Findings Of Fact Procedural issues. In June 1983, Petitioner filed an application for a certificate of need to operate a cardiac catheterization laboratory at Hollywood Medical Center. Respondent, the Department of Health and Rehabilitative Service (HRS) denied the application, and Petitioner filed this petition for administrative review. Notice of hearing was given by order dated August 6, 1984. Two days before the hearing, SOUTH BROWARD HOSPITAL DISTRICT moved to intervene. The petition was denied because it was filed less than five days before the hearing, and was therefore untimely. Rule 28-5.207, F.A.C. Also shortly before the hearing, HRS filed a motion in limine, seeking to exclude evidence of cardiac catheterization utilization other than a base year of 1981. The motion was denied because the relevant rule, rule 10-5.11(15) allows proof of "not normal" circumstances. Prior to the hearing, the parties filed a joint prehearing stipulation, agreeing to certain issues of law and fact. Pursuant to that stipulation, the following criteria are either not applicable in this case or have been satisfied by the Petitioner: section 381.494(6)(c)(3), (4), (5), (6), (7), (8), (10), (11), and (13), Fla. Stat., section 381.494(6)(d), Fla. Stat., and rule 10-5.11(15)(a) through (f), (g), (h)(1) and (2), (i)(1) through (3) and (5), (j), (m), (n), and (o)(2). It was further stipulated that the Petitioner will not be performing coronary angioplasty in its proposed cardiac catheterization laboratory. HRS further stipulated that if the Petitioner satisfies all other applicable criteria, the project will be financially feasible. Remaining at issue in this case are subparagraphs (6)(c)(1), (2), and (12) of section 381.494, Fla. Stat., and subparagraphs (h)(3), (i)(4), (k)(1), and (o)(1) and (3) of rule 10-5.11(15). F.A.C. The central issue in this case is whether pursuant to the relevant statutory and rule criteria there is a need for a cardiac catheterization laboratory at Hollywood Medical Center. The Hollywood Medical Center is located in the southern portion of Broward County. It is a 334 licensed bed medical/surgical hospital, and its medical staff covers all major medical specialties. The hospital has 24 hour emergency service, 14 intensive care beds, a full service operating room, and does cardiovascular surgery, but does not do open heart or bypass surgery. Hollywood Medical Center, based on zip codes from its own patient records, serves patients primarily from the Dade County line a few miles south to the New River Canal on the north and from the ocean on the east to the Collier County line on the west. In this service area, physicians tend to be located in the eastern section, and do not typically have staff privileges at hospitals in northern Broward County, nor do they tend to refer patients to hospitals in the northern section of Broward County. Patients at Hollywood Medical Center who need cardiac catheterization procedures are now referred to Memorial Hospital, which is approximately 2 miles away. In the south Broward County area, there is no other alternative. There was no evidence of any cardiac catheterization facility in northern Dade County accessible to patients from southern Broward County with the exception of a newly granted certificate of need to Humana Biscayne. There was no evidence as to when Humana Biscayne will be open and providing services. In northern Broward County, there are five operating cardiac catheterization laboratories. The one closest to Hollywood Medical Center, Broward General Medical Center, is approximately 6 miles to the north. Rule 10-5.11(15)(1), F.A.C., establishes a method of projecting the number of cardiac catheterization procedures expected for the year in which the proposed new service would begin. This number is the product of the projected population for the service area and the number of procedures performed in 1981 in the service area for one hundred thousand population. HRS interprets this rule to require analysis based upon HRS district data. The HRS district in this case is district ten, which is Broward County. Once the projected number of procedures is determined, that number is divided by 600 to determine the number of catheterization laboratories needed. This number is derived from rule 10- 5.11(15)(o)3., which forbids approval of a new laboratory if the average volume for all laboratories in the service area drops below 600. HRS now argues that the number 600 is only a floor to protect existing providers, and is not to be used to compute need. In the normal computation of need under the rule, this is not true. Thomas Porter, supervisor of the certificate of need section at HRS calculated his Projections of need using 600 procedures per unit in the district as the means to determine the need for a new laboratory. Mr. Porter testified: "Well, in terms of what I would agree with is in terms of numerically determining the need for the number of labs, we divide by 600 procedures. . . . HRS based its denial of the certificate of need in this case by using a use rate for Broward County in 1981 of 329.5 procedures per one hundred thousand population. This use rate in turn was based upon a 1981 population of 1,046,646 and 3,449 procedures in the county for that year. Since the projected population for Broward County in 1986, two years from the date of the hearing, is 1,179,205, HRS concluded that by 1986 the county will need 6.475 laboratories, which rounds to 6. There are 5 licensed and operating laboratories now in Broward County, and 2 additional laboratories have been approved by HRS in the final order in PLANTATION GENERAL HOSPITAL v. HRS, et al., DOAH case number 84-1838, 6 FALR 6796 (1984). Using the method proposed by HRS to calculate need, there is no need for an additional laboratory as sought by Petitioner in this case. Petitioner's exhibit 4, table 5, computes the same formula set forth above, but uses a 1981 rate of 340 catheterization procedures per one hundred thousand. This rate is incorrect. On table 2 of this exhibit the actual procedures for each Broward County facility is recorded for 1981, and the total number of procedures has been incorrectly added. The correct total is 3,449, not 3,546, and the resultant rate (which is based upon a slightly lower estimate of 1981 population, 1,042,941) is 330.7 procedures per one hundred thousand. Correcting table 5 using the 330.7 rate, the need for cardiac catheterization laboratories is: YEAR DISTRICT 1985 6.3 1986 6.5 Thus, if the rule for determining need in a normal situation is followed, the record in this case shows no need for the catheterization facility proposed by the petitioner. Subpart 15(f) of the rule, however, allows approval of an application if the circumstances are other than normal, in which case approval can occur even though need is not shown by subpart 15(l) and 15(o), above, pertaining to calculation of need using the 1981 use rate, future population projections, and division by 600. Mr. Porter testified for HRS that the 1981 use rate has been a fairly accurate predictor of actual use rates in subsequent years, but that it has not yet been accurate in Broward County. In 1981 the use rate, as corrected above, was 329.5, accepting as true the HRS population estimate for Broward County in 1981. In 1982 the use rate was 393.6. This figure differs from Petitioner's exhibit 4, table 3, because the columns are incorrectly added on table 2. The correct total of procedures for 1982 is 4211. The correct total for 1983 is 5008. In 1983 the use rate was 457.9 using the 5008 figure. Thus, in two years, Broward County has increased its use of cardiac catheterization by 39 percent over the 1981 base rate. HRS argued that the 1981 planning rate should continue to be used because current data may be anomalous, and not reflective of the long range trend. This might be true if the base rate were reflective of a stable prior trend, but it is not. It is only the data from one year, and as such, is less persuasive as a predictor of the future. The trend for at least Broward County in the six years from 1977 is reflected in Petitioner's exhibit 4, table 3. In 1977, the use rate in Broward County was 174 procedures per one hundred thousand. The actual rate has increased steadily each year for six years to the rate indicated above for 1983, 457.9 per one hundred thousand. This is an increase from the 1977 rate of about 263 percent. At least in Broward County, this data indicates that the 1981 rate is probably not static, but is only a point on a trend that shows significant increases annually. There was partial evidence that the trend indicated above may be slowing down. Dr. Silvio Sperber, who is a cardiologist in charge of the cardiac catheterization laboratory at Memorial Hospital, testified that Memorial Hospital had had 673 cardiac catheterization procedures from January 1984 through September 1984. He testified that his laboratory was running about 15 percent fewer procedures than the year before. This was not accurate. From Petitioner's exhibit 4, table 2, Memorial Hospital experienced 942 procedures in 1983. By the end of September 1984, it should have experienced about 75 percent of that number at a zero rate of increase, or 706 procedures. Its actual experience in nine months, 673, is only 4.7 percent less than the 1983 expected number of 706.3. The Memorial Hospital experience in 1984 is some evidence that the rate of increase in Broward County may be less or even stabilize in the future at the 1983 utilization rate, but this is evidence from only one hospital. The other four operating laboratories may have experienced a similar decline, or an increase, but there is no evidence on the point. And in any event, Use small decline at Memorial does not persuasively indicate a return to the significantly lower 1981 Broward County rate. There was additional evidence to support the conclusion that the 1983 rate of use would not decline again to the 1981 rate. Atherosclerotic heart disease is the number one cause of death in the United States today. Cardiac catheterization is the best tool currently available for evaluation of the condition of the heart. From 1978 to 1982, Broward County has experienced a higher death rate for major cardiovascular disease than Florida as a whole. The death rate was 16.6 percent higher in Broward County in 1982 than in Florida generally. Additionally, cardiac catheterization seems to he coming more and more useful in the treatment of heart disease. Three years ago, when HRS established the 1981 base rate, catheterization was not considered a state-of- the-art procedure for treatment of an acute heart attack. Today, catheterization during the first few hours of a heart attack for the point injection of a clot dissolving substance, streptokinase, is proving to be a remarkably effective means of reducing the long-range damage of clot caused heart attacks. Further, use of catheterization during the attack itself has enabled physicians to see for the first time that most heart attacks are caused by clots. As good uses for catheterization increase, it is only reasonable to expect that the utilization rate will increase. While the foregoing is some evidence that application of subpart 15(l) and (o) of the rule in this case in Broward County produces a "not normal" result, justifying consideration of additional evidence of need, it still does not necessarily follow that the application herein should be granted. First, using the 1983 use rate of 457.9 procedures per one hundred thousand population, and the 1986 predicted population of 1,179,205 in Broward County, the number of expected procedures by 1986 is 5400. There will be 7 approved laboratories by 1986, and thus each would be able to perform approximately 771 procedures, if there is an even distribution within the county. This would be considerably less than approximate maximum capacity of a catheterization laboratory, which is somewhat less than 1300. Dr. Sperber testified that his laboratory could perform 5 procedures per day, 5 days a week, or 1300 per year. This, however, fails to account for emergency work and angioplasty, both of which take more than two hours. Angioplasty at Memorial now runs about 15 percent of all procedures. It is urged by petitioner that once the number of procedures is predicted for 1986, then the need for laboratories should be derived by dividing that number by 600, which is in subpart 15(o) of the rule. While this is the procedure for determining need in the normal case, as found above, it does not follow that the standard of 600 continues to apply to determine need in the abnormal case. The "not normal" exception of subpart 15(f) of the rule operates to except analysis of need not only from the 1981 use rate (subpart 15(l)), but also the 600 procedures standard (subpart 15(o)). Since the 600 standard is only about 50 percent of maximum capacity, it constitutes a rather low threshold number for commencement of a new laboratory. In effect, although the 1981 use rate apparently predicts only 72 percent of the need as compared to the 1983 rate, the 600 standard overpredicts need by at least the same amount. As indicated above, even if the 1983 use rate is used, the seven approved laboratories would be easily able to handle this need since the average spread among these laboratories would be about 771 procedures per laboratory. Though petitioner sought to show that there would be unmet need in the area actually served by Hollywood Medical Center, the evidence falls short of demonstrating a "not normal" situation of actual unmet need in that area justifying approval of its application. This evidence will be considered in the following findings. HRS does not consider district lines to be absolute if the facts justify consideration of services available in an adjacent district. In Broward County the local health council has debated the issue of dividing the district service area into subdistricts, but has not chosen to do so. Mr. Porter testified that he could think of as many reasons to divide the county as reasons not to divide the county. Broward County is divided north and south by the legislature into two hospital districts, however. As found above, physicians in the southern portion of Broward County tend to refer patients to hospitals in the same area, and do not use hospitals in northern Broward County. These physicians tend to use hospitals closer to their offices, and consequently do not usually have staff privileges at hospitals in the northern portion of the county. These patterns of use, however, have not been shown to be an immutable condition, but simply reflect current practices. Patients at Hollywood Medical Center who currently need cardiac catheterization are transferred to Memorial Hospital, a few miles away. Memorial Hospital is about a ten minute drive from Hollywood Medical Center. The cost of transfer is about 5300 to 5400. Although Hollywood Medical Center cardiac patients needing diagnostic catheterization at times must wait a day or two before Memorial can provide that service, such delays were not typically of major significance or life-threatening. A more significant problem experienced on occasion by Hollywood Medical Center has been inability to transfer unstable patients to Memorial for diagnostic catheterization. Acutely ill patients at times may need catheterization for diagnostic purposes, but are too ill to be transferred by ambulance to Memorial for the procedure. However, the record does not contain evidence of how frequently this occurs. In any event, these inconveniences are normal and expected where not every hospital has cardiac catheterization facilities. Stated another way, the above would be evidence of a "not normal" condition only if the normal condition was for all acute care hospitals to have catheterization laboratories, which is not the case. As discussed above, cardiac catheterization is also used for emergency treatment of heart attack by the injection of streptokinase directly to the clot causing the attack. Cardiac catheterization facilities must be available at the hospital initially receiving the heart attack patient because these patients are usually too unstable to be transferred from the emergency room of the receiving hospital to Memorial. Treatment by streptokinase injection is therapeutically most beneficial only in the first few hours of the heart attack, or at least within six hours of the emergency, because it is during this period that the permanent damage caused by the clot will occur. Dr. Stephen Roth, a cardiologist on the staff of Hollywood Medical Center, had from 5 to 10 heart attack patients in 1984 who needed streptokinase injection by catheterization, and who suffered a deterioration of their condition due to the unavailability of facilities for catheterization at Hollywood Medical Center. He implied that his two other partners had a similar experience, but the record does not contain competent evidence to support a finding as to the magnitude of the problem for them. Dr. Jeffrey Erlich, also a cardiologist, has had a similar problem of having heart attack patients arrive at Hollywood Medical Center in need of emergency streptokinase injection by catheterization, but did not testify as to the magnitude of the problem. In Dr. Erlich's opinion, every acute care hospital that treats heart attack victims should have a cardiac catheterization laboratory to provide emergency injection of streptokinase. Dr. Silvio Sperber, who is one of the only three physicians who run the cardiac catheterization facility at Memorial Hospital, testified that he had performed about 7 streptokinase injection procedures since the beginning of 1984. The foregoing is insufficient evidence of a "not normal" need for a cardiac catheterization laboratory at Hollywood Memorial Hospital. The number of emergencies are not that great, the problem is not atypical of other hospitals not having cardiac catheterization facilities, and there is no evidence of any failed efforts to have emergency vehicle operators take all heart attack patients directly to the available laboratories in the area. See paragraph 24, ahead. Administratively, the process of transferring a patient from Hollywood Medical Center to Memorial for cardiac catheterization causes the sort of problems normally associated with transfer of ill patients. Though the drive is only ten minutes, the time preparing the patient and actually transferring the patient is much longer, and is a hardship on the patient. However, almost all of the cardiologists at Hollywood Medical Center are on the staff of Memorial, and can follow their patients at that facility without much difficulty, since it is only ten minutes away. In 1983, Memorial Hospital had 942 catheterization procedures. If the 1984 experience continues at 4.7 percent less than 1983, Memorial Hospital will perform about 898 procedures. If thereafter it experiences only a 10 percent growth rate, Memorial Hospital will perform 1086 procedures in 1986, and 1195 procedures in 1987. It is reasonable to conclude that it will reach its maximum capacity in a few years, probably by 1988. However, although not currently used by Hollywood Medical Center, there are or will be two catheterization facilities within less than eight miles. Broward General Hospital is the next closest, apparently about six miles away. In 1983, Broward General performed only 551 procedures, indicating significant future capacity. Additionally, a new laboratory has been approved for Plantation General Hospital, about eight miles away. Since this laboratory will be new, it will have a long way to go before it reaches a 1200 capacity. The driving distance to these two other facilities may be a few miles more than this, but the distance is not significantly greater than Memorial. Although Petitioner's physicians testified that they did not consider the hospitals further north to be acceptable as alternatives to Memorial, the distance alone does not pose a significant problem. The major problem is not in the driving distance, as long as the trip is 10 or 20 minutes driving time, but the administrative preparation time at either end, which would be the same inconvenience for transportation regardless which alternative was used. Typically patients who suffer a heart attack are transported to the emergency rooms of any number of hospitals in Broward County. Dr. Erlich testified that his prior patients do not usually call him before arriving at a hospital, and that he has no ability to direct his patients to a hospital having cardiac catheterization capability. Thus, he felt that all such hospitals should have the capability. There is no evidence that Memorial Hospital could not handle more heart attack patients, or that emergency vehicle operators could not transport more heart attack patients to Memorial. An ambulance carrying a heart attack patient could just as easily arrive at the emergency room of Memorial than it could at Hollywood Medical Center, only ten minutes away. The problem of having heart attack patients arrive in an unstable condition at Hollywood, where there is no catheterization facility, ought to be solved at least in part by greater coordination with emergency vehicle operators in the vicinity of the two hospitals. Dr. Sperber and his two partners apparently have a monopoly over the performance of cardiac catheterization procedures at Memorial Hospital. This factor is somewhat relevant to the issue of need for the proposed new catheterization laboratory, but absent additional evidence that patients will in fact be denied the service, or will receive service of poor quality or at unreasonable expense due to this apparent monopoly, this one factor alone does not show sufficient need to warrant approval of the application. Some patients prefer to go to Hollywood Medical Center, which is a smaller, for-profit hospital, but patient preference of this sort does not show a "not normal" need for the proposed catheterization laboratory. Based upon all of the foregoing, there is not sufficient evidence on this record demonstrating a "not normal" condition of need by 1986 to justify granting this application. However, if there were a need shown by the evidence, the following additional findings are made. Thomas Porter testified for HRS that the requirement that there be adequate care for indigents is satisfied if such care is provided by the District as a whole, and that there was no question that indigents were adequately served in District X. Petitioner will provide cardiac catheterization for indigents only on an emergency basis, and will rely upon Memorial to provide other indigent care. Based upon the testimony of Mr. Porter, the criteria with respect to indigent care, rule 10- 5.11(15)(h)3, F.A.C., has been satisfied. Since nearly all of the cardiologists on the staff of Hollywood Medical Center are also on the staff of Memorial Hospital, it is probable that Hollywood Medical Center would do a substantial number of catheterization procedures in the first year of operation, which is projected to be 1986. By the third year of operation, 1989, the Hollywood Medical Center facility would satisfy the requirement of rule 10-5.11(15)(i)4, F.A.C., that it annually perform at least 300 procedures within three years of initiation of service. For these limited purposes it is appropriate to consider the proximate population served, since this population is the most reliable source of patients and revenue. Most of the patients for the Hollywood Medical Center catheterization laboratory will come from its current actual service area, which was defined by the evidence to be a region in southern Broward County. Given the shared cardiologist staffing at both hospitals, it is not at all unreasonable to project that Hollywood Medical Center will service 30 percent of the need in the southern region of Broward County. Based on the 1983 Broward use rate, Hollywood Medical Center would do 518 catheterizations in 1989 if it handled only 30 percent of the need. Memorial would handle the remaining 70 percent, doing 1207 procedures annually. Even using the lower 1981 use rate provided by HRS, 329.5 per 100,000, Hollywood Medical Center would do 372 procedures in 1989, using the assumed market share of 30 percent. (As noted above, however, these figures do not demonstrate need, however, since existing facilities will be able to serve this same population adequately.) As already found above in calculation of need, rule 10- 5.11(15)(o)1 and 3, F.A.C., is satisfied if the 1983 use rate is used. Beginning with 1986, and in every year thereafter, there will be enough catheterization procedures needed so that the average volume for all facilities in the district will be at least 600 annually. HRS stipulated that if all other criteria were satisfied, the project proposed by Petitioner would be financially feasible. From the foregoing findings, all other criteria in dispute have been satisfied, and the project would be financially feasible. All other findings of fact proposed by the parties which have not been discussed above have been considered and have been deemed to be irrelevant.
