The Issue Whether the Petitioner should receive general revenue funds allocated to the Department of Children and Family Services.
Findings Of Fact The Petitioner is an 18 year-old female who is eligible for services as an individual with mental retardation. The Department (or its predecessor) first provided benefits to the Petitioner in 1985 based upon such eligibility (Downs Syndrome). Although an applicant for services in the Department’s District 15, the Petitioner currently attends a residential placement in Miami, Florida. From the undisputed evidence, Petitioner is performing well in her placement and is learning life skills. Petitioner exhibits child-like behaviors, however, and is dependent on adult supervision for her well being. The Petitioner is a client of the Department’s Developmental Disabilities Program and would have received the benefits requested in this cause but for the lack of funds. It is the Department’s position that the appropriations allocated to the Department by the Legislature did not provide sufficient funds to meet the Petitioner’s claim and that it would be unlawful for the Department to exceed its appropriated budget. Because the Department does not have funds for all of the eligible recipients (clients), the Department prioritizes the claims and places clients whose benefits are not provided on a waiting list. In fact, the Petitioner is on the Medicaid Waiver Program waiting list for the services sought. The Petitioner’s mother has provided for her daughter and incurred debt to do so. She must have financial assistance in order to keep the Petitioner at the school where she is doing well. The Department provides assistance for persons like Petitioner only when they are deemed to be “in crisis.” The Department maintains that the Petitioner does not currently meet its definition for “crisis” intervention. The Petitioner’s services from the Developmental Disabilities Program were canceled without notice to the Petitioner in 1988. The Petitioner timely sought benefits in 1998 or 1999 and would be receiving the benefits now sought had the Department properly processed the application through the correct program. The Department appropriates funds through its district offices. In this case, District 15 (where the Petitioner’s mother resides) does not have funds available to meet the Petitioner’s claim. Whether statewide funds are unavailable is unknown. Were the Petitioner’s mother to abandon the Petitioner, it is unlikely the Petitioner could provide for her own needs; she would be in “crisis.”
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Children and Family Services enter a final order granting Petitioner’s request for services. DONE AND ENTERED this 23rd day of December, 2002, in Tallahassee, Leon County, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 2002. COPIES FURNISHED: Paul F. Flounlacker, Jr., Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204 Tallahassee, Florida 32399-0700 Laurel Hopper, Esquire Department of Children and Family Services 337 North Fourth Street Fort Pierce, Florida 34950 William N. Swift, Esquire William N. Swift, P.A. 901 Southwest Martin Downs Boulevard Suite 208 Palm City, Florida 34990
The Issue The issue for determination in this case is whether Respondent’s application of a fair rental value system of property cost reimbursement to Petitioner under the Florida Title XIX Long-Term Care Medicaid Reimbursement Plan is appropriate.
Findings Of Fact Petitioner, CONSULTING MANAGEMENT AND EDUCATION, INC., d/b/a GULF COAST NURSING AND REHABILITATION CENTER (CME), is the licensed operator of a 103-bed nursing home in Clearwater, Florida, which is presently known as GULF COAST NURSING AND REHABILITATION CENTER (GULF COAST). CME participates in the Florida Medicaid Program as an enrolled provider. Respondent, AGENCY FOR HEALTH CARE ADMINISTRATION (AHCA), is the agency of the State of Florida authorized to implement and administer the Florida Medicaid Program, and is the successor agency to the former Department of Health and Rehabilitative Services, pursuant to Chapter 93-129, Laws of Florida. Stipulated Facts Prior to 1993, the GULF COAST nursing home facility was known as COUNTRY PLACE OF CLEARWATER (COUNTRY PLACE), and was owned and operated by the Clearwater Limited Partnership, a limited partnership which is not related to CME. In 1993 CME agreed to purchase, and did in fact purchase, COUNTRY PLACE from the Clearwater Limited Partnership. Simultaneous with the purchase of COUNTRY PLACE, CME entered into a Sale/Leaseback Agreement with LTC Properties, Inc., a Maryland real estate investment trust which engages in the financing of nursing homes. The Purchase and Sale Agreement between Clearwater Limited Partnership and CME was contingent upon the Sale/Leaseback Agreement and the proposed Lease between CME and LTC Properties, Inc. On September 1, 1993, CME simultaneously as a part of the same transaction purchased COUNTRY PLACE, conveyed the facility to LTC Properties, Inc., and leased the facility back from LTC Properties, Inc. As required, CME had notified AHCA of the proposed transaction. AHCA determined that the transaction included a change of ownership and, by lease, a change of provider. CME complied with AHCA's requirements and became the licensed operator and Medicaid provider for COUNTRY PLACE. Thereafter, CME changed the name of the facility to GULF COAST. After CME acquired the facility and became the licensed operator and Medicaid provider, AHCA continued to reimburse CME the same per diem reimbursement which had been paid to the previous provider (plus certain inflation factors) until CME filed its initial cost report, as required for new rate setting. In the normal course of business, CME in 1995 filed its initial Medicaid cost report after an initial period of actual operation by CME. Upon review of the cost report, AHCA contended that the cost report was inaccurate and engaged in certain "cost settlement" adjustments. During this review, AHCA took the position that CME's property reimbursement should be based on FRVS methodologies rather than "cost" due to the lease. In November of 1995, CME received from AHCA various documents which recalculated all components of Petitioner's Medicaid reimbursement rates for all periods subsequent to CME's acquisition of the facility. In effect, AHCA placed CME on FRVS property reimbursement. The practical effect of AHCA's action was to reduce CME's property reimbursement both retroactively and prospectively. The retroactive application would result in a liability of CME to AHCA, due to a claimed overpayment by AHCA. The prospective application would (and has) resulted in a reduction of revenues. CME is substantially affected by AHCA's proposed action and by Sections I.B., III.G.2.d.