Findings Of Fact Background Petitioner 1/ owns and operates a licensed nursing facility certified to participate in the Florida Medicaid Program. The facility, which is located at 490 South Old Wire Road, Wildwood, Florida, first became a Medicaid provider on January 27, 1987. Expanded from 120 beds to 180 beds prior to March, 1988, the average occupancy of WeCare is 175-176 residents. The Medicaid patient census is usually over 140 residents. Petitioner operates the only nursing facility in Sumter County providing skilled nursing services. By letter dated December 13, 1990, Petitioner requested an interim rate increase. The letter covers the 12-month period commencing October 1, 1990, which is the effective date of the federal Omnibus Budget Reconciliation Act of 1987 (OBRA). Petitioner requested an interim rate hike of $2.53 per patient day based on a total increase in expenses, due largely to OBRA requirements, of $161,815.32. By letter dated February 15, 1991, Respondent denied the request. The letter fails to address $114,415.32 in anticipated costs, mostly in the areas of nursing and new- resident assessment. These items were inadvertently omitted from Petitioner's December 13 letter. The February 15 response divides projected expenses into two categories: patient care costs and operating costs. The letter treats as patient care costs projected expenditures for food and employee wages to expand evening programs for residents, added consultant expenses for pharmaceutical advice, added consultant expenses for assistance with overall OBRA compliance and preparation for the state survey, new costs due to quality assurance committee meetings with department heads and outside consultants, and additional wages resulting from an increase in the federal minimum-wage standard. The February 15 letter treats as operating costs projected expenditures for the disposal of hazardous waste and maintenance requested by WeCare's resident council. Florida's Hedicaid Reimbursement Plan The Florida Title XIX Long-Term Care Reimbursement Plan , Version III, dated December 17, 1990 (Plan) 2/ is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Medicaid program pays a single per diem rate for all levels of nursing care. After a facility's first year of operation, a cost- settling process results in a final cost report, which serves as a baseline for the following years. Following the first year's operation, facilities file cost reports annually. In the absence of a special rate freeze, Respondent adjusts a facility's reimbursement rate twice annually based upon the factors discussed below. There are four components of a facility's total per diem rate for Medicaid patients. These cost components make up the total Medicaid patient per diem cost. The return on equity component 3/ is not involved in this case. The property cost component plays a minor role in this case. In a facility such as WeCare, which is owned rather than leased, property costs include depreciation, mortgage interest, equipment rent, ad valorem taxes, and property insurance. The two key reimbursement components in this case are "operating costs" and "patient care costs." The Plan defines these terms as follows: Patient care costs include those costs directly attributable to nursing services, dietary costs, activity costs, social service costs, and all medically ordered therapies. All other costs, exclusive of property cost and return on equity or use allowance costs are considered operating costs. Plan, pages 40-41. In general, the reimbursement program sets rates prospectively followed by a cost-settling process. In other words, a rate is set for the coming period in the manner described below. At the end of the period, a cost-settlement takes place. There are limited exceptions to the prospective orientation of the rate-setting process: the prospectively determined individual nursing home's rate will be adjusted. retroactively to the effective date of the affected rate under the following circumstances: an error was made by [Respondent] in the calculation of the provider's rate. A provider submits an amended cost report used to determine the rate in effect. An adjustment due to the submission of an amended cost report shall not be granted unless the increase in documented costs shall cause a change of 1 percent in the reimbursement rate. The amended cost report shall be filed by the filing date of the subsequent cost report or the date of the first field audit exit conference for the period being amended or the date a desk audit letter is received by the provider for the period being amended, whichever is earlier. Further desk or on-site audits of cost reports disclose a change in allowable costs in those reports. Plan, pages 31-33. In this case, Petitioner seeks "interim changes in [its] component reimbursement rates, other than through the routine semi-annual rate setting process." Plan, page 33. Like normal reimbursement rates, interim rates are set prospectively and then cost-settled at the end of the interim rate period. Plan, page 2. Accounting for property costs under the Fair Rental Value System (FRVS), Petitioner is ineligible for an interim change in Medicaid reimbursement rate under the Plan. Petitioner's sole means to obtain rate relief for property costs is to file for a rate adjustment as of January 1 and July 1 of any year. Plan, page 33-34. On January 1 and July 1, Petitioner may obtain an adjustment to the FRVS rate if "expenditures for capital additions and improvements totalling, $100 per licensed bed accrue in the 6-month periods ending April 15 or October 15 prior to rate semesters beginning July 1 and January 1, respectively." Plan, page 72. Because Petitioner has 180 beds, the threshold for the FRVS property cost adjustment is thus $18,000. The Plan does not require that the acquired property for which the rate adjustment is sought be purchased to comply with a new legal requirement. The reimbursement process is quite different for patient care and operating costs. Addressing interim rate hikes for these components of the reimbursement rate, the Plan provides: Interim rate changes reflecting increased costs occurring as a result of patient care or operating changes shall be considered only if such changes were made to comply with existing State or Federal rules, laws, or standards, and if the change in cost to the provider is at least $5000 and would cause a change of 1 percent or more in the providers current total per diem rate. If new State or Federal laws, rules, regulations, licensure and certification requirements, or new interpretations of existing laws, rules, regulations, or licensure and certification requirements require providers to make changes that result in increased or decreased patient care, operating, or capital costs, requests for component interim rates shall be considered for each provider based on the budget submitted by the provider. All providers' budgets submitted shall be reviewed by [Respondent] and shall be the basis for establishing reasonable cost parameters. In cases where new State or Federal requirements are imposed that affect all providers, appropriate adjustments s1hall be made to the class ceilings to account for changes in costs caused by new requirements effective as of the date of the new requirements or implementation of the new requirements, whichever is later. Interim rate requests resulting from 1. [devoted to property component interim rate hikes sought by non-FRVS providers] and 2. above must be submitted within 60 days after the costs are incurred, and shall be accompanied by a 12-month budget which reflects changes in services and costs. . . . An interim reimbursement rate, if approved, shall be established for estimated additional costs retroactive to the time of the change in services or the time the costs are incurred, but not to exceed 60 days before the date [Respondent] receives the interim rate request. The interim per diem rate shall reflect only the estimated additional costs, and the total reimbursement rate paid to the provider shall be the sum of the previously established prospective rates plus the interim rate. . . Interim Rate Settlement. Overpayment as a result of the difference between the approved budgeted interim rate and actual costs of the budgeted item shall be refunded to [Respondent]. Underpayment as a result of the difference between the budgeted interim rate and actual costs shall be paid to the provider. Interim rates shall not be granted for fiscal periods that have ended. The determination of interim reimbursement rates is best illustrated by following the Plan through the typical rate-calculation process. A facility must first "calculate per diems for each of these four cost components [patient care, operating, property, and return on equity] by dividing the components' costs by the total number of Medicaid patient days from the latest cost report." Plan, page 41. The facility adjusts its "operating and patient care per diem costs that resulted from [the calculation set forth in the preceding paragraph] for the effects of inflation . Plan, page 41. This is done by "multiplying both of these per diem costs" by the rate of increase of the Florida Nursing Home Cost Inflation Index at the midpoint of the cost reporting period. Plan, page 41. This step takes the facility's per diem rates then in effect for the patient care cost and operating cost components and increases them by the applicable inflation rate. The facility calculates the adjustment for a low occupancy factor. In all cases, the operating, patient care, and return on equity components are calculated separately. Otherwise, this step is irrelevant to the present case. Plan, pages 41 et seq. The next step is to calculate the statewide ceilings for, among other components,, the patient care cost and operating cost. These ceilings are determined separately, as evidenced by the use of different standard deviations in the calculation of the respective ceilings. Plan, page 47. These ceilings are otherwise irrelevant to the present cases The Plan next requires the facility to "[e] stablish the target reimbursement for operating and patient care cost per diems for each provided." The target per diems limit the respective per diem rates of these two components even if the applicable ceilings and inflation adjustments otherwise warrant a rate increase. In other words, a facility's per diem rate for patient care may be below the ceiling and warrant an increase for inflation; however, the increased rate may not exceed the target rate. The "target" more frequently than the "ceiling" serves to limit rate increases for the operating cost per diem rate and patient care cost per diem rate. For each of the two per diem rates, the target limits the increase of the provider's then-current per diem rate, without regard to incentives, to the rate of increase of the Florida Nursing Home Cost Inflation Index multiplied by 1.786. Plan, pages 48 -49. The Plan requires each facility to calculate separately its operating cost per diem and patient care cost per diem. For each component, the Plan "requires that the facility receive the lowest of the rates--then-current plus inflation, target, or ceiling. Plan, pages 49-50. Thus, for instance, the patient care component could be limited by its target but the operating component could receive a full inflation increase. The importance of interim rate changes is that they increase the reimbursement rate against which the targets are calculated for operating and patient care cost per diem rates. In this manner, the interim rate hike raises the applicable targets. As noted above, if the new federal or state requirements affect all providers, the ceilings can also be raised, although this issue has not been addressed in this case. Cost Reports Three of Petitioner's cost reports were admitted into evidence. Two cover one-year periods ending June 30, 1989, and June 30, 1990. One covers a six-month period ending December 31, 1990. The most recent cost report includes a request by Petitioner to obtain a FRVS property cost rate adjustment for computer and software hardware purchased in the last six months of 1990. The report classifies these items as property for cost reimbursement purposes. The cost report is relevant as evidence of the proper classification of computer hardware and software and the proper means by which an FRVS provider may obtain an adjustment for additional property costs. 