Findings Of Fact MCH was constructed circa 1973 as an acute care hospital and before 1980 had 126 medical-surgical beds authorized including eight intensive care beds. MCH is a for-profit hospital owned by Hospital Corporation of America. It is financially able to fund the proposed addition. In 1980 it received a certificate of need (CON) to add 64 medical-surgical beds for a total bed capacity of 190 medical-surgical beds. These beds came on line in January 1982. MCH here proposes to add a 54-bed unit for oncology patients; to add six operating rooms to use primarily for eye, ear, nose and throat surgical procedures on an outpatient basis; and a new eight-bed surgical intensive care unit located on the first floor adjacent to the existing surgery department. Currently, the hospital has two oncologists on staff who use a 16-bed unit dedicated to the treatment of cancer. Space exists for the additional operating room so the net result is an application for an additional 62 beds. The application also included expansion of general stores and maintenance and the addition of a parking structure, which were granted, leaving only the issue of need for the 62 additional beds requested at a cost of $7 million. When constructed MCH had an eight-bed ICU primarily for coronary care patients located on the second floor of the hospital in the opposite wing from the surgery department on the first floor. It has added a four-bed ICU on the fourth floor by converting two semiprivate medical-surgical rooms. The ratio of ICU beds to total beds in 1973 was 8:126 which is nearly identical to the current ratio of 12:190. The evidence was unrebutted that the ICU at MCH is usually full, that on occasion patients have to wait in the emergency room until a less ill patient can be moved from a bed in ICU, and that the more ICU beds are available the more they will be used. This use was attributed to the doctors desiring their patients to be in an ICU and to testimony that current surgical procedures are more sophisticated than formerly and a greater need exists today for a surgery patient to go to an ICU than existed 15 years ago. In its application for a CON (Exhibit 18) MCH's estimated charge for a medical-surgical bed is $100-150 per day and its estimated charge for ICU beds and SICU beds is $350 per day. The primary service area for MCH is Marion County. Petitioner submitted evidence that nearly 20 percent of the cancer patients diagnosed in Marion County in 1981 came from the surrounding counties of Citrus, Lake, Sumter, and Levy. Accordingly, MCH contends that its primary service area for oncology patients should include these counties. Evidence was also submitted that MCH has been certified by medical associations as an approved cancer treatment hospital; that oncology service is a service generally provided in regional hospitals which provide Level III medical treatment; and, therefore, MCH should be considered on a different scale than Level II services. No evidence was presented that any health systems plan ever considered MCH as a regional cancer hospital or established any bed need for cancer patients at MCH. The evidence was also unrebutted that cancer patients at MCH are primarily treated by chemotherapy; that the drugs used in the treatment are extremely toxic, some have a short life span after being mixed and must be used almost immediately; that having a mini-pharmacy in the cancer ward is highly desirable; that special training of nurses is required to safely administer these drugs to patients; that patients develop nausea, ulcers in the mouth and throat, and present special feeding problems, and because of these special feeding problems it is advantageous to have some facilities in the cancer ward to prepare food at odd hours for patients; that cancer is a "personal" disease, patients desire more privacy, and should have private rooms; that an area away from the patient's room where the patient can visit with his or her family and the family can consult with the doctor in some privacy is desirable; that some newer drugs require hospitalization of the patient for treatment with these drugs, but the hospital stay is shorter and the drugs may be used over longer periods of time; and that the patient needs the security that comes from developing a feeling of trust by the patient of the nurses and doctors who are administering to his needs. MCH has no radiation treatment facilities in the hospital. However, the hospital staff has access to a Linear Accelerator which is located in a private physician's office on MCH's campus. Several witnesses testified to the need for additional beds for cancer patients at MCH; that patients have had to wait several days for a vacant bed; some oncology patients have had to be placed in other wards at MCH; and that special treatment and special training for nurses are required for oncology patients. Marion Regional Medical Center (MRMC) is a nonprofit hospital owned by the Marion County Hospital District, a public body established by statutes with taxing powers in Marion County. MRMC is currently expanding its facilities by 80 beds to the authorized 314-bed hospital pursuant to a CON approved in 1981. The $23 million for that project was financed by revenue bonds issued by Marion County Hospital District. Preliminary bids indicate the original project will be under the estimated cost resulting in a $2-3 million savings. If the additional beds here requested are approved and the construction associated therewith can be accomplished concurrently with the present construction, a saving of nearly $1 million can be obtained. MRMC is the only full service hospital in Marion County and provides medical, surgical, obstetrical, pediatric, psychiatric, intensive care, coronary care, and neurological/neurosurgical services. It has the third most active Emergency Room in the state and receives approximately 45 percent of its admissions through this service. MRMC's proposed project calls for the construction of a sixth floor on the hospital, construction of 66 inpatient beds, and the conversion of a 20-bed pediatric unit for use as a labor and delivery suite, a net gain of 46 beds. As initially proposed, this would provide for eight additional pediatric beds, four pediatric intensive care beds, and 34 medical-surgical beds to be used as a pulmonary medicine unit. Before the hearing the request for additional pediatric beds was withdrawn, leaving a request for 34 additional hospital beds and four pediatric intensive care beds, a total of 38 medical-surgical beds, at a cost of $2.8 million. It was stipulated that both MCH and MRMC provide an acceptable quality of care and operate efficiently. The application satisfied the criteria in Section 381.494(6)(c) with the possible exception of need, and need is the only issue in dispute in these proceedings. Both applicants submitted evidence that they accept all patients regardless of their ability to pay; however, MCH is a private for-profit hospital whose bad debt and charity care amounts to two percent of its gross revenues. MRMC's patient load is four percent indigent and bad debts, and charity care amounts to 12 percent of its gross revenues. Exhibit 18 shows MCH patient utilization to be 61 percent Medicare and one percent Medicaid, and MRMC patient utilization to be 51 percent Medicare and five percent Medicaid, in 1981. There is currently "applicable district plan" or "annual implementation" as provided for in Section 381.494(6)(c)1, Florida Statutes (1982). The implementation of this statute has been stayed by rule challenges. The North Central Florida Health Planning Council, Inc. (NCFHPC), was the Health Systems Agency (HSA) for what was formerly known as Health Service Region II which included only Marion County as a district sub-area. Prior to the July 1, 1982, amendment of Florida's CON law, the HSA reviewed applications and made recommendations with written findings of fact to DHRS. The 1982 CON law eliminated HSA, accordingly the NCFHPC no longer exists. The former HSA recommended approval of the applications of both MCH and MRMC; however, the staff of the HSA recommended disapproval of both applications. For the determination of need in these proceedings, a planning horizon of five years is acceptable and was used by all parties. Thus, the need for the requested CON is assessed for the year 1988. At this time the population of Marion County is forecast to be 165,880. The percentage of persons 65 and older in Marion County is increasing in proportion to the remainder of Marion County's population, and this increase will continue through 1988. This "aging" of the population is occurring throughout the United States as people live longer and demographics change with differing birth rates at differing periods. No evidence was submitted that the percentage of people over 65 is greater in Marion County than in other parts of Florida. MCH has 190 authorized medical-surgical beds and MRMC has 244 authorized medical-surgical beds, for a total of 434 such beds authorized in Marion County in two hospitals across the street from each other in Ocala, Florida. With the 1982 amendment to the CON statute the HSA in Marion County ceased to exist and has been replaced by a local health council. Rule challenges have stayed the promulgation of a comprehensive state health plan and the only Health Systems Plan in being for Marion County is the revised 1983 Health Systems Plan (HSP). This plan was approved by the HSA for Marion County in June of 1982 and contains goals, objectives and standards for planning for the health services required in Marion County. Standard 1-1 provides the need for medical-surgical beds within each Level II planning area (Marion County) should be based on the actual 1980 medical-surgical bed need per 1,000 population in this area. Standard 2-1 provides no additional beds should be added to a community's total bed supply until the occupancy rate of medical- surgical beds in the community exceeds 85 percent if more than 200 such beds are available in the community. The generally accepted standard for occupancy rate above which more beds may be needed is 80 percent. However, where beds are concentrated in one area, which is the case in Marion County where 434 medical- surgical beds are authorized, 85 percent occupancy leaves a reasonable surplus of beds to cover most emergencies or unusual situations that would cause the bed availability to be exceeded. The need for medical-surgical beds per 1,000 population (use rate) in Marion County in 1980 was 2.41. The HSP has a goal of 3.5 beds per 1,000 population and an objective of 4.0 beds per 1,000 population by 1987 in Region II. Applying the 1980 use rate to the 1988 forecast population of Marion County results in a need for 400 medical-surgical beds. The Health Systems Plan update for Marion County defines medical- surgical beds as all hospital beds which are not reserved solely for the use of pediatric, obstetrics, or psychiatric patients. At the time the revised Health Systems Plan for Marion County was promulgated, the two hospitals, MRMC and MCH, had been authorized an additional 80 and 65 beds, respectively, and these beds were being placed in service. By prescribing a use rate for 1980 as the standard to be used in considering applications for additional medical-surgical beds in 1983 and for a year or two thereafter, it would be reasonable to conclude the HSA expected the use rate for the years 1981 and 1982 to be influenced by the addition of the recently authorized 144 beds and to not accurately reflect a reliable use rate for planning purposes. MRMC and MCH presented expert witnesses who, by using different modalities, containing different assumptions, arrived at a need for additional beds in Marion County in 1988 ranging from 97 to 200. Most of these modalities used an occupancy rate of 3.5 beds per 1,000 population and 80 percent utilization of beds. All assume increasing usage of medical-surgical beds by the increasing and aging population. In their application MRMC and MCH planned to finance these projects with rate increases of 11 percent per year (to keep even with inflation) and a continuing increase in the number of patients handled at these higher rates. While inflation may again be up to 11 percent or higher, it is generally accepted today that the current inflation rate is five percent or less. More than 50 percent of both MRMC and MCH patients are presently covered by Medicare, which pays 80 percent of the charges generated by these patients. To assume that this situation will not only continue in the face of current federal deficits, but grow to cover the increased use of these facilities predicted in the assumptions used to show increased bed need for 1988, is not necessarily a valid assumption. Evidence was presented that the number of doctors in Marion County has doubled in the last five years. The ratio of doctors to the population of Marion County for 1977-78 and 1982-83 was not presented nor was the percent increase in the number of doctors in the United States over the past five years. Without some basis for comparison, the fact that the number of doctors in a particular community doubled over a five-year period has no relevancy.
The Issue At issue here is whether Memorial should be authorized to operate the cardiac catheterization service it has already initiated. The parties have stipulated that criteria specified in Section 381.494(6)(c)(5), (7), (9), (10) and (13), Florida Statutes (1983), are not in contention and that Section 381.494(6)(d)(5), Florida Statutes (1983), does not apply. Still in dispute is whether Memorial's application conforms to the criteria set out in Section 384.494(6)(c)(1), (2), (3), (4), (6), (8), (11), (12) and (6)(d)(1), (2), (3) and (4), Florida Statutes (1983), and Rule 10-5.11(15), Florida Administrative Code. Among the parties' posthearing submissions are proposed findings of fact. By order entered February 3, 1984, Fort Myers Community Hospital's motion to strike DHRS' proposed findings of fact, conclusions of law and final order was denied. Proposed fact findings have been considered in preparation of the following findings of fact, and have been adopted, in substance, except where not supported by the weight of the evidence, immaterial, cumulative or subordinate.
Findings Of Fact Community and Memorial are in Fort Myers, Florida, about three miles apart. Since 1974, Community has offered cardiac catheterization services. Memorial instituted these proceedings in hopes of obtaining authority to establish a second cardiac catheterization service in Fort Myers. Memorial already had an arteriographic radiology room and had only to spend approximately $232,835 in order to acquire a polydiagnostic-parallelogram, a cine pulse M-400 single plane system, a 35 millimeter camera, a "CMB-A Combilabor 2 Cine" film processor and a film projector. With this new equipment, Memorial has gained cardiac catheterization capability, but it is still unequipped for open heart surgery. Memorial instituted cardiac catheterization service in July of 1983. Under an agreement between the hospitals, Memorial's Exhibit No. 5, cardiac patients at Memorial needing open heart surgery can be transferred to Community, once the need is apparent. DISTRICTS In 1981, and as late as the time of the hearing, Lee, Collier, Hendry, Glades, Charlotte, Sarasota, DeSoto, Highlands, Hardee and Polk Counties comprised District 8. As of October 1, 1983, however, the district shrank to seven counties, with the shift of Highlands, Hardee and Polk Counties to District No. 6. In 1981, there were three cardiac catheterization laboratories in what was then District 8: one each at Community, Lakeland Regional Medical Center and Sarasota's Memorial Hospital. Lakeland Regional in Polk County is now in District 6. Population projections for the ten counties originally in District 8 are as follows, for the years 1981, 1982, 1983, 1984 and 1985: 1981 Total Population Percent 0-64 Total Percent 0-64 65+ Total 65+ Percent 0-14 CHARLOTTE 62088.0 66.146 41086.6 33.854 21019.4 12.258 COLLIER 91456.8 80.428 73557.1 19.572 17899.7 18.464 DESOTO 19531.2 83.715 16350.5 16.285 3180.7 21.719 GLADES 6153.6 84.737 5214.4 15.263 939.2 22.697 HARDEE 19663.2 88.488 17399.6 11.512 2263.6 27.396 HENDRY 19339.2 91.255 17647.9 8.745 1691.3 28.362 HIGHLANDS 49460.8 73.075 36143.6 26.925 13317.2 17.605 LEE 215752.8 77.297 166770.2 22.703 48982.6 17.485 POLK 329801.6 85.519 282043.7 14.481 47757.9 21.750 SARASOTA 209440.8 69.897 146392.8 30.103 63048.0 13.664 SUM OF COUNTIES DISTRICT8 1022688.0 78.470 802588.5 802508.3 21.530 220099.5 220179.7 18.389 PROJECTION 1982 Total Population Percent 0-64 Total Percent 0-64 65+ Total 65+ Percent 0-14 CHARLOTTE 65716.0 66.255 43540.2 33.745 22175.8 12.258 COLLIER 96942.6 79.921 77477.6 20.079 19465.0 18.464 DESOTO 20023.4 83.655 16750.5 16.345 3272.9 21.719 GLADES 6315.2 84.177 5316.0 15.823 999.2 22.697 HARDEE 19947.4 88.350 17623.5 11.650 2323.9 27.396 HENDRY 20079.4 91.112 18294.8 8.888 1784.6 28.362 HIGHLANDS 51395.6 72.509 37266.4 27.491 14129.2 17.605 LEE 226239.6 76.941 174070.8 23.059 52168.8 17.485 POLK 337951.2 85.350 288440.7 14.650 49510.5 21.750 SARASOTA 216630.6 69.761 151124.0 30.239 65506.6 13.664 SUM OF COUNTIES DISTRICT8 1061241.0 78.184 829904.3 829719.6 21.816 231336.7 231521.4 18.389 PROJECTION 1983 Total Population Percent 0-64 Total Percent 0-64 65+ Total 65+ Percent 0-14 CHARLOTTE 69344.0 66.364 46019.7 33.636 23324.3 12.258 COLLIER 102428.4 79.414 81342.5 20.586 21085.9 18.464 DESOTO 20515.6 83.594 17149.8 16.406 3365.8 21.719 GLADES 6476.8 83.617 5415.7 16.383 1061.1 22.697 HARDEE 20231.6 88.211 17846.5 11.789 2385.1 27.396 HENDRY 20819.6 90.969 18939.5 9.031 1880.1 28.362 HIGHLANDS 53330.4 71.942 38367.1 28.058 14963.3 17.605 LEE 236726.4 76.585 181296.7 23.415 55429.7 17.485 POLK 346100.8 85.180 294810.1 14.820 52190.7 21.750 SARASOTA 223820.4 69.625 155835.7 30.375 67984.7 13.664 SUM OF COUNTIES DISTRICT8 1099794.0 77.897 857023.3 856710.0 22.103 242770.7 243084.0 18.389 1984 Total Population Percent 0-64 Total Percent 0-64 65+ Total 65+ Percent 0-14 CHARLOTTE 72972.0 66.474 48507.1 33.526 24464.9 12.258 COLLIER 107914.2 78.907 85151.7 21.093 22762.5 18.464 DESOTO 21007.8 83.534 17548.6 16.466 3459.2 21.719 GLADES 6638.4 83.057 5513.7 16.945 1124.7 22.697 HARDEE 20515.8 88.073 18068.8 11.927 2447.0 27.396 HENDRY 21559.8 90.827 19582.1 9.173 1977.7 28.362 HIGHLANDS 55265.2 71.376 39446.0 28.624 15819.2 17.605 LEE 247213.2 76.229 188447.9 23.721 58765.3 17.485 POLK 354250.4 85.011 301152.3 14.989 53098.4 21.750 SARASOTA 231010.2 69.490 160527.9 30.510 70482.3 13.664 SUM OF COUNTIES DISTRICT8 1138347.0 77.611 883945.6 883479.4 22.389 254401.4 254867.6 18.389 PROJECTION 1985 Total Population Percent 0-64 Total Percent 0-64 65+ Total 65+ Percent 0-14 CHARLOTTE 76600.0 66.583 51002.4 33.147 25597.6 12.258 COLLIER 113400.0 78.400 88905.3 21.600 24494.7 18.464 DESOTO 21500.0 83.473 17946.7 16.527 3353.3 21.719 GLADES 6800.0 82.497 5609.8 17.503 1190.2 22.697 HARDEE 20800.0 87.934 18290.3 12.066 2509.7 27.396 HENDRY 22300.0 90.684 20222.5 9.316 2077.5 28.362 HIGHLANDS 57200.0 70.809 40503.0 29.191 16997.0 17.605 LEE 157700.0 75.873 195524.4 24.127 62175.6 17.485 POLK 362400.0 84.842 307466.2 15.158 54933.8 21.750 SARASOTA 238200.0 69.354 165200.5 30.646 72999.5 13.664 SUM OF COUNTIES DISTRICT8 1176900.0 77.324 910671.1 910027.8 22.676 266228.9 266872.2 18.389 PROJECTION These figures come from Community's Exhibit No. 1, as to which all parties stipulated. USE RATES The parties also agreed that, during the calendar year 1981, cardiac catheterization procedures in the district amounted to 743 at Community, 739 at Memorial Hospital in Sarasota, and 409 at Lakeland Regional, for a total of 1891 procedures, of which 1482 occurred at cardiac catheterization laboratories still in District 8. Since no cardiac catheterization laboratory in District 8 takes pediatric patients, this segment of the population must be excluded in calculating District 8 cardiac catheterization use rates. Of the total 1981 population of what was then District 8, 18.389 percent was under the age of fifteen. It follows that 834,626 persons 15 or older lived in District 8 in 1981. 1/ Dividing 1891 cardiac catheterization procedures by the adult population yields a 1981 use rate of 226.56854 per 100,000 persons for "old" District 8. Excluding cardiac catheterization procedures performed at Lakeland Regional and excluding the population of Highlands, Hardee and Polk Counties, the 1981 use rate for what has become District 8 can be calculated by dividing 1482 by 521526.76. This yields a use rate of 284.15666 per thousand persons resident in 1981 in the area of which District 8 is now comprised. In the state as a whole, 28,497 adult cardiac catheterizations occurred in 1981. Community's Exhibit No. 2. Dividing by Florida's projected 1981 population of 10,028.317, Community's Exhibit No. 1, the statewide cardiac catheterization use rate in 1981 was 284.16532. HRS no longer uses the cardiac catheterization projections in the State Health Systems Plan. CALCULATIONS REQUIRED BY RULE The parties have stipulated to the applicability of Rule 10-5.11(15), Florida Administrative Code, which is in evidence as Joint Exhibit No. 4, and of which official recognition has been taken. This rule prescribes multiple numerical standards. First is a minimum service volume of "300 cardiac catheterizations performed annually . . . within three years . . . [of] initiation of service." Rule 10-5.11(15)(i)(4), Florida Administrative Code. Without a need for catheterization services, no applicant could meet this requirement but the minimum service volume requirement is designed to ensure that the technicians do their work often enough to remain proficient and is not, strictly speaking, a need criterion. It is clear from the evidence that Memorial can meet this minimum service volume requirement. Fifty or sixty procedures had already occurred at the Memorial laboratory by the time of the hearing. The other arithmetic calculations called for by the cardiac catheterization rule relate specifically to need. Because 1983 is the year in which Memorial initiated cardiac catheterization services, Rule 10-5.11(15)(1), Florida Administrative Code, requires that the number of cardiac catheterization procedures in the service area "Nx" be calculated for 1983. The rule specifies that this is to be accomplished by multiplying the 1981 use rate by the 1983 population. For purposes of the rule, the pertinent 1983 population is the adult population of present District 8, which, based on Community's Exhibit No. 1, amounts to 568,097 persons. Whether the statewide use rate or the use rate prevailing in what has become District 8 is used, the result is virtually identical. Multiplying by the 1981 use rate calculated with reference to the territory that is now District 8 yields 1614.3365 procedures in 1983. Multiplying by the 1981 use rate for Florida statewide yields 1614.3346. Multiplying by the 1981 use rate for what was then District 8 yields 1287.126, but this number cannot be said to relate to the population to be served in District 8 as it is presently constituted. For purposes of Rule 10-5.11(15)(1), Florida Administrative Code, therefore, "Nx" equals 1614. Rule 10-5.11(15)(o), Florida Administrative Code, requires that "Nx" be divided by the number of "existing and approved laboratories performing adult procedures in the service area." Memorial's program has never received final approval, even though it is in fact operating and therefore "existing" within the meaning of the rule. Since Community and Sarasota's Memorial also have existing programs, the rule requires that 1614 be divided by three, yielding 538 as the average number of procedures per laboratory per year. Rule 10- 5.11(15)(o)(1), Florida Administrative Code, provides that there shall be no additional adult cardiac catheterization laboratories established in a service area unless: The average number of catheterizations performed per year by existing and approved laboratories performing adult procedures in the service area is greater than 600. . . . No party contends that Memorial's application meets this rule criterion. All agree that three is the appropriate divisor. Nor is there any justification for adding the minimum service volume (300) to the need for cardiac catheterizations (1614) which the rule establishes for District 8. The rule treats the 300 as a subset of the 1614 total. COMMUNITY'S LABORATORY UNDERUTILIZED During the period January 3 to June 30, 1983, the cardiac catheterization laboratory at Community performed 517 catheterizations 2/ for an average of 4.34 procedures per day the laboratory was open. The cardiologists schedule their own procedures, by asking their office staff to arrange times with the Community employee who keeps the appointment book for the laboratory. Tuesday is most popular. During the period from January 3 to June 30, 1983, an average of 4.75 cardiac catheterizations occurred on Tuesdays in Community's laboratory. Wednesdays and Thursdays saw comparable, although lower utilization, but the average number of procedures dropped to 4.08 for Mondays and to 3.74 for Fridays. As a rule, cardiologists in Fort Myers do not perform these procedures on weekends. The cardiac catheterization laboratory at Community can handle five procedures a day comfortably. A single crew of technicians occasionally did seven cases a day, but this involved working overtime. The laboratory normally in operation no earlier than eight in the morning and no later than two or three in the afternoon. The average case takes an hour and fifteen minutes or so. When manipulation of the catheter beyond a heart valve proves exceptionally difficult, a case may take as long as two and a half hours. Without adding staff or lengthening its hours or changing its methods, the Community laboratory easily has the capacity to perform 25 cardiac catheterization procedures a week or 108 a month. In no month has this number been exceeded. In only one was it approached. On the basis of a 50 week year, 1250 procedures can be done without changing anything other than physicians' schedules on Mondays and Fridays. In 1982, Community performed only 806 procedures. The laboratory at Community has substantial unused capacity. Changes short of increasing hours of operation could increase the laboratory's capacity drastically. Of the time expended in a normal cardiac catheterization at Community, only 15 to 20 minutes actually entails use of specialized laboratory equipment. Preparing the patient for catheterization and administering post-catheterization care need not take place inside the laboratory proper. Experience in Florida has taught that moving pre- and post- care outside the laboratory itself makes seven or eight cases a day possible without going beyond two in the afternoon. Changes that would not require a certificate of need could increase Community laboratory's capacity substantially. There are eight cardiologists in the Fort Myers area, all of whom are on staff both at Community and at Memorial, and one possibility would be adding a second shift, or a sixth or seventh day. Either of these steps might entail adding not only catheterization technicians but also additional personnel for ancillary services, however. There is talk of introducing coronary transluminal angioplasty at Community, which would increase the demands on the laboratory, by some ten percent. (Approximately five percent of cardiac catheterization patients are candidates for coronary transluminal angioplasty and this procedure takes twice as long as the ordinary catheterization, on average.) Changes at Community's laboratory not requiring a certificate of need could readily offset any such an increase in utilization. EMERGENCY CATHETERIZATIONS A cardiac catheterization constitutes emergency therapy when, in order to restore normal blood flow, the catheter is used to introduce streptokinase, an enzyme that dissolves blood clots. Streptokinase may be injected intravenously so that it reaches a blockage at the desired strength, but there is a risk of untoward side effects. Use of the catheter permits local application of the enzyme to a blood clot blocking an artery. Neither of the cardiac catheterization laboratories in Fort Myers has ever administered streptokinase through a catheter, however. When a patient is admitted to hospital complaining of chest pains, and other tests do not indicate otherwise, cardiac catheterization may be appropriate, before the patient leaves the hospital. Once or twice, when there was an equipment failure at the Community laboratory, patients in this category had to be discharged and readmitted in order to be catheterized. On about ten occasions in the course of a year patients admitted with severe chest pains had to wait more than 12 hours for the laboratory to be free and in some of these cases the wait exceeded 24 hours. By comparison, the laboratory is idle for much longer periods weekends. Between two o'clock Friday afternoon and eight o'clock Monday morning, there are of course 66 hours; and there was no evidence of any use of the Community cardiac catheterization laboratory on weekends in recent times. CONTINUITY OF CARE About forty percent of the patients who are catheterized are deemed appropriate candidates for open heart surgery. Since Memorial does not have open heart surgery capability, patients must be transferred by ambulance to Community, in emergency situations. Otherwise they are discharged from Memorial and later enter Community or another hospital where open heart surgery is performed. EQUIPMENT COMPARABLE Nobody questions the adequacy of Community's laboratory. Memorial and Community offer identical cardiac catheterization services and each has all the equipment necessary to perform the services offered. Both Memorial and Community have digital vascular imaging equipment, but Community's vascular imaging equipment is not available for cardiac catheterization procedures. It is used in connection with other radiological techniques and is located elsewhere in the hospital. Since Memorial does cardiac catheterization in its radiology room, its digital vascular imaging equipment is available for cardiac catheterizations. Memorial cannot get more precise images with its equipment, but computer enhancement does allow precise images to be obtained with the use of less dye. According to uncontroverted testimony, however, the difference in the amount of dye is not large enough to affect the risk "as regards [anaphylactic] type reactions" (T. 403) to the dye. Memorial also has a U-arm apparatus that Community does not have. This facilitates taking pictures from different angles, but increased facility in this regard is only important in the performance of angioplasty procedures, which Memorial does not offer. Pursuant to Rule 10-11.5(15)(i)(5)(b), Florida Administrative Code, Memorial cannot offer coronary angioplasty because, unlike Community, it does not have facilities for open heart surgery. FINANCES Memorial's charges for a routine left heart catheterization exceed Community's charges for the same procedure by half, and are about 25 percent higher than average in the country. Memorial's charges exceed Community's for all catheterization procedures. There was no showing that anybody has ever been denied a cardiac catheterization at Community for inability to pay. The evidence suggested that this is more to the credit of the medical staff than to Community's administration, however. Memorial obviously had money available to finance initiation of its cardiac catheterization service, and might even make money on the service after a couple of years, if allowed to continue. It is losing money now, at least if its catheterization service is viewed apart from the "spinoff." One effect of permitting Memorial to operate a duplicative cardiac catheterization service in Fort Myers would be to divert revenues Community would otherwise have received to Memorial. Not only revenues for the catheterization procedures themselves, but also revenues attributable to the use of hospital rooms and other hospital services would be diverted, making the resulting marginal profit available to subsidize medical care at Memorial for which full charges go unpaid. Memorial has a high charity load and about double the proportion of medicaid patients that Community has. This undoubtedly contributes to making Memorial's charges in many categories among the very highest in the state. Community realizes profits of about $3,500,000 annually and could, at least theoretically, absorb the drop in profit that would attend its loss of revenue, without raising charges. But the fact remains that the cost of medical care to the community has increased because of Memorial's higher charges for identical services. In this case, competition increases rather than decreases total charges, as well as costs. The community could expect to pay more for catheterization services in the future if there are two laboratories in Fort Myers. MANPOWER Memorial hired its chief cardiac technician away from Community, which was still seeking a replacement at the time of the hearing. There is every reason to believe that enough staff can be obtained to man both laboratories, but it is the duplication of these salaries, more than the relatively insignificant duplication of capital costs, that makes two cardiac laboratories in Fort Myers a wasteful proposition at present.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED that the Department of Health and Rehabilitative Services deny Memorial's application for a certificate of need for a new catheterization service. DONE AND ENTERED this 29th day of August 1984 in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of August 1984.