(1), V.E.1.h., and V.E.4. of the Florida Medicaid Plan. Additional Findings of Fact The Florida Medicaid Plan establishes methodologies for reimbursement of a nursing home's operating costs and patient care costs, as well as property costs. The dispute in this matter relates only to reimbursement of property costs. CME as the operator of the GULF COAST nursing home facility is entitled to reimbursement of property costs in accordance with the Florida Medicaid Plan. CME as the operator of the GULF COAST facility entered into a Florida Medicaid Program Provider Agreement, agreeing to abide by the provisions of the Florida Medicaid Plan. The Sale/Leaseback Agreement entered into by CME and LTC Properties Inc. (LTC) specifically provides for a distinct sale of the nursing home facility to LTC. LTC holds record fee title to GULF COAST. LTC, a Maryland corporation, is not related to CME, a Colorado corporation. The Florida Medicaid Plan is intended to provide reimbursement for reasonable costs incurred by economically and efficiently operated facilities. The Florida Medicaid Plan pays a single per diem rate for all levels of nursing care. After a nursing home facility's first year of operation, a cost settling process is conducted with AHCA which results in a final cost report. The final cost report serves as a baseline for reimbursement over the following years. Subsequent to the first year of operation, a facility files its cost report annually. AHCA normally adjusts a facility's reimbursement rate twice a year based upon the factors provided for in the Florida Medicaid Plan. The rate-setting process takes a provider through Section II of the Plan relating to cost finding and audits resulting in cost adjustments. CME submitted the appropriate cost reports after its first year of operation of the GULF COAST facility. Section III of the Florida Medicaid Plan specifies the areas of allowable costs. Under the Allowable Costs Section III.G.2.d.(1) in the Florida Title XIX Plan, a facility with a lease executed on or after October 1, 1985, shall be reimbursed for lease costs and other property costs under the Fair Rental Value System (FRVS). AHCA has treated all leases the same under FRVS since that time. AHCA does not distinguish between types of leases under the FRVS method. The method for the FRVS calculation is provided in Section V.E.1.a-g of the Florida Medicaid Plan. A “hold harmless” exception to application of the FRVS method is provided for at Section V.E.1.h of the Florida Medicaid Plan, and Section V.E.4 of the Plan provides that new owners shall receive the prior owner’s cost-based method when the prior owner was not on FRVS under the hold harmless provision. As a lessee and not the holder of record fee title to the facility, neither of those provisions apply to CME. At the time CME acquired the facility, there was an indication that the Sale/Leaseback transaction with LTC was between related parties, so that until the 1995 cost settlement, CME was receiving the prior owner’s cost-based property method of reimbursement. When AHCA determined that the Sale/Leaseback transaction between CME and LTC was not between related parties, AHCA set CME’s property reimbursement component under FRVS as a lessee. Property reimbursement based on the FRVS methodology does not depend on actual period property costs. Under the FRVS methodology, all leases after October 1985 are treated the same. For purposes of reimbursement, AHCA does not recognize any distinction between various types of leases. For accounting reporting purposes, the Sale/Leaseback transaction between CME and LTD is treated as a capital lease, or “virtual purchase” of the facility. This accounting treatment, however, is limited to a reporting function, with the underlying theory being merely that of providing a financing mechanism. Record fee ownership remains with LTC. CME, as the lease holder, may not encumber title. The Florida Medicaid Plan does not distinguish between a sale/leaseback transaction and other types of lease arrangements. Sections IV.D., V.E.1.h., and V.E.4., the “hold harmless” and “change of ownership” provisions which allow a new owner to receive the prior owner’s method of reimbursement if FRVS would produce a loss for the new owner, are limited within the Plan’s organizational context, and within the context of the Plan, to owner/operators of facilities, and grandfathered lessee/operators. These provisions do not apply to leases executed after October 1, 1985. Capital leases are an accounting construct for reporting purposes, which is inapplicable when the Florida Medicaid Plan specifically addresses this issue. The Florida Medicaid Plan specifically addresses the treatment of leases entered into after October 1985 and provides that reimbursement will be made pursuant to the FRVS method.
The Issue The issue for determination in this proceeding is whether NME Hospitals, Inc., d/b/a Hollywood Medical Center (HMC), is entitled to a certificate of need to convert 30 existing medical-surgical beds to 30 short term psychiatric beds at its hospital located in Hollywood, Florida.