4/ The parties disagree as to which of the two earlier cost reports should be used to supply the threshold for Petitioner's request for an interim rate hike with respect to operating and patient care costs. Respondent insists that the source of Petitioner's "current total per diem rate," against which the 1% threshold is applied to determine eligibility for the interim rate hike, is the cost report for the year ending June 30, 1989. However, on or about October 30, 1990, Petitioner filed a cost report for the year ending June 30, 1990 (1990 cost report). This was about six weeks before applying for an interim change in the reimbursement rate. Respondent ignores the later cost report because it was filed late. However, there is no authority prohibiting the use of the more current cost report simply because it is filed late, at least when, as here, it is filed before the interim rate request is filed. 5/ For calculating the thresholds in this case, there is no difference in which cost report is used. Both parties used $38,000 as the threshold, which is sufficiently accurate under the facts of this case. The possible thresholds are $36,071 under the 1990 cost report 6/, which is hereby adopted, and $34,350 under the cost report for the prior year. 7/ New Cost Items Although the original request for an interim rate hike identifies more than $160,000 of new expenses necessitated by changes in the law, Petitioner refined its earlier estimate based on actual experience prior to the hearing. The new figure is $126,598.32, as identified at the hearing and in Petitioner Exhibit 42. 8/ Petitioner claims that changes in the law necessitated the following costs, which are stated, where applicable, as increases in expenses preexisting changes in the relevant law: PATIENT CARE PLANNING/RESTRAINT FREE ENVIRONMENT--SALARY NURSING 30,027.52 NURSING ASSISTANTS 19,762.73 DIETARY 4,073.23 TOTAL WAGES 53,863.48 TOTAL BENEFITS 10,234.06 TOTAL WAGES AND BENEFITS 64,097.54 ADMINISTRATIVE NURSING WARD CLERK 3,500.00 DATA ENTRY 513.00 IN-SERVICE EDUCATION 6,403.21 TOTAL WAGES 10,416.21 TOTAL BENEFITS 1,979.08 TOTAL WAGES AND BENEFITS 12,395.29 CONSULTANTS TO ASSURE COMPLIANCE WITH OBRA PHARMACY 440.00 SOCIAL SERVICE 250.00 DIETARY 1,093.75 TOTAL 1,783.75 AUTOMATION OF MDS AND RESIDENT TRUST FUND ACCOUNTING OUTSIDE DATA PROCESSING SERVICE 3,033.75 COMPUTER SOFTWARE 2,495.00 COMPUTER HARDWARE 1,540.00 TOTAL 7,068.75 MISCELLANEOUS OBRA MATTERS PRINT RESIDENTS' RIGHTS MATERIALS 401.05 B. GERIATRICS SURVEY AND TRAINING 500.00 C. ABUSE REGISTRY 285.00 D. WAGE AND HOUR FOR MAINTENANCE 11,178.00 E. MAINTENANCE BENEFITS 2,123.81 TOTAL 14,487.86 VI. OTHER REGULATORY CHANGES A. MINIMUM WAGE 13,827.84 B. MINIMUM WAGE BENEFITS 2,627.29 C. CHANGES IN OBRA/NFPA 9/ STANDARD 7,412.99 D. REMOVAL OF INFECTIOUS WASTES 2897.01 10/ TOTAL 26,765.13 GRAND TOTAL $126,598.32 Classification of New Cost Items Cost items IV.B, IV.C, and VI.C. are property costs representing $2495 and $1540 for computer software and hardware and $7412.99 for privacy curtains around residents' beds. Petitioner has failed to prove that these items, whose costs appear suitable for depreciation or cost-recovery, constitute patient care costs or operating costs. As property costs, Cost Items IV.B, IV.C, and VI.C are ineligible for an interim rate adjustment. Even if Petitioner had requested a FRVS property cost adjustment and thus raised the issue in this case, these items total only $11,447.99, which is below the $18,000 threshold for FRVS property cost rate adjustments. Because of the failure of these items to satisfy the threshold, as well as the fact that changing legal requirements are irrelevant to an adjustment in the property cost reimbursement rate, the remainder of the recommended order does not address Cost Items IV.B, IV.C, and VI.C. Cost Item VI.D, which is $2897.01 for infectious- waste removal, is an operating cost that is not a patient care cost. Cost Items VI.A and B, which are for $16,455.13 in wages and benefits due to an increase in the minimum-wage law, are operating costs that are partly patient care costs. Based partly on the testimony of Petitioner's accountant, one-half of the minimum wage and benefits, such as in the laundry and housekeeping departments, is an operating cost that is not a patient care cost. The remainder of the minimum wage and benefits is a patient care cost. Thus, $8227.57 of Cost Items VI.A and B is an operating cost that is not a patient care cost, and $8227.56 of Cost Items VI.A and B is a patient care cost. Cost Items V.D and E, which are for $13,301.81 in maintenance wages and benefits, are also operating costs that are partly patient care costs. These items represent an incremental increase over typical maintenance costs previously incurred by the facility. Petitioner has proved that two-thirds of the additional maintenance costs are patient care costs expended to address better the needs of the residents, such as by providing immediate repairs to wheelchairs or making their rooms more homelike by, for example, hanging bulletin boards in the rooms, installing personal television sets, and installing locks on cabinet drawers. Thus, $8867.88 of Cost Items V.D and E are patient care costs. The evidence as to the remaining $4433.93 of Cost Items V.D and E is sufficient to establish these expenditures as operating costs, but insufficiently descriptive to prove that these maintenance expenses are properly classified as patient care costs. Cost Item VI.D, one-half of Cost Items VI.A and B, and one-third of Cost Items V.D and E total $15,558.51 in operating costs that are not patient care costs. This is below the $34,350 threshold required for an interim rate hike for operating costs. Due to the possibility that Respondent may reject the Conclusion of Law that the patient care costs and operating costs must separately satisfy the threshold, the remainder of the recommended order discusses Cost Item VI.D. Description of Cost Items Background Prior to making any changes at the WeCare nursing facility following the effective date of OBRA, Petitioner was in full compliance with all applicable law and had earned and maintained a superior rating. None of the cost items was expended to eliminate pre-OBRA substandard conditions. In addition, patient needs were generally unchanged during the year preceding the effective date of OBRA and the following year. In other words, there were no significant changes in patient mix with respect to activity, levels of admissions and discharges, or other matters affecting costs. The largest portion of Petitioner's claim is Cost Item I, which comprises $64,097.54 in wages and benefits for nurses, nurse assistants, and dietary services. The nursing item is for 1.43 fulltime equivalents, the nursing assistant item is for 1.9 fulltime equivalents, and the dietary item is for 0.35 fulltime equivalents. Following the implementation of OBRA, WeCare changed its resident assessment forms. Previously, the facility had used primarily a standard admission record and nursing history and assessment to assess initially the new resident. These forms required about one-half hour per patient to complete. The new standardized assessment form has become known as the Minimum Data Set (MDS). The 11-page MDS is a highly sophisticated instrument that requires comprehensive data collection far more elaborate than that previously undertaken. These data must be obtained from the resident and, in many cases, other sources. The MDS also contains an intricate analytic section. In general, the MDS standardizes the resident- assessment process by which nursing staff collect and analyze data, form conclusions, and recommend interventions. The MDS is also a major step toward assembling a national database on the burgeoning population of nursing-facility residents. Even without regard to the analytic features of the MDS, the old resident assessment forms are different by kind, not degree, from the MDS. The new form requires that the facility's personnel invest considerably greater time and effort assessing each resident's functional abilities. The MDS elicits a richly detailed description of an individual and his needs and abilities, and many questions in the MDS require careful and thoughtful observation of the resident. For instance, the first page of the MDS requires important information concerning the resident's legal status. The array of options include legal guardian, durable power of attorney/health care proxy, health care surrogate, and family member. The same page also demands that the facility personnel determine if the resident has effectuated a living will, do-not- resuscitate code, organ donation, feeding or medication restriction, or autopsy request. Encouraging the resident's involvement with the outside community, the first page concludes by asking if the resident is registered to vote. The second page deals with cognitive patterns. This section also places demands on facility personnel considerably greater than those required by the old resident assessment forms. Personnel must check the resident's short- term and long-term memory and his ability to recall the current season, location of his own room, faces of staff, and his presence in a nursing facility. Personnel must assess the resident's ability to make decisions; the four options range from independent to severely impaired. Personnel must also assess the resident's tendency toward disordered thinking or delirium with five optional specific descriptions, such as "cognitive ability varies over course of day." Twenty-five options are contained in the section of the MDS covering the resident's ability to communicate. These data range from whether he wears a hearing aid or uses another receptive communicative technique such as lip reading to very detailed descriptions of the extent to which he can make himself understood and, in a separate set of questions, understand others. The level of detail is intense throughout the MDS. Other areas covered include physical functioning and structural problems (with 12 options to describe the resident's body control problems ranging from loss of balance to loss of limbs); continence; psychosocial wellbeing (including his level of identification with past roles and life status); mood and behavior patterns; activity pursuit patterns; disease diagnoses (32 options); health conditions (22 options); oral/nutritional status; skin condition; medication,' use; and special treatment and procedures. The analytic aspect of the MDS is contained in the Resident Assessment Protocol (RAP). The RAP references by letter and number nearly all of