Findings Of Fact The Petitioner is the Department of Professional Regulation, Board of Nursing. The Petitioner regulates the practice of nursing pursuant to section 20.30, and Chapters 455 and 464, Florida Statutes. The Respondent, McDonald Knights, is a registered nurse and holder, at all times pertinent to these proceedings, of license number 1715572. He received his formal training in England and became licensed in the State of Florida by endorsement on or about May 5, 1986. At all times material to these proceedings, the Respondent was employed as a registered nurse assigned to work in the surgical cardiac care unit at Cedars of Lebanon Medical Center in Miami, Florida. Francesco Garofalo was a patient in the coronary care unit of the medical center on March 8, 1987, awaiting cardiac aortic bypass surgery the next morning as a result of acute myocardia infarction. He was being intravenously infused with two medications, lidocaine (for arrhythmia) and nitroglycerin (for pain). The medications were applied through continuous intravenous infusion at separate injection sites and through separate volumetric pumps. At approximately 7:45 p.m., the alarm sounded on the volumetric pump responsible for discharging the nitroglycerin intravenous infusion. The Respondent answered the alarm and noted the container of nitroglycerin was empty. Since the previous shift had not provided a back up container of the medication, it was necessary for Respondent to order a replacement be delivered from the unit's pharmaceutical supply. While awaiting delivery of the medication, the Respondent started a dextrose solution running into the patient to prevent the injection site from closing. At this time, the patient complained of pain at the site of his other intravenous injection for lidocaine. The Respondent determined that this injection site had been infiltrated with the lidocaine solution leaking into the subcutaneous tissue of the patient's arm, resulting in discomfort to the patient. The Respondent decided a new site should be secured. In the process of securing a new site for the lidocaine infusion, the Respondent removed a manual plunger apparatus termed a "cassette" from the volumetric pump. This action effectively discontinued the function of the pump. After inserting the needle in the new venous site, Respondent manually operated the plunger apparatus to insure that the line was open and effectively discharging a smooth flow of lidocaine medication into the patient's body. He did not establish a rate of flow for the medication into the patient's body beyond cutting down the manual flow to an amount equal, in his opinion, to 10 to 20 drops per minute. At this point, the Respondent went to take a telephone call and left the patient's care to another nurse who had entered the room. The time was approximately 7:47 p.m. Cordette Steer is a registered nurse with twenty years experience. When she entered the patient's room to allow the Respondent to take the telephone call, she received no instruction from the Respondent. She did not know the medication being injected was lidocaine. Due to the toxic nature of lidocaine and her observation that the volumetric pump for administering this medication had been effectively bypassed, Steer assumed the Respondent had hung a harmless saline or dextrose solution to keep the vein open for the injection. She proceeded to apply tape to secure the needle at the injection site because, as she testified, "nobody would expect lidocaine to be infusing off of the pump, this is something that is never done." At 7:50 p.m., the patient complained of chest pain. Steer was aware of the exhaustion of the patient's nitroglycerin and that a new bag had not yet arrived from the pharmacy. She stepped from the room and returned almost immediately with nitroglycerin tablets which she gave to the patient to relieve his chest pain. He shortly began to exhibit seizure symptoms commonly associated with lidocaine toxicity. Code Blue was sounded. The Respondent was among those personnel responding. He disconnected the lidocaine infusion, stopping the flow of lidocaine to the patient. The time was 7:55 p.m. Resuscitation attempts failed and the patient subsequently expired at approximately 8:30 p.m. Nancy Cox is a critical care educator employed with the Miami Children's Hospital. She is an expert in the fields of surgical and cardiac critical care. She reviewed the medical records pertinent to this proceeding and her expert testimony establishes that: Lidocaine is an extremely toxic medication which can be fatal if the volume administered to a patient is not closely controlled. The dosage the patient should have been receiving was 15 cubic centimeters per hour or approximately three teaspoons per hour. The volumetric pump sets the rate of delivery of an intravenous drug with a finite, or high, decree of accuracy. When the pump is turned off, with the cassette in place, the flow of medication is stopped. When the cassette is removed from the pump device, an open flow is established and the pump fails to act as a regulator. Finite control of drug administration is not possible manually, as was attempted by the Respondent in this case, without taking considerable time to adjust the rate of flow in concert with timed intervals. Even when this is done, the plunger may spring open and allow a greater than desired drug flow. The Respondent should not have established a smooth flow of lidocaine, but rather a dripping or slow rate of infusion. The Respondent deviated from accepted minimal standards of cardiac or critical care nursing when he used the lidocaine solution to initially infuse at an open, unregulated rate in order to determine if the new injection site was functioning as opposed to establishing a patent intravenous route by either injecting saline via a syringe into the catheter, or connecting a bag of a saline or dextrose solution to the catheter for this purpose and then allowing it to infuse, prior to re-connecting the lidocaine. The Respondent also deviated from accepted minimal standards of acceptable and prevailing nursing practice by not informing Cordette Steer that lidocaine was being administered intravenously to the patient without the use of the volumetric pump.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Board of Nursing enter a final order finding the Respondent guilty of the offense charged in the administrative complaint, suspending his license for a minimum period of one year with probationary reinstatement thereafter conditioned upon 1) a showing by the Respondent that he has enrolled and completed continuing education courses, as deemed appropriate by the Board, in the area of cardiac critical care with an emphasis on intravenous medication applications, and 2) he agrees to comply with reasonable terms and conditions of the Board for a subsequent probationary period of two years. DONE AND RECOMMENDED this 22nd day of April, 1988, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of April, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5633 The following constitutes my specific rulings, in accordance with requirements of section 120.59 Florida Statutes, on proposed findings of fact submitted by the parties. PETITIONER'S PROPOSED FINDINGS Included in finding number 2. Included in finding number 2 Rejected as unnecessary. Including in finding number 2. Included in finding number 3. Included in finding number 4. Rejected as unnecessary. Included in finding number 4. Included in finding number 7. Rejected as unnecessary. Rejected as unnecessary. Included in finding number 4. Included in finding number 4. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Included in finding number 6. Included in finding number 6. Included in finding number 5. Included in finding number 6. Included in finding number 6. Included in finding number 6. Included in finding number 6. Included in finding number 6. Patient was pronounced officially dead at 8:52 p.m., but Respondent testified that death occurred earlier. Included in finding number 7. Included in finding number 7. Included in finding number 5. Included in finding number 7. Rejected as unnecessary. Rejected as unnecessary. Rejected as unnecessary. Included in finding number 7. Included in finding number 7. Included in finding number 5. Included in finding number 7. Rejected, not supported by the evidence. Included in finding number 7. Rejected as unnecessary. Included in finding number 7. Included in finding number 6. Rejected as a conclusion of law. COPIES FURNISHED: Lisa M. Bassett, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William E. Hoey, Esquire 2398 South Dixie Highway Miami, Florida 33133-2399 William O'Neill, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Judie Ritter Executive Director Department of Professional Regulation Room 504, East Coastline Drive Jacksonville, Florida 32201
The Issue The issues for determination are whether Petitioners should be awarded certificates of need authorizing the establishment of inpatient cardiac catheterization services at their respective facilities. As a result of stipulations of the parties, matters for consideration with regard to award of those certificates of need primarily involve a determination as to whether Petitioners' applications meet rule criteria relating to need (numeric and non-numeric), provision of a written protocol or transfer agreement, and utilization standards.
Findings Of Fact The legislature has deregulated the establishment of outpatient cardiac catheterization laboratories (cardiac cath labs), but a certificate of need (CON) is required before a hospital can operate an inpatient cardiac cath lab. The Department of Health and Rehabilitative Services (HRS) has not approved, as the result of initial agency action, a new cardiac cath lab CON in HRS' Service District Five since 1977. The Parties Palms Petitioner NME Hospitals, Inc., d/b/a Palms of Pasadena Hospital (Palms), is a 310 bed acute care hospital located in Pasadena, Florida. Pasadena is geographically located in the southern portion of Pinellas County, Florida. Pasadena, though geographically small, is one of the most densely populated cities in the United States. Within one half mile of Palms are 10,000 people of whom 60 percent are 65 years of age or older. Palms is a full service hospital with an extensive range of medical and surgical services, including a 24 hour emergency room; a coronary care intensive care unit; a surgical intensive care unit; and a respiratory intensive care unit. Palms also offers a full spectrum of non-invasive cardiology services including electrocardiography, echocardiagraphy, nuclear medicine, stress testing and 24 hour monitoring. Palms has five cardiologists, four of them invasive cardiologists, on its active staff and five cardiologists on its courtesy staff. The four invasive cardiologists would utilize a cardiac cath lab or program at Palms. Palms is situated on 13 acres with a main hospital complex that encompasses over 400,000 square feet. There are over 300 physicians on Palms' medical staff, representing virtually every medical specialty. The hospital is accredited by the Joint Commission on Accreditation of Healthcare Organizations. HRS Service District Number Five, which encompasses Palms location, is composed of Pinellas and Pasco Counties. The service district is heavily populated by persons age 65 and over; the persons who, nationally, have the highest rate of cardiac catheterization admissions per 1,000 persons. The rate for deaths resulting from major cardiovascular diseases and heart disease in Pinellas County is 150 percent above the rate for such deaths within the entire State of Florida. Notably, thirty percent of the approximately 200,000 persons within Palms' primary service area are age 65 or older. Further, sixty-eight percent of Palms' patients are medicare patients with an average age of 77 to 78 years. The average age of the medicare population at other hospitals in Pinellas County ranges from 72 to 73 years of age. During 1987 and 1988, 516 inpatients at Palms required cardiac cath services (238 in 1987 and 278 in 1988). A diagnostic cardiac catheterization (cardiac cath) is an invasive medical operation in which a catheter is passed via vascular access in the arm or leg into the heart for purposes of diagnosing cardiovascular diseases or measuring blood pressure flow. Significant advances in the technology of cardiac catheterization permits usage of cardiac caths in the emergency treatment of heart attacks through injection of thrombolytic agents directly into the blood clot causing the heart attack. While these medications can be given intravenously, such an option is not available in the case of elderly patients, who run a higher risk of internal bleeding as a side effect of the drug, and patients who delay seeking medical attention after the onset of a heart attack. Approximately 30 percent of the patients arriving at Palms' emergency room have a cardiac related problem. The number of these patients who are candidates for intravenous injection of thrombolytic agents is small. Approval of Palms' application would significantly improve the quality of care of these patients by permitting the injection of thrombolytic agents directly into the blood clot causing the heart attack, a permitted medical procedure in the process of administering a diagnostic cardiac cath. After the onset of a heart attack, there exists a six hour window during which potentially life-saving drugs can be administered. Due to the possible side effects of these drugs, cardiologists must often perform a cardiac cath to diagnose the ailment prior to administering the drugs. Consequently, patients who present themselves for treatment at Palms several hours after the onset of heart attack symptoms may be precluded from receiving these drugs in view of the lack of a cardiac cath lab or program at Palms. Mease Petitioner Mease Health Care, Inc., (Mease) owns and operates Mease Hospital Dunedin and Mease Hospital Countryside. Mease also operates clinics located in New Port Richey, Palm Harbor, Countryside and Dunedin, Florida. These clinics serve a combined 350,000 patients per year. Mease Hospital Dunedin is a 278 bed facility located in Dunedin, Florida. The Mease Dunedin Clinic houses approximately 60 physicians. Mease Countryside Hospital, opened in 1985, consists of 100 beds and is located approximately eight miles from Mease Hospital Dunedin. Approximately 30 physicians have offices at the Mease Countryside Clinic. Most physicians practicing in the clinics have hospital privileges only at the Mease facilities. Another 100 physicians on the staff of these two hospitals have practices in the surrounding area and admit patients to the Mease facilities. Physicians housed in the Mease Countryside and Dunedin Clinics provide a significant source of patient referrals for the two hospitals, since most physicians practicing in the two clinics have hospital privileges only at the Mease facilities. Ninety percent of patients hospitalized by physicians in the two clinics are hospitalized in Mease Dunedin or Mease Countryside hospital facilities. Mease currently operates a cardiac cath lab at its Mease Dunedin campus on an outpatient basis. This existing facility could be utilized by Mease for inpatient catheterization. The existing outpatient cath lab is outfitted with a Phillips Digital Cardiac Imaging System, the most medically advanced equipment of this type in Pinellas County. Mease's current outpatient cath lab meets all applicable standards for the operation of an inpatient cath lab and is adequately staffed to perform 600 cardiac caths per year. There is no difference in the physical layout of an inpatient cath lab versus an outpatient cath lab. Mease also provides diagnostic services such as echocardiography and nuclear cardiology. Growth in cardiology services experienced by Mease is consistent with the provision of these additional services. Morton Plant Morton F. Hospital, Inc., (Morton Plant) is a not-for-profit 740 bed general acute care hospital spread among twelve buildings on a 36 acre campus in Clearwater, Florida, approximately three or four miles from Mease. Morton Plant offers a wide range of health care services, including cardiac cath, open heart surgery, a cardiac rehabilitation program, post-cardiac surgery recovery areas and intensive coronary care units. HRS HRS is the state agency which is responsible for administering Sections 381.701 through 381.715, Florida Statutes, the "Health Facility and Services Development Act", under which applications for Certificates of Need (CON) are filed, reviewed, and either granted or denied by that department. Petitioners' Applications The applications of Mease and Palms, seeking a CON to implement inpatient cardiac cath services were filed with HRS on September 28, 1988. After initial review, HRS sent omissions letters to the applicants on October 13, 1988. Responses from Mease and Palms were made on November 11, 1988, and HRS denied both applications on January 12, 1989. Both Petitioners timely requested formal hearings regarding the denials. "Old Rule Versus New Rule" HRS has adopted procedures governing its review of applications, such as those of the petitioners, for CONs authorizing the establishment of inpatient cardiac catheterization programs. These procedures include HRS' numeric methodology for estimating need for cardiac cath labs or programs. This methodology has traditionally been found in Florida Administrative Code Rule 10- 5.011(1)(e). On April 22, 1988, HRS published a proposed "new" rule containing a new methodology for estimating cardiac cath program need. A key component of the new rule is the use of "admissions" to a cardiac cath program, as opposed to the old rule's use of "procedures", to determine numeric need for additional CONs. The new rule was timely challenged by two parties in proceedings before the Division Of Administrative Hearings. However, the matters in dispute between HRS and the challengers were resolved and the proceedings voluntarily dismissed. Subsequently, HRS filed the new rule as revised with the Secretary of State's office and published the new rule on July 29, 1988. The new revised rule was challenged within 21 days of publication pursuant to Section 120.54, Florida Statutes, by three new parties in Division Of Administrative Hearings Cases numbered 88-3970R, 88-4018R and 88-4019R. A Final Order eventually issued in those cases finding the rule challenges to have been timely brought pursuant to Section 120.54, Florida Statutes, and finding the revisions to be an invalid exercise of delegated legislative authority as a result of noncompliance by HRS with requirements of Section 120.54, Florida Statutes. Florida Medical Center v. DHRS, 11 FALR 3904 (Final Order issued June 29, 1989). The Final Order in Florida Medical Center has been appealed. The parties to this proceeding were permitted to present evidence of need for the respective applications under both the new and old versions of Rule 10- 5.011(1)(e) Florida Administrative Code, although all the parties were informed by order dated September 20, 1989, that the undersigned intended to apply those provisions of the administrative rule criteria in existence prior to the successful challenge to the proposed amendments treated in the Final Order issued in Florida Medical Center. Stipulations Palms and Mease stipulate that each other's application meets the quality of care criteria set forth in Section 381.705(1)(c), Florida Statutes. Morton Plant disputes only Mease's ability to insure quality of care through sufficient utilization. HRS stipulates that both applications meet quality of care criteria with the sole exception that neither applicant included a "written protocol" as noted on page II of the State Agency Action Report (SAAR). The parties stipulate that the requirement for a written protocol exists within the "new" version of the cardiac cath rule and not in the original version of the rule. The parties further stipulate that the terms "written protocol" and "transfer agreement" are not defined in either version of the cardiac cath rule. The parties stipulate that criteria contained in Section 381.705(1)(e), Florida Statutes, (relating to operation of joint, cooperative or shared health care resources) are not applicable to either of the applications in this case. HRS stipulates that criteria contained in Section 381.705(1)(f), Florida Statutes, (regarding the need within the service district of an applicant for special equipment and services not reasonably accessible within adjoining areas) are not applicable to either the Palms or Mease applications. Morton Plant contends these criteria are in issue with regard to Mease's application. All parties stipulate that criteria contained in Section 381.705(1)(g), Florida Statutes, (relating to need for research and educational facilities in conjunction with the applications) are not in issue. Criteria relating to manpower and resources contained in Section 381.705(1)(h), Florida Statutes, are not deemed applicable to the applications by HRS or the Petitioners. Morton Plant contends that these criteria are in issue with regard to the availability of necessary health manpower resources insofar as the Mease application is concerned. Petitioners agree that their applications meet immediate and long term financial feasibility requirements of Section 381.705(1)(i), Florida Statutes. HRS also joins in that agreement, provided costs associated with the cardiac cath lab director at the lab proposed by Palms does not affect the financial feasibility of Palms' project. Morton Plant contests the long term feasibility of Mease's project. All parties agree that criteria contained in Section 381.705(1)(m), Florida Statutes, relating to the costs and methods of proposed construction and equipment acquisition, are met by Palms' application and are not applicable to Mease's application. Criteria contained in Section 381.705(1)(n), Florida Statutes, relating to provision of services to Medicare and medically indigent patients, are met by the Petitioners according to HRS. The other parties contend these criteria are in issue. The parties agree that requirements of Section 381.705(2)(c) and (e), Florida Statutes, (relating to new construction alternatives and proposals for additional nursing bed capacity) are not applicable to the applications at issue in this case. The parties agree that the licensure and accreditation of the parties are not in issue and need not be proven. HRS stipulates that Palms' application and Mease's application satisfy all rule criteria under both the old and new versions of the cardiac cath rule with exception of those criteria relating to need (numeric and non-numeric), a written protocol or transfer agreement, and utilization standards set forth in the rule. Availability of existing services Palms Palms' patients requiring the services of a cardiac cath lab must be transferred by ambulance to other facilities where such service is available. Most of these transfers are made to All Children's Hospital (All Children's) in St. Petersburg, Florida, the nearest facility with cardiac cath services. Cath procedures are performed at that facility by cardiologists possessing staff privileges at Palms, as well as All Children's. On average, the transfer of a patient from Palms to All Children's takes an average of one and a half to two hours, although the actual automobile travel time is less than an hour. After a determination that a cardiac cath is needed, arrangements for the transfer involve negotiating an available time at All Children's and preparing the patient for transfer. Patient medical records are copied, consent forms signed, explanations given to patients and intravenous administration of fluids is begun. Because of their unstable condition, specialized nurses, capable of interpreting cardiac monitors and administering drugs associated with cardiac problems, must accompany these cardiac patients in the ambulance. All Children's ambulance is often not available for transfers from Palms. In those instances, Palms must provide an ambulance and nurse. If the need for such a transfer occurs in the middle of a nursing shift, Palms must pull a nurse from another unit in the hospital to accompany the patient. If plans for the transfer are known in advance of the beginning of a nursing shift, additional nursing staff is arranged for that shift. Some patients experience difficulties in the course of such a transfer. The number of intravenous applications (IVs) attached to a patient is limited during an ambulance transfer, consequently some patients must have some IVs removed. During transportation of the patient, IVs are often shaken loose, medications become unbalanced, other medical appliances become disconnected and some patients experience blood loss as well as a loss of blood pressure. Some patients have required blood transfusions upon arrival at the cardiac cath facilities. In view of the associated difficulties, some cardiovascular patients at Palms are simply too sick to undergo a transfer to another facility where cardiac cath services are available. If a cardiac cath lab or program existed at Palms, an estimated $68,000 in transportation charges would be saved in the first year alone. All Children's, a pediatric hospital, is the only hospital in the State of Florida that performs cardiac cath procedures on both adults and children in the same lab. Since All Children's is a tertiary, regional referral center, more than two thirds of the pediatric diagnostic cardiac caths are performed on nonresidents of the service district. Over 55 percent of all diagnostic cardiac caths at All Children's are performed on nonresidents of the district. Angioplasty is a therapeutic, as opposed to diagnostic, cardiac cath procedure. Such cardiac caths can only be performed at facilities providing open heart surgery services. All Children's is the only hospital in South Pinellas County able to perform angioplasty. All Children's has two cardiac cath labs. Both are heavily utilized. From July 1987 through June 1988, there were 1,268 cardiac admissions to the two labs. All Children's historic rate of 2.12 cardiac cath procedures per admission equates to 2,688 procedures performed on these patients. While this number of "procedures" is in excess of the minimum 600 "procedures" per lab standard applicable under the numeric need methodology used by HRS prior to publication of the proposed admission-based need determination formula, different definitions of the term "procedure" are ascribed to the term in accordance with the context of its usage. Under HRS' proposed admission-based need determination formula, there were 1,099 adult cardiac cath admissions to All Children's program from April 1987 through March 1988. This number of admissions is substantially in excess of the 300 admissions per program standard required for program operation under the proposed new rule policy. Currently 15 cardiologists normally use All Children's two labs on a regular basis. Three of these cardiologists deal with pediatric patients. A fourth pediatric cardiologist is being recruited by All Children's. This additional cardiologist will perform electrophysiology, a cardiac cath procedure involving use of multiple catheters. Electrophysiology studies are extremely time-consuming and this additional cardiologist's lab usage will contribute to present lab access difficulty. Presently, All Children's has a "block time" schedule for the different cardiologists on the active staff at the hospital. Each cardiologist has a scheduled block of time for usage of the cardiac cath labs. As a result, a cardiologist can not have a patient, admitted during the previous night, catheterized on a particular day unless that physician's block of time happens to fall on that day. This process effectively eliminates a majority of time during the week when a cardiologist may schedule catheterization for a patient. Pediatric cardiac caths require more lab time than adult cardiac caths and All Children's gives preference in scheduling caths to pediatric patients. Further, All Children's facilities are blocked all day on Mondays for pediatric patients. It is not unusual, in view of the preference given pediatric patients and emergency cath requirements, for adult cardiac cath patients to be "bumped" from the schedule after their arrival at All Children's. The length of hospitalization of adult cardiac cath patients therefore increases, along with a substantial increase in the patient's medical care costs. The decision of All Children's to block both of the hospital's labs for pediatric caths each Monday has resulted in the postponement of cardiac caths for Palms' patients until Monday night or Tuesday. The result is that weekend patients from Palms have a lengthened hospital stay, assuming the patients are stable and can endure the sometimes two or three days wait for a catheterization study. Palms' cardiologists also experience difficulty placing their patients after