The Issue Whether Petitioner should be granted the exemption from disqualification from employment that she is seeking.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: In 1975, when she was 36 years of age, Petitioner was dating a married man. When the man's wife found out about her husband's extramarital affair, she began to harass Petitioner and members of Petitioner's family. On March 4, 1975, Petitioner was sitting in her vehicle with her then 17-year old son in the driveway of her home. She was about to leave to take her son to work when her boyfriend's wife drove up and blocked the driveway. Petitioner's son got out of the car and asked the wife to move her vehicle. The wife responded by making what Petitioner perceived to be an "ugly" gesture that was directed to Petitioner's son. Petitioner reacted in anger to the wife's response. She exited her vehicle and physically attacked the wife, bloodying the wife's nose. Police officers arrived on the scene and arrested Petitioner. Petitioner was charged with, and on April 22, 1975, convicted of, aggravated assault as a result of this March 4, 1975, incident. As punishment for committing this crime, she was directed to pay a $50.00 fine and court costs. Petitioner recognizes that her physically aggressive behavior on March 4, 1975, was inappropriate. She is remorseful and repentant. Petitioner has not committed any similar unlawful acts of violence in the more than 22 years since the March 4, 1975, incident. In 1980, Petitioner was arrested and charged with two counts of resisting a law enforcement officer without violence after she had intervened in an altercation involving her son and several police officers, but the charges against her were ultimately dismissed. Petitioner is a certified nursing assistant. She began working as nursing assistant approximately 30 years ago. As a nursing assistant, Petitioner has assisted individuals (in their homes and in institutional settings) needing help in performing their activities of daily living. She has provided such assistance without incident, notwithstanding that she has had to care for some individuals who have been quite difficult, including certain residents of South Florida State Hospital, a state-operated mental health facility, where she worked from 1981 through 1991 (as an employee of two different private nursing agencies with whom the hospital had contracted to provide nursing assistant services) and from January 24, 1997, to July 23, 1997 (as an employee of the hospital).2 There were occasions during the time she worked at South Florida State Hospital that residents would become physically aggressive toward her. On these occasions, Petitioner reacted, not in kind, but rather with restraint and in a professional manner. On July 23, 1997, after a background screening investigation conducted by the Department had revealed that she was not qualified to serve in her position at South Florida State because of her 1975 conviction for aggravated assault, and following the Department's preliminary denial of her request for an exemption from such disqualification, Petitioner was terminated from her position at the hospital. Petitioner has been unemployed since July 23, 1997. Although she has been unable to find work as a nursing assistant, Petitioner still continues to perform nursing assistant services (without compensation) for her elderly aunt, for whom she has cared for the past five years. Based upon Petitioner's history since the March 4, 1975, incident that led to her arrest and conviction for aggravated assault, it appears that she has rehabilitated herself and that she will not present a danger if her exemption request is granted.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order granting the exemption that Petitioner has requested. DONE AND ENTERED this 22nd day of October, 1997, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1997.
The Issue Whether Respondent, Ernesto Sinda Colina, M.D., violated Section 458.33(1)(t) and (v), Florida Statutes, as alleged in the Administrative Complaint and, if so, what disciplinary action should be taken against Respondent's license to practice medicine.