Findings Of Fact Background Information Hollywood Medical Center (HMC) is owned and managed by its parent company, NME Hospitals, Inc. NME Hospitals, Inc., is a wholly owned subsidiary of National Medical Enterprises, Inc. (NME), a Nevada corporation headquartered in California. HMC is a 334-bed acute care hospital located in Hollywood, Florida. HMC is a full service hospital with an emergency room, a nine-suite operating unit, an intensive care unit, a coronary care unit, a 40-bed telemetry unit, a progressive care unit, and a dedicated oncology unit. HMC has a medical staff of more than 400 physicians with virtually every medical specialty represented, including psychiatrists. In addition, it is accredited by the Joint Commission on Accreditation of Healthcare Organizations. Hollywood is in the southern portion of Broward County, which is the only county in HRS Service District 10. The primary service area of HMC is the southern portion of Broward County, generally described as between State load 84 on the north and the Broward/Dade County line on the south. HMC is located in a peaceful and serene residential area. A high percentage of elderly people reside in condominiums which surround the hospital. One of the largest condominium developments in South Broward County is located within walking distance of HMC. Almost all of the programs at HMC are geared toward elderly patients; HMC does not even offer pediatric or obstetrical services. In September 1988, HMC filed a CON application to convert 30 of its existing medical-surgical beds to short term psychiatric beds. The proposal calls for the conversion of existing space on the sixth floor of the hospital. The total project cost is $864,545.00. HMC's application was comparatively reviewed by HRS with an application by the South Broward Hospital District d/b/a Memorial Hospital ("Memorial") to add 30 additional short term psychiatric beds to its facility which is also located in Hollywood, Florida. In its State Agency Action Report ("SAAR"), HRS preliminarily denied both applications. Both HMC and Memorial filed Petitions for Formal Administrative Hearings challenging their respective denials. These Petitions were referred to the Division of Administrative Hearings and consolidated by Order dated March 28, 1989. On August 17, 1989, Memorial voluntarily dismissed its petition for Formal Administrative Hearing. HMC's Proposal The elderly have unique psychiatric as well as medical needs. For example, the elderly have a much higher incidence of medically related nervous system disorders. In addition, the elderly experience certain psychiatric syndromes such as bipolar and manic depressive disorders and organic brain syndrome much more commonly than the rest of the population. Many of the elderly with psychiatric disorders have concomitant physical or medical problems such as cerebral vascular problems, arteriosclerosis, pulmonary problems, arthritic problems, physical disabilities, and mental impairments caused by senile dementia. The availability of medical treatment is a significant consideration in the selection of the appropriate treatment setting of elderly psychiatric patients who also suffer from one or more physical or medical problems. HMC believes there is a need for additional short term psychiatric services in its service area. In keeping with its goal of being a full service hospital capable of providing a full continuum of care to the patients in its service area, HMC seeks to fill this perceived need by offering such services at its own facility. The need perceived by HMC was based in large part on in-house physicians informing HMC's hospital administration that the physicians felt there was a need for such services. In its application, HMC proposes a separate geri- psychiatric unit with programs focused on the specific needs of geriatric psychiatric patients with multi-medical problems. The principal difference between such a specialized unit and an ordinary psychiatric unit is in the nature of the staffing and the training given to staff. Staff in a geri-psychiatric unit need to be prepared to address more multi-medical problems than are customarily encountered in a general psychiatric unit. Rather than proposing to add new beds to the facility, HMC decided it would be much more economical and cost efficient to convert some of its existing and unused medical- surgical beds to short term psychiatric beds. In this regard, a high percentage of HMC's licensed medical-surgical beds are empty, with the facility experiencing an average daily census of only 110 patients in its 334 licensed beds. Findings Regarding Section 381.705(1)(a), F.S. Section 381.705(1)(a), Florida Statutes, requires HRS to review applications for CONs in relation to the applicable district plan and state health plan. The State Health Plan in effect at the time HMC's application was filed (and as of the date of final hearing) was published in 1985 and established goals for 1987. Because the planning horizon applicable to HMC's application is 1993, the goals of the applicable State Health Plan are not particularly relevant to HMC's application. HMC's application is consistent with several of the goals contained in the Local Health Plan. Specifically, the Local Health Plan identifies the elderly as an under-served group and encourages the conversion of under-utilized medical-surgical beds to other needed services. HMC's application is consistent with these goals because it proposes the conversion of under- utilized medical- surgical beds to a geri-psychiatric unit. In this regard, according to HRS' acute care bed need methodology, in 1993 District 10 will have over 1,200 excess medical-surgical beds. HMC's application is not consistent with that portion of the Local Health Plan which states that planning should be on a district-wide basis. Findings Regarding Sections 381.705(1)(b) and (2)(d), F.S. Existing Providers Section 381.705(1)(b), Florida Statutes, requires HMC's application to be reviewed against the availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization, and adequacy of like and existing health care services in the service district of the applicant. In this regard, there are eight existing providers of short term psychiatric services in Broward County. Four of these providers are free-standing psychiatric hospitals. They are: Coral Ridge Psychiatric Hospital ("Coral Ridge"), CPC Fort Lauderdale Hospital, The Retreat, and Hollywood Pavilion Psychiatric Hospital ("Hollywood Pavilion"). Coral Ridge and CPC Fort Lauderdale Hospital are located north of State Road 84 in northern Broward