The Issue Whether Winter Haven Hospital should be authorized for a Level II, neonatal intensive care service with 11 beds via the final inventory of NICU beds for District VI, to be published by the Department of Health and Rehabilitative Services. Whether Lakeland Regional Medical Center should be authorized for more than 14 Level II beds in the same final inventory. Whether University Community Hospital established its right to challenge the number of Level II NICU beds to be authorized for either hospital.
Findings Of Fact Description of the Parties Winter Haven is a 579-bed general hospital in Winter Haven, Florida. Since 1987, it has been authorized to operate 475 acute care, 80 short term psychiatric and 24 comprehensive medical rehabilitation beds. Lakeland is an 897-bed general hospital in Lakeland, Florida. Its licensed bed complement includes the following: 805 acute care, 54 psychiatric short term and 38 substance abuse short term beds. University is a 404-bed acute care hospital in Tampa, Florida. University is seeking a certificate of need for a 10-bed Level II NICU at its facility. In order to obtain the license, University proposes to convert 10 of its existing medical-surgical beds to a 10-bed NICU. HRS is the state agency charged with the duty of regulating tertiary services, including neonatal intensive care. The provision of Level II NICU services in HRS District VI is the subject of this proceeding. All three hospitals are located in the district. University's Standing to Intervene University does not have a program to provide neonatal intensive care services at the present time. However, as part of the hospital's long-range planning goals, it intends to develop a Women's Center, which will include a 10- bed Level II NICU. University applied for the Level II NICU service in the batching cycle of 1990, prior to the effective date of the NICU rule. At the close of evidence on April 15, 1991, the outcome of the application was still pending. Additionally, University filed a Letter of Intent and an application for a 10- bed Level II NICU in the first batching cycle of 1991. That application was also still pending during the evidentiary portion of these proceedings. University's attempt to secure a certificate of need for NICU beds are directly impacted by the number of NICU beds reacknowledged and validated in the District VI inventory of "grandfathered" NICU beds. The number of beds ultimately established by the inventory will directly affect the fixed need pool to be applied to all subsequent certificate of need batching cycles. The NICU Rule The NICU Rule promulgated by HRS went into effect on August 6, 1990. The preliminary inventory of authorized Level II and Level III providers in District VI was published August 24, 1990. According to this inventory, Lakeland was authorized to have 11 Level II NICU beds and Winter Haven was not allocated any Level II beds on the initial preliminary inventory. Winter Haven's Inclusion in a Revised Preliminary Inventory Published September 12, 1990 When the preliminary inventory of Level II NICU beds was published, Winter Haven advised HRS that it had been excluded. Documentation was transmitted to the agency to support Winter Haven's contention that it has continuously developed and now has a operating Level II neonatal intensive care unit based upon past authorization from the agency. The documentation supplied by Winter Haven included past authorizations from the agency, which were relied upon by the hospital before expenditures were made on construction of the NICU and the unit created, and before a personal service contract was entered into for a hospital-based neonatologist in April 1988. Reliance on the agency's approval of the expansion project began on July 9, 1985, and was continuously relied upon throughout the development and establishment of these services at Winter Haven. When the documentation was reviewed by HRS, the decision was made to amend the preliminary inventory to include 11 NICU beds at this hospital. The revised preliminary inventory that included these beds was published on September 12, 1990. HRS decided 11 was the appropriate number of Level II beds to place on the inventory for Winter Haven as the approved construction plans show an isolation room of four beds and a continuing care room with seven beds. The beds in these rooms were described on the plan as "neonatal intensive care centers" and "intensive care bassinets." During the approval period, the square footage for each bed satisfied the draft rules that proposed fifty square feet per each Level II NICU bed. The decision to include Winter Haven on the revised preliminary inventory does not comport with the grandfathering provisions of the NICU Rule. Winter Haven does not meet the threshold requirements specified in sub- subparagraphs 14.a, 14.b or 14.f of the rule deems necessary for grandfathering to occur. During the years in which the NICU Rule was created, HRS did not consider the possibility that some hospitals might have progressed in the development stage of Level II NICU beds to such a level that the promulgated rule would contradict prior agency approvals reasonably relied upon by these hospitals. Before Winter Haven's beds were placed on the revised preliminary inventory, HRS permitted Alachua General Hospital's Level II NICU beds to be placed on the inventory based upon a CON exemption letter and construction plans approved prior to October 1, 1987. There have been no challenges to this decision, therefore, Alachua General can continue these services without a certificate of need as a grandfathered facility. Like Winter Haven, Alachua General did not comport with the grandfathering provisions of the NICU Rule. The decision to place Level II beds on the inventory was based on the approval of construction plans obtained through the licensure process at HRS in effect prior to October 1, 1987. HRS created the construction plans exception to the rule to acknowledge pre-existing bed authorizations not covered by the NICU Rule. Lakeland's Increase to 16 Level II Beds in the Revised Preliminary Inventory Published October 12, 1990 Lakeland was issued a CON exemption by HRS for 16 "Level II neonatal intensive care beds" in a letter dated March 12, 1985. This letter allowed Lakeland to re-designate 16 medical/surgical beds as Level II neonatal intensive care beds. On May 20, 1986, HRS approved Lakeland's construction plans for a 14- bed, Level II NICU. Lakeland did not rely on its opportunity to re-designate all 16 beds as Level II NICU beds when it established its NICU pursuant to the CON exemption. Lakeland was providing Level II NICU services prior to October 1, 1987, and continuously since then under the direction of a neonatologist or group of neonatologists, who were providing 24-hour coverage and who were either board-certified or board-eligible in neonatal-perinatal medicine as the various terms are defined in the NICU Rule. In its 1989 Neonatal Intensive Care Survey response to HRS, Lakeland erroneously underreported its Level II patient days from October 1, 1987 through September 20, 1988. The number reported was different than the 4,412 Level II neonatal intensive care services patient days reported separately to the Hospital Cost Containment Board for the same period, based upon audited data. A third review of the data revealed Lakeland provided, 4,414 Level II patient days in 1987-1988 reporting period for the 1989 survey. Pursuant to the formula set forth in sub-subparagraph 14.c of the NICU Rule, Lakeland should be authorized for 15 Level II beds on the final inventory which lists the established NICU beds that meet the grandfathering provisions of the rule. The inclusion of 16 Level II NICU beds on the revised preliminary inventory published October 12, 1990, went beyond the bed numbers allowed by rule.
Recommendation Based upon the foregoing, it is recommended: A Final Order be entered which excludes Winter Haven from the inventory which lists authorized neonatal intensive care services based on the provisions of sub-subparagraphs 14.a. through 14.g. of the NICU Rule. A Final Order be entered reducing Lakeland's inventory to 15 Level II NICU beds. RECOMMENDED this 6th day of August, 1991, in Tallahassee, Florida. VERONICA E. DONNELLY 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 6th day of August, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 90-7682 and 90-7683 Lakeland Regional Medical Center's proposed findings of fact are addressed as follows: Accepted. See Preliminary Statement. Accepted. See HO #8, #11, #17 and #22. Accepted. Accepted. Accepted. First two sentences accepted. The rest of the paragraph is rejected. Argumentative. Accepted. Accepted. Accepted. Rejected. Irrelevant. Accepted. See Conclusions of Law. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #13. Rejected. Contrary to law. See Conclusions of Law. Accept the first two sentences. Reject the next sentence. Speculative. The next two sentences accepted. The last sentence is rejected. Contrary to fact. See HO #12. Rejected. Irrelevant. Accept first three sentences. See HO #10. Reject fourth sentence. Incompetent legal conclusion. 21. Rejected. Irrelevant. 22. Rejected. Speculative. 23. Accepted. 24. Accepted. 25. Accepted. 26. Accepted. 27. Accepted. 28. Rejected. Cumulative. 29. Rejected. Irrelevant. 30. Rejected. Irrelevant. 31. Rejected. Irrelevant. 32. Accepted. 33. Rejected. Cumulative. 34. Accepted. See HO #11 and #12. 35. Accepted. See HO #12. 36. Rejected. Contrary to fact. 37. Rejected. Irrelevant. 38. Rejected. Improper summary of testimony. Irrelevant. 39. Accepted. 40. Rejected. Contrary to fact. 41. Rejected. Irrelevant. 42. Accept all but last sentence which is a distinction without substance. See HO #12, #15 and #16. 43. Accepted. See Conclusions of Law. 44. Accepted. 45A. Accepted. 45B. Accepted. 45C. Accepted. 45D. Accepted. 45E. Accepted. 45F. Rejected. Irrelevant. 46A. Accepted. 46B. Rejected. Irrelevant. 47. Rejected. Not evidence. Rejected. Irrelevant to resolution of material fact dispute. Accepted. See HO #17 and #19. Accepted. See HO #22. Accepted. See HO #21. Department of Health and Rehabilitative Services' proposed findings of fact are addressed as follows: Accepted. See HO #12 and Preliminary Statement. Accepted. See Preliminary Statement. Accepted. See Preliminary Statement. Accepted. See HO #8. Accepted. See HO #12 and #22. Accepted. See HO #17. Accepted. See HO #10. Accepted. Accept all but last sentence. See HO #16. The last sentence is improper Conclusion of Law. Winter Haven Hospital's proposed findings of fact are addressed as follows: Accepted. See HO #1. Accepted. See HO #2. Accepted. See HO #3. Accepted. See HO #4. Accepted. See HO #10. Accepted. See HO #8. Accepted. Accepted. See Preliminary Statement. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Accepted. See Preliminary Statement. Accepted. Accepted. Accepted. See HO #14. Accepted. Accepted. Accepted. See HO #15. Rejected. Improper Conclusion of Law. Accepted. Accepted. Accepted. Accepted. Rejected under current definition. Accepted to the extent the room provided many aspects of Level II care. Accepted. Accepted. Rejected. Contrary to fact. Accepted. Accepted. See HO #10. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. See HO #10. Accepted. See HO #10. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #12. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Improper Conclusion of Law. Accepted. Rejected. Speculative. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #10. Accepted. Accepted. See HO #15 and #16. Accepted. Accepted. Accepted. Accepted. See HO #11 and #12. Rejected. Improper Conclusion of Law. Rejected. Improper Conclusion of Law. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #18. Accepted. See HO #21. Rejected. Improper Conclusion of Law. Rejected. Improper Conclusion of Law. See HO #23 - #26. Accepted. Rejected. Contrary to fact. See HO #7. Accepted. Rejected. Incorrect legal conclusion. Accepted. Rejected. Insufficient foundation provided for the opinion to assist Hearing Officer as to weight and sufficiency. Accepted. Accepted. University Community Hospital's proposed findings of fact are addressed as follows: Accepted. See Preliminary Statement. Accepted. Accepted. Accepted. See HO #8. Accepted. See HO #12 and #22. Accepted. See Preliminary Statement. Accepted. See HO #4. Accepted. Accepted. Accepted. Accepted. See HO #5. Accepted. See HO #6 and #7. Accepted. Accepted. See HO #7. Accepted. See HO #7. Accepted. Accepted. Rejected. Speculative. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Rejected. This opinion was rejected by the Hearing Officer as an improper legal conclusion. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #11 and #12. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Contrary to fact. Rejected. Contrary to fact. See HO #12. Rejected. See HO #12. Rejected. Contrary to fact. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #10. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #22. Accepted. Accepted. Accepted. Accepted. Accepted. See HO #21. Accepted. COPIES FURNISHED: John H. Parker, Jr., Esquire PARKER HUDSON RAINES & DOBBS 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 John M. Knight, Esquire PARKER HUDSON RAINES & DOBBS 118 North Gadsden Street Tallahassee, Florida 32301 Richard A. Patterson, Esquire Assistant General Counsel Department of Health and Rehabilitative Services 2727 Mahan Drive - Suite 103 Tallahassee, Florida 32308 Patricia A. Renovitch, Esquire OERTEL HOFFMAN FERNANDEZ & COLE, P.A. Post Office Box 6507 Tallahassee, Florida 32314-6507 Cynthia S. Tunnicliff, Esquire CARLTON FIELDS WARD EMMANUEL SMITH & CUTLER, P.A. 215 South Monroe Street - Suite 410 Tallahassee, Florida 32301 R. S. Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The issue in these cases is whether certain rules proposed by the Agency for Health Care Administration (AHCA) related to adult interventional cardiovascular services are an invalid exercise of delegated legislative authority.