the answers," supplied on the MDS. The RAP legend supplies a matrix by which these answers are analyzed to determine if they require (trigger) an identified intervention. The RAP even quantifies the extent to which an intervention is likely necessary. These triggers are very detailed and quantify a decision-making process that gas subjective and necessarily more variable prior to the introduction of the MDS. The MDS takes at least one hour more to complete per resident than did the old forms. Petitioner's personnel have tried to avoid duplication. However, Respondent cited Petitioner for a deficiency involving their elimination of one of the pre- OBRA forms in WeCare's first audit following implementation of OBRA. Moreover, quarterly updates of the MDS take additional time, although only selected information is required at such times. Recognizing the increased importance of the initial resident assessment, Petitioner assigned the primary responsibility for the task to the three nurses who serve as coordinators of the three 60-bed units at WeCare. While working on the MDS forms, the unit coordinators' responsibilities are assumed by licensed nurses. The additional work presented by the MDS over the old form requires 1.43 licensed nurse fulltime equivalents. The cost of this is reflected in Cost Item I.A, which is $30,027.52, exclusive of benefits. Benefits were calculated in Petitioner Exhibit 8 at 19% of wages, so the benefits attributable to Cost Item I.A equal $5705.23. Petitioner has failed to establish that the nursing assistants, reflected as cost Item I.B, were required by to complete the new MDS form or any-other new OBRA requirement. The substance of Petitioner's evidence in this regard amounts to proving that: a) no other variables (e.g., change in patient mix or number) could account for the increased hours and b) nursing assistant hours increased after OBRA became effective. Without specific proof of the activities performed by the nursing assistants, it is impossible to determine if their efforts were necessitated by OBRA, such as in the MDS-assessment process, or were merely associated with nonrecurring activities by which facilities such as WeCare digested OBRA and tried to determine the extent to which they had to change prior practices. It is doubtful that Petitioner could have established the requisite relationship between the nursing assistant work and the MDS duties. Cost Item I.A is a reasonable allowance for the new work required of nurses by the MDS forms. Exclusive of benefits, $30,027.52 represents 1.43 fulltime nursing equivalents or about 2980 hours annually of nursing service. There is no evidence in the record linking the expenditure of additional nursing hours to the preparation of the MDS forms, even after consideration of the more limited quarterly reassessments. Petitioner likewise failed to establish that any new OBRA requirement, including the preparation of the MDS, was associated with the dietary cost of $4073.23, which is Cost Item I.C. Petitioner proved that Cost Items II.A and B, totalling $4013 of wages and $762.47 of benefits, were associated with the processing of the data collected in the process of preparing the MDS. The data-processing duties of these individuals are a necessary part of processing the RAPs and triggers in the MDS and determining if an intervention is indicated or required. The ward clerk and data entry person relieved the Director of Nursing of data-processing duties that, unlike the data-collection part of the MDS, do not require nursing expertise to perform. The processing of the RAPs and triggers, although important and time-consuming, is largely mechanical task. Petitioner proved that Cost Item IV.A, which is $3033.75 for outside data processing services, was also associated with the processing of the data collected in the process of preparing the MDS. These services ran from October, 1990, through April, 1991, when the ward clerk and data entry person assumed these duties. The outside data processing, as well as the ward clerk and data entry person, also included trust fund and asset accounting on behalf of residents. Petitioner failed to establish that the services of the in-service coordinator, as reflected in Cost Item II.C, were required by OBRA. Prior to OBRA, the Director of Nursing performed nearly all of the in-service activities. When OBRA was implemented, the Director of Nursing, could not perform these tasks because she was, at first, intensely involved with all aspects of ensuring that WeCare attained or maintained compliance with the new law. A nursing facility and its personnel must remain familiar with federal and state laws governing nursing facilities and their professions. However, nothing in OBRA required new levels of in-service education of nursing facility staff. By contrast, Petitioner proved that the promotion of residents' rights and welfare necessitated Cost Item V.B, which is $500 for a geriatrics survey and training. Petitioner showed that the services of Myra Carpenter, which are Cost Item V.B, were narrowly focused to assist Petitioner's personnel in promoting the rights and welfare of geriatric residents. Cost Items I.A and V.B are sufficient to allow for whatever training was necessary of the unit coordinators in charge of completing the MDS forms and general facility personnel as to the promotion of the rights of residents, especially geriatric residents. Petitioner failed to prove that Cost Items III.A, and C, which are $440 for pharmacy and $1093.7.5 for dietary consultants, were associated with army new OBRA requirement. As discussed in the Conclusions of Law, prior state requirements in these areas were rigorous. For the same reason, Petitioner failed to prove that OBRA necessitated Cost Item V.A, which is $401.05 for printing residents' rights manuals. Petitioner proved that the promotion of residents' rights and welfare was directly responsible for Cost Item III.B, which is $250 for a social service consultant. He increased his hours after OBRA to meet the demands of the residents and the residents' council for operational and structural changes at WeCare. Petitioner proved that the promotion of residents' rights and welfare was also associated with the two-thirds of Cost Items V.D and E previously determined to constitute patient care costs. 11/ The portion of these maintenance wages and benefits assigned to patient care costs constitute part of Petitioner's effort to promote the rights and welfare of the residents. Many of WeCare's residents are young persons who, often afflicted with multiple sclerosis, still possess considerable mental acuity. Adjustment to the environment of a nursing facility can be difficult for such persons, as well as for other residents. Empowering the residents to demand and obtain changes in their living environment is one useful means of promoting the residents' rights and, especially, welfare. The evidence was unconvincing that all of Cost Items V.D and E were devoted to the type of patient-care maintenance described in the preceding paragraph. Petitioner thus failed to establish the nature of the remaining one-third of Cost Items V.D and E. In the absence of proof to the contrary, these expenditures are characterized merely as operating expenses unassociated with any aspect of OBRA. Respondent has emphasized OBRA's promotion of residents' rights and welfare in seminars devoted to OBRA and post-OBRA facility surveys. As to the latter, the surveys of WeCare prior to OBRA typically took a couple of hours. Following OBRA, the surveys take four hours with much of the additional time devoted to resident interviews to ensure that the facility is promoting residents' rights and, especially, welfare. The OBRA mandates, as properly construed by Respondent, increasingly emphasize results or outcome's, not merely processes or procedures. Although OBRA largely leaves to the nursing facility the decision of how specifically to promote residents' rights and welfare, the new requirements of OBRA, as discussed in the Conclusions of Law, remain clear, ambitious, and enforceable. Cost Items III.B, V.B, and two-thirds of V.D and E, although not explicitly dictated by OBRA, were reasonably expended by Petitioner to promote residents' rights and, especially, welfare. Petitioner has proved that Cost Item VC, which is $285 for checking the names of employees on the abuse registry, was associated with a new OBRA requirement. The minimum-wage hike and benefits, which are Cost Item VI.A and B totalling $16,455.13, were mandated by a change in law and exclude any "ripple-effect" in other wages Petitioner proved that one-half of the minimum.-wage hike and benefits or $8227.56, are patient care costs. The remaining $8227.57 of minimum-wage hike and benefits, which obviously were also mandated by law, are operating costs that are not patient care costs. The only other operating cost that is not a patient care cost is Cost Item VI.D, which is $2897.01 for the removal of infectious wastes. Petitioner has proved that the additional costs in connection with the disposal of infectious wastes were associated with a change in state law. Based on the foregoing, Petitioner has proved that $61,672.41 of its expenditures are patient care costs associated with new OBRA requirements and a change in the minimum-wage laws. Petitioner failed to prove that the remaining $37,919.41 of its patient-care costs were associated with any change in law. Petitioner has proved that $11,124.58 of its expenditures are operating costs, other than patient care costs, that were associated with new infectious waste regulations and minimum-wage laws. Petitioner failed to prove that tie remaining $4433.93 of operating costs, which are one-third of the maintenance wages and benefits, were,' associated with any change in law. The remaining $11,447.99 of Petitioner's expenditures are property costs. For the reasons set forth above, the necessity of these costs is irrelevant to this proceeding.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order determining that Petitioner is entitled to an interim rate adjustment of $0.96 per diem. ENTERED this 20 day of March, 1992, in Tallahassee, Florida. ROBERT E. MEALE 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 20 day of March, 1992.
Conclusions Having reviewed the administrative complaint dated July 16, 2008, attached hereto and incorporated herein (Ex. 1), and all other matters of record, the Agency for Health Care Administration ("Agency") has entered into a Settlement Agreement (Ex. 2) with the other party to these proceedings, and being otherwise well-advised in the premises, finds and concludes as follows: ORDERED: The. att ached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. Filed June 30, 2009 1:59 PM Division of Administrative Hearings. Respondent shall pay an administrative fine in the amount of One Thousand Dollars ($1000.00). The administrative fine is due and payable within thirty (30) days of the date of rendition of this Order. Checks should be made payable to the "Agency for Health Care Administration." The check, along with a reference to these case numbers, should be sent directly to: Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS# 14 Tallahassee, Florida 32308 Unpaid amounts pursuant to this Order will be subject to statutory interest and may be collected by all methods legally available. Respondent's petition for formal administrative proceedings is hereby dismissed. Each party shall bear its own costs and attorney's fees. The above-styled case is hereby closed. DONE and ORDERED this du, day of- =---' 2009, in Tallahassee, Leon County, Florida. Holly Ben on, Secretary Agency fo Health Care Administration A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW OF PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: David C. Ashburn Attorney for the Respondent Greenberg Traurig, P.A. 101 East College Avenue Tallahassee, Florida 32302 (U. S. Mail) Mary Daley Jacobs Assistant General Counsel Agency for Health Care Administration 2295 Victoria Avenue, Room 346C Fort Myers, Florida 33901 (Interoffice Mail) Finance & Accounting Agency for Health Care Admin. Revenue Management Unit 2727 Mahan Drive, MS #14 Tallahassee, Florida 32308 (Interoffice Mail) Daniel Manry Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (U.S. Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was served on the above-named person(s) and entities by U.S. Mail, or the <?s = method designated, on this the Z f C J , 2009. Richard Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 922-5873 STATE OF FLORIDA