Findings Of Fact Respondent, Ernesto Sinda Colina, M.D. (Respondent), is and has been at all times material hereto, a licensed physician in the State of Florida, having been issued License No. ME-0031020. Respondent's last known address is 4002 West Thonotosassa Road, Plant City, Florida 33565-8593. On or about December 1, 1993, Patient E.C., a 61-year- old male, presented to the Orlando Vascular Clinic (Clinic) for evaluation of impotence. Respondent was the physician at the Clinic who treated Patient E.C. The evaluation included three visits, beginning with laboratory studies, physical examination, and concluding on December 7, 1993, with the injection of Prostaglandin E-1 into the corpora of Patient E.C.'s penis by order of Respondent. The injection of Prostaglandin E-1 produced an immediate erection which did not subside and became painful. On December 9, 1993, Patient E.C. contacted the Clinic complaining of an erection and discomfort and was advised to take Ibuprofen and pack the penis in ice. However, the rigidity persisted. Later on December 9, 1993, Patient E.C. presented to the South Seminole Hospital Emergency Room for further evaluation of a priapism (persistent erection of the penis, accompanied by pain and tenderness, resulting from a pathologic condition rather than sexual desire) of approximately 56 hours' duration. On December 9, 1993, Patient E.C. was seen by Elias Jacobo, M.D., who irrigated Patient E.C.'s corpora with normal saline and Heparin, evacuating old clots under sterile conditions and with antibiotic coverage. On December 10, 1993, Patient E.C. was re-evaluated because the priapism was continuing. On January 17, 1994, Patient E.C. returned to Dr. Jacobo due to recurrence of the priapism with tenderness and evidence of infection. That same day Patient E.C. was admitted to South Seminole Hospital (hospital) in Longwood, Florida. After Patient E.C.'s admission to the hospital, he was taken to the operating room where his corpora was drained, explored, and irrigated with alpha agonist ephedrine. The surgical procedure was performed by Dr. Jacobo. Patient E.C. was seen in consultation by an infectious disease specialist and maintained on antibiotics. The diagnosis was corporitis, which gradually resolved with proper drainage and antibiotic therapy. An injection of Prostaglandin E-1 may be used for the treatment of impotence. However, once the injection is given, the physician should monitor the patient's progress to determine what degree of rigidity is achieved over a given period of time and then make dosage adjustments. Moreover, the patient should be advised of the potential complications of procedures, such as priapism and infection. Finally, the patient should be instructed to return for an evaluation if the rigidity persists longer than four to six hours. Respondent failed to inform Patient E.C. of the risks of iatrogenic priapism, and failed to instruct Patient E.C. to return for immediate evaluation within four to six hours of persistent rigidity. Ibuprofen has no effect on reversing the effects of the Prostaglandin E-1. Recommending Ibuprofen and ice packs is inadequate treatment and is below that level of care, skill, and treatment which is recognized by a reasonably prudent similar physician as being acceptable under similar conditions and circumstances in the treatment of Patient E.C. The management of impotence with pharmacologic erection programs with injectible agents should be performed by or under the supervision of a specialist trained in the treatment of impotence, such as urology. Respondent had no such specialized training and the treatment of Patient E.C. without training was below the standard of care. Patient E.C. suffered permanent damage as a result of Respondent's treatment, which fell below the standard of care.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent's license to practice medicine in the State of Florida be revoked. DONE AND ENTERED this 27th day of April, 2000, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 27th day of April, 2000. COPIES FURNISHED: Kristy M. Johnson, Esquire Department of Health Post Office Box 14229 Tallahassee, Florida 32317-4229 Ernesto Sinda Colina, M.D. 4002 West Thonotosassa Road Plant City, Florida 33565-8593 Tanya Williams, Executive Director Board of Medicine Department of Health 1940 North Monroe Street Tallahassee, Florida 32399-0750 Angela T. Hall, Agency Clerk Department of Health 2020 Capital Circle, Southeast BIN A02 Tallahassee, Florida 32399-1701 William Large, General Counsel Department of Health 2020 Capital Circle, Southeast BIN A02 Tallahassee, Florida 32399-1701
The Issue What administrative sanction should be imposed on the participation of Robert J. Meek, D.O., (Respondent), in the Florida Medicaid program.
Findings Of Fact Petitioner is the agency of the State of Florida charged with the responsibility of administering the Florida Medicaid program. At all times relevant to this proceeding, Respondent has been a provider with the Florida Medicaid program and has had a Medicaid provider number that was issued pursuant to a Medicaid Provider Agreement with Petitioner. "Medicaid" is the medical assistance program authorized by Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq., and regulations thereunder. Respondent holds a doctor of osteopathic medicine degree and was licensed to practice medicine in Florida, Virginia, and Ohio. Because of his criminal conviction, which will be discussed below, his license to practice medicine in Ohio has been revoked and the licenses issued by Virginia and Florida have been suspended. At the time of the formal hearing, Respondent was incarcerated in a federal prison and his license to practice medicine in Florida was suspended. Respondent’s testimony at the formal hearing was taken by telephone. Respondent first became licensed in Florida in 2005. After completing a residency in proctologic surgery, Respondent worked at Colorectal and GI Specialists of South Florida from July 2006 until February 2007. Respondent then worked at The Hemorrhoid Relief Center from April 2007 through June 2009. Respondent practiced proctology five days a week during those periods. In addition to his regular jobs, from