Findings Of Fact By stipulation of the parties, all Petitioners and Intervenors in these cases are acute care hospitals licensed in Florida pursuant to Chapter 395, Florida Statutes; are substantially affected by the proposed rules at issue in these cases; and have standing to participate in this proceeding. AHCA is the state agency responsible for licensure of hospitals pursuant to Chapter 395, Florida Statutes, and responsible for promulgation of the proposed rules at issue in these cases. This dispute specifically involves proposed rules related to the licensure of adult cardiovascular services in Florida hospitals. Such services include percutaneous cardiac intervention (PCI), also referred to as percutaneous transluminal coronary angioplasty (PCTA). PCI involves the insertion of a device placed into an artery and directed to the site of a coronary artery blockage. The device is used to compress or remove the blockage material and restore arterial blood flow to heart tissue. A mechanism called a "stent" may be left in place at the site of the former blockage to reduce the potential for re-blockage ("restenosis") of the artery. The procedure is performed in a cardiac catheterization laboratory ("cath lab"). PCI that is performed on an emergency basis to open an arterial blockage causing myocardial infarction (heart attack) is referred to as "primary" or "emergent" PCI. PCI performed to resolve symptoms of coronary artery disease manifesting in presentations other than through myocardial infarction is referred to as "elective" PCI. Previous law restricted PCI services to those hospitals with onsite cardiac surgery (commonly referred to as "open heart" surgery). Hospitals are required to obtain a Certificate of Need (CON) from AHCA to operate a cardiac surgery program. Accordingly, in order to offer PCI services, a hospital was required to obtain a cardiac surgery program CON from AHCA. As cardiac catheterization procedures have become more widely available and physician training and experience have increased, the relative safety of the procedures has improved. The volume of open heart cardiac surgery has declined as the patient outcomes for non-surgical coronary artery disease treatments have improved, yet Florida hospitals seeking to provide PCI were still operating under the CON-based restrictions. There is an ongoing debate within the medical community related to the issue of whether non-emergent patients should receive PCI services at hospitals which lack cardiac surgery programs. The historic rationale for restricting the availability of elective PCI procedures to hospitals where onsite cardiac surgery was also available was related to the possibility that an unsuccessful PCI would require immediate resolution through surgery. The evidence establishes that PCI-related events requiring immediate access to onsite cardiac surgery have become less frequent, at least in part due to increased training and experience of practitioners, as well as an increased technical ability to resolve some events, such as arterial ruptures or perforations, within the cath lab. Nonetheless, there is also evidence that the outcomes of cardiac catheterization procedures performed in hospitals with onsite cardiac surgery may be superior to those performed in hospitals where onsite cardiac surgery is not available. In 2004, the Florida Legislature adopted two bills that, insofar as are relevant to this proceeding, had an impact on the regulatory process related to adult interventional cardiovascular services. The effect of the legislation was to shift the regulation of PCI programs away from CON-based restrictions and towards a licensing process. Both bills established a two-level classification of hospitals providing adult interventional cardiology services. House Bill 329 limited the provision of PCI at hospitals without onsite cardiac surgery to emergent patients and provided, in relevant part, as follows: In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult primary percutaneous cardiac intervention for emergent patients without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. (Emphasis supplied) Senate Bill 182 did not limit PCI services on the basis of onsite cardiac surgery availability and provided, in relevant part, as follows: Section 2. Notwithstanding conflicting provisions in House Bill 329, Section 408.0361, Florida Statutes, is amended to read: * * * In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. (Emphasis added) Both the House Bill and the Senate Bill were signed into law. The legislation was codified as Section 408.0361, Florida Statutes (2004), which provided, in relevant part, as follows: 408.0361 Cardiology services and burn unit licensure.-- * * * In establishing rules for adult interventional cardiology services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. Extensive evidence was offered at the hearing to support both sides of the debate regarding the appropriateness of performing elective PCI in hospitals without onsite cardiac surgery, and it is clear that the debate continues. However, the evidence establishes that the Florida Legislature specifically chose not to restrict non-emergent PCI to Florida hospitals with onsite cardiac surgery units and has determined that properly-licensed Florida hospitals may provide PCI services without regard to the availability of on-site cardiac surgery. It is reasonable to assume that had the Legislature intended to restrict provision of adult PCI in hospitals without cardiac surgery programs to emergent patients, the "notwithstanding" language contained in Senate Bill 182 would not have been adopted. There is no credible evidence that the Legislature was unaware of the continuing debate within the cardiology community at the time the legislation was adopted in 2004. The Legislature has acknowledged the distinction between emergent and elective PCI as indicated by Subsection 408.036(3)(o), Florida Statutes (2008), which provides under certain circumstances that a hospital without an approved "open heart surgery program" can obtain an exemption from CON requirements and provide emergent PCI services to "patients presenting with emergency myocardial infarctions." It is reasonable to assume that had the codification of the 2004 legislation been incorrect, the Florida Legislature would have subsequently amended the statute to reinstate the restriction. In fact, the Legislature has revised the referenced statute without substantively altering the relevant language establishing the two-level licensure designation. Section 408.0361, Florida Statutes (2008), the current statute directing AHCA to adopt the rules at issue in this proceeding, provides, in relevant part, as follows: 408.0361 Cardiovascular services and burn unit licensure.-- Each provider of diagnostic cardiac catheterization services shall comply with rules adopted by the agency that establish licensure standards governing the operation of adult inpatient diagnostic cardiac catheterization programs. The rules shall ensure that such programs: Comply with the most recent guidelines of the American College of Cardiology and American Heart Association Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories. Perform only adult inpatient diagnostic cardiac catheterization services and will not provide therapeutic cardiac catheterization or any other cardiology services. Maintain sufficient appropriate equipment and health care personnel to ensure quality and safety. Maintain appropriate times of operation and protocols to ensure availability and appropriate referrals in the event of emergencies. Demonstrate a plan to provide services to Medicaid and charity care patients. Each provider of adult cardiovascular services or operator of a burn unit shall comply with rules adopted by the agency that establish licensure standards that govern the provision of adult cardiovascular services or the operation of a burn unit. Such rules shall consider, at a minimum, staffing, equipment, physical plant, operating protocols, the provision of services to Medicaid and charity care patients, accreditation, licensure period and fees, and enforcement of minimum standards. The certificate-of-need rules for adult cardiovascular services and burn units in effect on June 30, 2004, are authorized pursuant to this subsection and shall remain in effect and shall be enforceable by the agency until the licensure rules are adopted. Existing providers and any provider with a notice of intent to grant a certificate of need or a final order of the agency granting a certificate of need for adult cardiovascular services or burn units shall be considered grandfathered and receive a license for their programs effective on the effective date of this act. The grandfathered licensure shall be for at least 3 years or until July 1, 2008, whichever is longer, but shall be required to meet licensure standards applicable to existing programs for every subsequent licensure period. In establishing rules for adult cardiovascular services, the agency shall include provisions that allow for: Establishment of two hospital program licensure levels: a Level I program authorizing the performance of adult percutaneous cardiac intervention without onsite cardiac surgery and a Level II program authorizing the performance of percutaneous cardiac intervention with onsite cardiac surgery. For a hospital seeking a Level I program, demonstration that, for the most recent 12-month period as reported to the agency, it has provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations or, for the most recent 12-month period, has discharged or transferred at least 300 inpatients with the principal diagnosis of ischemic heart disease and that it has a formalized, written transfer agreement with a hospital that has a Level II program, including written transport protocols to ensure safe and efficient transfer of a patient within 60 minutes. For a hospital seeking a Level II program, demonstration that, for the most recent 12-month period as reported to the agency, it has performed a minimum of 1,100 adult inpatient and outpatient cardiac catheterizations, of which at least 400 must be therapeutic catheterizations, or, for the most recent 12-month period, has discharged at least 800 patients with the principal diagnosis of ischemic heart disease. Compliance with the most recent guidelines of the American College of Cardiology and American Heart Association guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Establishment of appropriate hours of operation and protocols to ensure availability and timely referral in the event of emergencies. Demonstration of a plan to provide services to Medicaid and charity care patients. In order to ensure continuity of available services, the holder of a certificate of need for a newly licensed hospital that meets the requirements of this subsection may apply for and shall be granted Level I program status regardless of whether rules relating to Level I programs have been adopted. To qualify for a Level I program under this subsection, a hospital seeking a Level I program must be a newly licensed hospital established pursuant to a certificate of need in a physical location previously licensed and operated as a hospital, the former hospital must have provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations for the most recent 12- month period as reported to the agency, and the newly licensed hospital must have a formalized, written transfer agreement with a hospital that has a Level II program, including written transport protocols to ensure safe and efficient transfer of a patient within 60 minutes. A hospital meeting the requirements of this subsection may apply for certification of Level I program status before taking possession of the physical location of the former hospital, and the effective date of Level I program status shall be concurrent with the effective date of the newly issued hospital license. (5)(a) The agency shall establish a technical advisory panel to develop procedures and standards for measuring outcomes of adult cardiovascular services. Members of the panel shall include representatives of the Florida Hospital Association, the Florida Society of Thoracic and Cardiovascular Surgeons, the Florida Chapter of the American College of Cardiology, and the Florida Chapter of the American Heart Association and others with experience in statistics and outcome measurement. Based on recommendations from the panel, the agency shall develop and adopt rules for the adult cardiovascular services that include at least the following: A risk adjustment procedure that accounts for the variations in severity and case mix found in hospitals in this state. Outcome standards specifying expected levels of performance in Level I and Level II adult cardiovascular services. Such standards may include, but shall not be limited to, in-hospital mortality, infection rates, nonfatal myocardial infarctions, length of stay, postoperative bleeds, and returns to surgery. Specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans. Hospitals licensed for Level I or Level II adult cardiovascular services shall participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society for Thoracic Surgeons. As required by Subsection 408.0361(5), Florida Statutes (2004), AHCA created the TAP, which convened and met over the course of two years at a series of public hearings. The TAP also received written materials and comments from interested parties. Thereafter, AHCA convened rule development workshops to formulate the proposed rules at issue in this proceeding. The proposed rules were initially noticed in the September 28, 2007, Florida Administrative Weekly (Vol. 33, No. 39). Subsequent Notices of Changes to the proposed rules were published in the Florida Administrative Weeklies of November 16, 2007 (Vol. 33, No. 46); March 28, 2008 (Vol. 34, No. 13); and May 9, 2008 (Vol. 34, No. 19). There is no evidence that AHCA failed to comply with statutory requirements related to the rule adoption process. As required by Subsection 408.0361(3)(a), Florida Statutes (2008), the proposed rules set forth the procedures by which a hospital may apply for licensure as a Level I or Level II provider of adult cardiovascular services without differentiation based on the availability of on-site cardiac surgery. The proposed rules applicable to a hospital seeking licensure as a Level I provider of adult cardiovascular services are set forth at Proposed Rule 59A-3.2085(16). The proposed rules applicable to a hospital seeking licensure as a Level II provider of adult cardiovascular services are set forth at Proposed Rule 59A-3.2085(17). Subsection 408.0361(3)(b), Florida Statutes (2008), establishes minimum volume reporting requirements for licensure as a Level I program. Accordingly, Proposed Rule 59A- 3.2085(16)(a) provides, in relevant part, as follows: 1. A hospital seeking a license for a Level I adult cardiovascular services program shall submit an application on a form provided by the Agency (See Form 1: Level I Adult Cardiovascular Services License Application Attestation; AHCA Form, Section 18(a) of this rule ), signed by the chief executive officer of the hospital, attesting that, for the most recent 12-month period, the hospital has provided a minimum of 300 adult inpatient and outpatient diagnostic cardiac catheterizations or, for the most recent 12-month period, has discharged or transferred at least 300 inpatients with the principal diagnosis of ischemic heart disease (defined by ICD-9-CM codes 410.0 through 414.9). Reportable cardiac catheterization procedures are defined as single sessions with a patient in the hospital’s cardiac catheterization procedure room(s), irrespective of the number of specific procedures performed during the session. Reportable cardiac catheterization procedures shall be limited to those provided and billed for by the Level I licensure applicant and shall not include procedures performed at the hospital by physicians who have entered into block leases or joint venture agreements with the applicant. (Emphasis supplied) Subsection 408.0361(3)(c), Florida Statutes (2008), establishes minimum volume reporting requirements for licensure as a Level II program. Accordingly, Proposed Rule 59A- 3.2085(17)(a) provides in relevant part as follows: 1. A hospital seeking a license for a Level II adult cardiovascular services program shall submit an application on a form provided by the Agency (See Form 2: Level II Adult Cardiovascular Services License Application Attestation; AHCA Form , Section 18(b) of this rule ) to the Agency, signed by the chief executive officer of the hospital, attesting that, for the most recent 12-month period, the hospital has provided a minimum of a minimum of 1,100 adult inpatient and outpatient cardiac catheterizations, of which at least 400 must be therapeutic cardiac catheterizations, or, for the most recent 12-month period, has discharged at least 800 patients with the principal diagnosis of ischemic heart disease (defined by ICD-9-CM codes 410.0 through 414.9). a. Reportable cardiac catheterization procedures shall be limited to those provided and billed for by the Level II licensure applicant and shall not include procedures performed at the hospital by physicians who have entered into block leases or joint venture agreements with the applicant. (Emphasis supplied) St. Anthony's asserts that the proposed rule is invalid on the grounds that it fails to provide a clear and reasonable methodology for assessing and verifying the number of diagnostic catheterization procedures performed. St. Anthony's asserts that the exclusion of cardiac catheterization procedures performed within the hospital's cardiac cath lab but not billed by the hospital is arbitrary and capricious, modifies, enlarges, or contravenes the specific provisions of the statute implemented, fails to establish adequate standards for agency decision making, and vests unbridled discretion in the agency. The evidence fails to support these assertions. Although the phrase "block lease" is undefined by statute or rule, the evidence establishes that insofar as relevant to this proceeding, the term refers to a practice by which a group of cardiologists lease blocks of time from a hospital for exclusive use of a hospital's cardiac cath lab. St. Anthony's has a leasing arrangement with a group of cardiologists identified as the "Heart and Vascular Institute South" ("HAVI South") whereby St. Anthony's leases blocks of time in a cardiac cath lab to HAVI South cardiologists. The facility is located in a privately-owned medical office building physically attached to St. Anthony's hospital building. St. Anthony's leases the medical office building from a developer. HAVI South cardiologists perform cardiac catheterization procedures at the St. Anthony's facility during both leased and non-leased time. St. Anthony's provides personnel to staff the cardiac cath lab regardless of whether the procedure is performed during leased or non-leased time. The HAVI South cardiology group develops the schedule of cardiac catheterization procedures to be performed during the leased time