The Issue The issue in this case is which of the two applications for a certificate of need filed by petitioner and co-respondent to construct a 80-bed nursing home facility in Duval County, Florida should be approved.
Findings Of Fact Based on all of the evidence, the following findings of fact are determined: Background This controversy involves two competing applications for a certificate of need (CON) to construct an 80-bed nursing home facility in northern Duval County. The applications were timely filed by petitioner, Sawgrass Care Center, Inc. (Sawgrass), and respondent, Life Care Centers of America, Inc. (Life Care). Regulatory jurisdiction for approval of CON applications lies with respondent, Agency for Health Care Administration (AHCA). The site of the proposed new facility will be AHCA subdistrict 1 of AHCA district IV, which comprises Nassau and northern Duval Counties. After reviewing the applications, on September 16, 1994, AHCA proposed to issue a CON to Life Care. That preliminary decision has been contested by Sawgrass on the ground Sawgrass, and not Life Care, is the better qualified applicant. The purpose of this recommended order is to determine which of the two competing applications should be approved. The parties agree that a fixed numeric need for eighty community nursing home beds exists so as to justify the approval of one of the applications. Criteria The statutory review criteria for determining whether an application for a CON should be approved are found in Sections 408.035(1) and (2), Florida Statutes. In this respect, the parties have stipulated that paragraphs (e), (f), (g), (j), and (k) of subsection (1) and the entirety of subsection (2) are not applicable or not at issue. Remaining at issue are all or parts of paragraphs (a), (b), (c), (d), (h), (i), (l), (m), (n) and (o). These criteria will be discussed separately below. Section 408.035(1)(a). The need for the health care facilities, services and hospices being proposed in relation to the applicable district plan and state health plan, except in emergency circumstances which pose a threat to the public health. Each local health council has adopted a local health plan containing local health plan allocation factors. These factors represent the criteria which the local health council believes should be considered when CON applications are filed within its geographic area. There is also a state health plan which contains other factors to be considered when evaluating CON applications. Paragraph 408.035(1)(a) requires that the need for the proposals be considered "in relation to the applicable district plan and state health plan." This means that satisfaction of the local and state health plan factors is one criterion in the overall evaluation process. In this regard, the applicants have addressed these criteria in their applications. The parties have stipulated that factors 1, 3, 9, 10 and 11 of the state health plan have been satisfied by both applicants. They have further stipulated that both applicants have satisfied local health plan allocation factors 2-5, 7, 8, 12, 13 and 15. As to local allocation factor 1, which requires that applicants provide services "in a most economical manner in terms of capital and operational expenditures," the evidence shows that Sawgrass proposes lower overall construction cost, lower construction cost per square foot, lower total project cost and lower project cost per bed than does Life Care. In projecting these costs, Sawgrass used actual nursing home construction experiences in other states, adjusted for Florida using recognized cost manuals. While both applicants' projections are reasonable, Sawgrass' is more cost effective and thus it is best satisfies this factor. Local health plan allocation factor 10 generally requires that applicants have documentation to show that they have agreements with organizations and services "for the purpose of ensuring continuity of care." Sawgrass has such written agreements with three hospitals while Life Care submitted none. Accordingly, it is found that Sawgrass best satisfies this factor. As to local health plan allocation factor 12, which encourages applicants to contract with others to provide short term respite care, the record shows that both applicants satisfy this criterion. Local allocation factor 16 and state health plan allocation factor 8 are similar in nature and generally require that preference be given to an applicant with a record of providing high-quality or superior nursing home care. In this respect, the principal of Sawgrass, Health Management, Inc., has successfully managed nursing homes for some 25 years. None have ever been fined or had Class I deficiencies cited. Conversely, the nursing home in Florida which Life Care has operated for the most years, Life Care of Altamonte Springs, has had a conditional rating for most of the time since 1993, and still retained that rating at the time of hearing. Accordingly, it is found that Sawgrass best satisfies these two criteria. Local allocation factor 17 and state allocation factor 2 are substantially the same and require that preference be given to applicants who commit to maintaining a certain percentage of Medicaid patients. Because Sawgrass will accept as a condition on its CON to provide 87.5 percent of its total facility patient days annually to Medicaid patients, which exceeds the commitment of Life Care, it is entitled to preference in its application. Local allocation factor 18 requires that applicants document in their applications "a history of demonstrated willingness to accept local Medicaid residents requiring skilled rather than intermediate care." The more persuasive evidence supports a finding that because Sawgrass commits to serving 20 percent more Medicaid patients on an annualized basis than does Life Care, it has a greater likehood of securing more Medicaid skilled level residents than Life Care, and thus better satisfies this criterion. State allocation factor 4 requires that preference be given to an applicant "proposing to provide a continuum of services to community residents including, but not limited to, respite care and adult day care." The record shows that because Life Care proposes both respite and adult care as part of its continuum of care, while Sawgrass did not, it better satisfies this factor. As to state allocation factor 5, it provides that preference be given to applicants who propose "to construct facilities which provide maximum resident comfort and quality of care." Although both applicants provide resident comfort and quality of care in their proposed facilities, the evidence supports a finding that Sawgrass better satisfies this factor. State allocation factor 6 provides that preference be given to applicants "proposing to provide innovative therapeutic programs which have been proven effective in enhancing the residents' physical and mental functional level and emphasise restorative care." Although both applicants intend to provide the described innovative programs, only Sawgrass has described an intensive program of the type contemplated in the factor and agreed to have its CON conditioned on the delivery of those services. Therefore, it is found that Sawgrass better meets the requirements of the factor. State allocation factor 7 provides that preference be given to an applicant who proposes charges which do not exceed the highest Medicaid per deim rate in the subdistrict. Because Sawgrass' rates in years 1 and 2 are lower than those proposed by Life Care, and Life Care's rates are subject to manipulation after the CON is approved, it is found that Sawgrass should be given preference under this factor. State allocation factor 12 provides that preference be given to an applicant who proposes "lower administrative costs and higher resident care costs compared to the average nursing home in the district." Both applicants propose patient care expenses per patient day greater than the district average. However, Life Care's operational history belies its projection. In addition, its home office and management expenses are higher than the average for every subdistrict and district in which it operates or owns a nursing home in Florida. Given these shortcomings, it is found that Sawgrass better satisfies this criterion. In summary, after considering all the state and local factors, it is found that Sawgrass better meets, both qualitatively and quantitatively, the allocation factors and thus it better satisfies the requirements of paragraph 408.035(1)(a). Section 408.035(1)(b). The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, inadequacy of like and existing health care services and hospices in the service district of the applicant. The evidence shows a large percentage of Medicaid funded residents in the subdistrict. Contrary to Life Care's assertion, there is insufficient evidence to establish that there is a need for health maintenance organization (HMO) and private pay beds in the subdistrict. Given this state of the record, it is found that Sawgrass will provide greater access to those persons most in need of care in the subdistrict, namely, Medicaid funded residents. Therefore, Sawgrass better satisfies this statutory criterion. Section 408.035(1)(c). The ability of the applicant to provide quality of care and the applicant's record of providing quality of care. As noted in finding of fact 9, local allocation factor 16 and state allocation factor 8 provide substantially the same criteria as are found in subsection 408.035(1)(c). Based on the findings previously made regarding those allocation factors, Sawgrass is deemed to be better able to provide, and has a better record of providing, "quality of care." Subsection 408.035(1)(d). The availability and adequacy of other health care facilities and services and hospices in the service district of the applicant, such as outpatient care and ambulatory or home care services, which may serve as alternatives for the health care facilities and services to be provided by the applicant. Although the parties indicated that this criterion is still in dispute, there is a recognized need for eighty additional nursing home beds in north Duval County. Therefore, this criterion does not appear to apply to either proposed project. Subsection 408.035(1)(h). The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation; the effects the project will have the clinical needs of health professional training programs in the service district; the extent to which the services