first documented office visit to Dr. Lee was on October 7, 1996. Demyelinating neuropathy On October 7, 1996, Dr. Lee noted that Patient #24 complained of "pain c/o neuropathy bilaterally in lower and upper extremities," and she determined that Patient #24 had "moderately severe peripheral neuropathy," with occasional joint pain.17 Dr. Lee's physical examination of Patient #24 revealed that his reflexes were "equal bilaterally upper and lower extremities" and that his "motor/strength" was "4/5 throughout." Dr. Lee did not include neuropathy (diagnosis code 355.9) or demyelinating neuropathy (diagnosis code 357.0) as diagnoses for the October 7, 1996, office visit. Dr. Lee's medical records for Patient #24 include diagnoses of neuropathy for seven office visits between February 11, 1997, and November 21, 1997; for each of the diagnoses, Dr. Lee included the diagnosis code for neuropathy, "355.9," rather than the diagnosis code for demyelinating neuropathy, "357.0." On February 11, 1997, Patient #24 complained of "tingling and numbness in lower extremities that sometimes extends upwards; Dr. Lee noted "neuropathy persists, tolerable." There is no indication in the medical records of Patient #24's April 14, 1997, office visit that he complained of or exhibited symptoms of neuropathy or that Dr. Lee's physical examination of Patient #24 revealed any indication of neuropathy. On July 7, 1997, during a scheduled visit, Patient #24 reported "infrequent episodes of generalized muscle twitching with a feeling of weakness and feeling as though he were going to pass out." The symptoms Patient #24 described included "intermittent episodes of twitching, shaking 'inside'. Feet continue to hurt intermittently." Dr. Lee noted that Patient #24 was to continue to receive IVIG monthly. On September 2, 1997, Patient #24 reported that he had "moderately severe episodes of neuropathy in hands and feet" and that he felt "quite well" except for occasional "pain and persistent neuropathy." At Patient #24's scheduled office visit on October 14, 1997, Dr. Lee noted: "Neuropathy severe, slightly improved since start of IVIG . . . However, sometimes feels as if his feet are 'dead.'" Patient #24 received an infusion of IVIG at Dr. Lee's office on November 3, 1997; Dr. Lee did not examine Patient #24 during this office visit.18 At Patient #24's scheduled office visit on November 21, 1997, he reported "no major complaints," and Dr. Lee noted that he had "only minimal discomfort from neuropathy." Dr. Lee stated that she "would continue IVIG when available." Dr. Lee first diagnosed Patient #24 with demyelinating neuropathy at Patient #24's office visit on January 6, 1998, when Patient #24 received an infusion of IVIG and was examined by Dr. Lee. Dr. Lee did not note in the record of this office visit any complaints or symptoms of demyelinating neuropathy or neuropathy. The diagnosis of demyelinating neuropathy was also included in the diagnoses for Patient #24's January 7, 1998, office visit, but the only service he received on this date was the infusion of IVIG. There is no indication in the medical records provided by Dr. Lee's office that a nerve conduction study and a neurological study were conducted to confirm Dr. Lee's diagnosis that Patient #24 suffered from general neuropathy or demyelinating neuropathy. And, even if Dr. Lee's diagnosis of neuropathy were supported in the medical records, the treatment of peripheral neuropathy by infusions of IVIG is not medically necessary. General neuropathy involving the disruption in the peripheral nervous system does not respond to IVIG. Only neuropathy that involves the loss of or damage to the myelin sheath around the nerves, or demyelinating neuropathy, improves with IVIG treatments. Dr. Lee stated in the medical records of her first visit with Patient #24 that he exhibited the symptoms of "moderately severe peripheral neuropathy," and, without a nerve conduction study and neurological evaluation to confirm a diagnosis of demyelinating neuropathy, there is no medical necessity for Patient #24's IVIG treatments for neuropathy. DHI Patient #24 did not report any complaints or symptoms of sinusitis or pulmonary infection at his first office visit to Dr. Lee on October 7, 1996. He denied fevers, headaches, chest pain, and shortness of breath, although he did report "occasional cough, wheezing, dyspnea, and slight sputum production." Dr. Lee noted that Patient #24's history included chronic "environmental allergies." Dr. Lee's physical examination of Patient #24's nose revealed no abnormalities, and Dr. Lee's physical examination of Patient #24' lungs revealed that they were "clear to auscultation." Dr. Lee included "allergic rhinitis" as one of the diagnoses for the October 7, 1996, office visit. Dr. Lee examined Patient #24 on December 31, 1996, at a scheduled office visit. Patient #24 complained of "severe sinus congestion, worse over past few weeks," but he denied any sputum production. Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with "extremely" erythematous, edematous turbinates; the physical examination of Patient #24's lungs revealed no abnormalities. Dr. Lee included among the diagnoses for the December 31, 1996, office visit chronic sinusitis and DHI, and she noted that she would "start monthly IVIG for treatment of chronic sinusitis and decreased humoral immunity." Patient #24 received his first infusions of IVIG on January 9 and 19, 1997; Dr. Lee did not examine Patient #24 during either of these office visits. Patient #24's next office visits were on February 6 and 7, 1997, during which he only received infusions of IVIG. The diagnoses for February 6, 1997, included DHI and acute sinusitis; the diagnoses for February 7, 1997, included DHI. Patient #24 saw Dr. Lee for a scheduled office visit on February 11, 1997, when Dr. Lee noted that Patient #24's "sinus symptoms [were] improved." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Dr. Lee included DHI and chronic sinusitis among the diagnoses for the February 7, 1997, office visit. Patient #24 received infusions of IVIG at Dr. Lee's office on March 6 and 7, 1997. Dr. Lee did not examine Patient #24 during these visits, but chronic sinusitis and DHI were included among the diagnoses. Dr. Lee examined Patient #24 during an office visit on March 11, 1997, when he complained of neuropathy and diarrhea. There is no indication in the records of this office visit that Patient #24 complained of or had symptoms of sinusitis or pulmonary infection, and Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 received infusions of IVIG at Dr. Lee's office on April 7 and 8, 1997. Dr. Lee did not examine Patient #24 during these office visits. Dr. Lee did, however, examine Patient #24 during an office visit on April 14, 1997, and she noted that Patient #24 complained of cold symptoms affecting mainly his chest but denied that he had a fever with the cold. Dr. Lee also noted that Patient #24 "does continue to smoke cigarettes." Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with erythematous, edematous turbinates; the physical examination of Patient #24's lungs revealed no abnormalities. Dr. Lee included DHI and allergic rhinitis among the diagnoses for this office visit. Patient #24 visited Dr. Lee's office on May 2, 1997, complaining of a body rash that began after he swam in the ocean. Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities, and the diagnoses for this office visit included dermatitis and muscle spasm. Patient #24 received infusions of IVIG during office visits on May 5 and 6, 1997. Dr. Lee did not examine Patient #24 during either of these office visits, but he reported on May 5, 1997, that his rash had worsened. The diagnoses for the May 5 and 6, 1997, office visits included DHI and DHI, acute sinusitis, and chronic sinusitis, respectively. Dr. Lee examined Patient #24 on May 8, 1997, when he visited her office for a sick visit and follow-up. Patient #24 reported that the body rash was worsening and that he had slight shortness of breath and a slight cough. Dr. Lee's physical examination of Patient #24's lungs revealed no abnormalities, and Dr. Lee's diagnoses did not include DHI. Patient #24 visited Dr. Lee's office again on May 13, 1997, for treatment of the rash, which Dr. Lee reported was worsening, with lesions appearing in Patient #24's nose and ears. Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with "ulcerations bilateral nares"; Dr. Lee's physical examination of Patient #24's lungs revealed no abnormalities. At another office visit on May 21, 1997, Dr. Lee's physical examination revealed no abnormalities. Patient #24 visited Dr. Lee's office for a scheduled visit on June 9, 1997. Dr. Lee noted that Patient #24's rash was almost totally resolved and that he had a "mild cough due to smoking." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Nonetheless, Dr. Lee included among her diagnoses for the June 9, 1997, office visit DHI and chronic sinusitis. Patient #24 visited Dr. Lee's office on June 16 and 17, 1997, for infusions of IVIG. He was not examined during these office visits. On July 7, 1997, Dr. Lee examined Patient #24 at a scheduled visit. Patient #24's symptoms were related to neuropathy, and Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 received infusions of IVIG at Dr. Lee's office on July 14 and 15, 1997, but Dr. Lee did not examine him. The diagnoses for these office visits included acute sinusitis, chronic sinusitis, and DHI. At an office visit on August 4, 1997, Patient #24 complained that he was feeling "stuffy in his head." Dr. Lee noted that his sinus congestion was "slightly worse" and that his roommate had a cold. Dr. Lee's physical examination of Patient #24's nose revealed moist nasal mucosa, with erythematous turbinates; the physical examination of Patient #24's lungs revealed no abnormalities. Dr. Lee's diagnoses included chronic sinusitis and allergic rhinitis. Patient #24 received infusions of IVIG on August 11 and 12, 1997, but was not examined by Dr. Lee. At the office visit on September 2, 1997, Patient #24 reported "pain and persistent neuropathy." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 received infusions of IVIG on September 8 and 9, 1997, with diagnoses of DHI and chronic sinusitis. At an office visit on September 16, 1997, Patient #24 reported "severe fatigue since last IVIG." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. At the scheduled office visit on October 14, 1997, Patient #24 complained of "severe neuropathy." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities.19 At an office visit on November 11, 1997, Dr. Lee observed that Patient #24 was "feeling fairly well." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities, and she noted that she would "continue IVIG when available." On December 10, 1997, Patient #24 received an infusion of IVIG at Dr. Lee's office but was not examined by Dr. Lee.20 Patient #24 reported that he had a "cough, chest tightness, chills and sweats." The medical records of the office visit include the notation that Patient #24's "lungs [are] clear to auscultation." Dr. Lee notified Patient #24 through her nurse that he should increase his dosage of Bactrim, an antibiotic. Dr. Lee examined Patient #24 on December 11, 1997, at which time Patient #24 received his second infusion of IVIG for the month.21 Dr. Lee noted that Patient #24's "symptoms of shortness of breath slightly improved after increase in Bactrim. Denies fevers or chills. Cough resolving." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities, and she included "pneumocystis carinii" in her diagnoses. Dr. Lee noted that "since probable PCP, will start Mephron BID for 3 weeks and will follow closely." At a follow- up visit on December 16, 1997, Dr. Lee noted that Patient #24 was feeling better "since start of Mephron high dose" and had very little cough, though he still had some shortness of breath "on extreme exertion." Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. Patient #24 visited Dr. Lee's office on January 6, 1998, for an infusion of IVIG and for a physician visit.22 Patient #24's symptoms included "some slight shortness of breath," but he denied having fevers or a cough. Dr. Lee's physical examination of Patient #24's nose and lungs revealed no abnormalities. There is no indication in the Comparative Laboratory Test Results provided by Dr. Lee's office for Patient #24 that tests were done to measure the level of Patient #24's total immunoglobulin or the level of any of the subclasses of immunoglobulin. The medical records provided by Dr. Lee's office do not support her diagnosis that Patient #24 suffered from DHI because the records do not establish that Patient #24 had the severe, recurrent sinopulmonary infections and low level of total immunoglobulin or one of the five subclasses of immunoglobulin essential to such a diagnosis. Dr. Lee first diagnosed Patient #24 with chronic sinusitis and DHI, and decided to start him on IVIG, at his second office visit on December 31, 1996, when Patient #24 had symptoms of severe sinus congestion. Patient #24 also had symptoms of sinus congestion on August 4, 1997. The reports of Dr. Lee's physical examinations of Patient #24's nose at the December 1996 and August 1997 office visits revealed that Patient #24 had erythematous, edematous turbinates, but her physical examinations of Patient #24's nose and lungs revealed no abnormalities relating to congestion or sinusitis.23 The medical records do not, therefore, establish that Patient #24 had the severe, recurrent sinopulmonary infections that are indicative of DHI. The medical records provided by Dr. Lee's office, therefore, fail to support Dr. Lee's diagnoses of demyelinating neuropathy and DHI, and, therefore, they fail to establish that the infusion of IVIG was medically necessary. Accordingly, the claims to Medicaid for the IVIG infusions given on January 9 and 10, 1997; February 6 and 7, 1997; March 6 and 7, 1997; April 7 and 8, 1997; June 16 and 17, 1997; July 14 and 15, 1997; August 11 and 12, 1997; September 8 and 9, 1997; and January 6 and 7, 1998, should be denied.
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 requiring Marah J. Lee to repay the principal sum of $109,439.77. DONE AND ENTERED this 9th day of December, 2004, in Tallahassee, Leon County, Florida. S PATRICIA HART MALONO 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 9th day of December, 2004.