and notifies St. Anthony's of the schedule. The HAVI South cardiology group bills for both their professional fees and the facility charges (referred to as the "technical component") for the cardiac catheterization procedures performed during leased time. St. Anthony's does not bill for cardiac catheterization procedures performed during the leased time. For the cardiac catheterization procedures performed during non-leased time, the HAVI South cardiology group bills for professional fees, and St. Anthony's bills for the technical component. Patricia Sizemore, vice-president for patient services at St. Anthony's, acknowledged that other hospitals could have block-leasing arrangements different from those existing between St. Anthony's and the HAVI South group. The proposed rules would preclude St. Anthony's from including the outpatient cardiac catheterization procedures done by HAVI South during the block-leased time within those procedures available to meet the numeric threshold requirements identified in the statute. The evidence fails to establish that the proposed rule fails to provide a clear and reasonable methodology for assessing and verifying the number of diagnostic catheterization procedures performed. The relevant language of Subsection 408.0361(3), Florida Statutes (2008), identifies the hospital as the applicant and requires that the applicant "provide" the procedures or discharges being reported to meet the specified volume thresholds. The applicable definition of hospital is set forth at Subsection 408.032(11), Florida Statutes (2008), which defines a hospital as a health care facility licensed under Chapter 395, Florida Statutes. Subsection 395.002(12), Florida Statutes (2008), sets forth the following definition: (12) "Hospital" means any establishment that: Offers services more intensive than those required for room, board, personal services, and general nursing care, and offers facilities and beds for use beyond 24 hours by individuals requiring diagnosis, treatment, or care for illness, injury, deformity, infirmity, abnormality, disease, or pregnancy; and Regularly makes available at least clinical laboratory services, diagnostic X- ray services, and treatment facilities for surgery or obstetrical care, or other definitive medical treatment of similar extent, except that a critical access hospital, as defined in s. 408.07, shall not be required to make available treatment facilities for surgery, obstetrical care, or similar services as long as it maintains its critical access hospital designation and shall be required to make such facilities available only if it ceases to be designated as a critical access hospital. Physicians are not "hospitals" and are not licensed or regulated by Chapter 395, Florida Statutes. Physicians are not authorized to apply for licensure under the provisions of the statute and proposed rules at issue in this proceeding. Nothing in the statute suggests that entities other than hospitals may apply for licensure of a Level I or Level II adult cardiovascular services program. The rationale underlying the restriction of reportable procedures to those for which the applicant hospital issues bills for payment is based upon AHCA's reasonable intention to validate the procedure volume data submitted by applicant hospitals. Jeffrey Gregg, chief of AHCA's Bureau of Health Facility Regulation and CON Unit, testified that "the only practical, realistic way" for AHCA to routinely verify the accuracy of the procedure volume identified by a hospital's licensure application is through AHCA's ambulatory patient database. The reporting requirements for the ambulatory patient database are set forth at Florida Administrative Code Chapter 59B-9 and include elements such as demographic information, diagnosis codes, and charges. The database provides AHCA with access to patient record documentation and directly allows AHCA to verify the procedure volume identified in the licensure application. Because St. Anthony's has no charges related to the procedures performed by HAVI South cardiologists during the leased time, St. Anthony's has not reported procedures performed during leased time to the ambulatory patient database. St. Anthony's reports far more cardiac catheterization procedures to the local Suncoast Health Council than it does to AHCA's ambulatory patient database and asserts that AHCA could rely on health council data. AHCA has no organizational relationship with the local health council, and the evidence fails to establish that such data is as reliable as that collected by the ambulatory patient database. AHCA asserts that an additional basis to exclude procedures performed by entities other than the applicant hospital is that AHCA has no direct regulatory authority over the non-hospital entity. St. Anthony's asserts that AHCA would have its customary authority over the hospital and, by extension, over the third-party leasing the cardiac cath lab from the hospital. At best, AHCA's authority to obtain records from the non-hospital operator of the hospital's cardiac cath lab is unclear. St. Anthony's position effectively would permit a third-party operator to lease all of the time in a hospital's cardiac cath lab, yet allow the hospital to apply for and receive an adult cardiovascular service license. Nothing in Section 408.0361, Florida Statutes (2008), suggests that the Legislature intended to provide such an option. The proposed rule designating the reportable cardiac catheterization procedures is logical and rational, is not arbitrary or capricious, and does not modify, enlarge or contravene the specific provisions of the statute implemented. The evidence fails to establish that the designation of appropriately reportable cardiac catheterization procedures constitutes a failure to establish adequate standards for agency decision making or vests unbridled discretion in the agency. Subsection 408.0361(3)(d), Florida Statutes (2008), requires that the proposed rules include provisions "that allow for" compliance with the most recent guidelines of the American College of Cardiology and AHA guidelines for "staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety." Subsection 408.0361(5), Florida Statutes (2008), requires that the TAP "develop procedures and standards for measuring outcomes" and that, based thereon, AHCA adopt rules that include a risk adjustment procedure that accounts for variations in severity and case mix, outcome standards specifying expected levels of performance, and "specific steps to be taken by the agency and the licensed hospitals" that fail to meet outcome standards. The statute also requires that licensed hospitals participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society of Thoracic Surgeons. The TAP determined that the appropriate method of measuring outcome was to utilize the data available through the clinical outcome reporting systems referenced in the statute. Accordingly, Proposed Rule 59A-3.2085(16)(a) identifies the guidelines applicable to Level I adult cardiovascular services; identifies the specific provisions of the guidelines with which a Level I hospital must comply; requires that the Level I hospital participate in the statutorily-identified data reporting system; and requires that Level I hospitals document a quality improvement plan to meet performance measures set forth by the data reporting system. The proposed rule provides, in relevant part, as follows: All providers of Level I adult cardiovascular services programs shall operate in compliance with subsection 59A- 3.2085(13), F.A.C., the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) guidelines regarding the operation of adult diagnostic cardiac catheterization laboratories and the provision of percutaneous coronary intervention. The applicable guidelines, herein incorporated by reference, are the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention). Aspects of the guideline related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. Aspects of the guideline related to the provision of elective percutaneous coronary intervention only in hospitals authorized to provide open heart surgery are not applicable to this rule. Hospitals are considered to be in compliance with the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) guidelines when they adhere to standards regarding staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Hospitals must also document an ongoing quality improvement plan to ensure that the cardiac catheterization program and the percutaneous coronary intervention program meet or exceed national quality and outcome benchmarks reported by the American College of Cardiology-National Cardiovascular Data Registry. Level I adult cardiovascular service providers shall report to the American College of Cardiology-National Cardiovascular Data Registry in accordance with the timetables and procedures established by the Registry. All data shall be reported using the specific data elements, definitions and transmission format as set forth by the American College of Cardiology-National Cardiovascular Data Registry. Proposed Rule 59A-3.2085(17)(a) identifies the guidelines applicable to Level II adult cardiovascular services; identifies the specific provisions of the guidelines with which a Level II hospital must comply; requires that the Level II hospital participate in the statutorily-identified data reporting system; and requires that Level II hospitals document a quality improvement plan to meet performance measures set forth by the data reporting system. The proposed rule provides in relevant part as follows: All providers of Level II adult cardiovascular services programs shall operate in compliance with subsections 59A-3.2085(13) and 59A-3.2085(16), F.A.C. and the applicable guidelines of the American College of Cardiology/American Heart Association regarding the operation of diagnostic cardiac catheterization laboratories, the provision of percutaneous coronary intervention and the provision of coronary artery bypass graft surgery. The applicable guidelines, herein incorporated by reference, are the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention; and ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons. Aspects of the guidelines related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. Hospitals are considered to be in compliance with the guidelines in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention; and in the ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons when they adhere to standards regarding staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Hospitals must also document an ongoing quality improvement plan to ensure that the cardiac catheterization program, the percutaneous coronary intervention program and the cardiac surgical program meet or exceed national quality and outcome benchmarks reported by the American College of Cardiology-National Cardiovascular Data Registry and the Society of Thoracic Surgeons. In addition to the requirements set forth in subparagraph (16)(a)7. of this rule, each hospital licensed to provide Level II adult cardiovascular services programs shall participate in the Society of Thoracic Surgeons National Database. The Petitioners generally assert that the proposed rules insufficiently identify or establish the minimum standards identified as "guidelines" and "benchmarks" in the rule. The evidence fails to support the assertion. The guidelines are specifically identified and incorporated by reference within the rule. There is no evidence that the documents identified do not constitute the "most recent guidelines of the American College of Cardiology and the American Heart Association" as required by the statute. Hospitals are not obligated to meet all of the requirements set forth in the guidelines. A licensed hospital is deemed to be in compliance when, as specified in the statute, the hospital adheres to the standards related to staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. The Petitioners generally assert that such distinctions between the various compliance elements are unclear. The evidence fails to support the assertion. There is no credible evidence that the guidelines, albeit technical and complex, are not commonly understood by appropriate medical practitioners and hospital administrators. Martin Memorial asserts that the Proposed Rule 59A-3.2085(16)(a)5. is vague on grounds that it requires Level I hospitals to operate in compliance with the referenced guidelines while Proposed Rule 59A-3.2085(16)(a)9. authorizes provision of elective PCI at Level I hospitals. Martin Memorial further asserts that because the proposed rules provide for elective PCI in hospitals without onsite cardiac surgical programs, the proposed rules enlarge, modify or contravene the enacting statute. Subsection 408.0361(3)(d), Florida Statutes (2008), requires that AHCA include "provisions that allow for" the following: Compliance with the most recent guidelines of the American College of Cardiology and American Heart Association guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. (Emphasis supplied) Proposed Rule 59A-3.2085(16)(a)9. provides as follows: Notwithstanding guidelines to the contrary in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214 and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention), all providers of Level I adult cardiovascular services programs may provide emergency and elective percutaneous coronary intervention procedures. Aspects of the guidelines related to pediatric services or outpatient cardiac catheterization in freestanding non-hospital settings are not applicable to this rule. (Emphasis supplied) Martin Memorial's disagreement with the proposed rule is premised on the following statement in the ACC/AHA/SCAI 2005 Guideline Update: Elective PCI should not be performed at institutions that do not provide onsite cardiac surgery. (Level of Evidence: C) The statement is contained within subsection 4.3 ("Role of Onsite Cardiac Surgical Backup") within Section 4 ("Institutional and Operator Competency"). The statement is defined as a "Class III" standard, meaning within the "conditions for which there is evidence and/or general agreement that a procedure/treatment is not useful/effective and in some cases may be harmful." According to the "Level of Evidence: C" identification, the statement reflects "consensus opinion of experts, case studies, or standard of care." A footnote to the statement provides as follows: Several centers have reported satisfactory results based on careful case selection with well-defined arrangements for immediate transfer to a surgical program (citation omitted). A small but real fraction of patients undergoing elective PCI will experience a life-threatening complication that could be managed with the immediate onsite availability of cardiac surgical support but cannot be managed effectively by urgent transfer. Wennberg, et al., found higher mortality in the Medicare database for patients undergoing elective PCI in institutions without onsite cardiac surgery (citation omitted). This recommendation may be subject to revision as clinical data and experience increase. The guidelines are statements of "best practices" in health care delivery. They are intended to assist practitioners and facility administrators in making appropriate decisions. The cited statement neither prohibits nor requires performance of elective PCI in hospitals without onsite cardiac surgical programs. Whether a practitioner performs elective PCI in a licensed Level I hospital remains a medical decision under the provisions of the enacting statute and proposed rules. The footnote recognizes that elective PCI is available at some hospitals without onsite cardiac surgery through "careful case selection with well-defined arrangements for immediate transfer to a surgical program." The proposed rule specifically establishes staff and transfer requirements designed to facilitate rapid transfer of a patient from a Level I to a Level II facility. There is no evidence that such staff and transfer requirements are insufficient or otherwise inappropriate. Patient selection criteria are those which expressly identify clinical presentations of patients who are appropriate for revascularization through PCI. Section 5 of the referenced ACC/AHA/SCAI 2005 Guideline Update, titled "Clinical Presentations" explicitly addresses such criteria and constitutes the patient selection criteria contained within the document. The patient selection criteria do not regulate the location where PCI procedures are performed. As stated previously, the Florida Legislature, presented with the option of limiting the availability of cardiac catheterization services available at Level I hospitals to emergent patients, rejected the limitation. The evidence fails to establish that Proposed Rule 59A-3.2085(16)(a)5. is vague or that Proposed Rule 59A-3.2085(16)(a)9. enlarges, modifies or contravenes the enacting statute. Martin Memorial and St. Anthony's assert that the proposed rule contravenes Subsection 408.0361(5)(a), Florida Statutes (2008), which provides that AHCA adopt rules that include "at least the following" elements: A risk adjustment procedure that accounts for the variations in severity and case mix found in hospitals in this state. Outcome standards specifying expected levels of performance in Level I and Level II adult cardiovascular services. Such standards may include, but shall not be limited to, in-hospital mortality, infection rates, nonfatal myocardial infarctions, length of stay, postoperative bleeds, and returns to surgery. Specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans. The TAP recommended to AHCA that existing outcome data reporting systems created by the American College of Cardiology and the Society of Thoracic Surgeons be utilized for data collection related to licensed hospital adult cardiovascular services programs. Subsection 408.0361(5)(b), Florida Statutes (2008), requires that hospitals licensed under the proposed rules participate in clinical reporting systems operated by the American College of Cardiology and the Society of Thoracic Surgeons. The requirement was adopted by the 2007 Legislature based on the TAP recommendation. Proposed Rule 51A-3.2085(16)(a)8. requires licensed Level I hospitals to participate in the American College of Cardiology-National Cardiovascular Data Registry (ACC-NCDR) and sets forth additional directives related to such participation. The ACC-NCDR system is a risk adjusted outcome reporting system that accounts for variation in severity and case mix. It collects approximately 200 data elements and is in use in approximately 2,000 hospitals. Proposed Rule 51A-3.2085(17)(a)6. directs licensed Level II hospitals to participate in the Society of Thoracic Surgeons National Database (STS database) and sets forth additional requirements related to such participation. The STS database provides information generally similar to the ACC-NCDR database. Although Proposed Rule 59A-3.2085(17)(a)5. states that the Level II hospital must meet or exceed the performance standards identified within the ACC-NCDR, there appears to be no specific requirement in the proposed rules that a Level II hospital participate in the ACC-NCDR system. Proposed Rule 59A-3.2085(17)(a)6. contains a citation to Proposed Rule 59A-3.2085 (16)(a)7. The cited paragraph consists of text that is similar to the paragraph preceding the citation. The intent of the reference is unclear. If the reference were intended to incorporate the ACC- NCDR reporting requirements with those applicable to Level II hospitals, the citation in Proposed Rule 59A-3.2085(17)(a)6. should have been to Proposed Rule 59A-3.2085(16)(a)8., where the ACC-NCDR requirements are identified. In any event, the statute requires participation by licensed hospitals in the reporting systems, and, as stated previously, Level II hospitals must document plans to ensure that the cited standards are met; so, it is logical to presume that Level II hospitals will participate in the ACC-NCDR system, in addition to the STS database. Martin Memorial and St. Anthony's assert that the proposed rule does not include the "outcome standards specifying expected levels of performance" required by Subsection 408.0361(5)(a)2., Florida Statutes (2008), and that the proposed rules fail to identify the "national quality and outcome benchmarks" referenced therein. The evidence fails to support the assertions. 