catheterization at All Children's. Since All Children's is a pediatric hospital, there are no adult beds with the exception of eight intensive care beds which are usually filled by open heart and other surgical patients. As a result of the lack of available beds at All Children's, alternatives are to transfer Palms' patients to Bayfront Medical Center, a facility adjoining All Children's, following catheterization, or return them by ambulance to Palms. This latter alternative is often followed since Bayfront Medical Center is frequently without available beds. Since a significant percentage of diagnostic cardiac cath patients must later undergo a therapeutic catheterization, Palms' patients, who are returned to Palms after diagnostic catheterization, must be transferred back to All Children's for additional cath work. In one instance, a Palms' inpatient was transferred a total of nine times. The difficulty of access to the cardiac cath labs at All Children's is particularly acute during the first quarter of each year when many elderly people come to the St. Petersburg area to enjoy the warmer climate. Significant health care risks to delaying diagnostic cardiac caths include instances at Palms where patients with unstable angina have suffered large myocardial infarctions before their transfer to another facility's cardiac cath lab. These risks are enhanced for Palms' cardiac inpatients, many of whom have multiple health problems. Palms' inpatients have a higher comorbidity index than all other hospitals in the service district. The approximately 30 primary care physicians on the active staff of Palms are not on the active staff of any other hospital. As a result, they are unable to follow their patients and continue treating their other ailments when those patients are transferred to another facility for cardiac catheterization work. If these primary care physicians could follow their patients, the quality of care would be improved. In addition to difficulty obtaining timely access to All Children's cath labs, the volume of work performed at the lab has resulted in cardiac cath technicians requesting, on at least one occasion, that a catheterization be stopped due to the fatigue of the technicians. Approval of additional inpatient diagnostic cath labs or programs in the area would reduce or eliminate the occasions of such stoppage in the future. Cardiac patients admitted to hospitals in the service district which do not have inpatient cardiac cath services wait, on the average, 1.5 days longer in the hospital before they receive catheterization than do those patients admitted to hospitals in the district providing such services. As a result, patients undergoing cardiac cath procedures and staying in a hospital without inpatient cardiac lab services average a stay which is 1.6 days longer than patients staying in a hospital with inpatient cath services. If Palms were able to provide inpatient cath services, an average additional charge of $1,800 per patient undergoing cardiac cath would be eliminated. This equates to a total savings of $200,000 to $300,000 in medical costs from the reduction of the average length of stay as the result of an inpatient program at Palms. Since hospitalized patients are at increased risk for developing nosocomial illness, diseases or infections contracted during a hospital stay, reducing the length of stay also lessens the patient's opportunity to develop such an illness. Approval of the Palms application, while temporarily lowering the number of diagnostic cardiac caths performed at All Children's, would eventually result in an increase in the number of cardiac caths performed at All Children's. This is particularly applicable to the increase in therapeutic caths that would occur at All Children's as the result of establishment of a diagnostic inpatient cardiac cath lab at Palms. The elderly and seasonal population which would be served by an inpatient cath lab at Palms would result in increased referrals from Palms to All Children's for therapeutic cath services. Two other hospitals in South Pinellas County operate inpatient diagnostic cardiac cath labs, St. Anthony's Hospital (St. Anthony's) and Humana Hospital Northside (Humana). Since neither hospital provides therapeutic cath services, a patient transferred there from Palms for the purpose of a diagnostic cath must later be transferred a second time to All Children's in the event therapeutic services are required. The diagnostic cardiac cath lab at St. Anthony's is owned and operated by the Rogers Heart Foundation, a private non- profit foundation. The emphasis at the Foundation on cardiac research has led to a very low use rate in its cath lab. Additionally, staff privileges are limited to those cardiologists willing to serve on rotation as an emergency room physician. As a result of the reluctance of cardiologists, who have limited their practice to cardiology, to meet the emergency room duty requirement, the staff of St. Anthony's is effectively a closed one. The cardiac cath equipment at St. Anthony's is out- dated and fails to produce quality images. Problems have been encountered by cardiologists with the quality of film developed by St. Anthony's cardiac cath lab. Consequently, the lack of growth and modernization of the St. Anthony's lab does not present a reasonable alternative to Palms' application. The alternative of Humana presents a shortage of intensive care and cardiac cath beds similar to that experience with All Children~s, especially during the winter months. Continued diagnostic catheterization of Palms patients at Humana will result in increased competition for an already insufficient number of beds. Humana is located even further from Palms than All Children's, worsening the current problems associated with transfer of Palms' patients to All Children's. Further, Humana, according to the rate of admissions to its cath lab in the second year of operation, will Substantially exceed the new proposed HRS policy of 300 admissions required to justify a program's operation. During 1988, Palms ranked fourth out of the 24 hospitals in the service district in the number of inpatients requiring diagnostic cardiac caths. If those hospitals operating cardiac cath labs are eliminated from the list, then Palms ranked first in the total number of inpatients requiring cath services at the remaining 17 hospitals. In 1988, Palms' 278 inpatients requiring diagnostic cardiac cath services was more than the 219 at St. Anthony's and the 174 for Humana's first year, even though those facilities had cath labs. Palms' total also exceeded the 201 patients requiring this service at both of the Mease hospital sites. The likelihood of discernable adverse impact on the cardiac cath programs at St. Anthony's and Humana as the result of establishing diagnostic cath services at Palms is small in view of the infrequent admission of Palms' patients to those programs. Serious problems will continue to be experienced by Palms' patients in obtaining inpatient diagnostic cardiac cath services if the Palms application is denied. In view of the demographics of the surrounding area and patient age composition at Palms, establishment of a diagnostic cardiac cath program in that hospital would result in an improvement of the standard of care received by inpatients there. The unique nature of All Children's primary mission as a pediatric hospital, and its inability to provide ready access to its cardiac cath labs by Palms' patients for the purpose of diagnostic cardiac cath services, coupled with other previously- noted access problems constitute exceptional and "not normal" circumstances sufficient to justify approval of a diagnostic cardiac cath lab at Palms without regard to numeric need requirements of either the "old" or "new" versions of Rule 10- 5.011(1)(e), Florida Administrative Code. Mease Accessibility to health services has two aspects; geographical accessibility and financial accessibility. The "old" rule policy of HRS has a two hour travel standard within which a cardiac cath lab must be available. The proposed rule has a one hour standard. Morton Plant is approximately three or four miles from the Mease Dunedin campus. Both hospitals provide services to the same population. The Mease Countryside Campus is approximately eight miles from the Mease Dunedin campus. The considerable testimony regarding the problem and inconvenience of transporting patients for cardiac cath presented by Palms is not appropriate to Mease. The cardiac cath labs at Morton Plant are not overcrowded, although alternatives to that possibility are being contemplated in the future through the addition of another cardiac cath lab. Based upon projections presented at the final hearing, an additional cath lab may be necessary by 1991. The present labs are not utilized on the weekends except for emergencies and difficulty in scheduling a diagnostic or therapeutic cath is rarely encountered. However, a scheduling suggestion was made by Morton Plant officials, requesting that cathing cardiologists not schedule elective cardiac caths on Mondays and Fridays. But, Morton Plant has not implemented any rule making the cath labs unavailable for elective procedures at those times. One of the Morton Plant labs has been in operation since 1985 and the equipment in that lab is scheduled to be replaced in the fall of 1990. This refurbishment should eliminate concerns regarding reliability of that lab's machinery, although all maintenance of the equipment in both labs is conducted at night to permit both labs to be functional during the day. Mease opened an outpatient cardiac cath lab in April, 1989. Mease expects to perform 160 to 175 outpatient diagnostic caths in the first year of operation. The lab is not presently profitable. However, transfer of inpatients to other facilities for purpose of inpatient caths does impact negatively on Mease. Mease loses approximately $133,000 per year as the result of inpatient transfers, exclusive of ambulance fees. These losses represent the difference between the medicare reimbursement to Mease and the charges that Mease must pay to the other facility for provisions of the inpatient cath services. From October 1, 1988 through September 30, 1989, between 250 and 260 Mease inpatients were transferred to other facilities to receive inpatient caths. Ambulance cost per patient varies depending upon the destination facility which is generally either Largo Medical Center in Largo, Florida, for a charge of $436 round trip or Morton Plant for a round trip charge of $378. An estimated one hour is needed to make the transfer of a patient from Mease to Morton Plant, although actual travel time to the nearby facility is obviously much less. The services of those Mease nurses who accompany each patient are unavailable to Mease for other services for approximately two hours. The transfer of any inpatient to another hospital constitutes less than optimal care and can compromise patient safety as illustrated by one instance of the transfer of a Mease patient who suffered a major heart attack en route to another facility and became a "cardiac cripple." However, such examples with regard to accessibility to other facilities by Mease patients are not sufficient to constitute exceptional or not normal circumstances for purpose of granting the Mease application. Need For The Proposed Projects Prior to publication of the new proposed rule, HRS recognized that multiple procedures may be performed on a single patient during one admission to a cardiac cath lab. However, in the course of application of the old rule methodology to determine need for additional cardiac cath CONs, HRs did not, as a matter of operational policy, ascribe that same meaning to the term "procedures" in formula computations made to determine numeric need for those labs. Typically, a patient undergoes more than one procedure in the course of a cardiac cath. To determine an actual number of procedures, in the generic sense of the word, performed by existing cardiac cath labs in the service district, Mease and Palms subpoenaed information from all those labs. As a result of that effort, Mease and Palms have shown that 7,507 cardiac cath procedures were performed in the service district during the period July 1987 through June 1988. Of this total, approximately 5,081 were diagnostic cardiac caths. Cardiac cath lab admissions for diagnostic and therapeutic cardiac caths during the July 1987 through June 1988 period totaled 4,057 patients in the service district, averaging 1.85 procedures per cath lab admission. Similarly, diagnostic cardiac caths averaged 1.47 procedures per admission. A Diagnosis Related Group (DRG) is a combination of variable diagnoses codes and procedure codes that are used by Medicare to assign a fixed level of reimbursement to the type of medical services rendered by a provider. The term ICD-9CM Code is an acronym for the Internal Classification of Diseases, 9th Revision, Clinical Modification. The ICD-9 coding system is a classification for morbidity and mortality statistics which are modified for use in the United States for statistical collection. There are five diagnosis codes which identity conditions treated and three procedure codes identifying the type of treatment provided. The federal government and the State of Florida's Health Care Cost Containment Board (HCCCB) require that Florida hospitals maintain and report ICD-9-CM Code information. The American Hospital Association, with input from the federal Health Care Financing Administration, the National Center for Health Statistics, and the American Medical Records Association, publishes standards and rules to ensure uniformity in the reporting of ICD-9 information. Further, the Peer Review Organization, as part of its contract with the Health Standards Quality Bureau, reviews the accuracy of ICD-9 coding by hospitals. Florida hospitals report ICD-9 information to the HCCCB by filling out a Uniform Hospital Discharge Data Sheet for each patient. The HCCCB requires Florida hospitals to report up to five diagnosis and three procedure codes. Different ICD-9 codes are assigned for different types of cardiac catheterization procedures. Hospitals are expected to Code each individual cardiac catheterization procedure performed on the patient in accordance with specific instructions published by the American Hospital Association. ICD-9 code information reported to the HCCCB by existing providers of cardiac cath services in the service district corroborates the findings derived by Petitioners from information obtained through subpoenas to those providers, and verifies there is generally some multiple of ICD-9 code procedures per patient in a single admission. While ICD-9 code information is the most reliable tool available for health care planning purposes, the counting of procedures by those codes is not an appropriate measuring tool or good indication of need for two reasons. First, certain procedures may be a component of each and every catheterization, such as pressure measurements and angiography. The same amount of time and resources per patient are utilized regardless of whether the event is recorded as one "admission" or two "procedures". Secondly, different hospitals do record or code the various procedures differently, thereby skewing the results of any attempt to average procedures district wide in order to develop a ratio of procedures to admissions. In this regard, it is noted that Mease and Morton Plant do not code angiography as a separate procedure, consequently they have a low ratio of procedures to admissions in comparison to Palms. In developing its proposed new rule policy, HRS considered methodical scenarios for converting prpcedures to admissions, including a conversion factor of 1.2 procedures per admission and a conversion factor of 1.9 procedures per admission. Neither of these conversion options are utilized in the proposed new rule. Further, the evidence presented at the final hearing fails to establish that HRS has in place any methodology for the conversion of cardiac cath lab procedures to admissions to cardiac cath programs. Petitioners contend that HRS relied in the past upon local health councils to gather the correct number of cardiac cath lab procedures performed by existing labs in a service district, and that hospitals with cardiac cath labs erroneously reported lab admissions to the District Five Local Health Council rather than the total number of procedures performed in the labs. Petitioners further contend that as a result of unwitting reliance upon the number of cardiac cath lab patient admissions instead of the number of procedures performed on patients admitted to those labs, HRS historically suppressed projections of cardiac cath lab need in the Service District Five when applying the "old" rule. The weight of the evidence presented at the final hearing supports a finding that actual need may be at some minor variance with that projected by HRS' need formula computation under the old rule. The extent that such need exceeds the projected amount, while not totally capable of discernment on the basis of the evidence presented, is probably in the neighborhood of 1.01 procedures per admission. It is found that HRS did not intentionally suppress need projections in the district and that the minor variance shown does not substantially affect numeric need determinations calculated under the old rule. As previously alluded to above, the term "procedure" in the rule methodology previously utilized by HRS historically meant the aggregate of what is performed on one admission to a cardiac cath lab. The old rule was based on federal guidelines providing that procedures were equal to an admission. At the time the old rule was written, the terms "cases", "cardiac catheterization", and "cardiac catherization procedures" were used interchangeably with the advent of DRGs for medicare reimbursement purposes, hospitals responded to local health councils' data collection requests by reporting "Procedures" used for reimbursement purposes. The resultant confusion spawned the motivation for HRS to propose the new rule methodology which uses the term "admission." HRS reviewed the applications at issue here pursuant to the proposed new rule and its "admissions" based numeric need methodology. That review, conducted on the basis of admissions, was consistent with the policy of HRS to interpret the term "procedure" to mean "admission." Further, in view of the equivalency accorded the those terms by HRS, the number of procedures for purposes of numeric need calculation under the "old" rule formula does not require inflation in order to apply the old rule's numeric need formula. HRS has candidly admitted that various providers reported the number of "admissions" rather than "procedures". The policy of HRS, although subject to a minor margin of error with the advent of DRGs, to count admissions as procedures is one that has been consistently and fairly applied without regard to whether the result led to the granting or denial of a particular application. From a health planning perspective, an admission or patient is the appropriate unit of measurement to determine future need for cardiac cath services. The goal of the CON program is to ensure an appropriate allocation of services while controlling capital expenditures. The Petitioners contend that cardiac catheterization admissions are not a good measure of resource consumption and that the type of catheterization, i.e., adult versus pediatric and therapeutic versus diagnostic, should be considered. To an extent, the position is well taken, but in the absence of an agency policy that measures numeric need in that fashion, the alternative proposed by the Petitioners is unpalatable. The Petitioners' overly broad proposal for consideration of "procedure" as a multiple of "admission" for purposes of need formula computation results in a proliferation of cardiac cath labs in derogation of the CON program goal previously mentioned. The use of 300 admissions as a minimum number required for a new lab under the proposed "new" rule is not a recognition by HRS of any applicable conversion factor of procedures to admissions. Instead, the number of 300 admissions is a standard that must be met after all existing providers have their present patient volume protected, as opposed to a simple minimal admission number required to maintain skill proficiency of medical personnel. Under the old rule, a volume of only 600 patients per lab is protected in contrast to the new rule's proposal to protect uncapped patient volume in existing cardiac programs. To that extent, the old rule does not place the same emphasis on utilization of existing labs or programs as does the new rule. HRS' SAAR on the Petitioners' applications confirmed a total of 4,712 admissions to cardiac cath labs in the service district from April, 1987 until March, 1988. If the number of admissions is equated to mean the number of procedures, in accordance with HRS rule policy applied to the formula previously used to determine numeric need, then the result of that computation under the "old" rule is no numeric need for additional cardiac cath labs in the service district. Likewise, computations under the proposed "new" rule need formula utilizing reported admissions during the base period also results in a finding of no numeric need for additional cath labs in the district. Out-migration While it is conceded by the parties that strict application of the numeric need methodology of the proposed "new" rule results in a finding of no need for additional cardiac cath labs, Petitioners contend that HRS is required to factor into that new need methodology the number of residents in the service district who go outside the district to obtain cardiac cath services. While subsection h of the "new" rule requires that HRS consider such data in the determination of need, there is no requirement that the number of such residents be included within the need determination formula. As established at the final hearing, out-migration serves to establish need for a facility, in the absence of numeric need, where it is shown that residents are leaving the service district due to unavailability of the services within the district. While residents are leaving the service district in this instance to obtain cardiac cath services, the evidence fails to establish that this action is due to service unavailability. Quality Of Care The parties stipulated that both applicants partially meet the statutory requirement requiring proof of the ability to render quality care and the previous record of the applicant to render quality of care. HRS contends both applicants failed to a provide a "written protocol" for the transfer of emergency patients to open heart surgery providers in compliance with requirements of the "new" rule. HRS concedes that both applications meet quality of care requirements, including those relating to a "transfer agreement" if reviewed under the "old" rule. HRS has not formally defined the term "written protocol", but no evidence exists that either applicant would fail to provide quality of care with regard to transfer of patients in the event such became necessary. The purpose of a written protocol is to assure HRS that proper quality of care procedures would be used in transferring open heart patients. HRS professes confidence in the ability of the applicants to perform this service and therefore this requirement is considered fulfilled in the event approval of the applications is determined pursuant to provisions of the "new" rule. Availability Of Resources Morton Plant's concerns regarding Mease's ability to render quality of care are restricted to whether Mease has provided for sufficiently trained staff to handle the projected volume of cases in the event that Mease's application is approved. Availability of appropriately trained professionals is also a Morton Plant concern. The projections of Mease for salaries, number of employees, expenses, training or acquisition of employees, and overtime costs are reasonable and meet requirememts relating to availability of resources. Consistency With State And Local Plans The state health plan in effect when these applications were filed contains a goal that an average of 600 cardiac cath procedures per lab be maintained within the district. HRS found this provision of the state health plan to be inapplicable since these applications were not reviewed in conjunction with requirements of the "old" rule. Regardless of this omission, neither application meets this goal in view of the traditional interpretation accorded the term "procedures" by HRS. With regard to the district plan, all counties within Service District Five have existing or approved cardiac catheterization providers. With the exception of the access difficulties noted with regard to Palms, services are well distributed. Neither applicant is a major referral hospital, although both have traditionally served all patients without regard to the ability of the patient to pay. Adequacy And Availability Of Other Services There are other existing providers of diagnostic inpatient cardiac cath services available in service district five, whose capacity is not fully utilized. Mease, whose Dunedin campus is located only three to four miles from Morton Plant, proposes to provide services to the same patient population. As previously noted, the concerns about the adequacy of equipment in one of the Morton Plant cath labs is in the process of being addressed through the installation of new equipment in the fall of 1990. Although there are existing providers available, the instances of access difficulty recited by witnesses for Palms are likely to be compounded as more patients undergo cardiac catheterization at those alternative facilities in the future. The demographics of Palms' elderly and multiple illness-laden inpatient population increase the complications likely to be experienced by those inpatients during transfer for purposes of diagnostic catheterization. Likewise, outpatient cath lab establishment would not be a realistic alternative for these patients, or a cost effective measure. While many inpatients would invariably have to be transferred later for therapeutic cath services, the rigors of such a journey would be avoided initially for all inpatients and a considerable number of inpatients thereafter. Impact On Existing Costs No testimony presented at final hearing supports a finding of an adverse impact on any existing provider in the event that Palms' application is approved. Of the three other full service hospitals in Palms' primary service area, only one has a cardiac cath program. Palms projects savings from the elimination of ambulance transfers and reductions in the length of stay for Palms' inpatients receiving diagnostic cardiac caths at approximately $157,000 in the first year of operation. Cost per cardiac cath patient for this service would be approximately $2,200 on average, an amount comparable to other providers in the Palms area. One thrust of Mease's argument, in terms of impact of its program upon the costs of inpatient cardiac cath, is directed to the losses which Mease experiences through the transfer of inpatients to Morton Plant. While increased utilization of Mease's present outpatient cardiac cath lab by its inpatients would decrease or eliminate the present loss of income experienced by the hospital, the burden of that cost benefit to Mease falls upon Morton Plant. The number of inpatients projected by Mease would be derived primarily from individuals who would otherwise receive cardiac cath services at Morton Plant. Approximately 30 percent of the total procedures performed at Morton Plant would be lost if the Mease application is approved. Such a loss would not be detrimental to the Morton Plant program, other than to require Morton Plant to postpone future contemplated increases in the number of cardiac cath labs in the present program. Approval of the Mease application would increase competition to some degree among other providers of diagnostic cath services to inpatients in Mease's primary service area. As previously noted, the impact of competition would be primarily upon Morton Plant, whose cardiac cath facilities, while nearing capacity limits, are not over utilized at the present time. Mease estimates that an average cath charge to inpatients would be $1,500 if its CON is approved. The loss of revenue to Morton Plant will average $1,606 for each inpatient cath lost to another facility, or $511,000 if Mease's application is approved. This amount closely approximates the positive revenue impact of $563,785 estimated by Mease in the event of CON approval. Financial Feasibility All parties, except HRS, stipulated that Palms' application was financially feasible. HRS' position was that Palms' application met this criterion, provided costs of Palms' cardiac cath lab director did not affect financial feasibility. Palms presented evidence at the final hearing amplifying the information in its application and establishing that the cost of the lab director will not affect financial feasibility of the project. The directorship will be a voluntary, non-paying position rotated among the cardiologists with privileges to perform catheterizations. Palms' proposal is financially feasible. HRS stipulated that Mease's project is financially feasible. Morton Plant disputes the long term financial feasibility of Mease's project. Mease maintains that its provision of inpatient cath service will have no cost because the equipment has already been purchased and is being used to do outpatient caths. However, Mease also has an expense item on its inpatient pro forma for depreciation of that same equipment and maintains that the cost for providing the cath service will decrease as costs will be spread over more patients with the advent of inpatient cath services. The more reasonable assumption is that the cost of the equipment is a cost associated with the present CON application, particularly since Mease admits to the motivation of implementing outpatient service in an attempt to enhance the probability of obtaining an inpatient lab. Notwithstanding this cost discrepancy, Mease's application is financially feasible. Medicaid And Medically Indigent HRS has stipulated that the Petitioners' past and proposed provision of health care services to Medicaid patients and the medically indigent is not at issue. However, the parties contend that the matter is in issue between them. As a not-for-profit hospital, part of Mease's mission is to provide needed medical care, independently of the patient's ability to pay. Mease would apply this same philosophy to patients needing services in its inpatient cath lab. Mease provides its fair share of medicaid and charity services relative to the community in which it is located. Palms has made a commitment to serve all patients regardless of ability to pay. Palms does not have any policies which would discourage Medicaid patients. Comparative Review There is insufficient numeric need under either the new or old rule formula to approve either of the Petitioners' applications on that basis. However, Palms presented considerable evidence of exceptional and not normal circumstances justifying approval of its application. In particular, the overcrowding at All Children's, inpatient transfer problems, the severity of the scheduling difficulties at All Children's and other access problems provide an adequate basis for approval of the Palms application. Palms generates more inpatients requiring inpatient diagnostic cath services than does Mease. Notably, 4.76 percent of the total service district diagnostic cath inpatients originate from Palms as opposed to 3.37 percent for Mease. The average age of Palms' inpatients is higher than that of Mease's inpatients. Palms' inpatients have a higher comorbidity index than both Mease and the service district as a whole. Palms has had, historically, more inpatients in the 45-64 age cohort and the over age 65 cohort undergo cardiac cath than has Mease. Mease provides more Medicaid care than Palms, but Palms does not provide obstetrics and pediatric services, two areas of care traditionally high in Medicaid utilization. If the comparison is limited to Medicaid utilization for cardiology services, Palms ranks higher than Mease. Capital costs of Mease's construction of an outpatient lab capable of provision of inpatient services is not included in its application, although depreciation and amortization of the lab and equipment is included. Mease's outpatient lab was constructed in an effort to improve its application for a CON to provide inpatient services, therefore exclusion of that cost results in an unfair comparison of capital expenditure between the two applications. Discounting Mease's claim that its provision of inpatient cath service will have no cost because the equipment has already been purchased and is being used to do outpatient caths, the application of Palms is superior to that of Mease.