will be accessible to schools for health professions in the service district for training purposes, if such services are available in a limited number of facilities; the availability of alternative uses of such resources for the provision of other health services; and the extent to which the proposed services will be accessible to all residents of the service district. The parties have stipulated that the only provision of this lengthy paragraph in dispute is "whether the applicants have funds available for capital and operating expenses." The evidence shows that both applicants have "funds available for capital and operating expenses" for their respective projects. Therefore, both applicants satisfy this criterion in equal measure. Subsection 408.035(1)(i) - The immediate and long-term financial feasibility of the proposal. The evidence supports a finding that both applicants have the ability to make their respective projects feasible in the immediate and long-term. Therefore, both applicants have satisfied this criterion in equal measure. Subsection 408.035(1)(l). The probable impact of the proposed project on the costs of providing health services proposed by the applicant, upon consideration of factors, including, but not limited to, the effects of competition on the supply of health services being proposed and the improvements or innovations in the financing and delivery of health services which foster competition and service to promote quality assurance and cost-effectiveness. Because Sawgrass has a lower Medicare reimbursement rate in year one and year two than does Life Care, and Sawgrass proposes to provide a payor mix that is consistent with the needs of the area, Sawgrass will foster competition among existing and like facilities to provide a higher quality of care in a more cost effective manner. Subsection 408.035(1)(m). The costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction. Because Sawgrass has significantly lower construction costs per square foot, it is found that Sawgrass has the more cost effective methods and better satisfies this criterion. Subsection 408.035(1)(n). The applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent The evidence shows that both applicants satisfy this statutory criterion in equal measure. Subsection 408.035(1)(o). The applicant's past and proposed provision of services which promote a continuum of care in multilevel health care system, which may include, but is not limited to, acute care, skilled nursing care, home health care, and adult congregate living facilities. Sawgrass is the only applicant that proposes providing a continuum of care in a multilevel health care system that includes skilled nursing beds and adult congregate living. In addition, Sawgrass has committed to the assisted living unit since it agreed to a condition on its CON as to the total square feet depicted on the schematics that depict the co-located ACLF and nursing home beds. Therefore, it is found that Sawgrass better satisfies this statutory criterion. Summary and Overall Evaluation of Criteria After making a balanced review of the foregoing statutory criteria, it is found that Sawgrass better satisfies the statutory criteria as a whole. Therefore, its application should be approved.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order granting the application of Sawgrass Care Center, Inc. for a certificate of need to construct an eighty-bed nursing home facility in subdistrict 1 of district 4. The application of Life Care Centers of America, Inc. should be denied. DONE AND ENTERED this 21st day of November, 1995, in Tallahassee, Florida. DONALD R. ALEXANDER 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 21st day of November, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6256 Petitioner: Petitioner's proposed findings have been accepted in substance, albeit in substantially shorter form. Respondents: 1-20. Partially accepted in findings of fact 4-17. 21-34. Partially accepted in finding of fact 18. 35-42. Partially accepted in finding of fact 19. 43. Partially accepted in finding of fact 20. 44-46. Rejected as being unnecessary. 47-58. Partially accepted in finding of fact 21. 59-69. Partially accepted in finding of fact 22. 70-71. Rejected as being unnecessary. 72-74. Partially accepted in finding of fact 23. 75-85. Partially accepted in finding of fact 24. 86-90. Partially accepted in finding of fact 25. 91. Rejected as being unnecessary. Note: Where a proposed finding has been partially accepted, the remainder has been rejected as being unnecessary for a resolution of the issues, irrelevant, not supported by the more credible, persuasive evidence, subordinate, or a conclusion of law. COPIES FURNISHED: Robert D. Newell, Esquire 817 North Gadsden Street Tallahassee, Florida 32303-6313 Richard A. Patterson, Esquire Building 3, Suite 3400 2727 Mahan Drive Tallahassee, Florida 32308-5043 R. Bruce McKibben, Jr., Esquire Post Office Drawer 810 Tallahassee, Florida 32302-0810 R. S. Power, Agency Clerk Agency for Health Care Administration Building 3, Suite 3431 2727 Mahan Drive Tallahassee, Florida 32308-5403 Jerome W. Hoffman, Esquire General Counsel Agency for Health Care Administration 2727 Mahan Drive Tallahassee, Florida 32308-5043
The Issue Whether Respondent should recoup Medicaid payments made to Petitioner for health care services provided to eight patients.
Findings Of Fact Petitioner, Indian River Memorial Hospital, Inc., (Hospital), has contracted with Respondent, Agency for Health Care Administration (AHCA), to provide services to Medicaid patients. The parties have agreed that there is a dispute for Medicaid reimbursement for goods and services provided to eight patients: S.G., J.D., R.J., C.A., G.M., S.S., M.P., and C.T. The Agency has paid the Hospital for the services rendered to these eight patients and seeks to recoup the payment based on a retrospective review by a peer review organization, Keystone Peer Review Organization (KePro). The Agency claims that either the admission or a portion of the length-of-stay for the eight patients was medically unnecessary. Services were provided to C.T. in 1994 and to the remainder of the patients at issue in 1995. Payment for Medicaid services is on a per diem basis. The rate for 1994 is $473.22 per day, and the rate for 1995 is $752.14. The Agency contracted with KePro to do a review of the Medicaid payments to the Hospital. KePro employs nurses to review the patient files based on criteria on discharge screens. If the services meet the criteria, there is no further review and the payment is approved. If the nurse determines that the services do not meet the criteria on the discharge screens, the patient's files are reviewed by a board certified physician, who in this case would be a psychiatrist. If the physician determines that the services are not medically necessary, a letter is sent to the Medicaid provider, giving the provider an opportunity to submit additional information. Additional information submitted by the provider is reviewed by a board certified physician. If the doctor concludes that the services are still medically unnecessary, the provider is notified that that services do not qualify for reimbursement and the provider may ask for a reconsideration of the denial. If the provider seeks reconsideration, the file is reviewed by a physician, and the provider has an opportunity to be present during the review. If the physician determines that the services are medically unnecessary, KePro sends a letter to the Agency stating the reasons for denial. The denial letters that KePro sends to the Agency are reviewed by the Medical Director of KePro, who is not a psychiatrist. Dr. John Sullenberger, the Agency's Medicaid physician, reviews the KePro denial letters sent to the Agency, and 99.9 percent of the time he agrees with the findings of KePro regarding whether the services were medically necessary. Dr. Sullenberger does not review the patient's charts when he does this review. The Agency sends a recoupment letter to the Medicaid provider requesting repayment for services provided. Patient S.G., a 12 year-old boy, was being treated pursuant to the Baker Act. He was admitted to the Hospital on March 8, 1995, and discharged on March 25, 1995. The Agency denied Medicaid reimbursement for the admission and the entire length-of-stay for S.G. based on KePro's determination that it was not medically necessary for the services to S.G. to be rendered in an acute care setting because the patient was neither suicidal nor homicidal. Three to five days prior to his admission to the Hospital, S.G. had attempted to stab his father. He also had further violent episodes, including jumping his father from behind and choking him and pulling knives on his parents. S.G. had a history of attention deficit and hyperactive disorder. He had been using multiple substances, such as alcohol, LSD, cocaine, and marijuana, prior to his admission. His behavior was a clear reference that he was suffering from a psychosis. A psychosis is a significant inability to understand what is reality, including delusions of false beliefs, hallucinations, hearing and seeing things which do not exist, and ways of thinking that are bizarre. Psychosis is a reason to admit a patient, particularly combined with substance abuse. S.G.'s treating psychiatrist noted that S.G. had tangentiality, which means that his thoughts did not stay together. He did not have a connection between thoughts, which is a sign of a psychosis. The chart demonstrated that S.G. had disorder thinking, which includes the possibility of a psychosis. There was also a reference in the charts to organic mental disturbance which could infer brain damage as the cause for the mental disturbance. Two days after admission, there was an issue of possible drug withdrawal because S.G. was agitated and anxious and showed other symptoms. Drug withdrawal, psychosis, and a demonstration of overt violence require a stay in an acute care facility. There was some indication that S.G. was suicidal. While in the Hospital he was placed under close observation, which is a schedule of 15-minute checks to determine if the patient was physically out of harm's way. S.G. was started on an antidepressant, Wellbutrin, because the treating physician thought S.G. was becoming increasingly depressed and was having trouble organizing his thoughts. Antidepressants, as contrasted to a medication such as an antibiotic, may take a minimum of two to three weeks before the patient will benefit from the full effect of the drug. It is difficult to stabilize the dosage for an antidepressant on an outpatient basis. S.G. was taking Ritalin, which is commonly used for children with attention deficit, hyperactivity disorders. During his stay at the Hospital, S.G. was engaging in strange behavior, including absence seizures. On March 16, 1995, he was still lunging and threatening harm. On March 20, 1995, he was still unstable and at risk. The dosage of Wellbutrin was increased. On March 21 and 22, 1995, S.G. was still threatening and confused. S.G. was discharged on March 25, 1995. The admission and length-of-stay for S.G. were medically necessary. Patient J.D. was a 16 year-old boy who was admitted to the Hospital on March 7, 1995, and discharged on March 14, 1995. The Agency denied the admission and entire length-of-stay based on KePro's determination that the patient was not actively suicidal or psychotic and services could have been rendered in a less acute setting. J.D. was admitted from a partial