93. Proposed Rules 59A-3.2085(16)(a)7. and 59A- 3.2085(17)(a)5. require that each licensed hospital must document a "quality improvement plan to ensure" that the specified cardiac services meet or exceed "national quality and outcome benchmarks" reported by the ACC-NCDR and the STS databases. The word "benchmark" is not defined by statute or rule. Merriam Webster's dictionary defines "benchmark" as "a point of reference from which measurements may be made" or "something that serves as a standard by which others may be measured or judged." The evidence establishes that the "national quality and outcome benchmarks" referenced in the proposed rules are the "expected levels of performance" identified through the ACC-NCDR system. Each hospital participating in the ACC-NCDR system receives a detailed quarterly outcome report indicating the particular hospital's performance relative to all other reporting hospitals on a variety of elements associated with cardiac catheterization and PCI provided at the hospital. Accompanying each periodic report is an "Executive Summary" that identifies the relative performance of the hospital receiving the report on ten specific "PCI and Diagnostic Catheterization Performance Measures," including six "PCI Quality Measures," two "PCI Utilization Measures," and two "Diagnostic Quality Measures." The Executive Summary information visually displays the data through a set of "box and whisker plots" that present the range of data reported by all participating hospitals on each specific measure. The summary received by each hospital identifies its specific performance through an "arrow" and numeric data printed on the plot. The plot visually displays "lagging" and "leading" performance levels. The plot identifies hospitals performing below the tenth percentile of all participating hospitals as "lagging" hospitals. The plot identifies hospitals performing above the 90th percentile as "leading" hospitals. The evidence, including review of the ACC-NCDR data reporting system, establishes that the "expected levels of performance" are rationally those levels within the broad range of hospitals which are neither "leading" nor "lagging" according to the data. It is reasonable to assume that a "leading" hospital is performing at a level higher than expected and that a "lagging" hospital is performing at a level lower than expected. By reviewing the plot for each measure, a hospital can determine its performance relative to other participating hospitals on the ten measures included in the Executive Summary. The additional numeric data contained within the quarterly report permit additional comparison between an individual hospital and all other participating hospitals. Subsection 408.0361(5)(a)2., Florida Statutes (2008), does not require that AHCA establish numeric minimal standards, but only requires that the rule identify "outcome standards specifying expected levels of performance." The ACC-NCDR reporting system required by the statute and adopted by the proposed rules sufficiently identifies expected levels of performance. By their very nature, the outcome standards are not fixed. It is reasonable to presume that as hospital practices change, measurements of relative performance will also change. The rule requires only that each licensed hospital include within a quality improvement plan, documentation to ensure that such outcome standards will be met or exceeded, essentially encouraging a pattern of continual improvement by licensed programs. Subsection 408.0361(5)(a)3., Florida Statutes (2008), requires that the rule include the "specific steps to be taken by the agency and licensed hospitals that do not meet the outcome standards within specified time periods, including time periods for detailed case reviews and development and implementation of corrective action plans." The proposed rule complies with the requirements of the statute. Enforcement of outcome standards requirements applicable to Level I programs is addressed at Proposed Rule 59A-3.2085(16)(f) which provides as follows: Enforcement of these rules shall follow procedures established in Rule 59A-3.253, F.A.C. Unless in the view of the Agency there is a threat to the health, safety or welfare of patients, Level I adult cardiovascular services programs that fail to meet provisions of this rule shall be given 15 days to develop a plan of correction that must be accepted by the Agency. Failure of the hospital with a Level I adult cardiovascular services program to make improvements specified in the plan of correction shall result in the revocation of the program license. The hospital may offer evidence of mitigation and such evidence could result in a lesser sanction. Enforcement of outcome standards requirements applicable to Level II programs is addressed at Proposed Rule 59A-3.2085(17)(e), which provides as follows: Enforcement of these rules shall follow procedures established in Rule 59A-3.253, F.A.C. Unless in the view of the Agency there is a threat to the health, safety or welfare of patients, Level II adult cardiovascular services programs that fail to meet provisions of this rule shall be given 15 days to develop a plan of correction that must be accepted by the Agency. Failure of the hospital with a Level II adult cardiovascular services program to make improvements specified in the plan of correction shall result in the revocation of the program license. The hospital may offer evidence of mitigation and such evidence could result in a lesser sanction. AHCA does not routinely conduct surveys of accredited hospitals. Such surveys are conducted by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). AHCA generally conducts hospital surveys only during the investigation, pursuant to Florida Administrative Code Rule 59A-3.253(8), of a complaint filed against a hospital. AHCA would likely review ACC-NCDR and Society of Thoracic Surgeons data reports associated with the investigation of a specific complaint related to adult cardiovascular services. Assuming that AHCA's review of the data identified a deficiency, the proposed rules provide the licensee a 15-day period to develop a plan of correction acceptable to AHCA, unless the issue poses "a threat to the health, safety or welfare of patients" in which case it is reasonable to expect that a more prompt resolution of a deficiency would be required. Pursuant to Florida Administrative Code Rule 59A- 3.253, a hospital could be sanctioned for failing to submit a plan of correction related to an identified deficiency, or for failing to implement actions to correct deficiencies specified in an approved plan of correction. There is no evidence that AHCA's enforcement authority under the proposed rules differs in any significant manner from the general enforcement authority already available to the agency. There is no evidence that the proposed rules would result in any alteration of AHCA's investigative practices. Martin Memorial notes that, while the proposed rule provides a 15-day period for development of a plan of correction, AHCA's general enforcement rules already provide a ten-day period and asserts that the proposed rule is therefore inconsistent, fails to establish adequate standards for agency decisions, and vests unbridled discretion in the agency. The specific time period set forth in the proposed rule is clearly applicable, and there is no credible evidence of legitimate confusion in this regard. AHCA has suggested that "lagging" hospitals could be specifically regarded as failing to meet the outcome benchmarks identified in the ACC-NCDR data, but the proposed rule makes no specific reference to any systematic classification of hospital performance, and the statute does not require that a minimal performance level be established. Martin Memorial asserts that the Proposed Rule 59A- 3.2085(17)(a)6. is capricious because it requires that "each hospital licensed to provide Level II adult cardiovascular services programs shall participate in the Society of Thoracic Surgeons National Database," but only physicians can participate in the database. The enacting statute requires such participation. Subsection 408.0361(5)(b), Florida Statutes (2008), directs AHCA to adopt rules that require Level I or Level II licensed hospitals to "participate in clinical outcome reporting systems operated by the American College of Cardiology and the Society for Thoracic Surgeons." The proposed rule clearly implements the directive established by the statute. There is no credible evidence that the proposed rule is irrational or that a licensed Level II hospital would be unable to meet the obligations of the rule by requiring that its thoracic surgeons participate in the STS database. Martin Memorial asserts that the requirement that an applicant hospital's chief executive officer attest to compliance with certain guidelines is vague because "it is unclear what guidelines apply and what guidelines will not." The evidence fails to support the assertion. The referenced requirement applicable to a hospital seeking licensure as a Level I facility is set forth at Proposed Rule 59A-3.2085(16)(a)2., which provides as follows: The request [for licensure] shall attest to the hospital’s intent and ability to comply with the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-214; and the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention); including guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. The referenced requirement applicable to a hospital seeking licensure as a Level II facility is set forth at Proposed Rule 59A-3.2085(17)(a)2., which provides as follows: The request [for licensure] shall attest to the hospital’s intent and ability to comply with applicable guidelines in the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards: Bashore et al, ACC/SCA&I Clinical Expert Consensus Document on Catheterization Laboratory Standards, JACC Vol. 37, No. 8, June 2001: 2170-2; in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention); and in the ACC/AHA 2004 Guideline Update for Coronary Artery Bypass Graft Surgery: A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (Committee to Update the 1999 Guidelines for Coronary Artery Bypass Graft Surgery) Developed in Collaboration With the American Association for Thoracic Surgery and the Society of Thoracic Surgeons, including guidelines for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety. Proposed Rule 59A-3.2085(16)(a)6. designates the guidelines applicable to the operation of Level I hospital services. Proposed Rule 59A-3.2085(17)(a) designates the guidelines applicable to the operation of Level II hospital services. The specific elements of the referenced guidelines are identified in both the statute and the proposed rules. Martin Memorial asserts that the proposed rule is vague as to training requirements applicable for physicians performing elective PCI in Level I hospitals. In making the assertion, Martin Memorial references training requirements established at Proposed Rule 59A-3.2085(16)(b)2. and applicable to Level I physicians performing emergent PCI with less than 12 months experience. There is no credible evidence that the proposed rule is vague. Proposed Rule 59A-3.2085(16)(b), in relevant part, provides as follows: Each cardiologist shall be an experienced physician who has performed a minimum of 75 interventional cardiology procedures, exclusive of fellowship training and within the previous 12 months from the date of the Level I adult cardiovascular licensure application or renewal application. Physicians with less than 12 months experience shall fulfill applicable training requirements in the ACC/AHA/SCAI 2005 Guideline Update for Percutaneous Coronary Intervention A Report of the American College of Cardiology/American Heart Association Task Force on Practice Guidelines (ACC/AHA/SCAI Writing Committee to Update the 2001 Guidelines for Percutaneous Coronary Intervention) prior to being allowed to perform emergency percutaneous coronary interventions in a hospital that is not licensed for a Level II adult cardiovascular services program. The rule provides that a physician with less than 12 months experience working in a Level I facility can perform emergent PCI only if applicable training requirements have been met. The proposed rule does not authorize performance of elective PCI in a Level I hospital by a physician not meeting the minimum annual procedure volume requirements. Proposed Rule 59A-3.2085(17)(b) clearly identifies the requirements applicable to Level II physicians and in relevant part provides as follows: Each cardiac surgeon shall be Board certified. New surgeons shall be Board certified within 4 years after completion of their fellowship. Experienced surgeons with greater than 10 years experience shall document that their training and experience preceded the availability of Board certification. Each cardiologist shall be an experienced physician who has performed a minimum of 75 interventional cardiology procedures, exclusive of fellowship training and within the previous 12 months from the date of the Level II adult cardiovascular licensure application or renewal application. Martin Memorial asserts that the experience requirements set forth at Proposed Rule 59A-3.2085(16)(b)3. (related to Level I hospitals) and Proposed Rule 59A- 3.2085(17)(b)3. (related to Level II hospitals) are arbitrary or capricious. The evidence fails to support the assertion. The text of both proposed rules provides as follows: The nursing and technical catheterization laboratory staff shall be experienced in handling acutely ill patients requiring intervention or balloon pump. Each member of the nursing and technical catheterization laboratory staff shall have at least 500 hours of previous experience in dedicated cardiac interventional laboratories at a hospital with a Level II adult cardiovascular services program. They shall be skilled in all aspects of interventional cardiology equipment, and must participate in a 24-hour-per-day, 365 day-per-year call schedule. Martin Memorial argues that there is no evidence to suggest that 500 hours of experience indicates that appropriate competency levels has been achieved. The evidence establishes that the required experience level was developed by AHCA's hospital licensure unit staff and is the training level currently applicable for hospitals providing emergency PCI services under existing exemptions from CON requirements. The training requirements are not arbitrary or capricious. Martin Memorial asserts that the Proposed Rule 59A-3.2085(16)(c)1. is arbitrary or capricious. The cited rule requires that a Level I hospital make provisions for the transfer of an emergent patient to a Level II hospital, as follows: A hospital provider of Level I adult cardiovascular services program must ensure it has systems in place for the emergent transfer of patients with intra-aortic balloon pump support to one or more hospitals licensed to operate a Level II adult cardiovascular services program. Formalized written transfer agreements developed specifically for emergency PCI patients must be developed with a hospital that operates a Level II adult cardiovascular services program. Written transport protocols must be in place to ensure safe and efficient transfer of a patient within 60 minutes. Transfer time is defined as the number of minutes between the recognition of an emergency as noted in the hospital’s internal log and the patient’s arrival at the receiving hospital. Transfer and transport agreements must be reviewed and tested at least every 3 months, with appropriate documentation maintained. Martin Memorial asserts that the rule is arbitrary or capricious because it does not include a requirement that a Level I hospital make provisions for the transfer of an elective patient to a Level II hospital. There is no credible evidence to support the assertion. There is no evidence that a patient undergoing elective PCI at a Level I would not be regarded as an emergent patient were circumstances such that an emergent transfer to a Level II hospital warranted. There is no credible evidence to suggest a rationale for transferring a non-emergent patient from a Level I to a Level II hospital. Martin Memorial asserts that the proposed rule enlarges, modifies or contravenes the enacting statute on grounds that, although AHCA is directed to adopt rules to ensure compliance "with the most recent guidelines of the American College of Cardiology and American Heart Association Guidelines for Cardiac Catheterization and Cardiac Catheterization Laboratories," the proposed rule provides that "in case of conflicts between the provisions of this rule and the designated guidelines" the rule provisions "shall prevail." Such provisions appear in Proposed Rule 59A-3.2085(13)(j), Proposed Rule 59A-3.2085(16)(g), and Proposed Rule 59A-3.2085(17)(f). The enacting statute requires that hospitals licensed under the provisions of the proposed rules comply with guidelines "for staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety." To the extent that guidelines that relate to elements other than "staffing, physician training and experience, operating procedures, equipment, physical plant, and patient selection criteria to ensure patient quality and safety," the enacting statute does not require compliance by properly- licensed Florida hospitals. Other than as addressed elsewhere herein, the evidence fails to identify any specific conflicts between the guidelines and the proposed rules and, accordingly, fails to establish that the cited proposed rules enlarge, modify or contravene the enacting statute.
The Issue The issue is whether the Petitioner, Wellington Regional Medical Center, Inc., meets the criteria for approval of CON application number 9253 to convert 16 substance abuse beds to a seven-bed or ten-bed Level II neonatal intensive care unit.