County. The Retreat is located in western Broward County, south of State Road 84 Hollywood Pavilion is located in southern Broward County, across the street from the applicant, HMC. The existing acute care hospitals in Broward County that have psychiatric units are: Broward General Medical Center ("Broward General") , Florida Medical Center, Imperial Point Hospital, and Memorial Hospital. Broward General, Florida Medical Center, and Imperial Point Hospital are all located north of State Road 84. Memorial Hospital is located in southern Broward County, about a half mile from HMC. The existing providers of short term psychiatric services in Broward County have a total of 507 existing short term psychiatric beds, distributed as follows: South Broward Memorial Hospital 74 Hollywood Pavilion 46 The Retreat 80 (of which 24 are geriatric) North Broward Coral Ridge 74 Fla. Medical Center 74 (of which 10 are geriatric) CPC Ft. Lauderdale 64 Broward General 48 Imperial Point 47 (of which 8 are geriatric) The utilization or occupancy rates (expressed in percentages) for the seven Broward County providers of short term psychiatric services which were in operation during 1987 and 1988 were as follows: Facility Cal. Yr. 7/87 thru Cal. Yr. 1987 6/88 1988 Private Facilities Fla. Medical Center 57.3 63.0 67.3 CPC Ft. Lauderdale 42.2 43.5 52.0 Coral Ridge 19.9 20.8 [unk.] Hollywood Pavilion 34.0 61.7 59.2 Average pvt. utilization 38.4 47.3 [unk.] Public Facilities Broward General 94.0 88.9 86.3 Imperial Point 91.0 92.7 92.4 Memorial 91.8 91.7 94.8 Average pub. utilization 92.3 91.1 91.2 Average of all 7 21. On May 9, 1986, the 62.3 Florida 66.0 Psychiatric [unk.] Center, d/b/a The Retreat, was issued a certificate of need to construct a 100-bed facility in Broward County consisting of 80 short term psychiatric beds and 20 short term substance abuse beds. The 80 psychiatric beds were divided into 40 geriatric beds, 15 adolescent beds, and 25 adult beds. The Retreat began operation in late September of 1988. By mid-March of 1989, the Retreat was requesting that HRS grant it a modification of its certificate of need to reduce the number of geriatric beds from 40 to 24 and to redesignate the remaining 16 beds for short term psychiatric services for children under the age of 12. The Retreat's request to reduce the number of geriatric beds appears to have been motivated in large part by the fact that the occupancy rate for those beds from October 1988 through March 1989 never exceeded one percent, even though the Retreat's pro forma had projected 70 percent occupancy after six months of operation. During the same six-month period in which the Retreat achieved only one percent occupancy in its geriatric psychiatric unit, it achieved occupancy rates of 77 percent in its adolescent unit and 86 percent in its adult unit. The Retreat is a private facility. For some elderly psychiatric patients it is advantageous to provide in-patient psychiatric care in an acute care facility rather than in a free- standing facility. This is because many geriatric patients have a variety of, or multiple levels of, health care needs. An acute care facility that offers psychiatric services can take higher acute types of psychiatric patients because it has the resources, support, and back-up should a patient become medically unstable. In this regard, geriatric psychiatric patients often do not have a pure psychiatric illness. Rather, their psychiatric condition is often accompanied by a medical condition requiring medical coverage. These considerations are addressed in HRS' need determination rule. North/South Division HRS recognizes that there tends to be a north/south division in Broward County with respect to the delivery of acute care health services. In this regard, HRS acknowledges that individuals in South Broward County who are in need of acute care services will generally not travel to acute care hospitals located in north Broward County and vice versa. Broward County has been divided into two political taxing subdivisions, the North Broward Hospital District and the South Broward Hospital District, for purposes of providing tax revenues for the provision of health care services to the indigent. Memorial is the only district hospital located in the South Broward Hospital District. Memorial has a rule requiring physicians on staff at Memorial to both reside within the boundaries of the South Broward Hospital District and to have their offices located within said district. As a general rule, psychiatric patients residing south of State Road 84 tend to stay in southern Broward County for purposes of obtaining psychiatric services and psychiatric patients residing north of that line tend to stay in northern Broward County for purposes of obtaining psychiatric services. This appears to be due in large part to the fact that psychiatrists tend to obtain staff privileges and practice only at hospitals in southern Broward County or northern Broward County, but not both. If a physician is not on the staff of a facility, he or she cannot admit a patient to that facility. Therefore, the numerous psychiatrists who reside in southern Broward County and who are only on the staff of facilities located in southern Broward County generally cannot admit their patients to facilities located in northern Broward County. Unavailability of beds at Memorial and Hollywood Pavilion South of State Road 84 there are three available alternatives for inpatient psychiatric care for the elderly residents of southern Broward County; The Retreat, Hollywood Pavilion, and the 74-bed short term psychiatric unit at Memorial Hospital. Hollywood Pavilion and Memorial Hospital accept geriatric psychiatric patients, but neither has a designated geri-psychiatric unit. The Retreat started operations with a 40- bed geri-psychiatric unit, which has since been reduced to a 24- bed unit. The 74 psychiatric beds at Memorial are, for all practical purposes, operating at full capacity. Memorial has maintained waiting lists for its psychiatric unit for the last seven or eight years and the number of people on the waiting lists has been increasing. The 46 psychiatric beds at Hollywood Pavilion, which is located across the street from Memorial, have recently been operating at about sixty percent of capacity. It is often clinically desirable to treat geriatric psychiatric patients on a different unit from younger psychiatric patients. This consideration is reflected in the fact that The Retreat was originally approved for three distinct units, adolescent, adult, and geriatric, and has more recently been permitted to redesignate