hospitalization program pursuant to the Baker Act because he was observed by a health care professional banging his head against the wall and throwing himself on the floor. He had a history of depression and out-of-control behavior, including being a danger to himself and running away. At the time of his admission, he was taking Prozac. Banging his head against the wall can mean that the patient is psychotic, can cause brain damage, and can be dangerous if the cause of the behavior is unknown. Admission to the Hospital was justified because the patient was extremely agitated and self abusive, requiring restraints and medication to decrease his agitation and self abusiveness. One of the tests administered during his hospital stay indicated that J.D. was a moderate risk for suicidal behavior. During his hospital stay, it was discovered that J.D. had threatened to kill himself while at school. He had been in a partial treatment program during the day, but that environment was not working. There was violence in the home, and J.D. was becoming overtly depressed. During his stay at the Hospital, J.D. was placed on close observation with 15-minute checks. His dosage of Prozac was increased. The admission and length-of-stay for J.D. were medically necessary. R.J., a 10 year-old male, was admitted to the Hospital on January 1, 1995, and discharged on February 9, 1995. The Agency denied Medicaid reimbursement based on a determination by KePro that the treatment in an acute care facility was not medically necessary because R.J. was not psychotic, not suicidal, and not a threat to others; thus treatment could have been provided in an alternate setting. R.J. had been referred by a health care professional at Horizon Center, an outpatient center, because of progressive deterioration over the previous fourteen months despite outpatient treatment. His deterioration included anger with temper outbursts, uncontrollable behavior at school, failing grades, sadness, depressed mood, extreme anxiety, extensive worrying and a fear of his grandmother. R.J. also suffered from encopresis, a bowel incontinence. He was agitated, lacked energy, neglected his hygiene, experienced crying spells, and had difficulty concentrating. R.J. needed to be admitted for an evaluation to rule out a paranoid psychosis. It was necessary to do a 24-hour EEG as opposed to a 45-minute EEG. In order to do a 24-hour EEG, the patient is typically placed in an acute care facility. The EEG showed abnormal discharge in the brain, which could be contributing to a psychiatric illness. At school R.J. had smeared feces on the walls, behavior that could be seen in psychotic persons. There was evidence that he had been hitting and throwing his stepbrother and 3 year-old brother. He was fearful of his grandmother and, based on his family history, there was reason to fear her. R.J. was placed on Buspar, a medication which generally takes two weeks to take effect. Contrary to the Agency's determination, R.J. was disorganized. He was also violent in terms of threatening danger and extreme anger. The admission and length-of-stay for R.J. at the Hospital were medically necessary. Patient C.A., a 9 year-old male, was admitted to the Hospital on June 1, 1995, and discharged on June 12, 1995. The Agency disallowed one day of the length-of-stay based on a determination by KePro that the services provided on June 11, 1995, could have been provided in a less restrictive setting. C.A. was admitted for violent and disruptive behavior. He also had an attention deficit, hyperactivity disorder and was taking Lithium and Depakote. These medications are used for patients who experience serious mood swings and abrupt changes in mood, going from depression to anger to euphoria. To be effective, medicating with Lithium and Depakote requires that the blood levels of the patient be monitored and the dosage titrated according to blood level. C.A. also was given Wellbutrin during his hospital stay. On June 11, 1995, C.A. was given an eight-hour pass to leave the hospital in the care of his mother. The physician's orders indicated that the pass was to determine how well C.A. did in a less restrictive setting. He returned to the Hospital without incident. He was discharged the next day to his mother. The treatment on June 11, 1995, could have been provided in an environment other than an acute facility; thus the stay on June 11, 1995, was not medically necessary for Medicaid reimbursement purposes. Patient G.M., an 11 year-old male with a history of being physically and sexually abused by his parents, was admitted to the Hospital on March 21, 1995, and was discharged on April 3, 1995. The Agency denied Medicaid reimbursement for inpatient hospital treatment from March 28 to April 3, 1995, based on KePro's determination that the length of hospital stay exceeded health care needs at an inpatient level and could have been provided in a less acute setting. At the time of admission, G.M. had suicidal ideation. His school had reported that G.M. had mutilated himself with a pencil, banged himself on the knuckles, and told the school nurse that he wanted to die. Prior to admission, G.M. had been taking Ritalin. His treating physician took G.M. off the Ritalin so that she could assess his condition and start another medication after a base-line period. The doctor prescribed Clonidine for G.M. Clonidine is a drug used in children to control reckless, agressive and angry behavior. Clonidine must be titrated in order to establish the correct dosage for the patient. During his hospital stay, G.M. was yelling and threatening staff. He was placed in locked seclusion, where he began hitting the wall. G.M. was put in a papoose, which is similar to a straitjacket. The papoose is used when there is no other way to control the patient. The patient cannot use his arms or legs while in a papoose. This type of behavior and confinement was occurring as late as March 31, 1995. G.M. was given a pass to go to his grandparents on April 2, 1995. He did well during his pass, and was discharged on April 3, 1995. Treatment in an acute facility was medically necessary through April 1, 1995. Treatment on April 2, 1995, could have been provided in a less acute setting. Patient S.S., a 5 year-old male, was admitted to the Hospital on March 9, 1995, and was discharged on April 3, 1995. The Agency denied Medicaid reimbursement for the admission and entire length of his hospital stay based on a determination by KePro that S.S. was not psychotic or an immediate danger to himself or others and the evaluation and treatment could have been rendered in a less acute setting. Prior to admission to the Hospital, S.S. was threatening suicide, ran into a chalk board at school, scratched his arms until they bled, and showed aggressive intent toward his sister, saying that he would kill her with a saw. S.S.'s condition had been deteriorating for approximately three months before his admission. At the time of admission, he had been suicidal, hyperactive, restless, and experiencing hallucinations. The hallucinations imply a psychosis. S.S. was put on Trofanil, an antidepressant which needs to be titrated. The patient's blood level had to be monitored while taking this drug. During his hospital stay, S.S. was on close observation. All objects which he could use to harm himself were removed from his possession. After he ate his meals, the hospital staff would immediately remove all eating utensils. On March 28, 1995, S.S. threatened to kill himself and became self-abusive. His blood level on March 31, 1995, was sub-therapeutic, and his medication dosage was increased. On April 1, 1995, S.S. had a temper tantrum. The admission and length-of-stay for the treatment of S.S. were medically necessary. Patient M.P., a 10 year-old male, was admitted to the Hospital on April 27, 1995, and was discharged on May 6, 1995. The Agency denied Medicaid reimbursement for the admission and entire length-of-stay based on a determination by KePro that the patient functions on an eighteen to twenty-four month level but is not psychotic and the treatment could have been provided in a less acute setting. M.P.'s IQ is between 44 and 51. He was diagnosed with a pervasive development disorder, which is a serious lack of development attributed to significant brain damage. His condition had deteriorated in the six months prior to his admission. He had episodes of inappropriate laughter, fits of anger, hit his head, hit windows, and put his arm in contact with the broken glass through the window. At the time of his admission, he had a seizure disorder. An EEG and an MRI needed to be performed on M.P. in order to evaluate his condition. M.P. had to have a regular EEG, a 24-hour EEG, and a neurological examination. The patient was aggressive, restless, and uncooperative. In order for the MRI to be performed, M.P. had to be anesthetized. The admission and length-of-stay for M.P. were medically necessary. Patient C.T., a 34 year-old female, was admitted to the Hospital on November 11, 1994, and was discharged on November 26, 1994. The Agency denied the treatment from November 17, 1994, to November 26, 1994, based on a determination by a peer review organization that the patient was stable by November 17, 1994, and psychiatric follow-up could have been performed in an outpatient setting. C.T. was admitted for kidney stones. She did pass the kidney stones but continued to have severe pain. Her doctor asked for a psychiatric consult. The psychiatrist diagnosed C.T. as having a personality disorder, chronic psychogenic pain disorder, and an eating disorder. Her depressive disorder exacerbated pain. C.T. had been given narcotics for the pain associated with the kidney stones. In order to assess her mental status, the physicians needed to taper the dosage of Demerol which she had been receiving. She was started on Sinequan, which is an anti-depressant given to alleviate the psychological condition and to help with the physical complaints. C.T. was later put on Vicodin, an oral narcotic, which seemed to bring the pain under control. The drugs used could cause a drop in blood pressure; therefore, they had to be titrated slowly. Her treating physician was trying to find an appropriate anti-depressant, while weaning the patient from intramuscular narcotics. On November 17, 1994, C.T. left her room and went to the hospital lobby, where she was found by nursing staff. C.T. was crying and saying that she was in pain and wanted to die. During her hospital stay, C.T. was in much distress; she would scream out that she was in pain. On November 18, 1994, she was found crying on the floor of the hospital chapel and had to be returned to her room. It was the opinion of Dr. Bernard Frankel, an expert retained by the Hospital, that C.T. probably could have been discharged a day earlier. The hospital stay for C.T. from November 17, 1994, to November 25, 1994, was medically necessary. The last day of her stay was not medically necessary.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered requiring Indian River Memorial Hospital, Inc., to pay to the Agency $752.14 for one day of service provided to G.M., $752.14 for one day of service provided to C.A., and $473.22 for one day of service provided to C.T. and finding that the Hospital is not liable for payment for any of the other services at issue in this proceeding. DONE AND ENTERED this 2nd day of November, 1998, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of November, 1998. COPIES FURNISHED: Thomas Falkinburg, Esquire Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 John D. Buchanan, Jr., Esquire Henry, Buchanan, Hudson, Suber & Williams, P.A. 117 South Gadsden Street Tallahassee, Florida 32302 Sam Power, Agency Clerk Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308 Paul J. Martin, General Counsel Agency for Health Care Administration Fort Knox Building 3 2727 Mahan Drive, Suite 3431 Tallahassee, Florida 32308