Findings Of Fact The Agency for Health Care Administration (AHCA) administers the certificate of need (CON) program for health care facilities and services in the state of Florida. Wellington Regional Medical Center, Inc. (Wellington or WRMC) is a 120-bed community-based hospital, with 104 acute care and 16 substance beds. In September 1999, Wellington applied for CON Number 9253 to convert the 16 substance abuse beds into a ten-bed Level II neonatal intensive care unit (NICU). Currently, Wellington transfers newborns requiring Level II care to St. Mary's Hospital, in West Palm Beach, approximately 45 minutes away. The St. Mary's transport team can arrive as quickly as 20 to 30 minutes, but has taken up to four hours to pick up the babies. AHCA reviewed and denied Wellington's application, based on an absence of need in District 9 under criteria applicable to both normal and not normal circumstances, and the absence of any demonstrated problems for patients in getting access to Level II NICU care. For the January 2002 planning horizon used for applications which were, like Wellington's, filed in September 1999, AHCA published a numerical need for zero additional Level II NICU beds in AHCA District 9. The methodology used by AHCA to calculate numeric need, factoring in the existing inventory of 70 licensed and 20 approved beds, and applying the objective for 80 percent district-wide occupancy, resulted in a numeric need for a negative 32 beds. In other words, in District 9, there is a surplus of 32 Level II NICU beds, based on the formula established in AHCA's rules. The NICU II occupancy rate for 1998 was approximately 66 percent in District 9. In the absence of numerical need, Wellington applied for CON approval based on not normal circumstances, and contends it met, on balance, the requirements of the applicable criteria. 59C-1.042(6) - birth volume In Rule 59C-1.042(6), Florida Administrative Code, a not normal circumstance based on minimum birth volume is set forth, in pertinent part, as follows: Hospitals applying for Level II neonatal intensive care services shall not normally be approved unless the hospital had a minimum service volume of 1,000 live births for the most recent 12-month period ending 6 months prior to the beginning date of the quarter of the publication of the fixed need pool. For this application cycle, the fixed need pool was published in July 1999; therefore, calendar year 1998 is the time period for determining birth volume. In 1998, there were 909 live births at Wellington. In 1999, live births at Wellington increased to 1,101, and, in the 12 months prior to the hearing, to 1,152. AHCA permits applicants to use the most recent data in cases involving not normal circumstances. Currently, approximately 100 live births a month occur at Wellington, which justifies the projection of 1,238 total live births for the year 2000. The current level of live births achieved at Wellington, over 1,000, is equaled or exceeded at fewer than 70 of over 200 hospitals in Florida. For the period ending June 30, 1999, 53 of the 70 hospitals also exceeded 1,200 live births. Of the 53 hospitals with over 1,200 live births annually, 48 had Level II NICUs. Six hospitals in Florida range between 1,200 and 1,499 live births a year; five have Level II NICU. 59C-1.042(5) - minimum ten-bed unit size AHCA's CON reviewer testified that she believed that AHCA had only deviated from the ten-bed minimum unit once, for CON Number 9243 to North Collier Hospital, a Medicaid disproportionate share hospital with over 2,000 live births. She also testified that, even though the applicant showed the required occupancy level in fewer than ten beds, CON approval for a ten-bed unit was awarded to Boca Raton Community Hospital (Boca Raton), in part, based on its large number of live births. By contrast, according to the chart on page 19 in AHCA's Exhibit 2, four of the seven Level II NICU providers in District 9 operated fewer than 10 beds at the time Wellington's application was approved. Apparently, unlike in the case of the Boca Raton application, AHCA held Wellington to the requirement of showing that it could reach 80 percent occupancy in the beds, although AHCA's expert health planner testified that the standard was a "benchmark," not an absolute bar to approval. In general, 1.1 Level II NICU patient days result from each live birth. The ratio of 1.1 to 1, when applied to 80 percent occupancy in a ten-bed unit, results in a mathematical necessity for 2,920 patient days a year, or a project volume of at least 2,654 live births a year. The use of the 80 percent district-wide occupancy standard for normal circumstances as a facility-specific standard for not normal circumstances is unreasonable and conflicts with the minimum volume requirement of 1,000 live births in Rule 59C-1.042(6). AHCA's application of the 80 percent occupancy requirement to Wellington is inappropriate and inconsistent with the agency's prior action. For example, in this case, arguably the failure to meet the normal standard for district occupancy might justify requiring a higher than normal facility standard, but AHCA has not done so with any apparent consistency. Only four out of 57 Level II providers in Florida exceed 2,654, the number of live births necessary to achieve the equivalent of 80 percent occupancy in a ten-bed NICU, three of those exceed 3,000 live births a year, and the fourth is in the range between 2,500 to 2,999 live births a year. Applying the 80 percent test with a 1.1 to 1 ratio to project Level II patient days, the six most recently approved Level II NICU applicants fall short, with projected occupancies ranging from 30 to 40 percent. 59C-1.042(8) - quality of care staffing standards Wellington provides obstetrical services in its Department of Maternal Health, also called the Center for Family Beginnings. Seven dedicated beds are used for labor, delivery, recovery, and postpartum care in that Department, with the frequent need to use overflow beds. Despite the screening of mothers prior to delivery to eliminate those whose babies are likely to need Level II or higher care, at least 25 percent of all expected normal deliveries develop into high risk problems. Wellington is already equipped to handle these unexpected, high risk babies, as it must do prior to transferring them. Wellington also provides follow-up care to high risk babies as a result of their agreement with St. Mary's to allow "back transferring" of stabilized babies. Wellington has a neonatologist-perinatologist on call 24 hours a day. It has neonatal intensive care nurses with Level II and Level III experience on staff 24 hours a day. AHCA questioned the adequacy of the staffing proposed in the CON application because a medical director and respiratory therapists are not explicitly listed on Schedule 6. The medical director will be the same neonatologist- perinatologist who is currently on staff and who will continue to receive professional fees for services, but will not be a hospital employee. That arrangement is explained in the notes to Schedule 6. Similarly, the category "Other Ancillary," Wellington explained in the assumptions to Schedule 6, includes two full-time equivalent staff positions for respiratory therapists. Wellington has on staff two perinatologists, who are doctors specializing in high risk maternal-fetal medical care. One of them moved to Wellington when another NICU program in the County was closed. See Findings of Fact 26. 59C-1.030(2) - health care access criteria Rule 59C-1.030(2), Florida Administrative Code, requires consideration of criteria related to the need for the services proposed and the expected accessibility of the services for residents of the district. The criteria largely overlap with those in Subsections 408.035(1)(b), (d), and (f), and (2), Florida Statutes, which are also related to need and access. See Findings of Fact 20-25 below. In addition to more general need and access issues, the rule requires considerations of access for low income, minorities, and other medically underserved patients, including those receiving Federal financial assistance, Medicare, Medicaid, and indigent persons. The parties stipulated that related criteria in Subsection 408.035(1)(n) - evaluating the applicant's past and proposed Medicaid service - is met or not at issue, based on Wellington's commitment to provide 30 percent Medicaid in the NICU, and historical provision of 32.4 percent Medicaid in the obstetrics unit. By stipulating that the criteria are not at issue or are met in Subsection 408.035(1)(a) - need related to district health plan - the parties necessarily agreed that the local health plan requirement for a commitment to provide at least 30 percent Medicaid/Indigent patient days was met, and so, therefore, is the income accessibility concern of the Rule. Wellington addressed the Rule criterion for minority access to NICU services. The only Haitian doctor specializing in obstetrics and gynecology (OB/GYN) in Palm Beach County, who speaks fluent Spanish as well as Creole, delivers 99 percent of his patients' babies at Wellington. From 60 to 80 percent of his patients come from Lake Worth, most of whom are Haitians and Hispanics, including Gualemalans and Mexicans. Another OB/GYN group of four doctors, with privileges at four different hospitals, delivers 30 to 40 babies a month at Wellington, based on their preference for the care provided at Wellington. The only OB/GYN group in Palm Beach County, which has two affiliated perinatologists, both of whom are on staff at Wellington, serves large numbers of patients from Clewiston, Belle Glade, Pahokee, and Okeechobee. These areas are low income, farming communities located, in driving time, from 45 minutes to 1 1/2 hours west of Wellington. Even when predicted to have high risk births, mothers from the low income areas who are told to go to St. Mary's Hospital because it has a Level II NICU are approximately 70 percent non-compliant. St. Mary's is an additional 45-minute drive east of Wellington. 408.035(1)(b) - availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing facilities and services; (d) - availability and adequacy of alternatives, such as outpatient or home care; (e) - economics of joint, cooperative, or shared resources; (f) - need for services not reasonably and economically accessible in adjoining areas; and 408.035(2)(a), (b) and (c) - less costly, more efficient or more appropriate alternatives, such as existing inpatient facilities, sharing arrangements; and (d) - serious problems for patients to obtain care without proposed service. In addition to the absence of numeric need under normal circumstances, and the absence of the requisite birth volume which results from the imposition of the district occupancy standard to the hospital, AHCA also determined that Wellington failed to show any problems with patient access to like and existing facilities. Currently, there are 70 licensed and 20 approved Level II NICU beds in District 9. Overall, the occupancy rate for the District is approximately 66 percent. In addition, existing Level II NICU providers are located within two hours driving time for all residents of the district, as required for NICU which is classified as a tertiary service. Seven hospitals in District 9 provided Level II NICU care in 1998 to 1999. These included Lawnwood Regional Medical Center (Lawnwood) in St. Lucie County, Martin Memorial Medical Center (Martin Memorial) in Martin County, and Palm Beach Gardens Medical Center (Palm Beach Gardens) in Palm Beach County, West Boca Raton Hospital (West Boca), St. Mary's Hospital (St. Mary's), Good Samaritan Hospital (Good Samaritan), and Bethesda Memorial Hospital (Bethesda). In addition to the licensed beds, 20 approved beds had been allocated as follows: four for Good Samaritan, ten for Boca Raton Community Hospital, and six for West Boca. All of the existing Level II providers are located in eastern Palm Beach County along the Interstate 95 corridor. The population of Palm Beach County is migrating west. The Wellington community is experiencing significant growth. One indication is approval for the opening of five new schools in Wellington, three elementary, one middle, and a high school approximately 3 miles from the hospital. The number of new residential housing starts in Wellington has increased from 4,332 in 1990 to 6,012 in 1999. The housing starts in Wellington's primary service area represent over 48 percent of the total for Palm Beach County. Approximately 35,000 of the 80,000 women in Palm Beach County aged 35 to 44, who are more likely to have high risk pregnancies, live in the Wellington service area. Births at the three obstetrics providers in western Palm Beach County have increased from 1,441 in 1995 to 2,580 in 1999, including an approximately 200 percent increase at Wellington, from 345 in 1995 to 1,057 in 1999 (for the 12 months ending in August). Prior to October 1, 1999, the two closest hospitals to Wellington with Level II NICU services were Good Samaritan, with seven existing and four approved beds, and St. Mary's, with 22 beds. After Good Samaritan closed its obstetrics and NICU services, the two closest Level II NICU providers to Wellington are St. Mary's and West Boca, with nine licensed and six approved beds. For the 12-month period from July 1998 to June 1999, there were 3,832 NICU II patient days, or 149.98 percent occupancy in the seven operational beds at Good Samaritan; 5,743 patient days, or 71.52 percent in 22 beds at St. Mary's; and 3,210 patient days or 97.72 percent in the nine licensed beds at West Boca. With the closing of Good Samaritan, patients who were using its seven beds were assumed mostly likely to go to St. Mary's, which is owned by the same parent company. AHCA calculated a blended occupancy rate of 84.05 percent for St. Mary's with the addition of nine Good Samaritan beds (seven operational and two of four approved) to its existing 22 beds. Despite the high occupancy in the nearest facilities, the others in the District were relatively low for the same period of time: 39.15 percent in ten Level II NICU beds at Lawnwood, 8.38 percent in five beds at Martin Memorial, 19.23 percent in five beds at Palm Beach Gardens, and 50.46 percent in 12 beds at Bethesda. - immediate or long-term financial feasibility, as related to utilization AHCA rejected Wellington's projection of the volume of babies it would receive as Level II transfers from Glades General Hospital and Palms West Hospital. For the year ending August 1999, there were 737 live births at Glades General and 786 at Palms West. From that, Wellington projected 797 births at Glades General and 850 at Palms West in 2002. From that, Wellington expects to receive 231 transfers from Glades General and 197 from Palms West. The projections are based on historical birth to patient day ratios for the County, reasonable projections of volume, and reasonable market share assumptions. AHCA accepted Wellington's projections of its internal birth volume, which was 1,714 live births by January 31, 2000, resulting in a range between 1,192 and 1,834 Level II days. Based on the reasonableness of the expected transfers and the undisputed reasonableness of internal birth projections, Wellington demonstrated that it will achieve 73.5 percent occupancy in a ten-bed unit, or 75.2 percent in a seven-bed unit, by January 2003. As a result of reasonable utilization projections, as otherwise stipulated by the parties, the project is financially feasible. Factual Summary In general, Wellington demonstrated that the number of live births at Wellington, the closing of the nearest Level II provider, occupancy levels at nearby providers, the distances to other existing providers, particularly from various western areas of its service area, and the demographic and growth patterns within the County are not normal circumstances for the approval of its proposal. On balance, Wellington meets the criteria for approval for approval of CON Number 9253, to convert 16 substance abuse beds to a ten-bed Level II NICU.
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 issuing Certificate of Need Number 9253 to Wellington Regional Medical Center, Inc., to convert 16 substance abuse beds to 10 Level II neonatal intensive care beds. DONE AND ENTERED this 25th day of August, 2000, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of August, 2000. COPIES FURNISHED: Sam Power, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Julie Gallagher, General Counsel Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Mark S. Thomas, Esquire Richard A. Patterson, Esquire Agency for Health Care Administration 2727 Mahan Drive Fort Knox Building 3, Suite 3431 Tallahassee, Florida 32308-5403 Robert D. Newell, Jr., Esquire Newell, Terry & Rigsby, P.A. 817 North Gadsden Street Tallahassee, Florida 32303-6313
The Issue Whether the Agency for Health Care Administration (AHCA or the Agency) should approve the application for certificate of need (CON) 7700 filed by Miami Beach Healthcare Group, LTD. d/b/a Miami Heart Institute (Miami Heart or MH).