a unit of beds for short term psychiatric services for children under the age of 12. The 24- bed geriatric psychiatric unit at The Retreat has recently been operating at about two percent of capacity. Findings Regarding Section 381.705(1)(d), F.S. Section 381.705(1)(d), Florida Statutes, requires consideration of the availability and adequacy of other health care services such as outpatient care and ambulatory or home care services which may serve as alternatives for the services proposed by the applicant. On this issue, there was no real dispute that outpatient care and ambulatory or home care services were not viable alternatives for persons in need of short term inpatient psychiatric services. Findings regarding Section 381.705(1)(i), F.S. As noted above, HRS stipulated that if HMC's project was approved and met the occupancy projections contained in its application it would be financially feasible. The financial break-even point for the 30 psychiatric beds proposed by HMC is an average daily census of only 9 patients, which would constitute 30 percent occupancy. The psychiatric unit at HMC would be managed by a professional psychiatric management company, Psychiatric Management Services. Psychiatric Management Services is a company that specializes in the management of psychiatric units in acute care hospitals. It has already developed psychiatric programs for geriatric patients that would be utilized at HMC. In addition, Psychiatric Management Services has a large variety of programs, services and specialists available to assist HMC in establishing the proposed unit. Through Psychiatric Management Services, the proposed unit will have access to a wide variety of services, including but not limited to, marketing, community liaison development, sophisticated policies and procedures manuals, accreditation services, licensure, staffing and community education seminars. Approval of HMC's application would also give HMC an opportunity to attempt to broaden its base of business and thereby possibly increase the overall profitability of the hospital. This would, if successful, help relieve the cost pressures from the acute care side of the hospital and potentially lower future increases in acute care patient charges. Moreover, by expanding the services offered at HMC, approval of HMC's applications would allow HMC to compete more effectively for health maintenance organizations (HMOs) and preferred provider organizations (PPOs) agreements. Currently, HMC is precluded from competing for some HMOs and PPOs such as SIGNA and Health Options because HMC does not offer a full array of services. Approval of HMC's application would also have the effect of adding 30 more beds to the existing pool of under- utilized short term psychiatric beds in Broward County. Findings regarding Section 381.705(1)(n), F.S. In its application, HMC projects a higher Medicaid utilization rate in its psychiatric unit than for its hospital overall because Medicaid services can only be provided to psychiatric patients in an acute care hospital setting and the psychiatric beds at Memorial, the only acute care facility in South Broward County presently authorized to provide psychiatric services, are full. In this regard, HMC has a Medicaid contract with the State of Florida. It is reasonable to anticipate that HMC would encourage Medicaid business at its facility and achieve the Medicaid projection contained in its application because HMC receives more from the State of Florida under its Medicaid contract than it would from an HMO or PPO. It is HMC's policy to treat all patients, regardless of their ability to pay. If HMC's application is approved, this policy would apply to psychiatric patients admitted to the hospital. During the first six months of 1988, 2.2 percent of HMC's patient days were provided to indigents. HMC currently averages 60 to 70 percent Medicare utilization. For its proposed geri-psychiatric unit, HMC projects 70 percent Medicare utilization. Given that the proposed unit would be geared toward the elderly, it is reasonable to project that 70 percent of HMC's geri-psychiatric utilization would be Medicare patients, regardless of what the total utilization rate might be. Findings regarding Section 381.705(2)(a), F.S. The design of HMC's proposed geri-psychiatric unit conforms to the requirements contained in Chapter 10D-28, Florida Administrative Code. As noted above, HRS stipulated that the costs and proposed methods of construction are reasonable. The psychiatric unit at HMC would occupy existing space on the sixth floor of the hospital. The renovations can be made quickly and at substantially less expense than the cost of new construction. Nevertheless, a less costly, more efficient, and more appropriate alternative would be to make greater use of existing under- utilized short term psychiatric beds in Broward County, particularly the beds in the privately owned facilities, which are Florida Medical Center, CPC Ft. Lauderdale, Coral Ridge, Hollywood Pavilion, and the Retreat. Findings regarding Section 381.705(2)(b), F.S. To the extent the three publicly owned providers of short term psychiatric services are being operated at or near their optimal capacity, they are being used in an appropriate and efficient manner. To the extent some of such facilities, like Memorial Hospital, appear to be operating above their optimal capacity, some inefficiencies necessarily result. Similarly, inefficiencies necessarily result from the substantial under- utilization of beds in privately owned short term psychiatric units. Approval of a new psychiatric unit at an existing acute care hospital in southern Broward County might help alleviate the waiting list and over crowding at Memorial, but it would do so at the expense of adding to the inefficiencies that result from current under-utilization of other existing facilities. Further, in light of recent utilization trends in Broward County, if short term psychiatric beds were to be added in Broward County, it would appear to be more appropriate to add them at publicly owned facilities. Findings regarding Rule 1O-5.O11(1)(o)3 and 4, F.A.C. Rule 10-5.011(1)(o), Florida Administrative Code, provides that a CON application for short term psychiatric beds will "not normally" be approved unless need is indicated in accordance with the mathematical need formula contained in the short term psychiatric rule. That rule allocates .35 beds per 1,000 population based on a five-year planning horizon. Since the application was submitted in 1988, the five-year planning horizon requires that HMC's application be reviewed against the