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered approving the application of Palms for an inpatient cardiac catheterization lab or program Certificate of Need, and denying the application of Mease. DONE AND ENTERED this 22nd day of March, 1990, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1990. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Mease's Proposed Findings. 1.-3. Adopted in substance. 4. Rejected as to cost, not supported by weight of the evidence. 5.-15. Adopted in substance. 16. Rejected, conclusion of law. 17.-20. Rejected, cumulative. 21.-25. Rejected, unnecessary. 26.-31. Adopted in substance, but qualified in some instances. Rejected, unnecessary. Adopted in substance. Rejected, unnecessary. Rejected, misrepresentative of HRS policy interpretation of "procedures" in the context of rule application. Rejected, not supported by the weight of the evidence. 37.-38. Adopted in substance. 39. Adopted. 40.-41. Rejected, not supported by weight of the evidence. 42.-43. Rejected, unnecessary. 44.-45. Rejected, not supported by weight of the evidence. Adopted. Rejected, not supported by weight of the evidence. 48.-51. Rejected, cumulative. 52.-58. Adopted by reference. Rejected, relevancy. Rejected as recitation of testimony, alternatively ultimate conclusion not supported by weight of the evidence. Adopted by reference. Rejected, relevancy. 63.-65. Adopted. Rejected, speculative. Adopted by reference. Rejected, not supported by weight of the evidence. Rejected, cumulative. 70.-72. Adopted in substance. Rejected, cumulative. Adopted in substance. 76. Rejected on basis of creditability. 77.-78. Adopted. 79.-81. Adopted in substance. 82.-84. Rejected, cumulative. 85.-86. Rejected, not supported by weight of the evidence. 87.-88. Adopted by reference. 89. Rejected, cumulative and speculative. 90.-91. Adopted in substance. 92. Rejected, not supported by weight of the evidence. 93.-94. Adopted in substance. 95.-97. Rejected, not supported by weight of the evidence. 98.-99. Adopted by reference. 100. Rejected, unnecessary. 101.-103. Adopted in substance. 104.-110. Rejected, not supported by weight of the evidence. 111. Adopted in substance. 112.-114. Rejected, not supported by weight of the evidence. 115.-116. Rejected on basis of creditability. 117.-122. Adopted by reference. Rejected, not supported by weight of the evidence. Adopted in substance. Rejected on basis of creditability. 126.-128. Rejected, cumulative. 129. Rejected, not supported by weight of the evidence. 130.-131. Adopted in substance. 132.-138. Adopted by reference, although cumulative. 139.-141. Rejected, relevancy. 142. Rejected, not supported by weight of the evidence. 143. Rejected, relevancy. 144. Adopted with modifications. 145. Rejected, not supported by weight of the evidence. Palms' Proposed Findings. 1.-10. Adopted in substance. 11. Rejected, unnecessary. 12.-25. Adopted in substance. 26. Rejected, unnecessary. 27.-41. Adopted in substance. 42. Rejected, not supported by the evidence. 43.-45. Adopted in substance. 46. Rejected, unnecessary. 47.-57. Adopted in substance, though not verbatim. 58. Rejected, conjecture unsupported by weight of the evidence. 59.-63. Adopted in substance. 64. Rejected, unnecessary. 65.-71. Adopted in substance. 72.-75. Rejected, unnecessary. 76. Adopted as to first sentence. Rejected as to second sentence as unsupported legal conclusion. 77.-79. Adopted in substance. Rejected, not supported by weight of the evidence. Adopted for recitation of factual background in recommended order. However, the term "procedure" refers to ICD-9 procedures and not to "procedures" as that term has been defined by agency policy for need formula calculation. Proposed finding's conclusion of additional lab numeric need is rejected as not supported by weight of the evidence. 82.-88. Adopted in substance, though not verbatim. 89.-92. Rejected, unnecessary. 93.-94. Rejected, unsupported by weight of the evidence. 95.-101. Rejected, unnecessary. 102. Rejected, not supported by weight of the evidence. 103.-105. Rejected as legal argument and conclusions unsupported by weight of the evidence to advance the theory that ICD- 9 procedures should govern over the agency's policy definition of procedures under the old rule, and that such other definition should control the determination of number of admissions used to calculate numeric need under the new rule. Rejected, unnecessary. First sentence adopted in substance, remainder of this proposed finding is rejected as argumentative legal conclusion not supported by weight of the evidence to the extent that subsection h data must be included in numeric need formula calculations. Rejected as to ultimate conclusion of this proposed finding as unsupported by weight of the evidence. 109.-114. Adopted in substance. 115.-117. Adopted by reference. 118.-119. Rejected, not supported by weight of the evidence. 120.-125. Adopted in substance. 126. Rejected, unnecessary. 127.-130. Adopted in substance. 131. Rejected, not supported by weight of the evidence. 132.-137. Adopted in substance, though not verbatim. Morton Plant's Proposed Findings. 1.-5. Adopted in substance. Adopted in substance with exception of last sentence which is not supported by weight of the evidence. Adopted by reference. Rejected as to ultimate conclusion as unsupported by the weight of the evidence. 9.-11. Adopted in substance. 12.-15. Adopted in substance. 16.-18. Rejected, unnecessary. First sentence reject, unsupported by evidence as to Palms. Adopted by reference as to remainder of this proposed finding. Adopted in substance. Rejected, unnecessary. Adopted in substance. Rejected, unnecessary. Rejected, except as to last sentence which is adopted in substance. Adopted by reference. 26-28. Adopted in substance. 29. Adopted in substance with exception of next to last sentence of this proposed finding which is rejected as unsupported by weight of the evidence. 30.-34. Adopted in substance. First sentence rejected as unsupported by the weight of the evidence. Remainder of this proposed finding is rejected as unnecessary. Rejected as unnecessary. 37.-38. Adopted in substance. 39.-40. Rejected, unnecessary. Ultimate conclusion of this proposed finding regarding accessibility of cardiac cath services to Mease inpatients is adopted in substance. This proposed finding is apparently directed only to the Mease application in view of the usage of the singular in the reference to denial of the "application" and as such the remainder is rejected as unnecessary. Adopted in substance. All aspects of this proposed finding are not supported by the weight of the evidence. Therefore, as a multiple proposed finding not susceptible to division, it is rejected for that reason. Adopted in substance. Rejected, not supported by the weight of the evidence. Rejected, not supported by the weight of the evidence. 47.-48. Rejected as unnecessary with exception of last sentence of proposed finding number 48 which is rejected as unsupported by the weight of the evidence. 49.-50. Rejected, not supported by the weight of the evidence. 51. Adopted in substance. 52.-56. Rejected, legal argument. 57. Adopted in substance. HRS' proposed findings. Adopted in substance, as to patients requiring angioplasty. Rejected, unnecessary. Rejected, not supported by weight of the evidence. Adopted in substance. Rejected, unnecessary. Adopted in substance. 7.-10. Adopted in substance. 11. Rejected, unnecessary. 12.-13. Adopted by reference. Rejected as unnecessary. First sentence adopted in substance, remainder rejected as speculative, not supported by weight of the evidence. Rejected, not supported by weight of the evidence. Adopted by reference. Adopted in substance. 19.-21. Adopted in substance. 22.-23. Rejected, unnecessary. 24.-25. Adopted in substance with exception of last sentence of proposed finding number 25 which is not supported by the weight of the evidence. 26.-27. Rejected, unnecessary. 28. Adopted by reference. 29.-30. Adopted in substance. Adopted in substance. Last sentence rejected as unsupported by the weight of the evidence. Adopted by reference. 34.-35. Adopted. Rejected, not supported by weight of the evidence. Adopted in substance. Not supported by the weight of the evidence. 39.-45. Adopted in substance. Rejected, unnecessary. Adopted in substance except as to last sentence which is rejected as unnecessary. Adopted. 49.-53. Rejected as unnecessary. 54. Adopted. 55.-56. Rejected, unnecessary. 57.-58. Adopted in substance. 59. Rejected, unnecessary. 60.-61. Adopted in substance. 62. Rejected, unnecessary. 63.-67. Adopted in substance. 68.-72. Rejected, unnecessary. 73.-77. Adopted in substance. 78.-79. Rejected as unnecessary. 80.-81. Rejected as legal conclusions. 82. Rejected as unnecessary. 83.-87. Rejected, legal conclusions and argument. 88.-89. Adopted in substance. 90.-92. Rejected, unnecessary. Adopted in substance. Rejected, unnecessary. Adopted in substance. 96.-98. Adopted by reference. 99. Rejected, unnecessary. 100.-101. Adopted in substance. Rejected, recitation of testimony. Rejected as to Palms, not supported by weight of the evidence. As to Mease, existing inpatient providers provide an alternative. 104.-105. Rejected, not supported by the weight of the evidence. 106. Rejected as cumulative. 107.-108. Rejected as unnecessary. Adopted by reference. Rejected, legal argument. Adopted in substance. Adopted by reference. 113.-114. Adopted in substance with modification. 115. Adopted in substance. COPIES FURNISHED: Edgar Lee Elzie, Jr., Esq. 215 South Monroe Street, Suite 804 Tallahassee, FL 32301 C. Gary Williams, Esq. Stephen C. Emmanuel, Esq. 227 South Calhoun St. P.O. Box 391 Tallahassee, FL 32302 Ken Hoffman, Esq. W. David Watkins, Esq. P.O. Box 6507 Tallahassee, FL 32314-6507 Cynthia S. Tunnicliff, Esq. Loula Fuller, Esq. P.O. Drawer 190 Tallahassee, FL 32302 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller, Esq. General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 =================================================================
Findings Of Fact The Petitioner, Medical Center Hospital, is a 208 bed not-for-profit hospital located in Charlotte County, Florida. Its primary service area is Charlotte County. It has secondary service areas including DeSoto County and the peripheral areas of Lee and Sarasota Counties, which adjoin Charlotte County. It has filed an application for a Certificate of Need authorizing it to establish a cardiac catheterization (cardiac cath) lab at its facility in Punta Gorda, Florida. After review by HRS staff personnel, the Department initially elected to deny the Certificate of Need application. HRS District 8 includes Collier, DeSoto, Lee, Sarasota, Hendry and Charlotte Counties. Charlotte County is in the approximate geographic center of that district and is the third most populous county in the district. There are 622 acute care beds in Charlotte County divided among three acute care hospitals. There are no cath labs in Charlotte County and in all of District 8, there are only three: (1) Memorial of Sarasota in Sarasota County, (2) Lee Memorial in Lee County and (3) Ft. Myers Community Hospital in Lee County. Charlotte County has a significant population of elderly citizens. This elderly portion of the population is that portion composed of persons of the age of 60 years or older. The population growth of the county and the surrounding areas has been very rapid and continues to be. Charlotte County has historically grown at a rate faster than that of the State of Florida. The county has the largest percentage of elderly persons of any county population in the United States, with approximately 34 percent of its citizens being in the elderly category. Statistically, this elderly age group has the highest degree of damage to coronary arteries and major vessels of the heart. The population of persons over 45 years of age is the broader age group of candidates for cardiac catheterization, comprising approximately 55 percent of the total population of the county. Approximately 40 percent of Petitioner's hospital patient volume, based upon its total admissions, consists of cardiac patients. This percentage is actually higher when computed in terms of patient days of care. Significantly, Medicare eligible patients, the more elderly patients, constitute the predominant number of Petitioner's hospital admissions. The 1981 and 1982 Medicare patient days were 67.16 percent of the Petitioner's total patient days. Patients in the primary and secondary service areas of the Petitioner's hospital, as well as the other two acute care hospitals in Charlotte County, who require cardiac cath services must now be referred out of that county. This referral process, with attendant delays in providing sometimes critical emergency care to patients, disruption of their living routines and those of their families attending them, causes a significant adverse impact on patients in terms of costs, personal health risks, stress and overall adverse effects on the quality of patient care. The economic costs of this referral process are significantly higher than if a cardiac cath facility were located in Charlotte County, especially in terms of the duplicated services and duplicated expenses involved in care for such cardiac patients since many of the aspects of care provided by the Petitioner as the initial admitting facility are duplicated when the patient arrives at the referral facility. A referral for cardiac cath to another physician and hospital involves transfer of the patient, if the patient is already an inpatient at the Petitioner's facility or one of the other two Charlotte County hospitals. The cost of an ambulance or helicopter transfer is significant and must be borne by the patient or the patient's reimbursement provider. The patient must be admitted to the referral facility as an inpatient. This leads to an additional facility charge, not to mention additionalmental and physical stress, on the patient. In turn, another physician at the referral facility must admit the patient to that second facility. He, in turn, will charge a fee. Further, additional laboratory tests and procedures are performed at the referral facility as part of the standard patient "work-up." These include all manner of blood examinations and tests and analyses, chest x-rays, EKG's and the like. Fees are charged for all of these tests and procedures which, in the case of an inpatient requiring cardiac cath, would have already been performed at Use referring facility. Added to this duplication of costs is the stress occasioned the cardiac patient by simply having to go to another hospital at a distance from his home, to a new doctor, to have that new doctor with whom he is unfamiliar, perform a procedure that the patient is apprehensive about. Additional real-life, practical problems involving equipment breakdown can result in additional inpatient time and expense at can result in additional impatient time and expense at the referral facility, since, in the present scenario, that is the only facility in the area with a cardiac cath lab and appropriate equipment. The transporting of a high risk patient, who should not be subjected to the transfer process due to the stress an risk it poses, but must be because the cath procedure cannot be legally performed by the referring facility (Petitioner), presents a clinically significant and often unacceptable risk of death for such patients. Without the cardiac cath lab capability at Petitioner's facility, optimal care to cardiac patients cannot be provided by the physicians and facilities attempting to treat such patients in the Charlotte County area. The minimum service volume requirement (as delineated in the cardiac cath rule at paragraph (i)(4)) requires that a minimum of 300 cardiac cath procedures be performed annually in a cardiac cath lab within three years following the initiation of those services. The number of cardiac cath procedures generated from the Charlotte County area is and has been significantly high for a long period of time. Dr. Rosenfield established that from his practice alone in Charlotte County, 175 to 160 cases have been referred for cardiac cath services since January, 1983. Based on the practices of other cardiologists and physicians in the area, Dr. Rosenfield was able to establish that 400 to 500 cardiac cath procedures a year could be performed in Petitioner's lab, if authorized. In addition to the actual patients referred out of the area, for instance to Lee County, for cardiac cath services, are those patients who refuse referrals. In these instances, patients, although recommended to undergo a cath procedure, refuse to because they are afraid or otherwise unwilling to go to an unfamiliar hospital outside of their county or to an unknown physician. Dr. Rosenfield had approximately 50 to 100 cases in his practice, in 1984, he would have referred to a cardiac cath facility in Lee County or other areas, but his patients refused to accept that arrangement. In short, it was established that the Petitioner can meet the minimum service volume requirement embodied in the so-called "cardiac cath rule." The frequency of cardiac caths being performed in District 8 facilities is increasing in an unbroken trend. Catheterizations are typically performed earlier in a patient's illness and hospital stay than in former times in order to earlier and better diagnose the patient's condition. This results in a higher quality of care for the cardiac patient and lessening of the overall cost of that patient's care both by reducing the number of hospital days and avoidance of unnecessary, sometimes duplicative diagnostic tests. There is a clear national and District 8 trend in cardiac medical practice which consists of performing more therapeutic cardiac caths as a useful tool of preventive cardiac medicine. Actual recent historical utilization and demand for cardiac cath service in District 8 has not been consistent with the prediction embodied in the calculations provided for in Rule 10-5.11(15)(1), Florida Administrative Code. That rule seeks to predict future cardiac cath procedures required in a future year (here 1986) by multiplying the 1981 actual cardiac cath use rate by the 1986 projected population in the District. The resultant figure is then divided by 600 to yield the number of cardiac caths needed as determined by the rule methodology. In the instant situation however, that abstract mathematical calculation projects that 1,833 procedures would be performed in 1986, yielding "need" for three cardiac cath labs. However, in District 8, in 1983, the actual cardiac cath procedures performed, without consideration of the six months of cardiac cath procedures performed by the Lee Memorial Lab in 1983 (annualized), were actually 2,089 procedures, significantly in excess of the need calculation the rule demonstrates for the year 1986, three years later. Utilizing the Department's rule-based mathematical calculation of need, it would be 1990 before enough procedures are projected to warrant a fourth cardiac cath lab in the District. In 1990, 2,128 procedures would be projected by the rule. Actual 1983 procedures, again only including six months of operation of the Lee Memorial Lab without annualizing that six month's experience, fall only 39 procedures short of what the formula shows to be the 1990 "need." If Lee Memorial's 1983 procedures were annualized, the resultant number of District 8 procedures in 1983 is 2,255, more than the Respondent's projected 1990 "need." Thus, the situation established for District 8 in Charlotte County is clearly a "not normal" factual situation, in that the Department's rule methodology shows for 1986, the "horizon" year at issue, and indeed even for 1990, that less procedures will be "needed" than the Petitioner established have already been performed in a single year, i.e. 1983. Thus, due in part to the high percentage of elderly patients who have more frequent need of cardiac cath procedures in the Charlotte County and District 8 population, the need calculation provided for in the above rule clearly does not mesh with nor address what the actual need is already. It is also significant to note that the actual numbers of cardiac cath procedures performed in District 8 cath labs in 1981, as compared to the numbers of unverified procedures reported to HRS, clearly result in a showing of a need for a fourth cath lab consistent with the need determination formula. Six- hundred thirty-three cardiac cath procedures were performed in 1981 at the Ft. Myers Community Hospital and Memorial Hospital of Sarasota. These procedures were "right heart" cath procedures which were included within complete Catheterizations or other Catheterizations procedures, which were counted as one procedure for reporting to HRS, but which in actuality involve separate procedures and billing. The addition of 633 procedures to the 1,482 procedures reported to and employed by HRS in its calculations herein results in a total of 2,115 actual 1981 procedures. Thus, the revised 1981 use rate results in a total of 2,511 projected procedures, for a 1986 horizon year need of 4.2 cath labs. The 1984 real utilization rate reveals in turn, as projected through the year end of 1984, an immediate need in District 8. This is predicated on the Department's acknowledged policy of granting one cath lab for each 600 procedures. If the 2,274 procedures actually experienced in 1984 in District 8 is divided by 600 there results a need of 3.79, or four, cath labs for 1984 based upon the 1984 actual utilization rates. It is also noteworthy that if 1983 actual use rates are utilized, the resulting computation reveals the need for four cath labs for the year 1986. The additional basis upon which the Respondent, HRS opposes the grant of the application is the feared inability of the Petitioner to meet the requirement of Rule 10-5.11(15)(i)5.a. which requires that cardiac cath labs in a facility not performing open heart surgery must submit with their CON applications a written referral agreement with a facility providing open heart surgery within 30 minutes travel time by emergency vehicle under average travel conditions. The Petitioner's application however, (Exhibit 5 in evidence) shows that indeed written referral agreements for open heart surgery between the Petitioner and Memorial Hospital of Sarasota and Ft. Myers Community Hospital have been executed. Ft. Myers Community Hospital is accessible from the Petitioner's location in 20 to 25 minutes travel time by an emergency vehicle, with normal driving time of 30 to 35 minutes. In the context of financial feasibility and control or economy in health care costs to the public, it is established that the Petitioner presently has space available in its existing facility and substantially all of the equipment necessary to perform cardiac catheterization procedures. The cost of its proposed lab will be a maximum of $87,000. That cost includes purchase of new equipment and modifications to the existing examination table.1 It is significant that the cost of this project is substantially less than that which existing health care providers may spend without undergoing certificate of need review, as long as they do not seek to offer a new service. The cost of the project is minimal in relation to the benefits to be derived by patients of the health care service area by institution of the additional cardiac cath service represented by this application. In a similar vein, no issue has been raised concerning the financial feasibility of the Petitioners installation and operation of the proposed cardiac cath lab service.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, as well as the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That a Certificate of Need authorizing the installation and operation of a cardiac catheterization laboratory for its facility at Punta Gorda, Charlotte County, Florida be issued to Adventist Health Systems/Sunbelt, d/b/a Medical Center Hospital. DONE and ENTERED this 9th day of May, 1985 in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of May, 1985. COPIES FURNISHED: William B. Wiley, Esquire 666 Lewis State Bank Building Tallahassee, Florida 32301 Gary L. Wilkins, Esquire 590 Harbor Blvd., Northwest Suite 204 Port Charlotte, Florida 33952 John M. Carson, Esquire Department of Health and Rehabilitative Services 1317 Winewood Blvd. Building 2, Room 407 Tallahassee, Florida 32301 E. G. Boone, Esquire and Robert T. Klingbeil, Esquire Post Office Box 1596 Venice, Florida 34284 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