Findings Of Fact The Agency is the state agency charged with the responsibility of reviewing and taking action on CON applications pursuant to Chapter 408, Florida Statutes. The applicant, Miami Heart, operates a hospital facility known as Miami Heart Institute which, at the time of hearing, was comprised of a north campus (consisting of 273 licensed beds) and a south campus (consisting of 258 beds) in Miami, Florida. The two campuses operate under a single license which consolidated the operation of the two facilities. The consolidation of the license was approved by CON 7399 which was issued by the Agency prior to the hearing of this case. The Petitioner, Mount Sinai, is an existing health care facility doing business in the same service district. On February 4, 1994, AHCA published a fixed need pool of zero adult inpatient psychiatric beds for the planning horizon applicable to this batching cycle. The fixed need pool was not challenged. On February 18, 1994, Miami Heart submitted its letter of intent for the first hospital batching cycle of 1994, and sought to add twenty adult general inpatient psychiatric beds at the Miami Heart Institute south campus. Such facility is located in the Agency's district 11 and is approximately two (2) miles from the north campus. Notice of that letter was published in the March 11, 1994, Florida Administrative Weekly. Miami Heart's letter of intent provided, in pertinent part: By this letter, Miami Beach Healthcare Group, Ltd., d/b/a Miami Heart Institute announces its intent to file a Certificate of Need Application on or before March 23, 1994 for approval to establish 20 hospital inpatient general psychiatric beds for adults at Miami Heart Institute. Thus, the applicant seeks approval for this project pursuant to Sections 408.036(1)(h), Florida Statutes. The proposed capital expenditure for this project shall not exceed $1,000,000 and will include new construction and the renovation of existing space. Miami Heart Institute is located in Local Health Council District 11. There are no subsdistricts for Hospital Inpatient General Psychiatric Beds for Adults in District 11. The applicable need formula for Hospital General Psychiatric Beds for Adults is contained within Rule 59C-1.040(4)(c), F.A.C. The Agency published a fixed need of "0" for Hospital General Psychiatric Beds for Adults in District 11 for this batching cycle. However, "not normal" circumstances exist within District which justify approval of this project. These circumstances are that Miami Beach Community Hospital, which is also owned by Miami Beach Healthcare Group, Ltd., and which has an approved Certificate of Need Application to consol- idate its license with that of the Miami Heart Institute, has pending a Certificate of Need Application to delicense up to 20 hospital inpatient general psychiatric beds for adults. The effect of the application, which is the subject of this Letter of Intent, will be to relocate 20 of the delicensed adult psychiatric beds to the Miami Heart Institute. Because of the "not normal" circumstances alleged in the Miami Heart letter of intent, the Agency extended a grace period to allow competing letters of intent to be filed. No additional letters of intent were submitted during the grace period. On March 23, 1994, Miami Heart timely submitted its CON application for the project at issue, CON no. 7700. Notice of the application was published in the April 8, 1994, Florida Administrative Weekly. Such application was deemed complete by the Agency and was considered to be a companion to the delicensure of the north campus beds. On July 22, 1994, the Agency published in the Florida Administrative Weekly its preliminary decision to approve CON no. 7700. In the same batch as the instant case, Cedars Healthcare Group (Cedars), also in district 11, applied to add adult psychiatric beds to Cedars Medical Center through the delicensure of an equal number of adult psychiatric beds at Victoria Pavilion. Cedars holds a single license for the operation of both Cedars Medical Center and Victoria Pavilion. As in this case, the Agency gave notice of its intent to grant the CON application. Although this "transfer" was initially challenged, it was subsequently dismissed. Although filed at the same time (and, therefore, theoretically within the same batch), the Cedars CON application and the Miami Heart CON application were not comparatively reviewed by the Agency. The Agency determined the applicants were merely seeking to relocate their own licensed beds. Based upon that determination, MH's application was evaluated in the context of the statutory criteria, the adult psychiatric beds and services rule (Rule 59C-1.040, Florida Administrative Code), the district 11 local health plan, and the 1993 state health plan. Ms. Dudek also considered the utilization data for district 11 facilities. Mount Sinai timely filed a petition challenging the proposed approval of CON 7700 and, for purposes of this proceeding only, the parties stipulated that MS has standing to raise the issues remaining in this cause. Mount Sinai's existing psychiatric unit utilization is presently at or near full capacity, and MS' existing unit would not provide an adequate, available, or accessible alternative to Miami Heart's proposal, unless additional bed capacity were available to MS in the future through approval of additional beds or changes in existing utilization. Miami Heart's proposal to establish twenty adult general inpatient psychiatric beds at its Miami Heart Institute south campus was made in connection with its application to delicense twenty adult general inpatient psychiatric beds at its north campus. The Agency advised MH to submit two CON applications: one for the delicensure (CON no. 7474) and one for the establishment of the twenty beds at the south campus (CON no. 7700). The application to delicense the north campus beds was expeditiously approved and has not been challenged. As to the application to establish the twenty beds at the south campus, the following statutory criteria are not at issue: Section 408.035(1)(c), (e), (f), (g), (h), (i), (j), (k), (m), (n), (o) and (2)(b) and (e), Florida Statutes. The parties have stipulated that Miami Heart meets, at least minimally, those criteria. During 1993, Miami Heart made the business decision to cease operations at its north campus and to seek the Agency's approval to relocate beds and services from that facility to other facilities owned by MH, including the south campus. Miami Heart does not intend to delicense the twenty beds at the north campus until the twenty beds are licensed at the south campus. The goal is merely to transfer the existing program with its services to the south campus. Miami Heart did not seek beds from a fixed need pool. Since approximately April, 1993, the Miami Heart north campus has operated with the twenty bed adult psychiatric unit and with a limited number of obstetrical beds. The approval of CON no. 7700 will not change the overall total number of adult general inpatient psychiatric beds within the district. The adult psychiatric program at MH experiences the highest utilization of any program in district 11, with an average length of stay that is consistent with other adult programs around the state. Miami Heart's existing psychiatric program was instituted in 1978. Since 1984, there has been little change in nursing and other staff. The program provides a full continuum of care, with outpatient programs, aftercare, and support programs. Nearly ninety-nine percent of the program's inpatient patient days are attributable to patients diagnosed with serious mental disorders. The Miami Heart program specializes in a biological approach to psychiatric cases in the diagnosis and treatment of affective disorders, including a variety of mood disorders and related conditions. The Miami Heart program is distinctive from other psychiatric programs in the district. If the MH program were discontinued, the patients would have limited alternatives for access to the same diagnostic and treatment services in the district. There are no statutes or rules promulgated which specifically address the transfer of psychiatric beds or services from one facility owned by a health care entity to another facility also owned by the same entity. In reviewing the instant CON application, the Agency determined it has the discretion to evaluate each transfer case based upon the review criteria and to consider the appropriate weight factors should be given. Factors which may affect the review include the change of location, the utilization of the existing services, the quality of the existing programs and services, the financial feasibility, architectural issues, and any other factor critical to the review process. In this case, the weight given to the numeric need criteria was not significant. The Agency determined that because the transfer would not result in a change to the overall bed inventory, the calculated fixed need pool did not apply to the instant application. In effect, because the calculation of numeric need was inapplicable, this case must be considered "not normal" pursuant to Rule 59C-1.040(4)(a), Florida Administrative Code. The Agency determined that other criteria were to be given greater consideration. Such factors were the reasonableness of the proposal, the ability to afford access, the applicant's ability to provide a quality program, and the project's financial feasibility. The Agency determined that, on balance, this application should be approved as the statutory and other review criteria were met. Although put on notice of the other CON applications, Mount Sinai did not file an application for psychiatric beds at the same time as Miami Heart or Cedars. Mount Sinai did not claim that the proposed delicensures and transfers made beds available for competitive review. The Agency has interpreted Rule 59C-1.040, Florida Administrative Code, to mean that it will not normally approve an application for beds or services unless the statutory and rule criteria are met, including the need determination criteria. There is no list of circumstances which are routinely considered "not normal" by the Agency. In this case, the proposed transfer of beds was, in itself, considered "not normal." The approval of Miami Heart's application would allow an existing program to continue. As a result, the overhead to maintain two campuses would be reduced. Further, the relocation would allow the program to continue to provide access, both geographically and financially, to the same patient service area. And, since the program has the highest utilization rate of any adult program in the district, its continuation would be beneficial to the area. The program has an established referral base for admissions to the facility. The transfer is reasonable for providing access to the medically under-served. The quality of care, while not in issue, would be expected to continue at its existing level or improve. The transfer would allow better access to ancillary hospital departments and consulting specialists who may be needed even though the primary diagnosis is psychiatric. The cost of the transfer when compared to the costs to be incurred if the transfer is not approved make the approval a benefit to the service area. If the program is not relocated, Medicaid access could change if the hospital is reclassified from a general facility to a specialty facility. The proposed cost for the project does not exceed one million dollars. If the north campus must be renovated, a greater capital expenditure would be expected. The expected impact on competition for other providers is limited due to the high utilization for all programs in the vicinity. The subject proposal is consistent with the district and state health care plans and the need for health care facilities and services. The services being transferred is an existing program which is highly utilized and which is not creating "new beds." As such, the proposal complies with Section 408.035(1)(a), Florida Statutes. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing services in the district will not be adversely affected by the approval of the subject application. The proposed transfer is consistent with, and appropriate, in light of these criteria. Therefore, the proposal complies with Section 408.035(1)(b), Florida Statutes. The subject application demonstrates a full continuum of care with safeguards to assure that alternatives to inpatient care are fully utilized when appropriate. Therefore, the availability and adequacy of other services, such as outpatient care, has been demonstrated and would deter unnecessary utilization. Thus, Miami Heart has shown its application complies with Section 408.035(1)(d), Florida Statutes. Miami Heart has also demonstrated that the probable impact of its proposal is in compliance with Section 408.035(1)(l), Florida Statutes. The proposed transfer will not adversely impact the costs of providing services, the competition on the supply of services, or the improvements or innovations in the financing and delivery of services which foster competition, promote quality assurance, and cost-effectiveness. Miami Heart has taken an innovative approach to promote quality assurance and cost effectiveness. Its purpose, to close a facility and relocate beds (removing unnecessary acute care beds in the process), represents a departure from the traditional approach to providing health care services. By approving Miami Heart's application, overhead costs associated with the unnecessary facility will be eliminated. There is no less costly, more efficient alternative which would allow the continuation of the services and program Miami Heart has established at the north campus than the approval of transfer to the south campus. The MH proposal is most practical and readily available solution which will allow the north campus to close and the beds and services to remain available and accessible. The renovation of the medical surgical space at the south campus to afford a location for the psychiatric unit is the most practical and readily available solution which will allow the north campus to close and the beds and services to remain available and accessible. In totality, the circumstances of this case make the approval of Miami Heart's application for CON no. 7700 the most reasonable and practical solution given the "not normal" conditions of this application.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Agency for Health Care Administration enter a final order approving CON 7700 as recommended in the SAAR. DONE AND RECOMMENDED this 5th day of April, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH 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 5th day of April, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-4755 Note: Proposed findings of fact are to contain one essential fact per numbered paragraph. Proposed findings of fact paragraphs containing multiple sentences with more than one statement of fact are difficult to review. In reviewing for this case, where all sentences were accurate and supported by the recorded cited, the paragraph has been accepted. If the paragraph contained mixed statements where one sentence was an accurate statement of fact but the others were not, the paragraph has been rejected. Similarly, if one sentence was editorial comment, argument, or an unsupported statement to a statement of fact, the paragraph has been rejected. Proposed findings of fact should not include argument, editorial comments, or statements of fact mixed with such comments. Rulings on the proposed findings of fact submitted by Petitioner, Mount Sinai: Paragraphs 1 through 13 were cited as stipulated facts. Paragraph 14 is rejected as irrelevant. With regard to paragraph 15 it is accepted that Miami Heart made the business decision to move the psychiatric beds beds from the north campus to the south campus. Any inference created by the remainder of the paragraph is rejected as irrelevant. Paragraph 16 is rejected as irrelevant. Paragraph 17 is rejected as irrelevant. Paragraph 18 is accepted. Paragraph 19 is rejected as irrelevant. Paragraph 20 is rejected as contrary to the weight of the credible evidence. Paragraph 21 is rejected as contrary to the weight of the credible evidence. Paragraph 22 is accepted. Paragraph 23 is rejected as irrelevant. Paragraph 24 is accepted. Paragraph 25 is rejected as repetitive, or immaterial, unnecessary to the resolution of the issues. Paragraph 26 is rejected as irrelevant or contrary to the weight of the credible evidence. Paragraph 27 is rejected as comment or conclusion of law, not fact. Paragraph 28 is accepted but not relevant. Paragraphs 29 and 30 are accepted. Paragraphs 31 through 33 are rejected as argument, comment or irrelevant. Paragraph 34 is rejected as comment or conclusion of law, not fact. Paragraph 35 is rejected as comment or conclusion of law, not fact, or irrelevant as the FNP was not in dispute. Paragraph 36 is rejected as irrelevant. Paragraph 37 is rejected as repetitive, or comment. Paragraph 38 is rejected as repetitive, comment or conclusion of law, not fact, or irrelevant. Paragraph 39 is rejected as argument or contrary to the weight of credible evidence. Paragraph 40 is accepted. Paragraph 41, 42, and 43 are rejected as contrary to the weight of the credible evidence and/or argument. Paragraph 44 is rejected as argument and comment on the testimony. Paragraph 45 is rejected as argument, irrelevant, and/or not supported by the weight of the credible evidence. Paragraph 46 is rejected as argument. Paragraph 47 is rejected as comment or conclusion of law, not fact. Paragraph 48 is rejected as comment, argument or irrelevant. Paragraph 49 is rejected as comment on testimony. It is accepted that the proposed relocation or transfer of beds is a "not normal" circumstance. Paragraph 50 is rejected as argument or irrelevant. Paragraph 51 is rejected as argument or contrary to the weight of credible evidence. Paragraph 52 is rejected as argument or contrary to the weight of credible evidence. Paragraph 53 is rejected as argument, comment or recitation of testimony, or contrary to the weight of credible evidence. Paragraph 54 is rejected as irrelevant or contrary to the weight of credible evidence. Paragraph 55 is rejected as irrelevant, comment, or contrary to the weight of credible evidence. Paragraph 56 is rejected as irrelevant or argument. Paragraph 57 is rejected as irrelevant or argument. Paragraph 58 is rejected as contrary to the weight of credible evidence. Paragraph 59 is rejected as irrelevant. Paragraph 60 is rejected as contrary to the weight of credible evidence. Paragraph 61 is rejected as argument or contrary to the weight of credible evidence. Paragraph 62 is rejected as argument or contrary to the weight of credible evidence. Paragraph 63 is accepted. Paragraph 64 is rejected as irrelevant. Mount Sinai could have filed in this batch given the not normal circumstances disclosed in the Miami Heart notice. Paragraph 65 is rejected as irrelevant. Paragraph 66 is rejected as comment or irrelevant. Paragraph 67 is rejected as argument or contrary to the weight of credible evidence. Paragraph 68 is rejected as argument or irrelevant. Paragraph 69 is rejected as argument, comment or irrelevant. Paragraph 70 is rejected as argument or contrary to the weight of credible evidence. Rulings on the proposed findings of fact submitted by the Respondent, Agency: Paragraphs 1 through 6 are accepted. With the deletion of the words "cardiac catheterization" and the inclusion of the word "psychiatric beds" in place, paragraph 7 is accepted. Cardiac catheterization is rejected as irrelevant. Paragraph 8 is accepted. The second sentence of paragraph 9 is rejected as contrary to the weight of credible evidence or an error of law, otherwise, the paragraph is accepted. Paragraph 10 is accepted. Paragraphs 11 through 17 are accepted. Paragraph 18 is rejected as conclusion of law, not fact. Paragraphs 19 and 20 are accepted. The first two sentences of paragraph 21 are accepted; the remainder rejected as conclusion of law, not fact. Paragraph 22 is rejected as comment or argument. Paragraph 23 is accepted. Paragraph 24 is rejected as argument, speculation, or irrelevant. Paragraph 25 is accepted. Rulings on the proposed findings of fact submitted by the Respondent, Miami Heart: Paragraphs 1 through 13 are accepted. The first sentence of paragraph 14 is accepted; the remainder is rejected as contrary to law or irrelevant since MS did not file in the batch when it could have. Paragraph 15 is accepted. Paragraph 16 is accepted as the Agency's statement of its authority or policy in this case, not fact. Paragraphs 17 through 20 are accepted. Paragraph 21 is rejected as irrelevant. Paragraph 22 is rejected as irrelevant. Paragraphs 23 through 35 are accepted. Paragraph 36 is rejected as repetitive. Paragraphs 37 through 40 are accepted. Paragraph 41 is rejected as contrary to the weight of the credible evidence to the extent that it concludes the distance to be one mile; evidence deemed credible placed the distance at two miles. Paragraphs 42 through 47 are accepted. Paragraph 48 is rejected as comment. Paragraphs 49 through 57 are accepted. COPIES FURNISHED: Tom Wallace, Assistant Director Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303 Sam Power, Agency Clerk Agency for Health Care Administration The Atrium, Suite 301 325 John Knox Road Tallahassee, Florida 32303 R. Terry Rigsby Geoffrey D. Smith Wendy Delvecchio Blank, Rigsby & Meenan, P.A. 204 S. Monroe Street Tallahassee, Florida 32302 Lesley Mendelson Senior Attorney Agency for Health Care Administration 325 John Knox Road, Suite 301 Tallahassee, Florida 32303-4131 Stephen Ecenia Rutledge, Ecenia, Underwood, Purnell & Hoffman, P.A. 215 South Monroe Street Suite 420 Tallahassee, Florida 32302-0551
The Issue Whether Certificate of Need Application Number 6785 should be approved for the conversion of 10 acute care medical/surgical beds to a 10 bed Level II neonatal intensive care unit at University Community Hospital.