The Issue The issue presented for decision herein is whether or not Proposed Rule 10- 5.005(2), Florida Administrative Code, as promulgated by DHRS constitutes an invalid exercise of delegated legislative authority. Based upon the following findings of fact, conclusions and analysis, proposed Rule 10-5.005(2)(a) and (b) is invalid.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I hereby make the following relevant factual findings. DHRS' Office of Health Planning and Development is divided into two separate divisions: The Office of Community Medical Facilities, which administers the State Certificate of Need Program and has responsibility for making recommendations regarding CON applications, and (2) the Office of Comprehensive Health Planning, which has primary responsibility for development of rules pertaining to Certificate of Need policy. Mr. Robert Maryanski, Administrator of the Office of Community Medical Facilities, believes his office made no formal comments (perhaps informal comments,) concerning the proposed rule. Mr. Maryanski considered that the proposed rule was objectionable based on his understanding of the statutes. (TR 33, 54). Elfie Stamm is employed by the Office of Comprehensive Health Planning and has primary responsibility for development of Proposed Rule 10-5.005. The text of the proposed rule is as follows: 10-5.005 Exemptions. * * * (2)(a) Physician offices or physician group practices which do not exist for the primary purpose of providing elective surgical care are exempt from certificate of need requirements for ambulatory surgical centers as specified in 10-5.011(30). This certificate of need exemption applies to offices and associated surgical suites maintained by one or more private physicians or a physician group which is used only by the physician or the physicians of the group practice, and in which 50 percent or more of the patients treated annually are non-surgical patients. (b) Physician offices, or physician group practices applying for designation as an ambulatory surgical center (ASC) by the Health Care Financing Administration (HCFA) and who meet the requirements for exemption from certificate of need review under the provisions delineated under paragraph (2), shall submit a request for exemption from certificate of need to the Department. The physician office or physician group practice shall provide the Department with at least 30 day's written notice of the proposed exemption from the certificate of need requirements for ambulatory surgical centers. Within 30 days of receipt of such written notice, the Department shall determine if the physician office or physician group practice is exempt and advise the applicant of its determination in writing. (Petitioner's Exhibit 6). The proposed rule exempts physician offices and physician group practices from CON requirements for ambulatory surgical centers (ASC) when at least 50 percent of the patients treated annually in these facilities are non- surgical patients. The proposed rule purportedly implements the Federal Health Care Financing Administration's (HCFA) policy allowing physician offices which are exempt from State CON and licensure requirements to apply directly (to HCFA) to receive ASC designation for medical facility reimbursement purposes without first obtaining a CON. Currently, "Ambulatory Surgical Center" means a facility, the primary purpose of which is to provide elective surgical care and in which the patient is admitted to and discharged from such facility within the same working day and which is not part of a hospital. However, a facility existing for the primary purpose of performing therapeutic abortions, an office maintained by a physician for the practice of medicine, or an office maintained for the practice of dentistry shall not be construed to be an ASC. Section 395.002(2), Florida Statutes (1985). DHRS is trying to implement what it believes to be a statutory CON exemption for doctor's offices through the proposed rule. In so doing, HRS considers physicians' offices to be indistinguishable from physician group practices. In this regard, the relevant statutes do not reference physician group practices. Historically, HRS would not certify physician offices as medicare providers (in its role as surveyor for HCFA) because such certification entails the requirement that a physician's office comply with the State ASC Law. In short, a physician's office wishing to become an ASC had to satisfy both CON and State licensure requirements in order to be certified as a medicare providing ASC. Prior to promulgation of the proposed rule, DHRS never had a policy that group practices or physicians with operating suites are excluded from the statutory definition of an ASC. DHRS has no exemptions or exclusions for physicians' groups with surgical suites so that they could become ASCs for medicare certification. (Testimony of Tom Porter, previous supervisor for DHRS' Certificate of Need Program). DHRS took the position that it was without authority to grant an exemption to physician group practices and the related offices as an associated surgical suite without such facility having first obtained a CON as an ASC prior to offering such services. DHRS also took the position that a physician wishing to do minor surgical procedures as a sub-part of his office practice would not be required to obtain a CON as an ASC. These services could be done as an ancillary part of the physician's office. (Testimony of Gene Nelson, former Administrator, Office of Comprehensive Health Planning and Administrator of the Office of Community Medical Facilities prior to Mr. Maryanski's tenure with DHRS). Section 381.495, Florida Statutes, provides for several defined exemptions from CON review. As stated above, the proposed rule purports to grant an exemption to physician offices or to physician group practices from State CON requirements. Section 381.493 (3)(a), Florida Statutes (1985), states, in relevant part, that an office maintained by a physician for the practice of medicine is excluded from the definition of an ASC. The referenced statute does not grant an exemption from the ASC regulation nor has DHRS previously exempted a person or entity from CON review under such circumstances. DHRS has historically distinguished between a physician performing minor surgical procedures as an ancillary part of his office versus a full service ASC. HCFA clarified in Memorandum FQA-731, Ambulatory Surgical Center regulations relating to compliance with state licensure requirements and the application of state CON provisions as a prerequisite for medicare certification. (Pet. Exh. 8) In states where ASC licensure laws are in effect, facilities seeking to participate in medicare must meet such licensure requirements. Thus, 42 CFR Section 416.40 states, in pertinent part, that the ASC must comply with state licensure requirements. CON provisions must be met as a prerequisite for medicare licensure certification for an entity to operate legally within a state and CON approval is required before the decision to award a license is made. In instances where licensure is not required either by virtue of the absence of an ASC Licensure Law or the exemption of certain entities from the licensure law, compliance with CON provisions is not necessary for medicare eligibility as an ASC. It is through a series of correspondence between Mr. Robert Streimer of HCFA and Mr. Marshall Kelley, DHRS' Assistant Secretary for Program Planning that affords the proffered "basis" for the proposed rule. (TR 87). The Streimer letter provides that ASC services performed in a physician's office which is not required by state law to be licensed as an ASC and which meets all medicare ASC requirements would be covered and reimbursed by medicare at the ASC rate. As noted, DHRS historically took a different position. Nowhere in Mr. Kelley's letter to Mr. Streimer did HRS identify the specific criteria that would relate to an exemption request in Florida as currently stated in the proposed rule. DHRS, based on the proposed rule, now takes the position that any physician having a operating room and furnishing surgical procedures for less than 50 percent of his or her patients would be entitled to an exemption from CON requirements and in turn be entitled to apply for certification from HCFA as an ASC for ASC reimbursement (facility fee). The proposed rule allows for surgery currently performed in a physician's office to qualify for higher reimbursement from medicare (i.e., a facility fee). DHRS uses as authority for the proposed rule, Section 381.493(3)(a), Florida Statutes. Prior to receipt of Streimer's letter, DHRS considered HCFA's policy to be that if a facility did not have a CON and was not licensed as an ASC, there would be no medicare certification forthcoming from HCFA. The Streimer letter purportedly clarifies HCFA's policy although it does not represent a change in that policy. (Petitioner's Exhibit 6). The proposed rule defines "primary as 50 percent or more of the patients treated annually as being non-surgical patients. However, according to the 1982 federal regulations, an entity seeking application and certification as a medicare ASC must be dedicated exclusively to the provision of Ambulatory Surgical Services (42 CFR Section 416.2). Federal Rules provide that the requirement for ASC's to be certified in order to receive medicare payments was expected to exclude physicians offices. There appears to be no federal regulation dealing with reimbursement for the surgical procedures which are to be done in physicians' offices. To satisfy HCFA's certification requirements, an applicant must satisfy the relevant state licensure requirements if any, and meet federal certification requirements. As presently codified, it is impossible to simultaneously satisfy the proposed rule and the federal ASC definition contained in 42 CFR Section 416.02. Thus, an entity could not "exclusively" provide ASC services and at the same time not exist for the "primary" purpose of providing elective surgical care on an outpatient basis. They are mutually exclusive since the two definitions are inconsistent. The Streimer letter initiated HRS's evaluation of current statutes and the proposed rule is, according to HRS, designed to implement current statutes. HCFA's policy is that if a facility legally provides or is allowed to provide elective surgical procedures in Florida, without having to be licensed as an ASC or having gone through the CON process, it is inappropriate to require the facility to obtain a CON and be licensed as an ASC as a condition of that facility being approved for medicare reimbursement at the ASC rate. Prior to HCFA's correspondence, HCFA required an applicant for medicare ASC certification to meet State Law and also meet its certification requirements. This is still the case and the HCFA's correspondence to DHRS did not change that requirement. The purpose of the Health Facility and Health Services Planning Act, more commonly known as the CON law, (sometimes called the Act) is to protect the public health, safety and welfare of Floridians. These protections are further