need projected for 1993. The parties agreed that the numerical bed need methodology projects a gross bed need for 458 short term psychiatric beds in Broward County in 1993. However, the parties disagreed on the inventory of beds that should be subtracted from this figure. The inventory of 507 existing and approved short term psychiatric beds relied upon by HRS includes the 74 beds at Coral Ridge Hospital. The beds at Coral Ridge are licensed as short term psychiatric beds. The average length of stay of psychiatric patients at Coral Ridge has usually been in excess of 30 days, but substantially less than 90 days. The average length of stay at Coral Ridge does not appear to result from treatment of adolescent patients. Subpart 4a of Rule 10-5.011(1)(o) provides that a minimum of .15 beds per 1,000 population shall be in hospitals holding a general license and Subpart 4b provides that .20 beds per thousand may be in specialty hospitals. The .15 standard is currently met in Broward County. The short term psychiatric rule requires applicants to be able to project occupancy rates of 70 percent for adults in the second year of operation and 80 percent for adults by the third year of operation. In light of the utilization rates of existing privately owned providers of short term psychiatric services, and especially in light of the most recent utilization rates in the geriatric psychiatric unit at The Retreat, it is unlikely that HMC would achieve these occupancy rates. The short term psychiatric bed need rule also considers the occupancy of existing psychiatric beds. In this regard, HRS agreed that a 70 percent occupancy figure was the appropriate figure to be applied in this case. As noted in paragraph 20 of these findings of fact, during the twelve-month period prior to submission of HMC's application, the average occupancy of short term psychiatric beds in Broward County was only 66 percent. Subpart 4g of Rule 10-5.011(1)(o) provides that short term inpatient psychiatric hospital based services should have at least 15 designated beds. By proposing to convert 30 beds, HMC's application meets this criterion of the Rule. Findings regarding Rule 1O-5.O11(1)(o), F.A.C. Regarding Subpart 5e of Rule 10-5.011(1)(o), Florida Administrative Code, an important component of the proposed psychiatric unit would be the community education and outreach services described in HMC's application. These services, which would be provided at no cost to local residents, are representative of HMC's commitment to developing a cooperative relationship with existing providers. As an existing hospital, HMC has already established linkages with numerous health care providers. If its application were to be approved, HMC would expand its existing network to include community mental health centers and other local providers of mental health services.
Recommendation For all of the foregoing reasons, it is RECOMMENDED: That the application by NME Hospitals, Inc., d/b/a Hollywood Medical Center, to convert 30 medical-surgical beds to 30 short term psychiatric beds be DENIED. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 22nd day of November 1989. MICHAEL M. 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 Divisions of Administrative Hearings this 22nd day of November 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-1369 The following are my specific rulings on all findings of fact proposed by both parties. Findings proposed by Petitioner: Paragraphs 1 and 2: Accepted. Paragraph 3: Rejected as not supported by persuasive competent substantial evidence and as, in any event, unnecessary. Paragraphs 4, 5, 6, 7, 8, 9 and 10: Accepted. Paragraphs 11 and 12: Accepted in substance. Paragraphs 13, 14, and 15: Accepted. Paragraph 16: Rejected as unnecessary and as not fully consistent with the greater weight of the evidence. Paragraphs 17 and 18: Accepted. Paragraph 19: First sentence accepted. Last sentence rejected as constituting argument rather than findings of fact. Paragraph 20: Rejected as constituting a proposed conclusion of law rather than a proposed finding of fact. Paragraphs 21, 22, and 23: Accepted in substance. Paragraph 24: Rejected as not supported by persuasive competent substantial evidence. Although there is expert witness testimony in the record to the effect proposed in paragraph 24, I do not find that testimony to be persuasive. Specifically, I am not persuaded that the relationship between a patient and the patient's regular medical doctor is more severely impacted in a freestanding psychiatric facility than in a psychiatric facility located in an acute care facility. There are advantages and disadvantages to both types of psychiatric facilities. Paragraph 25: Rejected as repetitious. Paragraph 26: Rejected as subordinate and unnecessary details. Also, see comments above regarding paragraph 24. Paragraph 27: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 28: Accepted. Paragraph 29: Rejected as constituting subordinate and unnecessary details. Paragraph 30: Accepted. Paragraph 31: First sentence rejected as constituting a broader statement than is supported by the competent substantial evidence. The remainder of this paragraph is accepted in substance. Paragraphs 32 and 33: Rejected as constituting subordinate and unnecessary details. Paragraph 34: Accepted. Paragraph 35: Rejected as irrelevant and as based on unpersuasive evidence. Although there is testimony to the effect that the considerations recited are significant considerations, it appears from the totality of the evidence that considerations of treating physician convenience (or efficiency) and where the treating physician has admitting privileges, are the primary determinants of patient placement. Paragraph 36: Rejected because this is a conclusion that does not necessarily follow from the evidence. [See Transcript, page 263, lines 5 to 10.] Paragraph 37: Rejected as not supported by persuasive competent substantial evidence. Although the record does contain opinion testimony to the general effect proposed here, the scope of that opinion testimony is more narrow than the fact proposed in paragraph 37. The testimony would support a finding that the Retreat is inconveniently located for some South Broward psychiatrists. Paragraph 38: First sentence rejected as not supported by persuasive competent substantial evidence. Second sentence rejected as contrary to the greater weight of the evidence. Paragraph 39: Accepted in substance. Paragraph 40: All but last sentence accepted in substance. Last sentence rejected as subordinate and unnecessary details. Paragraph 41: Rejected as