Findings Of Fact On August 9, 1991, HRS published a fixed need pool for Level II and III Neonatal Intensive Care Services in the Florida Administrative Weekly, Volume 17, Number 32. For District 6, HRS published a "Preliminary Estimate of Bed Need" for an additional 10 Level II Neonatal Intensive Care Unit (NICU) beds, with an explanatory footnote which was as follows: "Due to pending litigation regarding the inventory of neonatal intensive care unit beds, no fixed need projection is made." The pending litigation was a challenge to the inclusion of 11 beds at Winter Haven Hospital ("Winter Haven") on the inventory of existing Level II NICUs. Following an amendment of the "grandfathering" rules, Winter Haven's dispute with AHCA was settled. Winter Haven's 11 bed NICU is included on the Level II inventory and its petition in this proceeding, which a Winter Haven witness described as their "fall back position", has been voluntarily dismissed. Humana of Florida, Inc., d/b/a Humana Women's Hospital Tampa ("Humana") intervened in these proceedings. Subsequent to the hearing and filing of proposed recommended orders, Humana entered its notice of voluntary withdrawal of its petition on March 17, 1993. AHCA is the state agency which administers CON laws, following transfer of that responsibility from HRS. See, Chapter 92-33, Laws of Florida. University Community Hospital ("UCH") is a 424 bed hospital in Tampa, Hillsborough County, Florida, AHCA District 6, with services which include open heart surgery, pediatric intensive care, and obstetrics. UCH began obstetrics services on September 2, 1991. In its first full year of operation, there were 1299 deliveries in its 31 bed obstetrics unit. UCH projected that there would be 1500 to 1800 deliveries in its second year of obstetrics services. Numeric Need and Occupancy Levels UCH filed its application to convert 10 acute care beds to establish a 10 bed Level II NICU on September 26, 1991, in response to HRS' August 9, 1991 publication of need. Total project cost was estimated at $765,000. Although HRS described the District 6 publication as a "preliminary estimate," there is no statutory or rule authority for the publication of any numeric need number other than the fixed need. By letter dated December 16, 1991, Tampa General Hospital ("Tampa General") notified HRS that the utilization data for Tampa General, which was used to calculate numeric need was incorrect. Tampa General reported 11,112 Level II NICU patient days for 1987, 11,387 for 1988, and, initially, 10,770 for 1990. Tampa General also reported a 20 percent increase in births from 1988 to 1990, and a 117 percent utilization increase in Level III NICU patient days. Tampa General's revised figures distinguished between services provided in its special care nursery and those provided in Level II NICU beds. The revised report divided the total 10,770 into 4,600 patient days in special care nursery beds and 6,170 in Level II NICU beds, but does not specifically take into account the intensity of nursing care or the severity of infants' conditions. Using 6,170 patient days, rather than 10,770, AHCA recalculated numeric need, determined that the numeric need was zero, and used zero need in reviewing the District 6, Level II NICU applications filed in this batch. AHCA did not publish the revised calculation of zero need. AHCA's policy is to not recalculate a fixed need pool, unless there is time to republish before applications are due. Nevertheless, AHCA takes the position that the need publication in this case may be revised because it was preliminary. Using the August bed need projection published by HRS, Level II NICU beds were reporting 86.5 percent occupancy in the twelve month period ending six months prior to the publication. If Tampa General's utilization rates are decreased from 114.28 percent to 70.43 percent, revised district utilization rates would decrease from 86.5 percent to 72.83 percent. Staffing ratios and costs indicate that some neonates in the Tampa General special care nursery received care consistent with Level II NICU services. There is more credible evidence to support the data used by the agency in its publication of need than there is to support its revised determination of zero need. Minimum 1,000 Births Rule 10-5.042(6), Florida Administrative Code, is, in relevant part, as follows: Hospitals applying for Level II neonatal intensive care services shall not normally be approved unless the hospital had a minimum service volume of 1,000 live births for the most recent 12-month period ending 6 months prior to the beginning date of the quarter of the publication of the fixed need pool. There is no dispute that UCH initiated obstetrics services in September 1991, the same month in which it filed the CON application at issue in this case. Because the August 9, 1991 publication was the time for determination of need, then UCH does not meet the requirements of the rule. Standards For Review The publication of numeric need, minimum district occupancy levels, and minimum birth volumes are factors which determine the standard for review of CON applications. Due to the lack of any statutory or rule authority for the publication of preliminary estimates of numeric need, the nature and only possible effect of the pending litigation, AHCA's untimely revision of the numeric need number, and its failure to publish the revised number to allow a point-of-entry for challenges to the revised numeric need number and occupancy level, UCH is not required to demonstrate not normal circumstances. The failure to meet the minimum birth volume rule does, however, necessitate a showing of not normal circumstances for the approval of the UCH application. UCH assesses that its birth volume, and the number of neonates at UCH in need of Level II NICU care, the absence of available, accessible alternative hospitals, and the standard of care in the district are not normal circumstances which outweigh the minimum birth volume requirement. Available Alternatives Subsection 408.035(1)(b), Florida Statutes, also requires consideration of the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of other Level II NICUs in the district. AHCA asserts that its corrected data showing zero need is a major indicator of available alternatives. As noted, however, UCH demonstrated the unreliability of the corrected data. In addition, geographic, economic, and other practical concerns may also affect accessibility. The total District 6 inventory of Level II NICU beds with 1990 occupancy and patient days as published on August 9, 1991, is as follows: Hospital Occupancy Patient Days Humana - Brandon 108.82 1,986 Humana Woman's 72.35 3,961 Tampa General 114.28 10,011 Manatee Memorial 90.23 1,976 Lakeland Regional 75.50 4,409 Winter Haven 49.02 1,968 The inventory is accepted as valid for the same reasons that the original publication of need is accepted as more reliable than the revised estimates. See, Finding of Fact 13. Tampa General's Level II and III nurseries are not available alternatives, because they exceed 90 percent occupancy. See, Findings of Fact 10 and 13. Humana Brandon is not an alternative with its Level II and III NICU beds exceeding capacity. Expert testimony on traffic practice and referral patterns support UCH's assertion that facilities in Winter Haven or Lakeland are not viable alternatives, although within the two hour travel time established by the rule on geographic access. Normal referral patterns are from more rural to more urban areas. Humana Women's, which is seven miles from UCH and has a transfer agreement with UCH, is the most geographically accessible, available alternative. The parties disagree over whether Humana Women's is economically accessible and has the capacity to serve most of the Level II neonates born at UCH. Humana Women's increased its service to 10-11 percent Medicaid obstetrics patients in 1991-1992, in contrast to UCH's level of 7 percent Medicaid obstetrics patients, and therefore, is no longer economically inaccessible to Medicaid patients. Humana Women's has 15 Level II NICU beds, which reported 72 percent occupancy in 1990. The demographic characteristics of the UCH service area include 7.1 percent Medicaid eligible population, and overlaps with the service area of Humana Women's. In addition, UCH and Humana Women's have overlapping medical staffs. For these reasons, Humana Women's experiences provide the most reliable indication of the accuracy of UCH's projections. At Humana Women's 7 percent of neonates require Level II and III care. By contrast, Lakeland Regional Medical Center experiences 12.7 percent neonates requiring NICU care, close to that projected by UCH, however, 30 percent of Lakeland Regional's patients are in the Medicaid payor category. The link between Medicaid and the greater need for NICU care was established by expert testimony. On this basis, the expert projections that 7 percent, not 10-15 percent, of UCH newborns will need Level II NICU care is accepted as reasonable. Average lengths of stay in Humana Women's Level II NICU beds were 6 to 7 days, not 10 days as projected by UCH. That data also supports AHCA's expert's conclusion that the average length of stay in UCH's stabilization unit, 2.3 days, is not indicative of UCH's having provided Level II care to 160 to 170 neonates. According to AHCA's expert planner, total capacity at Humana Brandon, Humana Women's and Tampa General is 14,000 patient days. Using the inventory published by the agency, those hospitals reported a total of 15,958 patient days in 1990. Even assuming that UCH overestimated the number of neonates needing NICU care, the capacity at accessible facilities within the district cannot accommodate the additional patients, and constitutes a not normal circumstance outweighing the minimum birth volume requirement. The fact that UCH is the only obstetrics facility in Hillsborough County without Level II and III NICU beds indicates that, if otherwise in compliance with review criteria, UCH's application should be approved to meet the need for additional Level II NICU beds. UCH's expert also testified that the number of Level II NICU beds in the Tampa area were disproportionately low compared to the population. Tampa has 3.2 Level II beds per thousand births in contrast to 7.6 in Lakeland, and 7.7 in Winter Haven. Given the demographic differences among the hospitals' service areas, the bed to population ratio was not shown to be meaningful as an indication of Level II NICU need. State and Local Health Plans Subsection 408.035(1)(a), Florida Statutes requires an evaluation of need in relation to applicable state and district health plans. The 1989 Florida State Health Plan lists the following general categories of preferences, most of which are applicable to any proposal to transfer or convert acute care beds regardless of the proposed new service: for conversion of acute care beds, for providing indigent care, for providing emergency services, for teaching, research and referral hospitals, and for providing specialized services. The District 6 plan issued in June 1990 by the Health Council of West Central Florida includes only one applicable CON allocation factor, which is related to the state health plan indigent care preferences and is as follows: Preference shall be given to an applicant who provides the department with documentation that they provide, or propose to provide, a disproportionate share of Medicaid and charity care patient days in relation to other hospitals in the subdistrict. The charity care definition shall be consistent with the definition used by the Health Care Cost Containment Board as defined in Chapter 89-275, Laws of Florida. The first group of preferences in the State Health Plan includes the following: Preference shall be given to a bed transfer and conversion application in which the applicant proposes a sizable reduction of excess beds in the existing facility. AHCA argues that the preference is not met. Because UCH has 404 licensed beds with an average occupancy of about 50 percent, or 200 empty beds, AHCA states that the conversion of only 10 medical-surgical beds to 10 Level II NICU beds is not a sizable reduction of excess acute care beds. However, AHCA only projected a need for an additional 10 NICU beds, which is the minimum size allowed by AHCA rules. AHCA's position that no additional Level II beds are needed is inconsistent with penalizing UCH for not proposing to convert more beds in this application. Therefore, this preference must be deemed inapplicable to this case. Similarly, given the size of the published need, the objective of reaching 75 percent occupancy in five years is also inapplicable to this application. The second relevant group of preferences relates to whether the conversion of beds will adversely impact disproportionate share providers. That same issue is also addressed in the group of preferences related to indigent care. AHCA argues that this preference is not met, because Tampa General, the only disproportionate share provider in the District, would be adversely affected. The evidence presented at hearing supports a conclusion to the contrary, that Tampa General will not be affected adversely. UCH and Tampa General have an agreement to cooperate in providing NICU services. UCH proposes to assist Tampa General in the delivery of Level III NICU services, by transfers of Level II neonates back to UCH as soon as possible. The fact that Tampa General's Level III utilization has increased substantially, more than 100 percent since 1988, was not disputted. Tampa General's medical director's testimony on the benefits to Tampa General of the agreement with UCH is persuasive. The next group of relevant preferences is entitled "Indigent care." The only local health plan factor also favors applicants which will provide a disproportionate share of Medicaid and charity care. UCH will not provide a disproportionate share of its services to Medicaid and charity care patients. The Level II NICU providers in District 6 average 40 percent Medicaid participation, and UCH proposes 6 percent. UCH does not meet the disproportionate share preferences in the state or local health plans. The "emergency services" group of preferences apply to applicants who (1)accept indigents for emergency care, (2)have a trauma center, (3) provide a full range of emergency services, and (4) have not been fined for violating emergency service statutes. UCH has an active emergency room, accommodating 45,000 visits in fiscal year 1991, and under expansion to increase its capacity to 60,000 visits a year. UCH, in general, meets the preference for providers of emergency room services. UCH is not a teaching, research, or referral center, nor is its proposed service unavailable within its service area. In response to this group of preferences, UCH has also not demonstrated that patients are leaving the state for this service, that any new physician specialities would be attracted to the area, or that its proposal will expand medical research in Florida. For the group of preferences for specialized services, UCH meets two of three applicable preferences. One for proposing a conversion of medical/surgical beds to NICU beds, another for proposing a commitment to serve 6 percent Medicaid and 5 percent charity care. In 1990, 41 percent of District 6 Level II NICU discharges were Medicaid patients. In 1990, Medicaid services ranged from a high of 61.6 percent of total Medicaid provided by Tampa General to a low of 2 percent by Humana Women's. UCH has shown its 6 percent Medicaid commitment to be reasonable and attainable by demonstrating that 7.1 percent of the population in its service area is Medicaid eligible. The actual Medicaid percentage in the first year for obstetrics services was 7 percent, which coincides with the percentage of Medicaid eligible persons living within the UCH service area. UCH has not emphasized specialized services to substance abusers, other than to have a referral network to community service agencies. The review of UCH's application in relation to state and local health plans results in the conclusion that the proposal is generally supported by preferences for the conversion of excess acute care beds, for not adversely impacting and potentially assisting Tampa General, for having emergency room services, and for providing specialized services with an attainable relatively low, Medicaid commitment. On the negative side are the preferences for applicants serving a disproportionate share Medicaid and charity patients, for teaching, research or referral centers, for services unique to the area, or for specialized service to substance abusing pregnant or postpartum women. On balance, the application of the state and local health plans does not suggest strongly that the UCH application either should or should not be approved, particularly in this case, where comparative review is impossible because UCH is the sole remaining applicant. Other Statutory Criteria Subsection 408.035(1)(c), Florida Statutes, criteria are met by UCH. UCH can provide good quality care in Level II NICU services. It is accredited by the Joint Commission on Accreditation of Health Organizations and has the ability to comply with rule requirements for equipment, staff and physical facilities. UCH already has a board-certified neonatologist on staff. Subsection 408.035(1)(e), favoring joint, cooperative or shared operation of health care services is not a criterion met by the UCH proposal. Although UCH suggests that its transfer agreement with Tampa General complies with the statute and the evidence showed that the two hospitals will cooperate in providing the separate services they each provide, but the transfer agreement does not constitute cooperative operation of the service. Subsection 408.035(1)(f), arguably is a basis for approval of the UCH application, because Level II NICU equipment and services do not exist in the adjoining area of east Pasco County. For District 5, which includes Pasco County, zero need was published for the same batching cycle. Subsection 408.035(1)(g) criterion, related to research and training programs, is not met by the UCH application. UCH meets the criteria in Subsection 408.035(1)(h), by having shown that it has the manpower, personnel and funds to establish and operate a 10-bed Level II NICU. UCH is able to renovate existing space and to acquire the equipment required for the 10-bed NICU for approximately $765,000. AHCA does not dispute UCH's assertion that it has adequate funds to finance this project and that project costs are reasonable. Having already hired a neonatologist, and 6 to 7 of the 11 1/2 to 12 1/2 full time equivalent or FTE's required, UCH has, or can recruit and hire, the necessary staff. Financial Feasibility Under Subsection 408.035(1)(i), the financial feasibility of a project must be considered. UCH estimated that a Level II NICU will generate $290,000 in year one, and $336,000 in year two revenues. The projections were based on providing Level II NICU services to 11 to 12 percent of newborns, or 2290 patient and 2670 patient days in years one and two, respectively. This underlying assumption is rejected. See, Finding of Fact 26. UCH's projection of a 10 day average length of stay in Level II NICU beds is not supported by Humana Women's experience of 6 to 7 days. See, finding of Fact 27. From the testimony and assumptions, attached to UCH's projected revenues and expenses, it is possible to determine that reduced total patient revenues will result from lower than projected numbers of patients and days. It is also apparent that deductions from revenue and some operating expenses will also decrease. There is, however, no testimony from which the relative proportions of adjustments to each item and the effect on charges for NICU services be calculated. Nor is there testimony regarding any minimum utilization necessary for the project to be financially feasible. Therefore, UCH has failed to meet the burden of showing that the proposed Level II NICU at UCH will be financially feasible. On balance, but not excluding all the applicable criteria, the most positive factors of the UCH proposal, the published need and potential benefits to Tampa General, do not outweigh the most negative ones, the failure to demonstrate financial feasibility and to make a more significant commitment compared to the district demand for Medicaid in Level II NICU beds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of University Community Hospital for Certificate of Need 6785 to convert 10 acute care beds to 10 Level II neonatal intensive care beds be DENIED. DONE AND ENTERED this 8th day of October, 1993, in Tallahassee, Leon County, Florida. ELEANOR M. HUNTER 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 8th day of October, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-1490 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: UNIVERSITY COMMUNITY HOSPITAL Accepted in Findings of Fact 5 and 36. Accepted in Finding of Fact 6. Accepted in Finding of Fact 7. Accepted in Finding of Fact 2. Accepted in Finding of Fact 2. Accepted in Finding of Fact 3. Accepted in Findings of Fact 1 and 2. Accepted in Finding of Fact 2. Accepted in Finding of Fact 8. Accepted in Findings of Fact 9 and 10. Accepted in Finding of Fact 11. Accepted in Finding of Fact 11. Issue not reached. Issue not reached. Issue not reached. Accepted in Findings of Fact 10 and 11. Accepted in Finding of Fact 13. Subordinate to Finding of Fact 13. Accepted in Finding of Fact 10. Subordinate to Finding of Fact 13. Accepted in Findings of Facts 5 to 13. Subordinate to Finding of Fact 13. Subordinate to Finding of Fact 13. Accepted in Finding of Fact 13. Accepted in Findings of Fact 10 and 13. Accepted in Finding of Fact 47. First two sentences, Subordinate to Finding of Fact 6, Last two sentences, Rejected in Finding of Fact 26. Accepted in Finding of Fact 28. Rejected in Findings of Fact 50 and 51. Accepted in Finding of Fact 27. Rejected. Accepted in Finding of Fact 29. Accepted in Finding of Fact 36. Accepted in relevant part in Finding of Fact 34. Subordinate to Finding of Fact 26. Subordinate to Finding of Fact 26. Conclusion rejected in Finding of Fact 30. Rejected in Finding of Fact 41. Rejected in Findings of Fact 50 and 51. Accepted in relevant part in Finding of Fact 41. Accepted in Finding of Fact 34. Accepted in relevant part in Finding of Fact 38. Accepted in Findings of Fact 20, 22, and 28. Accepted in Finding of Fact 23. Accepted in Finding of Fact 25. Subordinate to Finding of Fact 25. Accepted in Finding of Fact 24. Accepted in Finding of Fact 29. Accepted in Finding of Fact 34. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Rejected in Finding of Fact 48. Rejected in Findings of Fact 50. Rejected in Findings of Fact 48. Subordinate to Finding of Fact 50. Subordinate to Finding of Fact 50. Unable to determine. Unable to determine. Accepted. Unable to determine. Rejected in Finding of Fact 45. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Accepted in Finding of Fact 47. Accepted in Finding of Fact 28. Issues not reached due to Humana's Voluntary Dismissal. Issues not reached due to Humana's Voluntary Dismissal.