defined as a necessary increase in health care, minimizing duplication in health services, and minimizing situations where there is an underutilization of existing health care resources. The proposed rule does not relate to or otherwise address any "need" issue or capacity issue and contrary thereto, allows for uncontrolled growth of surgery suites as long as the physician group practice has 50 percent or more of total patients treated as non-surgical patients. It can be expected that there will be a proliferation of physicians, solo or group practices, with physician surgical practices developing in addition to hospital out-patient surgery. Additionally, there is no physical constraint on the location of the physician and a physician's group practice. Adoption of the proposed rule will also increase the cost of the total health care system in Florida as follows: The average cost per procedure increases when procedures are spread out over a greater number of fixed facilities and because of incentives that would be inherent in this additional capacity for additional unnecessary utilization. Physicians would receive a facility fee in addition to a professional fee. Physicians would thereby receive more money for doing the same procedures they are currently doing in their offices without the facility fee. The effect of the introduction of surgery centers where there is already excess capacity in hospitals and in freestanding surgery centers is to increase the cost of health care to the community. With the addition of new facilities, there are added fixed costs placed into the system that would remain until the facility becomes outmoded. With the addition of fewer procedures spread over more fixed costs, the average cost per procedure likewise increases even though the cost to an individual patient might appear to be lower in an alternative setting. Excess capacity leads to underutilization with the resultant increase in the rates for surgery. Without a capacity constraint, there will be more elective surgery performed. With the approval of the proposed rule, a doctor's office will be eligible for medicare reimbursement for a facility fee. Medicare reimbursement for a facility fee is unique to ASCs and does not apply to surgical procedures performed in a doctor's office. The purpose behind reimbursing for facility fees is that there is considerable overhead associated with performing relatively complex surgical procedures which require an operating room. If procedures are so simple as to be safely performed in a doctor's office, the intent of the rule is to distinguish between these two settings. It is desirable for procedures to be done in a doctor's office that are simple because it is the lower cost setting. Procedures performed in a physician's office will not qualify for the facility fee reimbursement and overhead payment because of the simplistic nature of the procedures and the lack of need for sophisticated equipment which is currently being used in ASCs. The federal regulations were intended to remove hospital surgery to ASCs, if appropriate, and to remove minor surgery to doctors' offices in order to avoid reimbursement for procedures which can be done in a less sophisticated setting. If more procedures are shifted to medicare certified ASCs, there would be an additional facility fee and physicians would be eligible for this reimbursement. An example of the operational effect of the proposed rule is the scenario surrounding Doctor Stephen S. Spector and the Presidential Eye Surgery Center in Palm Beach County. Doctor Spector was denied a CON for an ASC based on a lack of need for additional operating suites in Palm Beach County. After DHRS made its initial decision denying Dr. Spector's CON, he petitioned for a formal administrative hearing. A Recommended Order was entered denying Dr. Spector a CON and HRS then issued a Final Order denying a CON to Dr. Spector. Dr. Spector has since simply requested an exemption for a freestanding ASC pursuant to the proposed rule. DHRS will entertain this request and if granted, Dr. Spector will be entitled to medicare certification and a facility fee for surgical procedures performed in his office. The proposed rule will encourage the massive proliferation of outpatient surgery facilities and outpatient surgery suites. 3/ Evidence adduced at final hearing indicates that CON approved and licensed freestanding ambulatory surgery centers are currently underutilized and not operating at optimal capacity. The result will be increased hospital and ASC costs per unit because fixed costs must then be spread over a smaller patient base. It is likely that there will be underutilization of existing facilities. The proposed rule does not foster the purposes of Florida's CON law and it will not restrain increases in health care costs. The proposed rule will enhance or maximize unnecessary duplication and promote underutilization of existing resources. Pursuant to Section 120.54(2), Florida Statutes (1985), the Department is required to prepare an economic impact statement of the proposed rule. For the proposed rule, HRS states, in part, in its economic impact statement as follows: The proposed amendment is expected to have an economic impact on hospital outpatient departments and ambulatory surgical centers licensed by the State. It is expected that some Medicare patients who previously have been referred to hospital outpatient departments or a freestanding ambulatory surgical center licensed by the State may have their elective surgeries performed in the physician's group practice. In addition, the proposed rule may encourage the development of physician group practices with surgical suites since they are exempted from the certificate of need process and State licensure requirements. The fiscal impact on hospitals and ambulatory surgical centers cannot be estimated since the Department has no data regarding the number of potential applicants under this Rule, the location of those applicants, the volume of surgeries which may be performed by these entities, or the number of surgeries which would have been performed in hospital outpatient departments or State licensed ambulatory surgical centers in the absence of these new entities. (Petitioner's Exhibit 7). The economic impact statement for the proposed rule does not provide any data or method used in making the required economic impact estimates. The statement does not include any data to analyze whether the rule will impact ASCs having less than one million dollars net worth and less than 25 employees or whether the proposed rule will have an economic impact on hospitals and ambulatory surgery centers. Although HRS has indicated that the exact amount of the fiscal impact is impossible to estimate due to the unknowns respecting the number of physician offices or group practices that will qualify for the exemptions and therefore no analysis was undertaken or developed, studies could have been made to determine the effect any level of participation would have on hospital costs and utilization of existing facilities. Although the task of compiling such data would, no doubt, be arduous, evidence adduced at final hearing indicates that DHRS could have, with effort, compiled a data base with a stratified sample which would have been reliable and could forecast the likely effect of the proposed rule within an acceptable margin of error. DHRS did not compile data which would provide an estimate as to the number of patients who would choose the physician's office over other facilities that perform Ambulatory Surgery. DHRS never requested input from hospitals or outpatient surgery centers with respect to pay or patient mix. DHRS conducted no surveys with respect to the number of potential applicants under the proposed rule. DHRS considered it not relevant to examine the capacity of existing freestanding surgery centers or hospitals having outpatient surgery facilities. DHRS conducted no studies to determine the accessibility of existing ASCs and hospital ASCs. No studies were done to examine the impact, as to the cost to patients, that the proposed rule is likely to have on existing providers. No studies were done to assess the impact the proposed rule will have on the medicare trust fund. No studies were done to determine the impact, if any, on Florida small and minority businesses. It is true that a great deal of the needed data was not readily available to HRS whereas, on the other hand, it made no attempt to gather such data. DHRS has the ability to assess the number of surgeries that could be performed in hospital outpatient departments and ASC's since DHRS does such compilations on a day to day basis when it projects the need for new ASCs. DHRS could have commissioned studies to determine the effect any level of participation would have on hospital costs and utilization. Development of an adequate data base and a meaningful economic impact of the proposed rule is paramount in view of the legislative mandate (to DHRS) to contain health care costs. Rules are promulgated to further the purpose and objective of the statutes they implement. To accomplish this, they must be consistent with the statute. Here, the purpose of the statute is cost containment. Evidence adduced at final hearing reveals, without contradiction, that the proposed rule will increase health care costs, contrary to the major purpose for its existence. Finally, DHRS compiled no data as to the impact on the ability of hospitals to provide indigent care under the proposed rule. As example, Florida Hospital projects that it will provide $48,000,000 in uncompensated care for fiscal year 1986. If the hospital were to lose revenue as result of this proposed rule, the level of indigent care will also correspondingly be reduced in order to offset the loss of revenue. Other parties herein provide services to indigent persons. The proposed rule does not require these exempt facilities to provide indigent care. In addition to the above economic impact which will be brought about by the proposed rule on the Health Care system as a whole, the proposed rule will have an economic impact on the existing hospitals and ASC's. (TR 276-277; 438-440). As example, one Petitioner herein advises that if one surgery suite were added by an existing physician group or formed near the hospital, the hospital will lose approximately $481,000 per annum. By letter dated August 29, 1986, DHRS forwarded a copy of the purposed rule to the statewide and local health councils requesting comments by September 12, 1986. The public hearing on the proposed rule was scheduled for October 20, 1986. Neither health council (state or local) participated in the public hearing for the proposed rule nor has either council submitted comments respecting the proposed rule. The notice provided to the local and statewide health councils for comments on the proposed rule was adequate and afforded the various councils an opportunity to voice any concerns or provide input about the proposed rule. Dr. Montgomery, an Intervenor herein, will receive additional medicare reimbursements of $500.00 per patient for a facility fee under the proposed rule. Dr. Montgomery approximated that he performed 320 cataract surgeries per year of which approximately 300 patients are paying patients. Approximately 85 percent of those patients are over 65. Therefore, Dr. Montgomery will receive medicare reimbursement for 255 patients or approximately $127,500.00 in additional fees if his office is certified as exempt under the proposed rule.