quotation of testimony rather than proposed finding of fact. Also rejected as subordinate and unnecessary details. Paragraphs 42, 43 and 44: Rejected as subordinate and unnecessary details. Paragraph 45: First two sentences accepted. The remainder of this paragraph is rejected as not supported by competent substantial evidence. Although statements in the transcript, in depositions, and in affidavits contain opinions that Hollywood Pavilion offers quality of care that is "unacceptable" or "substandard," none of those opinions includes any factual basis for the opinion. (Ironically, the record contains more information about shortcomings in the psychiatric unit at Memorial Hospital; the unit with the highest occupancy rate and, therefore, presumably the most popular.) Paragraph 46: Rejected as not supported by persuasive competent substantial evidence. See comments above regarding paragraph 45. Paragraphs 47, 48, 49, 50, 51 and 52: Rejected as subordinate and unnecessary details. Paragraphs 53 and 54: Accepted. Paragraph 55: Rejected as irrelevant and unnecessary details, not all of which are fully supported by the evidence. For example, while the last sentence of paragraph 55 is sometimes true, it is not always true because if it were always true there would be precious little need for free standing psychiatric facilities. Paragraphs 56 and 57: Accepted. Paragraph 58: Accepted in substance with many subordinate and unnecessary details omitted. Paragraph 59: All but last sentence accepted. Last sentence rejected as contrary to the greater weight of the evidence. Paragraph 60: First sentence rejected as subordinate and unnecessary. Remainder of paragraph rejected as contrary to the greater weight of the evidence. Paragraph 61: Rejected as irrelevant and as not supported by persuasive competent substantial evidence. The testimony on this subject was too vague and generalized to form a basis for meaningful fact finding relevant to any issue in this case. Paragraphs 62 and 63: Accepted in substance. Paragraph 64: Rejected as contrary to the greater weight of the evidence. Paragraphs 65, 66, 67 and 68: Accepted. Paragraph 69: Accepted in substance. Paragraph 70: First two sentences accepted in substance. Last two sentences rejected as irrelevant as well as subordinate and unnecessary details. Paragraph 71: Rejected as contrary to the greater weight of the evidence. Paragraph 72: First sentence rejected as over broad and, therefore, not supported by competent substantial evidence. Also rejected as containing a conclusion not warranted by the evidence. Paragraph 73: Accepted. Paragraph 74: All but last sentence accepted. Last sentence rejected as constituting incomplete summary of rule definition. Paragraph 75: Accepted in substance. Paragraph 76: Rejected as constituting argument or conclusions of law rather than proposed findings of fact. Paragraph 77: Rejected as contrary to the greater weight of the evidence. Paragraph 78: Rejected as irrelevant in view of conclusion that the beds at Coral Ridge should be included in the inventory. Paragraph 79: Rejected as contrary to the greater weight of the evidence. Second sentence also rejected as constituting argument, rather than proposed findings of fact. Paragraph 80: Rejected as irrelevant, except for proposed findings regarding occupancy at The Retreat. Paragraph 81: Accepted. Paragraph 82: First sentence accepted. Last sentence rejected as contrary to the greater weight of the evidence. Paragraph 83: First two sentences accepted. Last sentence rejected as irrelevant because there is no demonstrated reason to exclude Coral Ridge. Paragraph 84: Accepted in substance. Paragraph 85: Rejected as not supported by competent substantial evidence. Paragraph 86: Rejected as contrary to the greater weight of the evidence. Paragraph 87: Accepted. Paragraph 88: Rejected as repetitious. Further, last sentence is not fully consistent with the greater weight of the evidence. Paragraphs 89 and 90: Accepted. Paragraph 91: Rejected as constituting a conclusion of law rather than a proposed finding of fact. Paragraphs 92 and 93: Rejected as constituting argument about the sufficiency of the evidence, rather than proposed findings of fact. Findings proposed by Respondent: Paragraphs 1, 2 and 3: Rejected as constituting subordinate procedural details which have been addressed in the Preliminary Statement. Paragraph 4: First two sentences accepted. The remainder is rejected as subordinate and unnecessary details. Paragraph 5: Rejected as constituting subordinate and unnecessary details or constituting argument and proposed conclusions of law. Paragraph 6: Rejected as constituting primarily argument and proposed ultimate conclusions rather than proposed findings of fact. Paragraph 7: First two lines of first sentence accepted. Remainder of first sentence rejected as argument. Second sentence rejected as irrelevant in view of HRS agreement that 70 percent occupancy was the appropriate standard. Third sentence accepted. Fourth sentence rejected as irrelevant. Fifth and sixth sentences rejected as argument. Paragraph 8: First and last sentences rejected as argument. Remainder rejected as subordinate and unnecessary details. Paragraph 9: First two sentences rejected as argument. Third and fourth sentences rejected as subordinate and unnecessary. Fifth and sixth sentences rejected as argument and comment on the testimony. Seventh, eight, and ninth sentences rejected as subordinate and unnecessary. Tenth sentence accepted in substance. Eleventh and twelfth sentences rejected as commentary on the evidence. Last sentence rejected as argument or ultimate conclusion. Paragraphs 10 and 11: Rejected as constituting primarily argument rather than proposed findings of fact. Paragraph 12: Rejected as constituting conclusion of law rather than proposed findings of fact. Paragraph 13 and the unnumbered paragraph following paragraph 13: Rejected as constituting discussion of the issues rather than proposed findings of fact. Paragraph 14: First two sentences rejected as discussion of issues, rather than proposed findings of fact. The remainder of this paragraph is accepted in substance, but with many unnecessary details omitted. Paragraph 15 and the unnumbered paragraph following paragraph 15: Rejected as constituting discussion of the issues, rather than proposed findings of fact. Paragraph 16 and 17: Accepted in substance with many unnecessary details omitted. Paragraph 18: First two sentences accepted in substance. The remainder of this paragraph is rejected as constituting discussion of issues or conclusions of law. Paragraph 19: Accepted in substance with many unnecessary details omitted. Paragraph 20: Rejected as constituting an amalgamation of conclusions of law, discussions of the issues, and argument. COPIES FURNISHED: C. Gary Williams, Esquire Stephen C. Emmanuel, Esquire Ausley, McMullen, McGehee, Carothers & Proctor 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 Deanna Eftoda Department of Health and Rehabilitative Services 2727 Mahan Drive Suite 103 Fort Knox Executive Center Tallahassee, Florida 32308 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue Whether Petitioner's September 29, 1993, claim (Claim No. 34092993) for reimbursement of expenses for medical services rendered in 1992 should be denied on the ground that said claim was not timely filed with Department of Management Services, Division of State Employees' Insurance (hereinafter referred to as the "Department")?