The Issue Whether Trustees of Mease Hospital, Inc., d/b/a Mease Hospital Dunedin ("Mease") is entitled to be included on the Neonatal Intensive Care Unit ("NICU") inventory, as authorized to provide Level III NICU services in five (5) Level III beds in Department of Health and Rehabilitative Services ("HRS") District 5. Whether All Children's established its standing to intervene in Case No. 90-6255, as an existing provider of Level III NICU services in HRS District 5. Whether Morton Plant established is standing to intervene in the consolidated cases, as an existing provider of Level II NICU services in HRS District 5.
Findings Of Fact On September 14, 1990, Mease a 278-bed acute care hospital, located in Dunnedin, Florida, timely challenged the inventory of neonatal intensive care beds published for District 5 (Pasco and Pinellas Counties) by HRS. The preliminary inventory, published on August 24, 1990, authorized five (5) Level II and no Level III beds at Mease. All Children's is a 168-bed specialty children's hospital, which has a 24-bed Level III NICU, located in St. Petersburg, Florida, in Pinellas County. Morton Plant is a 750-bed acute care hospital with Level II NICU beds, located in Clearwater, Florida, in Pinellas County. Of the 2,670 babies delivered at Morton Plant in 1990, 598 came from the Mease area; 569 of the 2,670 were classified as not normal or in need of some NICU services, and 148 of the 569 not-normal newborns came from the Mease service area. HRS is the department with responsibility for promulgating NICU rules pursuant to legislation passed in May 1987, effective in October 1987. See, Section 381.702(20) and 381.706(1)(a), (e), (h), and (m), Florida Statutes (1989). The NICU rule became final in August 1990, and included a "grandfather" provision for providers of NICU services prior to October 1, 1987, to avoid any disruption in the availability of NICU services. The grandfather provision includes, as one of three tests for determining if NICU services were offered prior to October 1, 1987, the requirement that 50% of the neonates admitted to Level II and III units from October 1, 1986 through September 30, 1987, were classified in Diagnostic Related Groups (DRGs) 385, 386, 387 or 388. See, Florida Administrative Code, Rule 10-5.042(14)(f) (2)(b) (III). In August 1987, HRS, in preparation for the promulgation of the NICU rule, mailed surveys to various hospitals, including Mease, requesting information about the provision of NICU services at those hospitals. Using the Guidelines for Perinatal Care to distinguish the level of services it was providing, Mease responded to the August 1987 survey by reporting that it had three (3) Level II beds and no Level III beds. In response to the survey questions, Mease also reported that its NICU services began on April 1, 1987, coinciding with the time that a neonatologist, Mary Newport, M.D., joined the staff at Mease. In March 1987, Board Certified Neonatologist Mary Newport began providing 24-hour coverage at Mease, receiving final approval for active staff privileges in early May 1987, so that Mease could treat rather than transfer sick neonates. Mease resubmitted the August 1987 survey in February 1989, reporting that it had increased from three to six Level II beds, after October 1, 1987, and from one to four Level III beds beginning on October 1, 1987, although such changes required certificate of need ("CON") approval effective October 1, 1987. HRS sent out a second survey in April 1989, to which Mease responded that it currently had six Level II beds and no Level III services, under the more stringent requirements included within the proposed rule as compared to the Guidelines for Perinatal Care standards used in the first survey. In August 1989, Mease resubmitted the second survey and reported a current total of six Level II beds and four Level III beds of which three Level II beds and one Level III bed were operating on September 30, 1987. Mease, in the August resubmittal of the second survey, also reported that 37 neonates were admitted to the Level III bed for 63 patient days and that a total of 188 neonates were admitted to both Level II and Level III beds, from October 1, 1986 through September 30, 1987. Of the 188 neonates admitted to Level II and Level III beds from October 1, 1986 through September 30, 1987, Mease claimed that 87 of those had DRG's 385, 386, 387 or 388. On September 10, 1990, Mease submitted documentation to HRS showing that from October 1, 1986 through September 30, 1987, NICU admissions totaled 122 patients, of which 77 were in DRGs 385, 386, 387 or 388. Subsequently, Mease claimed to have had 18 fewer admissions. On December 18, 1990, Mease claimed to have had 107 NICU patients, of which 69 were in DRGs 385, 386, 387 or 388. At the final hearing, Mease claimed that its review of the available records of 1512 of the 1520 deliveries from October 1, 1986 through September 30, 1987, showed that, when diagnoses and codes were changed retrospectively, there were 126 NICU admissions, of which 74 were in DRGs 385, 386, 387, and 388. The number of neonates in intensive care and the number of neonates in the specified DRGs asserted by Mease are both unreliable. There is no credible evidence to support Mease's claim that it started offering NICU services upon the arrival of Dr. Newport on the courtesy staff on March 28, 1987, or upon her becoming a member of the active staff in early May, 1987. Credible expert testimony was presented that a time lag occurs between the arrival on staff of a neonatologist and the initiation of NICU services. In fact, Dr. Newport testified that after she arrived at Mease, she tried out various rented equipment and evaluated it before making purchases, and altered the locations of the nurseries. The Mease Perinatal Committee Agenda dated May 26, 1987 included an item "Task Force for Development of Level II Facility." Even assuming arguendo that Mease did establish NICU services on April 1, 1987, as reported to HRS in response to the first HRS survey, a substantial number of the neonates Mease claimed to have served in its NICU were, in fact, discharged from Mease prior to April 1, 1987. 1/ Mease has failed to submit documentation that it had neonatal intensive care services from October 1, 1986 through September 30, 1987. Mease has failed to submit documentation that it admitted 126 neonates to intensive care services from October 1, 1986 through September 30, 1987. Mease has failed to submit documentation that 74 neonates were classified into DRGs 385, 386, 387 or 388. Credible expert testimony supports the conclusion that retrospective changes in diagnoses are not reliable, in view of the fact that observation of a patient, not just the patient's record, is significant in making a diagnosis. Mease reported to the Health Care Cost Containment Board that it had no revenue from the operation of a NICU from October 1, 1986 to September 30, 1987.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: Including Mease on the final inventory as an authorized Level II neonatal intensive care unit with five beds, based on the Summary Recommended Order of April 9, 1991, entered without objection; and Excluding Mease from the final inventory as an authorized provider of Level III neonatal intensive care services. DONE and ENTERED this 1st day of November, 1991, at Tallahassee, Florida. ELEANOR M. HUNTER 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 1st day of November, 1991.
Findings Of Fact Background Petitioner, NME, Inc. d/b/a Seven Rivers Community Hospital, operates a Level II hospital facility on Highway 19, approximately six miles north of Crystal River in Citrus County, Florida. It is located in HRS District No. 3. The facility has been in operation since August, 1978. On November 12, 1982, petitioner filed an application with respondent, Department of Health and Rehabilitative Services, for a certificate of need to add fifteen acute care beds to its facility at a total cost of $37,231.34. The application was denied by respondent on February 28, 1983, on the following grounds: The major reason for denial is that the proposed project is not consistent with the Goals, Standards and Objectives of the HSP. There is an excess of 28 medical/surgical beds in Planning Area IV by 1987. Overall occupancy in the two county area averaged 71.2 percent in 1981. The addition of 122 beds at Lykes Memorial and Bayonet Point Hospital, Inc., should, in the foreseeable future, satisfy demand for beds in the area. The denial prompted the instant proceeding. The hospital is classified as a Level II facility and currently has 75 beds consisting of 67 medical 1/surgical beds and 8 intensive care unit/critical care unit (ICU/CCU) beds. It is accredited by the Joint Commission on Accreditation of Hospitals. The facility provides a wide range of services including a 24-hour emergency room, pharmacy, respiratory therapy department, laboratory with clinical and pathology sections, a radiology department with nuclear medicine, ultrasound, regular radiographic and flourscopic units, and a mobile CT scanner. However, it does not provide open heart surgery, radiation therapy, renal transplantation, or obstretic and pediatric services. The staff has specialists in the areas of opthalmology, cardiology, pulminology, gastroenterology and general and peripheral vascular surgery. A large majority of these services and resources are provided to people who live within HRS District No. 3. At the present time there are 206 existing or approved acute care beds licensed for operation in Citrus County. The only other licensed facility in the county Is Citrus Memorial Hospital in Inverness. It presently has 131 acute care beds. Planning Area IV, in which petitioner's facility lies, includes Citrus and Hernando Counties. The latter county has one existing hospital, Lykes Memorial Hospital, with 161 acute care beds, and one hospital approved for construction, HCA Health Services of Florida, Inc. HCA was recently authorized 96 acute care beds and expects to open a new facility in Spring Hill, Florida in 1986. Petitioner's Proposal Petitioner proposes to add fifteen beds by converting fifteen private rooms to semiprivate rooms. This can be done quickly and inexpensively since the rooms already have the appropriate square footage, lighting and electrical systems to accommodate the conversion. If the application is approved, the conversion project can be completed in about two weeks at a cost of only $37,231.34. The hospital has historically experienced seasonal fluctations in its patient occupancy rates. Typically, the large influx of winter visitors and residents has caused its occupancy rates to increase during the winter months while a tailing off has occurred between April and September. However, in 1983 this trend changed and the so-called traditional "slack period" occurred only in the months of May and July, when the occupancy rate fell below 75 percent. Indeed, during the first four months of 1983 the rate was in excess of 92 percent, which is well above the 80 percent optimum occupancy standard used by the Department. This in turn has caused long waiting periods in the emergency room by patients waiting for a bed and postponements by persons seeking to have elective surgery. Based upon historical annual growth patterns experienced during the years 1979 through 1983, which is the most current and representative data, petitioner expects to have an annual growth rate of almost 12 percent in patient days during the years 1984 through 1988. This in turn will create the need for 57 additional beds by the year 1988. Even if the potential loss of patient days caused by the opening of the new hospital in Spring Hill in 1986 is considered, petitioner will still need 46 additional beds by 1988. In this regard, it considers the 15 bed addition sought herein as an interim measure, and intends to file another application for additional beds in the near future. The granting of the application will alleviate the overcrowding conditions in an extremely cost-efficient manner. Proposed Department Rule 10-16.004 The Department has proposed a new Rule 10-16.004 which contains the Local Health Plan for HRS District 3. 2/ The rule was published in Volume 9, No. 22, Florida Administrative Weekly, page 1954. The proposed rule was developed by the local health council in District 3. The council has proposed to eliminate the five planning areas within District 3 and to establish in lieu thereof seven separate subdistricts. Under the new proposal, Citrus County would be the only county in Subdistrict 5. The rule projects a total acute care bed need of 260 beds in 1988 for the Subdistrict, or a net need of 54 beds over the present number licensed for operation in the County. The time for filing challenges to Rule 10-16.004 has expired and none have been filed. At the time of the hearing the rule was being revised as a result of the amendment (HRS). . .made, which arose out of testimony at the public hearings", and had not yet been filed with the Department of State. The extent and nature of such amendments, if any, were not disclosed. Department Objections As noted earlier, the basic reason for denial of the application was that the proposed project was not consistent with the Goals, Standards and Objectives of the Health Systems Plans (HSP). In its state agency action report issued on February 28, 1983, the Department reasoned that because there will be an excess of 28 medical/surgical beds in Planning Area IV (Citrus and Hernando Counties) by 1987, and overall occupancy in the two county area averaged only 71.2 percent in 1981, and new beds will be added at Lykes Memorial and HCA Services of Florida, Inc., the demand for beds in the area should be satisfied. As further clarified at the hearing, a Department representative indicated the reasons for denying the application included (a) a lack of need, (b) petitioner's failure to have a Medicaid contract, and (c) petitioner having exceeded certain "screens" of the Hospital Cost Containment Board for 1983 and 1984. However, the latter "problem" was attributable to a lower patient length of stay at Seven Rivers than at other hospitals reviewed by the Board, and for this reason the excesses were acceptable. The Department's principal concern as to the Medicaid issue was that NME, the parent corporation, had an alleged corporate policy of not taking Medicaid patients which is contrary to Department "goals". But petitioner has agreed to enter into a Medicaid provider contract if the application is approved in order to satisfy this objection. Moreover, during fiscal year 1983, the facility had direct patient write-offs of approximately $750,000 which represents uncompensated care to medically indigent individuals. This amount exceeded the level of care given to indigents by Citrus Memorial Hospital, a tax supported hospital in Citrus County, during the same period of time. Under the methodology contained in Rule 10-5.11(23), Florida Administrative Code, the Department determined there is a projected need for 24 additional acute care beds by the year 1988 in the entire District 3, which encompasses 16 counties. This is based upon a current total of 3,139 beds within the District and a projected total need of 3,163 beds by that date. The record is unclear as to how 20 beds at shands Teaching Hospital in Gainesville now devoted to special psychiatric care for children are classified. If they are classified as acute care, the actual net need for beds within the District is 44 since these beds should not be classified within that category. The Department has not allocated the bed shortage to any particular county or planning area. Therefore, there is no impediment to assigning a portion of that total to Citrus County. This is especially appropriate in light of petitioner's occupancy rates, the overcrowding which has recently occurred, and the cost efficient manner in which the addition will be completed.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of NME Hospitals, Inc., d/b/a Seven Rivers Community Hospital for a certificate of need to add fifteen acute care beds to its hospital in Citrus County, Florida, be GRANTED. DONE and ENTERED this 21st day of October, 1983, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of October, 1983. COPIES FURNISHED: C. Gary Williams, Esquire and Michael J. Glazer, Esquire O. Box 391 Tallahassee, Florida 32301 Jay Adams, Esquire Building One, Room 406 1323 Winewood Boulevard Tallahassee, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 Alicia Jacobs, Esquire General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 =================================================================