Findings Of Fact This cause arose upon a proposal of substantial amendments by the Department of Health and Rehabilitative Services (HRS) to Rule 10-5.011(1)(e), Florida Administrative Code, which amendments were noticed July 29, 1988. The rule in question and the amendments proposed provide for the review of certificate of need applications for cardiac catheterization services (in- patient services). The parties stipulated at the outset of this hearing that all parties were substantially affected by the proposed amendments and therefore standing to challenge the amendments by original petition or intervention in the proceeding is not in dispute. Prior to 1987, a certificate of need was required to provide cardiac cath services to either in-patients or out-patients. In the 1987 session of the legislature, the provision of cardiac cath services to out-patients was "de- regulated" from certificate of need (CON) review. In response to this action by the Legislature, the Department decided that its cardiac cath rule should be amended to take into account this change. A cardiac cath "work group" was formed to assist the Department in reviewing the existing cardiac cath rule and in proposing changes thereto. The work group was assembled in order to provide guidance, advice and technical assistance to the Department in promulgating amendments to the cardiac cath rule and in order to express concerns of the health care providers to the community and the Department. Thereafter various comments and suggestions were incorporated into initial drafts of the proposed rule by the work group and its members. One of the chief concerns expressed by the work group members was that the de-regulation of out-patient cardiac cath would result in a proliferation of those services, which in turn could have the effect of generating unnecessary catheterizations and could adversely affect the need for hospital-based cardiac cath services, including already existing services, and the efficient, economic operation of those services. Inasmuch as out-patient cardiac cath services were no longer subject to certificate of need regulation and could not therefore be controlled as to inventory, volume and the like, the work group was concerned about unnecessary duplication of cardiac cath services which it felt would not be in the best interest of the community, in terms of assuring quality of care and the efficient and financially feasible provision of cardiac cath services. The work group's and the Department's efforts at arriving at acceptable amendments to the cardiac cath rule came to fruition with the publication of proposed changes to the cardiac cath rule on April 22, 1988 in the Florida Administrative Weekly. The notice accompanying that publication stated, that if requested within 21 days, a public hearing would be held on the proposed amendments on May 24, 1988. The summary of Economic Impact Statement provided with that publication specifically stated that, "the proposed rule amendment will restrict the entry of new cardiac catheterization providers, thus, avoiding unnecessary duplication of services." That proposed rule, then published, also made consideration of the "unnecessary duplication of services" a review criterion at paragraph 8, concerning "need determination", wherein it was stated, "in order to assure patients safety and staff efficiency, to prevent the unnecessary duplication of services, and to achieve maximum economic use of existing resources, the following criteria shall be considered... (Emphasis supplied) Thus the rule, as proposed in April, addressed the concerns of the Department's work group regarding proliferation of cardiac cath services by establishing a means of defining those procedures and by emphasizing the importance of avoiding unnecessary duplication of services and continuing reasonable restriction on entry into the cardiac cath market by new providers. Petitions challenging the proposed rule amendments were filed by Martin Memorial and Mease in accordance with Section 120.54(4)(b), Florida Statutes. Those petitions were assigned case numbers 88-2253R and 88-2398R by the Division of Administrative Hearings. In the meantime, a public hearing on the changes proposed in April 22 was requested and held on May 24, 1988. At this informal public hearing, conducted by HRS, Mr. Kenneth Krantz was the only individual making comment. His comments did not lead to any of the changes in the proposed rule amendments which ultimately were published on July 29, 1988. Several individuals also submitted written comments to the Department regarding the proposed amendments within 21 days of the April 22 publication. These written comments were incorporated by reference into the record HRS made at the public hearing. Only one of these comments resulted in any changes to the proposed rule. The HRS Hearing Officer Elfie Stamm, who testified in the instant proceeding, noted, at that hearing, that the proposed rule amendments had been challenged by petitions filed by Martin Memorial and by Mease, but those rule challenge petitions did not become incorporated into the record of the public hearing. The Department did not take any affirmative action to incorporate those two petitions into the record of the rulemaking proceeding as envisioned by Section 120.54(13)(b), Florida Statutes. No mention was made of the two petitions in the "summary of comments accepted into the record" which was made by HRS. No representative of either of those Petitioners made any comment or appeared at the public hearing on the rule. Representatives of Mease and Martin met on a number of occasions with representatives of the Department to negotiate changes to the proposed rule in an effort to settle the disputed subject matter of the rule proposed on April 22nd and challenged by them. These were private, unnoticed meetings between the litigants to those two rule challenges. During the course of those contacts and by correspondence and notes transmitted to HRS during the period of these negotiations, Mease and Martin presented in both verbal and written form certain proposed changes to the rule. These proposals were used by the Department in making changes to the Rule. After making the changes, some of the written notes or memoranda were apparently discarded and not kept in the Department's file pertaining to the rule related to the rule and its publication. These negotiations, written correspondence and verbal and written proposals culminated in certain changes to the rule from the way it was originally proposed and noticed on April 22. Thus, on July 29, 1988, in the Florida Administrative Weekly, the Department published a "notice of change in proposed rule amendments" regarding the cardiac cath rule. This notice specifically stated, "the changes were made as a result of public comments and negotiations with the Petitioners challenging certain portions of the amendments." This was the first time any general public notice of the proposed changes to the amendments noticed on April 22nd was made. Thus, Martin Memorial and Mease's petitions did not proceed to final hearing before the Division of Administrative Hearings; rather, both Martin and Mease dismissed their petitions based upon the settlement arrived at with the Department whereby the Department agreed to make the changes to the rule proposed by Martin and Mease, in modification of the amendments published on April 22. Almost all the changes to the rule, published on July 29, 1988, were the result of negotiations with Mease and Martin. One of the changes, however, was the result of a written comment received during the 21-day comment period and concerned the subject of the definition of "in-patient visit." This change is non-controversial. One other change which the Department has characterized as "technical" concerns the definition of service areas for pediatric catheterizations. It apparently was not based on any written comment received or verbal comment made during the public hearing on May 24, but the Department maintains that the change is permissible because of its "technical" as opposed to "substantive", nature. After publication on July 29, 1988 of the changes to the rule amendments as proposed on April 22, FMC, NME and Florida Hospital filed petitions challenging those changes within 21 days of July 29th. These challenges raise the issue of whether the July changes were made in accordance with Section 120.54(13)(b), Florida Statutes, and whether the July changes represented such an altered agency intent, because of the differing expressions of intent therein, and the substantive nature of the changes themselves, as to amount, in essence, to a new rule, with a different intent and purpose from that purposed on April 22. They thus contend that the Department must provide a new notice of its intent pursuant to Section 120.54(1), Florida Statutes, and a new 21-day point of entry for substantially interested parties. The decision on these issues will determine, on the one hand, whether these three petitions were themselves timely and, concomitantly, whether the rule process was procedurally valid in terms of the above-cited statutory provisions. That provision, Section 120.54(13)(b) provides in pertinent part: (b) After the notice required in subsection 1 and prior to adoption, the Agency may withdraw the rule in whole or in part or may make such changes in the rule as are supported by the record of public hearing held on the rule, technical changes which do not affect the substance of the rule, changes in response to written material relating to the rule received by the agency within 21 days after the notice and made a part of the record of the proceeding, or changes in response to a proposed objection by the committee. (emphasis supplied) The Petitioners contend that many of the changes published on July 29, 1988 are not the type of changes countenanced by the above-quoted provision and are not changes in response to any objection by the Joint Administrative Procedures Committee. Indeed, it is undisputed that no objection was made by the Committee to any of the July changes. A reading of the proposed rule amendments noticed on July 29, 1988 reveals the first notable change to be to the language of paragraph 1 of the proposed rule, concerning the Departmental intent. The following language was added to the paragraph by the July 29 publication: It is the intent of the department to allocate the projected growth in the number of cardiac catheterization admissions to new providers regardless of the ability of existing providers to absorb the projected need. Hospitals operating more than one hospital facility under the same hospital license in the same district, shall obtain a separate certificate of need for the establishment of a cardiac catheterization program in each health care facility. (Emphasis supplied). The Petitioners challenged this change for two reasons. First, they argued that the first sentence of the above language represents a significant alteration of the agency's original intent and purpose in proposing the changes which were published on April 22. Petitioners also contend that the second sentence of the above quoted language requires hospitals operating more than one facility under the same license to now obtain separate CONs for each cath program added, whereas, separate CONs were allegedly not required prior to the July changes. HRS and the intervenors on the other hand, argued that these changes were mere technical changes which do not affect the substance of the proposed amendments, as published in April, and point out that the rule methodology or formula remains the same for determining cardiac cath numerical need. Richard Morrison testified on behalf of Florida Hospital on this issue after being accepted as an expert health care planner. He was a member of the cardiac cath work group which assisted HRS in drafting the original amendments published in April. One of the concerns of that work group was that the deregulation of out-patient cardiac cath by the 1987 Legislature would lead to a proliferation of new cath programs. Therefore the work group sought to prevent unnecessary duplication of cardiac services by controlling or restricting the entry of new providers, in the draft amendments submitted to the Department, which were accepted and published on April 22. Mr. Morrison established that this intent was reflected in the "summary of Economic Impact Statement" published with the April version of the proposed rule which provides in pertinent part: The proposed rule amendment will restrict the entry of new cardiac catheterization providers, thus, avoiding unnecessary duplication of services. Mr. Morrison opined that the addition of the new language in Section 1 regarding Departmental intent constituted a substantial, material change from the April version of the proposed rule because it changed the Department's express intent and purpose from one of preventing unnecessary competition in the cardiac cath field, by limiting entry of new providers, to an intent to promote competition by increasing the number of new providers without regard to the ability of existing providers to accommodate new projected growth. According to Mr. Morrison, this change in agency intent, as codified policy, will necessarily have a significant effect on the Department's review of applications for cardiac catheterization programs, notwithstanding that the need methodology formula itself did not change between the April 22 and July 29 versions of the proposed rule amendments. In Mr. Morrison's opinion, if the original intent was to avoid unnecessary duplication of services, then that intent would guide the agency as it applies the rule in certificate of need application situations. Then, the intent being changed to one of fostering competition, the agency's changed intent to loosen restraints on entry into the market, without taking into account the ability of existing providers to meet the need, will have a material impact on interpretation and application of the rule in the opposite direction as the agency reviews CON applications. The altered substantive effect of the change in codified intent or policy published with the July change becomes apparent when one bears in mind that both the April and July versions of the proposed rule amendments in the Departmental Intent Section at issue here also contain the following language: A certificate of need for the establishment of in-patient cardiac catheterization services shall not normally be approved unless the applicant meets all relevant statutory criteria, including standards and need determination and criteria set forth in this rule. The use of this "not normally" condition on the expression of departmental intent gives the department a great deal of flexibility in interpreting and applying the rule. Thus, even though the rule formula for determining numeric need is the same in the April and July versions, the department could still potentially grant a certificate of need when the formula need calculation itself does not justify one, by the department's determination that a special circumstance or circumstances exist justifying its departure from the "normal" strict adherence to the results of the need calculation and the other statutory and rule-mandated criteria for CON approval. One such circumstance could involve its expressed intent, in the July 29 version of the rule amendments, designed to foster competition regardless of the capacity of existing providers to meet the need. The flexibility given the Department by the above-quoted language, which allows it to carve out situations where it can depart from strict adherence to the rule and statutory criteria, renders the expression of intent in the July version as changed from that of the April version, of significant, substantive importance, despite the fact that the bare numeric need formula itself did not change from the April to the July version. It is also true that, somewhat paradoxically, that the new intent language published in July could result in even stricter adherence to the numerical need calculation methodology itself. Under the mandate of Section 381.705, Florida Statutes, the Department is required to give a balanced consideration to all applicable review criteria. (See Department of Health and Rehabilitative Services v. Johnson and Johnson Home Health Care Inc., 447 So.2d 361 (Fla. 1st DCA 1984). The new intent language however would appear to substantially alter or eliminate any such balancing by putting undue weight on the mathematical computation contained in the need methodology and mandating that any calculated numerical need resulting from strict adherence to the formula must automatically be awarded to a new provider. This could occur even though an existing provider was a competing comparative applicant since, as explained above, the "not normally" language gives the Department a logical basis for giving strong, substantive emphasis to its expressed CON review intent. Thus, even though the rule formula itself favors new entrants to the market who apply for cardiac cath CONs, the agency could use this intent expression as a basis for giving no regard or little regard to the various statutory considerations such as quality of care, efficiency, availability of like and existing services and so forth, which might favor existing providers, especially because of this last statement of intent that CON awards will be made regardless of the capacity of existing providers. This language thus likely can have the effect of precluding a balanced consideration of all applicable review criteria and actually elevating the numerical need determination under the rule methodology above and to the exclusion of the other criteria. Thus for these reasons also, this change in the intent language between the April and July versions is a very important and material change in the rule from that which was published in April, 1988. An additional example of the change in the Department's intent and purpose underlying the rule is found in paragraph 8 as published on July 29, concerning "need determination." In that publication, the previously stated purpose to "prevent the unnecessary duplication of services" has been altered to that of "fostering competition" among providers. This change, and that discussed above, conflicts with the intent expressed in the "summary of Economic Impact Statement" which accompanied the April publication, which indicated the intent of restricting the entry of new providers so as to avoid unnecessary duplication of services. This change in the need determination language in paragraph 8 of the proposed rule, coupled with the above-discussed change in intent, is a strong indication of the agency's change of direction and purpose so that, under the July version, its primary emphasis is directed at increasing the number of cardiac cath providers, rather than restricting entry into the market, which was more the emphasis of the April version of the rule. This clear change in emphasis toward fostering competition in the place of avoiding unnecessary duplication of services, in light of the above-discussed considerations regarding the material impact of the agency's codified intent in the rule, will effectively do away with close restraint on entry into the market, since it categorically provides that no consideration be given to the current operations of the existing providers and their ability to meet projected need. Thus this latest change of agency intent would have a material, substantive impact on the manner in which CON applications are reviewed and the manner in which the rule is interpreted and applied. It is both a marked change in intent which was not the subject of a Section 120.54(1) Florida Statutes notice and point of entry and is a substantive, as opposed to a technical change. The above-quoted language concerning necessity for hospitals operating more than one facility under the same license in the same district obtaining separate CONs for the establishment of cardiac cath programs in each facility, does not in reality appear to constitute a substantive change between the versions of the amendments published in July, 1988 and the proposed rule as published in April. That language indeed did appear for the first time in the July 29, 1988 publication of the proposed rule, but it was demonstrated by the testimony of Ms. Stamm, that when the rule amendments were first published in April of 1988, HRS' intent was that separate campuses of the same licensed hospital or facility should have to obtain separate cardiac cath CONs and undergo batch review and that intent was not modified. This interpretation of the proposed rule as published in April of 1988 is in accordance with long accepted CON regulatory law and practice in which a health care provider who, for instance, has a hospital licensed at one end of a district and who wishes to build a satellite at the other being required to provide entitlement under the certificate of need law, Section 381.705, Florida Statutes and related rules. If such a facility is going to serve a portion of the projected need in a health service district then, ipso facto, it will have to prove entitlement to do so under the various review criteria of the above-cited law. This has consistently been the case with all types of services which are regulated through the certificate of need review process. It is illogical to think that the Department would intend otherwise with respect to its proposed cardiac cath rule. It is thus found that this intent was present with the publication of the April 22, 1988 version of the proposed rule and that the intent was not modified when it was published in the specific language, quoted above, on July 29, 1988. That language was merely a clarification or explanation of what the intent already was, it does not represent a change in intent requiring new notice. Because it does not represent a change in intent or in the manner in which the rule would operate in terms of need calculation and treatment of existing providers, it also does not represent a substantive change, for purposes of Section 120.54(13)(b), Florida Statutes. In reality, it really simply more clearly defines what is meant by "health care facility" as that term is used in the rule. Although the need methodology formula itself did not change between the versions published in April and in July, several of the critical elements or components of the methodology were altered. These include a new definition of "approved program" (See paragraph 2d); a revised definition for "service planning area," as well as a change in the base period for the collection of utilization data needed to operate the rule's need calculation, for purposes of paragraph 8(c) of the proposed rule. The following definition for the term "approved program" was added in Section 2(d) of the proposed rule: Approved program. For the purpose of this rule, a program is considered an approved program if it is not operational three weeks prior to the publication of the fixed need pool rule. A program shall be considered an approved program if the department has issued an intent to grant a certificate of need, or entered into a settlement signed by all involved agreeing to grant a certificate of need, or a final order issued by the department, whichever occurs first. The definition of an "approved program" is an important element in the operation of the need methodology contained in the proposed rule amendments. The April version of the proposed amendments did not contain any definition of an approved program. The July version, however, has specific requirements as to when a program becomes approved, as quoted above. This addition of the July definition has changed the outcome of the need methodology contained in the proposed rule. That this was a substantive change, as opposed to a mere technical clarification of what had previously been published in April, 1988, as pointed out by the instance described in Mr. Greene's testimony, where, in District IX, HRS recently approved a cardiac cath application for Lawnwood Regional Medical Center using the new methodology, despite its having settled an earlier case by awarding a program for cardiac cath to Martin Memorial. Under the new need methodology, there was only a need for one of those programs. However, the Martin Memorial approval was not counted against the Lawnwood application because the Martin Memorial application had not been approved three weeks prior to the date for publication of the fixed need pool. The department had a policy under its original cardiac cath laboratory rule, whereby Martin's approval would have counted against Lawnwood Medical Center's application because the policy called for counting the number of approved cardiac labs as they existed at the time a subsequent application was reviewed. Since the April version of the proposed rule amendments was silent on what constituted an "approved program," it could logically be presumed that this same policy would apply, by analogy, from the cardiac cath lab situation, to the new cardiac cath program situation. Thus the change in the rule version published on July 29, in the Lawnwood case, led to the approval of one more cardiac cath program than was actually needed according to HRS' own need formula. The July 29th addition of the new definition of "Approved Program" definitely represents a substantive change causing a different result through operation of the rule, than would have been the case under the April-published version; notwithstanding the fact that the bare mathematical formula is the same in both versions. It has also been established that the addition of the language regarding the Department's intent and the addition of the definition of the term "approved programs" was not in response to any comments accepted into the record of the public hearing held on the proposed rule amendments. Two other changes published on July 29th publication concern revisions to Section 2h of the proposed rule regarding "service planning area." The first change concerns the service planning area for which applications for adult cardiac cath programs will be evaluated. Prior to the July changes, the proposed rule indicated that all applications for cardiac cath services would be reviewed based upon the applicable HRS district or subdistrict. However, the April version did not actually define cardiac cath subdistricts. The July version of the rule, on the other hand, does specifically refer to cardiac cath subdistricts which may be established by the various local health counsels and then codified by the Department into rules. The July version of the proposed rule also proposes larger than district planning areas for pediatric cardiac cath services and defines each of those regional planning areas as encompassing multiple health services districts. The April rule merely provided that "pediatric cardiac catheterization programs shall be established on a regional basis." The April rule did not define those regions and witness Stamm for the Department conceded that the April version of the rule really did not provide the necessary guidance required to operate the need methodology for pediatric cardiac cath applications. "Region" in the common parlance of CON regulation has always presumptively meant a geographic area of regulation larger than the boundaries of one health service district. It is also true that a pediatric cardiac cath program under the rule's methodology can only be added where there are 30,000 live births. That is the more important requirement driving the need methodology which did not change in the July version. That being the case, the fact that "region" was not specifically defined in the April version, and was in the July version, is not a substantial change which affects the substance of the rule. It is a technical change since, as Ms. Stamm established, the actual definition of the districts making up the pediatric cardiac cath regions being described in the July rule, only really serves to clarify and offer additional guidance in the operation of the need methodology. It was simply a further clarification or explanation and not a substantive change. The same is true of the reference to cardiac cath subdistricts for adult cardiac cath services in paragraph 2(h) of the proposed rule. The modifications to the definitions of this service planning area are technical and do not change the substance of the rule. Previously, the April version stated that the service area would be the "HRS district or subdistrict as promulgated into rule by the Department." The July version then read "HRS District, unless cardiac catheterization subdistricts have been defined by the respective local health council and promulgated into rule by the Department." In either case, the service area would remain the HRS district involved, unless a rule was promulgated setting up the subdistricts. It makes no difference whether the impetus for the rule was the Department itself or, in the July version, the local health councils. The fact remains that either version of the proposed rule requires the promulgation of a rule before subdistricts can be defined and used for CON review. This, of course, would give any substantially affected party an opportunity to participate in such a rule promulgation. This, too, was a technical, as opposed to a substantive change, and thus did not depart from the standards of Section 120.54(13)(b), Florida Statutes. The modification to paragraph 3C was not truly contested in this proceeding