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is now, and has been at all times material to the instant case, a participant in the State of Florida Flexible Benefits Plan (hereinafter referred to as the "Plan") with an established Medical Reimbursement Account. The following were among the medical expenses incurred by Petitioner and members of her immediate family during the 1992 calendar year: DATE TYPE OF SERVICE AMOUNT 6/29/92 Dental $70.00 7/9/92 Dental $310.00 7/11/92 Endodontic $450.00 7/17/92 Optical $266.75 7/22/92 Dental $500.00 7/27/92 Optical $84.70 8/19/92 Optical $416.50 12/29/92 Dental $210.00 In August of 1992, Hurricane Andrew ravaged parts of South Florida. Petitioner's residence was extensively damaged by the storm. Most of the contents of the residence, including medical records and receipts, were destroyed. Petitioner and her family were forced to vacate the premises. They packed their remaining belongings and moved to another location in Dade County, with the intention of returning to their home once the damage to the structure had been repaired. As of the date of the hearing in this case, all of the necessary repairs to the home had yet to be made and therefore the family had not moved back in. Petitioner and the other members of her family were among those residents of South Florida whose lives were significantly disrupted by the hurricane and the destruction and devastation it caused In the aftermath of the hurricane, Petitioner directed her energies toward obtaining a return to normalcy in her life. Although she realized that there were medical expense reimbursement claims that she needed to file with the Department, filing these claims was not a priority of hers. She focused her attention on other matters that she considered to be more deserving of her time given her situation. In January or February of 1993, Petitioner telephoned the Department to inquire if extensions of time for filing reimbursement claims were being given to Plan participants, such as herself, who were still suffering from the consequences of Hurricane Andrew. The person to whom Petitioner spoke advised her that such extensions were indeed being given. Based upon what she had been told by this Department representative, Petitioner reasonably believed that she would be able to file reimbursement claims for 1992 medical expenses after March 1, 1993, without having these claims rejected on the ground that they had been untimely filed. She therefore felt that there was no urgency with respect to the filing of these claims and she acted accordingly. Shortly after gathering all of the supporting documentation she believed she needed, 1 Petitioner, on September 29, 1993, filed a claim with the Department requesting that she be reimbursed from her Medical Reimbursement Account for the medical expenses enumerated in Finding of Fact 2 of this Recommended Order. The Department designated the claim as Claim No. 34092993. Petitioner also sought reimbursement, through the filing of this claim, of certain medical expenses incurred in 1993, including $140.00 for dental work that Petitioner had inadvertently indicated on the claim form had been performed in July of 1992. The work had actually been done in July of 1993. By letter dated October 8, 1993, the Department advised Petitioner that "[o]nly expenses for services rendered during the January 1, 1993 through December 31, 1993 plan year are eligible for reimbursement" and that "[s]ince [her] 1992 expense does not fall within this plan year, it is not reimbursable." Petitioner responded to this advisement by sending the following letter, dated November 28, 1993, to the Department: This is a petition or application requesting a formal hearing on my Claim #34092993 for Payment/Reimbursement for expenses incurred during my period of coverage for 1992. This Claim was denied. My Name is: Luretha F. Lucky My Address is: 10430 S.W. 162nd Terrace (temporary) Miami, Florida 33157 My permanent address is: 10361 S.W. 139th Street Miami, Florida 33176 I am employed at Florida International University, Miami, Florida 33199. I filed my claim late because my home was severely damaged when hit [b]y Hurricane Andrew, August 24, 1992. In addition, the content[s] in my home w[ere] destroyed, therefore, it took awhile for me to collect documentation for my claim from medical personnel. Also, I had to move and the few items saved were packed away. Lastly, I called the Department of Management Services, Division of State Employees' Insurance to inform them of what had happened to me and asked if . . . they were providing extensions on submitting claims. I was told they were. My mistake was not asking and recording the name of the person with whom I spoke. As you can see from my temporary address, I am still not back in my home! In fact we just settled (with the assistance of the Insurance Commissioner's Office) with our insurance company to complete the work on our home. We had to request an extension on filing our income tax for 1992. This past year has been an awful experience for us, and I do hope you will provide me a hearing on my reimbursement. My Claim # is: 34092993. The decision that my claim was denied was received by regular mail. Thank you very much for considering my request.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Department enter a final order finding Petitioner's September 29, 1993, claim (Claim No. 34092993) for reimbursement of expenses for medical services rendered in 1992 to have been timely filed and therefore subject to consideration on its merits. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 15th day of April, 1994. STUART M. LERNER 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 15th day of April, 1994.