and constitutes a technical change not affecting the substance of the rule. It merely takes into consideration that more modern equipment can be used in the cardiac cath market, which has the same capability or performs essentially the same functions as that mentioned in the rule. This modification really is only designed to recognize more current cardiac cath technology now available in the market. The July modifications to paragraph 6a concerning "Coordination of Services" were done to allow applicants not having an open heart program at their facilities to submit a "written protocol" allowing for the transfer of emergency patients to hospitals having open heart surgery capability, instead of the somewhat more stringent requirement of having a written transfer agreement with such hospitals. This modification doesn't change the underlying intent of the rule that there be some formalized procedure for transferring emergency patients to open heart program facilities, but does allow new cardiac cath applicants to have their certificate of need applications unimpeded by an existing provider hospital's refusal to enter into an agreement for the transfer of patients. It doesn't change the substance of the rule and is a change which comports with the intent originally embodied in the rule as published on April 22. A significant change was made to Section 8(c) of the proposed rule concerning the base period to be used in figuring volume under the need methodology. The rule methodology, as of April 22nd, required the use of data "for the most recent calendar year available to the Department" in determining the use rate. This provision was amended with the July 29th publication to require the use of data "for the most recent 12 month period available to the Department." The base period used for data collection is an important element in applying the need formula. The change from the calendar year data parameter to the most recent 12-month period data will have a significant impact on the operation of the proposed rule, particularly in the spring batching cycle. The Department will not yet have the entire calendar year data available for the year immediately preceding the spring batching cycle. This data will not be available in time to calculate need and publish it in accordance with the "fixed need pool rule" requirement for that batching cycle. Therefore, under the proposed rule, as published in April, the Department would have had to look to the preceding calendar year's data for use in spring batching cycle. Thus, the spring of 1989 batch cycle review would employ calendar year 1987 data, as all of the calendar year 1988 data would not be available to the Department that soon. Therefore, the operation of the rule, as it was proposed in April, would result in much more current data being available for the Fall batching cycle, because by that time the most recent preceding calendar year data would be prepared. This situation would substantially affect the need calculations embodied in the rule formula. Typically, the greater projected need would be shown in the fall batching cycle because of this unbalanced situation concerning the currency population and use rate of data available in the spring, as opposed to the fall batch. Therefore, the proposed July 29th amendment was inserted by the Department to make the most current 12-month period data available immediately prior to the publication of the fixed need pool for each batch cycle as the base period for calculating use rate. This will result in a more current and comparable data source being available for the operation of the need methodology in both the spring and fall batch cycles. This will consequently have a significantly different effect on the need determination in each batch compared to the situation that would have prevailed if the April version had remained unchanged. This definitional difference in the base period and currentness of data to be used in determining use rate and the need determination functions that flow from that, has an obvious effect on the ultimate projection of need under the rule as proposed in July versus that proposed in April. Consequently, regardless of whether the July version is more logical and makes more regulatory sense, the fact remains that it is a significant alteration in the manner in which need is calculated and is a substantial change from the comparable portion of the rule published in April. The Department also significantly changed the way in which need in subsequent batch cycles would be determined in the July published version of the rule amendments. Specifically, the Department changed paragraph 8d of the rule in the following manner: Need Determination of Subsequent Batching Cycles If NN is less than 300 in the first batching cycle after the rule becomes effective, the ACCPV value which is subtracted from PCCPV will be the same value as ACCPV in the first batching cycle reaches a program volume of 300 or more. The ACCPV value used to project PCCPV shall be updated for every batching cycle and shall be based on data available for the department for most recent 12-month period three weeks prior to the publication of the fixed need pool. Then, after a program is approved, the formula described in subparagraph 8C, will be applied in the subsequent batching cycle. If NN is less than 300 in this subsequent batching cycle, ACCPV will be held constant again until the projected need in a future batching cycle reaches a program volume of 300 or more. Under this July version, ACCPV is the actual cardiac catheterization program volume for the most recent twelve month period. Under this section, if NN, which is defined as the annual net program volume need in the service planning area projected two years in the future, is less than 300 in the first batching cycle after the rule becomes effective, then the ACCPV value which is subtracted from PCCPV, (the projected adult cardiac catheterization program volume), shall be held constant until the projected net need in the future batching cycle reaches a program volume of 300 or more and a program is actually approved. Under the April version, however, once the projected program volume reached 300 then, "regardless of whether or not a program is awarded in that batching cycle" the above-referenced ACCPV figure would no longer be held constant and thus the growth of the capacity of existing providers could be considered. In other words, the July version of the rule has the affect of keeping a "window" of net needs open until a new program is actually approved, whereas the April version provides a one-time opportunity for approval during which the actual cardiac cath program volume of existing providers for purposes of the formula would be held constant with increases in volume and capacity not considered only for that batch. Thus, if a program was not awarded under the April version of the proposed rule, then the ACCPV value would be revised to reflect more recent data and specifically the actual volume and capacity of the existing providers. Both Martin Memorial expert, Judith Horowitz, and HRS expert Elfie Stamm, conceded that this change would tend to make the July rule less restrictive in that it provides the existing providers less protection as to their volume and capacity against the advent of new competitors in the market with potential unnecessary duplication of services. This substantive change corroborates the fact of the above-discussed change in agency intent associated with the July version of the proposed rule and is not merely technical. The Department also added the following language at paragraph 10 of the proposed rule in the July 29th published version regarding the effective date: 10. This rule shall first be applied to certificate of need applications filed in the batching cycle immediately following the effective date of this rule. This rule shall not be applied to any pending certificate of need applications filed in prior batching cycle (cycles). The April version of the rule was silent as to the effective date. Both the April and July versions of the proposed rule require the publication of a "fixed pool" prior to the letter of intent deadline. Despite this fact, the fixed pool was not published for the September, 1988 batching cycle because the date needed to operate the rule was not available at the time. After the April publication, but prior to the July publication, witness Robert Greene inquired of the agency about the proposed rule's effective date and was told by an HRS official that the new methodology would not be applied until the spring of 1989 batch cycle. In spite of this representation and the agency's failure to publish the fixed need pool for the fall, 1988 batch cycle (because the data was not yet available), the Department applied Section 10 of the July version of the proposed rule to applications filed in the fall, 1988 batching cycle. 1/ The mandated effective date affects the substance and the outcome of the rule methodology because the data needed to apply that methodology was not available and the Department was unable to publish a fixed need prior to the letter of intent deadline. Thus, this insertion of a mandatory effective date in the July published amendments had a material effect on both the applicants and existing providers because the values of the elements in the rule methodology were unknown. The data to determine them was not yet available. Therefore, this change from the April published version of the rule is a substantive change and is non-technical in nature. Accordingly, in view of the above-discussed reasons, it is determined that the changes published July 29, 1988 to Sections 2D, 8 and 10 of the proposed rule are changes affecting the substance of the proposed rule and they are not merely technical in nature. They have the potential for changing the results of the need methodology contained in the proposed rule. It is also found that the changes to Section 1 and the first sentence of Section 8 in the July version of the proposed rule are not technical in nature and do affect the substance of the rule. Even if it were to be assumed that the other changes made in July did not affect the outcome of the need methodology contained in the proposed rule (which they can), these changes in the expressed intent and purpose of the Department in enacting and applying the rule would have a significant impact on the Department's review of cardiac cath CON applications for the reasons discussed above. The question now becomes whether the Department failed to follow the other statutory rule promulgation procedures set forth at Section 120.54(13)(b), Florida Statutes (1987) in making the changes published in July, 1988. The agency gave the required notice of its intent to adopt changes to the cardiac cath rule in the April 22, 1988 edition of the Florida Administrative Weekly in accordance with Section 120.54(1), Florida Statutes. After giving that notice, and prior to the adoption of the rule, the agency is only allowed to make changes in the rule which are supported by the record of the public hearing held on the rule, technical changes not affecting its substance; changes in response to written material received within 21 days after the notice referenced above and actually made a part of the record of the rule proceeding. It is undisputed that no objection from the Joint Administrative Procedures Committee was received. The public hearing was held on May 24, and only one person, Mr. Krantz, made comment at this hearing. The Department took none of the actions noticed on July 29 on the basis of his presentation and comments at the public hearing. There were several written comments in the form of letters received by the Department within the 21-day comment period after the April publication, but the only change made to the proposed rule published in July as a result of these comments was to the last sentence of paragraph 2(c) pertaining to the definition of an in-patient visit. Other than this and the technical change involving service areas referenced above, the other changes to the rule were made as a direct result of negotiations with the Petitioners Mease and Martin. The Department is maintaining that the petitions filed by Mease and Martin within 21 days after the April notice, fall within the category of "written material relating to the rule received by the agency within 21 days after the notice and made a part of the record of the proceeding...." See Section 120.54(13)(b). In fact, it was not demonstrated that the rule challenge petitions were actually made a part of the record and of the rulemaking proceeding. The petitions were filed with the Division of Administrative Hearings (DOAH) and thus are considered to be a part of the record of the formal proceeding under the Division's original jurisdiction of rule challenge matters. The petitions thus did not come to HRS as part of its record but rather as merely pleadings of the opposing parties served on HRS as a party to the rule challenge proceeding before DOAH. The evidence indeed shows that the petitions were not made a part of the record. When compiling its rulemaking proceeding file, HRS has a policy and practice of relying on a generic "checklist," which lists all the items that should be included in the record. This generic checklist does not include rule challenge petitions related to the rule at hand. (See NME Exhibit 4 in evidence). The public hearing was held on the rule on May 24 and witness Elfie Stamm for the Department was the HRS Hearing Officer presiding over that hearing. She specifically incorporated into the record of the rulemaking proceeding the other written comments received by the agency within the 21-day period, all but one of which were not the basis for any changes as referenced above. (See NME Exhibit 3 in evidence.) Neither Ms. Stamm nor any one else specifically incorporated those petitions into the record of the rulemaking proceeding. She merely mentioned, as an aside, that the proposed rule had been challenged or that the petitions had been filed by Martin Memorial and Mease, but never specifically incorporated them into the record before the agency. In addition to this, as part of its rulemaking process, the Department prepared a document entitled "Summary of Comments Accepted Into the Record At the May 24, 1988 Public Hearing on the Proposed Amendment to Rule 10-5.011(1)(c), FAC, Cardiac Catheterization Programs." This document summarized all of the other oral and written comments received by the agency within the 21-day comment period and the action taken on them. No mention was made in the document of Martin Memorial and Mease's petitions. There simply is no evidence that the petitions were ever received into the rulemaking process record so that could be used as a basis for making the changes made on July 29th in accordance with Section 120.54(13)(b), Florida Statutes. Even if the petitions had been properly accepted into the record, a liberal reading of them does not reveal that the substantive changes discussed above, published in July, can be attributed to the content of the petitions. Ms. Stamm participated in the negotiations with Mease and Martin and established that the Department received certain written materials, letters, notes, and memos from them proposing specific rule language as a basis for the changes to the rules which were published in July. The testimony of Ms. Stamm, along with the written materials and correspondence in evidence, which were submitted more than 21 days after the April publication date, shows that these were the basis for the substantive changes made in the rule amendments published in July, rather than the content of the petitions themselves. The change regarding the Department's intent, appearing in Section 1 of the proposed rule, for instance, is not directly supported by either Martin's or Mease's petition. HRS acknowledged that nothing in the Mease petition itself serves as the basis for the new intent language and a careful review of Martin's petition reveals no language supporting the intent language change made and published. There is a general statement at paragraph 4(c) of the petition regarding the "stated legislative goal of cost containment and strengthening of competitive forces in the health services industry." This does not support the new intent language, however. Rather, it specifically refers to complaints the Petitioners had about calculations and the mathematical formula of the need methodology which are set forth at paragraphs 4(a) through (d) of the petition. In fact, the Department made no changes to the mathematical need formula itself between the April and the July publications. There is no language in the petitions of Martin or Mease which would support the deletion from consideration of the "unnecessary duplication of services" in favor of "fostering competition among providers" with reference to the language of paragraph 8 of the rule July version of the amendments discussed above. Although paragraph 8 is referenced in both petitions, it is mentioned solely in the context of disagreement with the mathematical formula, to which no changes are made in either the April or July publications. The same is true with the other changes to the rule as published in July which are found above to be substantive changes and changes of agency intent. Thus, the petitions filed by the original challengers to the April version of the proposed rule are not the bases for any changes made to the rule, even though they were submitted within 21 days of the original publication date and even if they had been made a part of the record of the rulemaking proceeding, which they were not. The only written comments which realistically address and are supportive of the new intent language and the other substantive changes in the proposed rule come from letters and notes delivered to representatives of the Department from Martin's and Mease's representatives after the 21-day-comment period had expired. The new intent language, in fact, is drawn verbatim from the language submitted by Mr. Byron Matthews in letters to Ms. Leslie Mendelson and Mr. J. Robert Griffin, dated May 25 and May 31, 1988, respectively; (in evidences as Exhibits 5-7). Ms. Stamm, a participant in the negotiations with Mease and Martin acknowledged that during the course of them the Department received various written communications advocating specific proposed language, much of which was incorporated into the rule as published in July. She also pointed out that she was not aware of what happened to these written materials except that some were "thrown away". In any event, they were not made part of the record, nor could they legitimately have been, since they were submitted more than 21-days after the original publication date. Some of the extant documents were admitted into evidence, however, (See NME Exhibits 5-8); Tr. 285- 287). Other documents that were submitted by Martin and Mease to the agency at an unnoticed meeting were apparently discarded or destroyed, according to Ms. Stamm. In light of the above findings, it is found that the July changes, to the extent that they were substantive and represented a change in agency intent, as found above, were not based on written material received by the agency within 21 days of the April notice and were not made a part of the record of the rulemaking proceeding. Because these July changes were not made as a result of any comment made at public hearing or as a result of properly received written materials and were not based upon such materials being a part of the record of the rulemaking proceeding, there has been no opportunity for public comment on the July 29th noticed changes. The April notice did not specifically advise the public that alternatives or additional language regarding the Department's intent or the subject matter of the rules would be considered by the agency (See Joint Exhibit 1) in evidence. This is not a situation where the agency noticed its intent and the subject matter of the proposed rule and also noticed at the same time that it might adopt an alternative intent or interpretation of the subject matter. 2/
Findings Of Fact Fawcett's Application. Petitioner, Fawcett, is a 254 bed acute care hospital located in Port Charlotte, Charlotte County, Florida. Its primary service area is Charlotte and DeSoto Counties, Florida. Fawcett's secondary service area includes parts of Sarasota and Lee Counties, and all of Glades County. Fawcett timely filed an application for a CON to establish an adult cardiac catheterization lab at its facility in Port Charlotte, Florida, on October 15, 1985. Fawcett's application was denied by Respondent, HRS, on February 28, 1986. Fawcett's proposed cardiac cath lab would be located in the special procedures suite at Fawcett, specifically, special procedures Room NO. 2. It is the intention of Fawcett that the cath lab operate in conjunction with the special procedures laboratory as it exists currently at Fawcett. The cardiac cath lab will have an open staff policy, meaning that any physician meeting the training and experience criteria under the medical staff bylaws will be able to participate in the lab. Regular service hours will be from 7:00 a.m. to 4:30 p.m., Monday through Friday. In addition to this, the lab will be capable of providing emergency care twenty-four hours a day, seven days a week. Cardiac cath services will be available to all persons regardless of race, ethnic minority, sex, handicap, and inability to pay who, by physician's order, are in need of a cardiac cath. Fawcett proposes to open the cardiac cath lab as soon as is practicable, setting a target date to open no later than July 1, 1987. Need. Rule 10-5.011(1)(e)12, Florida Administrative Code (1986), states that need for a cardiac cath lab is to be determined by computing the projected number of cardiac cath procedures in the service area, using a mathematical formula. "Service area" is defined as the entire HRS district, in this case District 8. Utilizing this formula, the actual use rate in the service area for the 12-month period beginning 14 months prior to the letter of intent deadline for the batching cycle is multiplied by the projected population in Year "X", the year in which the proposed cardiac cath lab would begin service, to give a projected number of cath procedures for Year "X". This projected number of cath procedures is then divided by 600 (the average number of caths required by the rule to be performed per year by existing and approved labs) to yield the number of labs needed in the District. Utilizing this formula, a mathematical need is not shown for District 8. Indeed, the rule methodology shows a need for only five cardiac cath labs in District 8 in July, 1987, and there already are seven existing and approved labs in District 8, not counting Fawcett's proposed lab. Rule 10-5.011(1)(e)6, Florida Administrative Code (1986), states that "[t]he Department will not normally approve applications for new cardiac cath laboratories in any service area unless additional need is indicated." (Emphasis added.) Mortality Rate. Charlotte County has a significantly higher mortality or death rate per 100,000 persons than either the State of Florida or the United States as a whole. Charlotte County's mortality rate is high even when compared to the rest of District 8. The mortality rate from cardiovascular disease in District $ is likewise high. The mortality rate from heart disease in District 8 is 453.2 per 100,000 deaths, with the rate for Florida being 389.4 per 100,000 deaths, and the United States 325 per 100,000 deaths. In contrast to the death rate in other District 8 counties due to cardiovascular disease, Charlotte County's rate of mortalities due to cardiac disease is 619 per 100,000 deaths. Cardiac cath has become the standard treatment modality for dealing with serious cardiovascular disease. Cardiac cath has the potential to greatly decrease deaths due to cardiovascular disease in Charlotte County, where there is a large patient population in Charlotte County who could benefit from this service. Population Growth. Charlotte County has a very high rate of population growth in relation to Florida and the rest of the United States. The rate of growth between 1986 and 1991 will be approximately 23 percent, compared to Florida's overall growth rate of approximately 11 percent and the United States' growth rate of 3 percent. Charlotte County ranks ninth in the United States in terms of population growth from 1980 to 1985 for counties with populations of 50,000 or more. A large proportion of the overall 23 percent growth rate is comprised of the elderly population, aged 65 and over. The 65 and over population is expected to grow by 31 percent between 1986 and 1991 in Charlotte County. This is compared to a projected 18 percent growth of this group in Florida, and a projected 11 percent growth in the United States as a whole for the same time period. Elderly Population. Charlotte County has a population which is heavily weighted toward the elderly when compared to Florida and the United States. An estimated 36.5 percent of the Charlotte County population is aged 65 and over, compared to 19 percent for the State of Florida and 12 percent in the United States as a whole. Fawcett is dependent on the elderly population for its patients, including in the area of cardiac-related services. The majority of cardiac cath patients in Charlotte County are taken from the 65 and over population. Upward Trend in Number of Cardiac Caths. Cardiac cath is the process of taking a sterile plastic tube and placing it into the left or right section of the heart. This allows the cardiologists to perform a combined study, obtaining pressures from the right and left ventricles, as well as injecting dye into the heart's various arteries to take pictures. These two combined studies allow the physician to make as accurate a diagnosis as possible. Cardiac cath has become very important in recent years, so much so that hospitals with advanced cardiac programs which are willing to make the commitment should have cardiac cath to ensure state of the art quality care to the patients. Cardiac cath has become a routine procedure in the treatment of heart- related disorders. Patients with a myocardial infarction (development of lack of blood flow to the heart muscle) are now immediately cathed and diagnosed. This is important in light of the major advances recently made in angioplasty, a non-surgical method of treating blocked cardiac vessels. The current treatment modality is to get information on the problem immediately and reopen the blood vessel that is obstructed to allow blood to get in the heart muscle, thereby avoiding further damage to the heart muscle. There has been a consistent trend upwards in the rate of cardiac caths performed in District 8 relative to its population. The actual use rate for cardiac caths has increased, and the 1986 use rate is higher than the use rate utilized by the rule methodology. In other words, the use rate called for in the rule understates what is actually happening in 1986. The use rate increased approximately 40 percent between 1985 and 1986. The Charlotte County area has experienced an increase in the rate of growth of cardiac caths overall. The evidence reveals an upward trend in utilization of cardiac cath on a national scale. Cardiac cath probably will become a more and more prevalent treatment modality and therefore should be more readily available, with wider application of technological advances, in the future. As more caths are done, the procedure becomes safer and more accessible to people. Medical science has now made it possible for 20 to 30 percent of all persons who suffer heart attacks to be treated without major cardiac surgery, i.e., via a technique called angioplasty, whereby an occlusion or blockage is decreased by the expansion of a balloon in the diseased vessel. Cardiac cath is a necessary step in identifying the need for the angioplasty procedure. Fawcett's Degree of Reliance on the Elderly Population and Its Cardiac Programs. Fawcett is unusual in its degree of reliance on the elderly population. Over two-thirds of all Fawcett's patients are Medicare patients (over age 65), an unusually high number of elderly patients. Approximately 20 percent of Fawcett's 1985 admissions were cardiac disease related. These patients constitute a large percentage of Fawcett's patient revenues. In an area like Port Charlotte, which is so heavily populated with the elderly, it is desirable from the standpoint of patient care to have needed cardiac cath services available to patients at their primary care hospital. Fawcett is the primary care hospital for a large portion of the Charlotte County population. New Service at Minimal Cost. Fawcett proposes to establish its cardiac cath lab at a cost of roughly $90,700. This is a relatively small capital expenditure to add a new cardiac cath service to a facility. Many hospitals must make expenditures of as much as $1,000,000 to add a cardiac cath lab to their facilities. Fawcett already has the bed capacity to handle any additional inpatients which may result from the addition of a cath lab. No recruiting of physicians or the cost associated with such recruiting would be involved. Fawcett currently has 11 cardiologists on staff. Additionally, the rule requires that a certified or board eligible cardiologist be director of the cardiac cath lab, and Fawcett has several certified cardiologists on staff who qualify for this position. Medical Center And Other District 8 Providers. Intervenor, Medical Center Hospital (Medical Center) is a 208-bed facility. 52 beds are used for substance abuse psychiatric service, 156 are acute care beds with psychiatry, oncology, and cardiac facilities. The hospital is a not-for-profit hospital. Medical Center has a Medicaid provider number and has had one for at least seven years. For 1984, Medical Center provided approximately $37,000 worth of charity care; $105,000 for 1985; and through December 4, 1986, $258,000. The amount was anticipated to be as high as $350,000 for 1986. Medical Center is in Punta Gorda, 5 1/2 miles south of Fawcett. Medical Center's primary service are is Charlotte County; it draws approximately 90 percent of its patients from Charlotte County. The remaining ten percent come from Lee, Sarasota and DeSoto, with some as far as Hardee County. The only cardiopulmonary services not offered by Medical Center are open- heart surgical procedures and angioplasty, which goes along with open-heart. There are no conditions existing at Medical Center with respect to the lab that would preclude its availability to patients who might be in need of a cardiac cath. Medical Center has an open cardiac cath lab staff. Dr. Rosenfield and Dr., Popper presently do cardiac caths at the hospital but do not perform cardiac caths at any other laboratory in the District now. From March, 1985 through June, 1986, 57 caths were performed at the Medical Center lab. But from January, 1986, through November 1986, 194 caths were performed. Medical Center estimates that they will perform approximately 250 cardiac caths during calendar year 1986, and 486 are projected for calendar year 1987, Medical Center's cardiac cath lab is currently open 8 hours a day, 5 days a week, 52 weeks a year. The maximum capacity for the cath lab is 2,080 procedures a year. It is a shared lab with the hospital special procedures room. The shared procedures have not caused Medical Center to have any scheduling problems with the laboratory yet, but optimal capacity probably is about 1040 caths per year under present conditions. The Medical Center lab is not over-utilized at this point in time. There is no reason why Medical Center could not perform the 650 projected procedures in 1987 for Charlotte and DeSoto counties; 675 for 1988, 694 for 1989, or 727 for 1990. Approval of a new cardiac cath lab at Fawcett would have an adverse economic affect on Medical Center's cardiac cath lab. Medical Center Hospital operates on a fairly tight margin for profitability. There would be potential impact on the level of indigent care offered at Medical Center if its profit margin should decline due to a loss of patients. Medical Center might not give the same amount of indigent care that it would have given otherwise. Medical Center projects, for 1987, to perform 486 procedures at $1,250 charge per procedure. If approximately 21 procedures (4.3 percent of the total) are drawn away from Medical Center in 1987, Medical Center probably would be a minus-loss situation rather than a plus-profit situation. Fawcett's projected market share of the number of the projected caths to be performed in 1987 for Charlotte and DeSoto counties, i.e., 650, would mean that Fawcett would do approximately 260 cases. Charlotte and DeSoto counties are the primary area in which Medical Center receives its cardiac cath referrals. It is probable that Fawcett would capture at least 4.3 percent of the total of referrals from Charlotte and DeSoto Counties since they project a 40 percent market share from the same area. Including the lab at Medical Center, there are seven existing or approved cardiac cath labs within District 8. The labs are accessible in terms of financial availability to individuals such as Medicaid and indigent patients as well as Medicare, insurance, and private pay. They are also geographically located such that access is available throughout the entire District. There was no evidence to suggest that over 10 percent of the District 8 population is two hours away from cardiac cath services. There is sufficient capacity at the existing labs to take on additional patients. No information was provided HRS to indicate that physicians have had patients who were unable to receive services at the existing facilities or that the quality of services within those labs was such that it was detrimental to individuals in need of a cardiac cath within the area. At this time, Medical Center's cath lab, 5 1/2 miles south of Fawcett, is underutilized. There was no evidence that District 8 existing and approved cath labs are over-utilized or that quality of care is suffering from over- utilization. Other Circumstances. The medical population is growing faster in Port Charlotte than in Punta Gorda. Fawcett and St. Joseph's Hospital are located across the street from one another and are the largest facilities in Port Charlotte. Both hospitals together have the ability to draw a large number of patients. Medical Center, on the other hand, is the smallest hospital in the area. Cardiac procedures are rapidly increasing in volume and as the number of cardiac patients in the area increase, Medical Center will be filling more and more of its beds with cardiac patients if it has the only cath lab in the county. However, Medical Center's medical-surgical beds are only 55 percent occupied, and there is ample room at Medical Center to accommodate growth in cardiac caths up to maximum capacity at Medical Center's lab. An indefinite but small number of patients choose not to have cardiac caths that are indicated because the service is not available at Fawcett, their primary care provider. A cath lab at Fawcett would enhance quality of care to those persons, alleviate the trauma of transferring to another hospital, and eliminate duplicate billing occasioned by such transfers. When Fawcett opened, it had a fully equipped intensive care unit that has been upgraded with time so that Fawcett now has a complete non-invasive cardiology program in operation. Fawcett's cardiopulmonary department has grown since the opening of the hospital. When it opened, the hospital only provided basic 12-lead electrocardiograms. Since then Fawcett has added 24-hour holter monitoring, cardiac stress testing and echocardiography, and performs two-dimensional echocardiograms. In addition, the hospital has a peripheral vascular diagnostic lab, and recently has started MUGA testing. Catheterizations are already being performed at Fawcett on a daily basis. Qualified physicians are currently catching every part of the body but the heart, utilizing state of the art procedures and equipment. The provision of cardiac cath is the next logical step in Fawcett's growth and desire to provide a full range of services to its patients. The safety of cardiac cath has been enhanced due to the increased numbers being performed, in that proficiency increases with practice. Accessibility has increased both as to numbers of physicians performing cardiac caths, as well as facilities providing the service. Also, the procedure of angioplasty is increasing in use, and cardiac cath is a prerequisite to angioplasty. Aflgioplasty is a major alternative to cardiac surgery. Fawcett is well-qualified to provide cath lab services with the idea of eventually expanding its cardiac services into other areas of cardiac care, i.e., angioplasty and open heart surgery. The addition of a cath lab at this time is a logical and necessary step toward this goal. At present, Fawcett patients requiring cardiac cath are sent to anther facility providing the service, usually Ft. Myers Community Hospital (FMCH). Fawcett's procedure when transferring a patient is to discharge the patient from the hospital. If it is an emergency situation, he or she would be transferred via the Charlotte County Ambulance Service or by Air Ambulance through an arrangement with that service out of Tampa. A transfer to FMCH could be accomplished by air ambulance in under 30 minutes if the helicopter were based at Fawcett. But the total time from the request for the Tampa-based air ambulance to arrival at FMCH is more than 30 minutes. By ground ambulance, the 31-mile trip from Fawcett to FMCH takes approximately 40 minutes. Transferring a patient in cardiac distress is not without its costs, to the public as well as the patient, the patient's family, and the doctor involved. Every time an ambulance makes that transfer, it is at a cost of several hundred dollars. The patient, the patient's family and perhaps the physician must commute from one facility to the other. Visiting can become a problem because of the travel involved. Transferring a patient also involves a risk to the patient's health because of the trauma of riding in an ambulance. Patients suffer a loss of comfort and continuity of care in having to leave familiar surroundings and familiar doctors. Dr. Collado and other cardiologists in his group, on staff at Fawcett, are unwilling at the present time to transfer patients to Intervenor, Medical Center Hospital (Medical Center), for a cardiac cath because of Medical Center's perceived lack of a proven "track record." These doctors watch a program, see how the program and its physicians perform and how the patients feel about that program, and establish their own relationship with the physician to whom they refer patients, before routinely transferring patients to that physician. Because of this, Dr. Collado presently sends all of his patients to FMCH or Lee Memorial. This is not a minor undertaking. Dr. Collado's group alone refers out at least 100 patients a year in cardiac cath, some years close to 200 patients. Without a cardiac cath lab at Fawcett, considering the medical advances made in the treatment of cardiac disease, it is envisioned that in two or three years, Fawcett will have to transfer more and more patients in order to keep up with common cardiology practices. But more and more of these patients could be transferred to Medical Center, a five to ten minute drive south in Punta Gorda, instead of to Ft. Myers as Medical Center's track record becomes more established. HRS' Policy. Before former Rule 10-5.11(15) [now 10-5.011(1)(e)] was amended, HRS locked applicants into a 1981 use rate. Under this policy, HRS would use the rate at which cardiac caths were performed in 1981 to determine need in the applied-for year. Fawcett's original application, filed in October, 1985, was reviewed and denied under this use rate. Since Fawcett's original review, however, the rule was amended in June 1986. The new rule provides that need is determined using the actual use rate (number of procedures per hundred thousand population) in the service area for the 12-month period beginning 14 months prior to the letter of intent deadline for the batching cycle. Less than two months prior to Fawcett's hearing, HRS' policy was to utilize a planning horizon that was fixed by the application's submittal date. If a formal administrative hearing was held, HRS then applied the need methodology using current population and utilization data available for the most recent 12-month period before hearing. This resulted in the use of more current data than had been used previously or, often, is used now. Three months prior to Fawcett's final hearing, HRS issued three CONs, Nos. 3539, 3964 and 3971, at the same time for the establishment of cardiac cath labs in District 6. One application was filed in October, 1984, targeting the July, 1986, planning horizon, and the other two were filed in April, 1985, for the January, 1987, planning horizon. These applications were initially reviewed under a 1981 "use rate" and denied due to lack of need under the methodology for the given horizon. Subsequently, HRS reconsidered its position on the CONs under the "use rate" as amended in the rule and utilized data from the most recent twelve month period. As a result of this review, 2 cath labs were approved in the same city, Bradenton, and another in Brandon. However, a need for all of these applications also would be shown using a strict interpretation of the current rule, as urged by HRS in this case. In this case, HRS urges a strict interpretation of the rule to lock utilization data regarding district cath labs on the 12-month period beginning 14 months before the letter of intent deadline. But HRS urges looking at current data as of the hearing date in counting approved cath labs. Long Term Financial Feasibility and Quality of Care. Fawcett's proposed project shows a profit by its second year of operation. There will be sufficient utilization of the proposed cardiac cath lab. Projected utilization of Fawcett's cardiac cath lab was derived by first multiplying the projected total population of Charlotte and DeSoto Counties (Fawcett's primary service area) for the first two years the cath lab will operate by the projected 1986 use rate to give the total number of cardiac caths for these counties. Fawcett will capture approximately 40 percent of the Charlotte County and DeSoto County cardiac cath market in its first year of operation, increasing to 50 percent in the second year. Forty percent of the total caths in Year 1 would give Fawcett 274 caths in its first year of operation. Fifty percent of the total caths in Year 2 would give Fawcett 355 total caths in its second year of operation. These projections are reasonable and obtainable. Utilization will surpass 300 procedures per year by the second year of operation, enough caths for its staff to remain proficient, satisfying both Rule 10-5.011(1)(e)'s minimum volume requirement and the sole issue regarding quality of care not already stipulated by the parties. Fawcett's pro forma for the cardiac cath project is based on reasonable and realistic assumptions: The charge per cath is $1,250 for the first year, with an inflation of 5 percent for the second year. This assumption was based upon average charges from area labs. The contractual allowances or the difference in charges and actual reimbursement for Medicare patients are based on the hospital's historical experience for Medicare patients. Uncollectible charges were forecast as 6.2 percent of patient service revenue, based upon historical experience of uncollectible charges (4.9 percent) and an assumption that approximately 2.3 percent of revenues would be service to Medicaid patients. Fawcett does not have a Medicaid provider number and will not be reimbursed for these patients, so these are treated as uncollectible. Salaries and wages were based on area averages of approximately $12.60 an hour for a trained cardiac technician at 2,080 hours a year. Employee benefits were based on the hospital's current budget of approximately 19.7 percent of salaries and wages for employee benefits. The assumption for supplies and other expenses was based on discussions with the people at the hospital and FMCH's experience. e. Repairs and maintenance depreciation assumes an eight year life on the equipment and an equipment purchase price of $90,230. g. Federal and state income tax assures an overall corporate rate for Basic American Medical, Inc. of 34 percent for federal tax, and 5 1/2 percent for State tax. Based on these assumptions, the proposed cath lab is financially feasible, with a projected net income of nearly $35,000 the first year, and $65,000 the second year. These numbers reflect the relatively low fixed cost involved in the project. In fact, Fawcett's break-even point is less than 140 cardiac caths per year. Indigent Care. Fawcett is willing to condition its CON on the provision of 5 percent care to indigent patients. But Fawcett does not have a Medicaid provider number and its commitment to provide indigent care is suspect. Currently, 4 percent of Fawcett's patients are non-paying, this includes charity indigent care and bad debt. According to HCCS data, Fawcett did no Medicaid and its deductions from revenue for charity work was only one-tenth of one percent in 1985. Without a Medicaid provider number, Fawcett would be writing off approximately $7,500 in Medicaid revenue if it provided 2.3 percent care to Medicaid patients. This is additional financial disincentive from meeting or exceeding its projected Medicaid service. As stated in its application, Fawcett's proposed policy for its cath lab will be to treat Medicaid patients in need of the service, regardless of ability to pay. But actual Medicaid care provided under the policy is dependent upon the actual number of Medicaid patients Fawcett's doctors refer for cardiac cath.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that Respondent, Department of Health and Rehabilitative Services, deny the application of Petitioner, Fawcett Memorial Hospital, for certificate of need to establish an adult cardiac catheterization lab, CON Action NO. 4313. RECOMMENDED this 6th of April, 1987 in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 6th day of April, 1987.
Findings Of Fact The Respondent, Jayaprakash Kamath, M.D., is a licensed physician in the State of Florida, having license ME 0036704. He is board certified in internal medicine and gastroenterology. He has had no prior complaints of any kind against him since he began practicing medicine in Florida in 1980, and he has a reputation for being a competent and caring physician. On the morning of August 1, 1988, while making rounds at Morton Plant Hospital in Clearwater, Florida, the Respondent was paged by one of his partners, Belur Sreenath, M.D. The Respondent returned the call and was asked to see a patient whom Sreenath had just accepted and admitted on a 23-hour basis at Morton Plant. Sreenath reported that the patient was a referral from the Morton Plant emergency room. The patient's regular physician was on vacation, and the regular physician's on-call cover had recommended to the emergency room physician that the patient be referred to the Respondent and Sreenath to treat the patient for diagnosed fecal impaction. It was reported to the Respondent, through Sreenath, that the patient had come into the emergency room at about five in the morning complaining of abdominal pain and constipation. The emergency room physician, Jerry Julius Chase, M.D., had three X-rays done and had done his own "wet reads" of the X-rays before sending them to the radiology department for a definitive interpretation. According to Chase, the X-rays showed "much fecal matter, no obstruction." Chase did not mention any other significant findings. Chase's preliminary diagnosis was "fecal impaction." Sreenath also reported that he (Sreenath) had ordered enemas for the patient. Soon after the Respondent received the call from his partner, the Respondent called Chase, who was still in the emergency room and still had the X-rays. Chase confirmed what Sreenath had told the Respondent, again not mentioning any other significant findings. After talking to Chase, the Respondent visited the patient in his hospital room. By this time it was about 10:00 a.m. The Respondent took a history from the patient, examined the patient, and read the patient's chart. The chart included the results of lab work and the "ER sheet," which included the emergency room physician's diagnosis of abdominal pain and impaction and the results of his "wet-read" of the X-rays, but it did not yet include a report from the radiology department or the X-rays themselves. The Respondent did not contact the radiology department for a definitive interpretation of the X-rays or obtain the X-rays for his own review. By the time the Respondent saw the patient, the patient already had one enema and seemed to be responding to the treatment. Based on the information he had, the Respondent made a diagnosis of fecal impaction, confirmed his partner's orders for enemas for the patient, and added a stool softener. The nursing staff was ordered to monitor the patient's progress. The patient continued to respond satisfactorily to treatment during the day. Between ten and eleven in the evening of August 1, 1988, the patient complained of some abdominal pain or cramping (symptoms that are consistent with a diagnosis of fecal impaction and enema treatments) and the nurses on duty contacted the Respondent's partner, who was on call. Sreenath ordered a combination of demerol and vistaril as an analgesic. One small dose was enough to relieve the patient's pain, and the patient slept through most of the night. He ate 80% of his breakfast the next morning and was not complaining of pain or asking to see a doctor. At approximately 9:15 a.m. on August 2, 1988, a nurse telephoned the Respondent for a decision whether the patient was being discharged or was being admitted as an inpatient. The Respondent still had not seen the patient's X- rays, seen or had reported to him the radiology report on them, or spoken to the radiologist. On questioning, the nurse reported the patient's status to the Respondent. The nurse's report satisfied the Respondent that the patient was responding to the treatment for fecal impaction and could be discharged. The nurse was given orders to have arrangements made for the patient to see his regular physician within a week and to instruct the patient on symptoms to report if they occurred between discharge and seeing his regular physician. In accordance with the Respondent's telephone instructions, the patient was discharged at approximately 9:30 a.m. on August 2, 1988. Although there were no clinical signs or symptoms of it during the patient's stay at Morton Plant, the patient had a large aortic aneurysm, approximately eight centimeters in diameter, in his abdomen just below the renal arteries. The aneurysm was readily apparent on the X-rays, yet Chase did not report it to either the Respondent or to his partner, Sreenath. The radiologist either did not contact Dr. Chase to point out to him that the report of Chases's "wet read" of the X-rays omitted the aneurysm or, if he did, Chase did not relay this information to the Respondent or his partner. The radiologist's written report, stating that the X-rays revealed the large aneurysm, was sent to Chase, not to the Respondent, and Chase did not relay the information in it to the Respondent or his partner. If the Respondent had known about the aneurysm, he would have considered the aneurysm to be the patient's most serious medical concern. He might not have accepted the patient or, if he did, he probably would have brought a vascular surgeon into the case and had the vascular surgeon, or perhaps a cardiologist, closely monitor the patient for possible leaking or dissecting or rupture of the aneurysm. The Respondent also would have had to give consideration to whether the aneurysm was a cause of the patient's abdominal pain. In addition to treating the aneurysm as the patient's most serious medical concern, giving consideration to whether the aneurysm was a cause of the patient's abdominal pain, the Respondent would have had to give consideration to altering his diagnosis for the patient had he reviewed the X-rays or the radiologist report, or had spoken with the radiologist. In addition to showing the existence of the aneurysm, the X-rays indicated that the patient technically may not have been impacted. (The gas pattern was non-specific.) With respect to this patient, the Respondent practiced medicine below that level of care, skill and treatment which is recognized by a reasonably prudent similar physicians as being acceptable under similar conditions and circumstances (below the standard of care) in that he did not either personally review the X-rays on the patient, read or have reported to him the contents of the radiologist's report, or talk to the radiologist. Instead, he relied totally on the emergency room physician's "wet read." As a result, the Respondent's diagnosis of "fecal impaction" may not have been correct, and he did not give proper consideration to the aneurysm. However, except for the failure regarding the X-rays, the DPR otherwise did not prove that it was below the standard of care for the Respondent, who was treating the patient for fecal impaction, to discharge the patient without seeing him on the morning of August 2, 1988, based on the nurse's report to the Respondent. Although it was below the standard of care for the Respondent not to either read the X-rays himself or obtain the radiologist's definitive interpretation, it was reasonable for the Respondent to expect that the emergency room physician would have told him, and noted in the "ER sheet," that the patient he was being referred had an aneurysm of the kind and size of the one the patient had in this case. Even if the emergency doctor had not initially communicated to the Respondent the existence of the aneurysm, either directly or through the "ER sheet," it was reasonable for the Respondent to expect that, in the normal course, the radiologist reviewing the X-rays would have noted that, according to the "ER sheet," the ER doctor "missed" the aneurysm and would have contacted the ER physician to bring this to his attention, and that the ER doctor then would have contacted the Respondent to advise him of the omission. The patient did not experience abdominal pain after his discharge from Morton Plant, but he began to experience back and groin pain. The aneurysm was becoming symptomatic. The patient's symptoms markedly worsened in the early morning hours of August 4, 1988. The patient's wife had him taken to the emergency room at HCA New Port Richey Hospital at approximately half past midnight. The patient was confused, and was complaining of pain in the back and groin area. His blood sugars were three times normal. He was diagnosed preliminarily in the emergency room as having out-of-control diabetes and confusion and as being near sycope. No X-rays were taken in the emergency room at New Port Richey Hospital, and no information was obtained from Morton Plant Hospital. Because the patient and his wife did not know about the aneurysm, they were unable to report it when the emergency room physician took the patient's history. The patient was admitted to New Port Richey Hospital at approximately 2:30 a.m. on August 4, 1988. However, the admitting physician did not see the patient or order diagnostic medical imaging at that time. The admitting physician saw the patient at approximately 9:00 a.m., and ordered X-rays and a CAT scan. Before the X-rays or CT scan were taken, at approximately ten o'clock, the patient suffered an acute hypotensive event while in his hospital room. An emergency abdominal sonogram was ordered, and it was determined that the patient was suffering from the rupture of the abdominal aortic aneurysm (the same one that was evident on the X-rays taken at Morton Plant). Surgery was attempted to resect the ruptured aneurysm. The patient was a poor candidate for surgery of that kind due to his age and other health factors. The patient died on August 6, 1988. If the patient knew of the aneurysm, it is likely that his treatment on August 4, 1988, would have been far different. First, when the aneurysm became symptomatic, they probably would have contacted the vascular surgeon, who would have been on the case already, either immediately or on arrival at the emergency room. The aneurysm would have been closely monitored from the time of arrival at the hospital, and the vascular surgeon would have been prepared for surgery when indicated. 2/ At the very least, the patient and his wife probably would have reported the aneurysm during the taking of a history in the emergency room at HCA New Port Richey Hospital, and the emergency room surgeon could have immediately taken appropriate steps, such as contacting a vascular surgeon and immediately ordering appropriate diagnostic medical imaging. 3/ The Respondent did not dictate admission notes for the patient until August 17, 1988. The Respondent did not dictate discharge notes. The DPR did not prove that it was below the standard of care for the Respondent to delay the dictation of admission notes or for him not to prepare a discharge summary for a patient in the hospital on a 23-hour basis. The DPR also did not prove that the Respondent failed to keep written medical records justifying the course of treatment of the patient.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Board of Medicine enter a final order: (1) finding the Respondent, Jayaprakash Kamath, M.D., guilty of one count of violating Section 458.331(1)(t), but dismissing the other count of the Administrative Complaint; reprimanding him; and (3) fining him $2,000. RECOMMENDED this 27th day of July, 1992, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 1992.