the fall of 2007 through the summer of 2009, Respondent worked some weekends at Physicians Immediate Care. Prior to May 2009, Respondent had no background, experience, or training in pain management. Between the middle of May 2009 until the end of February 2010, Respondent worked between one and three days a week at Executive Pain Clinic in Palm Beach County, purportedly in the practice area of pain management. Respondent’s employment at Executive Pain Clinic led to the federal grand jury indictment, dated August 12, 2011, against Respondent and 30 other defendants for multiple charges. Succinctly stated, Executive Pain Clinic was a pill mill. Among the charges brought against Respondent were a count for conspiracy to unlawfully distribute and dispense and possess with intent to distribute a controlled substance in violation of the Controlled Substance Act and a count for conspiracy to commit money laundering. The federal grand jury indictment was related to Respondent’s practice of medicine at Executive Pain Clinic.2/ Of the 31 persons named in the indictment, 13 were licensed to practice medicine in Florida. Of those 13 doctors, 11, including Respondent, entered into a plea agreement to resolve the charges. By his plea agreement, Respondent pled guilty to conspiracy to commit money laundering in exchange for the United States agreeing to dismiss the other charges against him. As part of the plea agreement, Respondent agreed to testify on behalf of the United States in its prosecution of the two medical doctors who were charged by the indictment, but who refused to enter into a plea agreement to resolve the charges. As of the formal hearing, Respondent had so testified, thereby satisfying his obligation under the plea agreement. In addition to the plea agreement, Respondent entered into a "Stipulated Statement of Facts," (Petitioner's Exhibit 4) which contained the following, which are hereby adopted by the undersigned as findings of fact: Had this case proceeded to trial, the government would have presented evidence by way of witness testimony, Court authorized wire interceptions of coconspirators and documentary evidence. The evidence would establish that the defendant was a physician licensed to practice medicine in Florida and maintained a Drug Enforcement Administration registration number which enabled him to order and purchase Schedule II-V controlled substances. The evidence would establish that from in or about 2009 through in or about April 2010, the defendant conspired and agreed with coconspirators to receive monetary compensation from Executive Pain clinic [sic] and to deposit such monetary compensation into a financial institution. The monetary compensation was the proceeds of specific unlawful activity, that is, the illegal distribution of oxycodone pills, a Schedule II controlled substance. The defendant and conspirators [sic] participated in the operation of illegal "pill mills" wherein individuals seeking controlled substances paid for examinations by the defendant and coconspirator physicians based upon alleged complaints of pain. The defendant and coconspirator physicians illegally prescribed large quantities of oxycodone, 30 mg. pills and other controlled substances without a legitimate medical purpose and outside the usual course of professional practice. The defendant and coconspirator physicians prescribed controlled substances without reviewing prior medical records, referring individuals to medical specialists, or recommending alternative treatment modalities. The defendant and coconspirator physicians prescribed a predetermined "cocktail" of controlled substances which contained oxycodone 30 mg. and 15 mg. xanax and/or soma. No individualized or particularization of treatment of care was used, other than to vary the quantity of drugs prescribed in the "cocktail." The evidence established that the pain management clinics wherein the defendant and coconspirator physicians were employed were, in fact, facilities used for the illegal distribution of controlled substances. The defendant and coconspirators engaged in the above-described criminal conduct for a profit motive. The monetary compensation received by the defendant had a value of more than $10,000. During Respondent’s tenure at Executive Pain Clinic, approximately 628,200 dosage units of oxycodone were ordered under his name. Respondent was assigned a large safe at Executive Pain Clinic, in which the dosage units were deposited. Many of the prescriptions written at Executive Pain Clinic were filled on-site. Patients paid cash for the prescriptions filled at Executive Pain Clinic. Respondent was not paid by Medicaid for his work at Executive Pain Clinic. Executive Pain Clinic was not a Medicaid provider. Respondent saw an average of 40 patients per day at Executive Pain Clinic, spending as few as five minutes with some before prescribing pain medication. A very high percentage of those patients left with a prescription for a controlled substance. Respondent prescribed large quantities of oxycodone or other controlled substances in complete disregard to whether the patient was or was not a Medicaid recipient and without knowing whether Medicaid would pay for the prescription. Respondent was not qualified to practice pain management when he practiced at Executive Pain Clinic, and he practiced beyond the scope of his expertise. Respondent testified that in the month of August 2009, he began to question the legality of what he was doing at Executive Pain Clinic. Nevertheless, he did not leave that employment until the end of the following February. As a result of his plea, Respondent was sentenced to be incarcerated for a period of 66 months. As reflected by the plea agreement, that sentence may be adjusted following Respondent’s cooperation in testifying against two of his codefendants. On April 20, 2012, the Florida Department of Health (DOH) filed an Administrative Complaint before the Board of Osteopathic Medicine against Respondent alleging certain facts pertaining to his plea in the federal proceeding. DOH designated that Administrative Complaint as Case No. 2011-15165. The Administrative Complaint alleged that Respondent pled guilty to a crime that "relates to the practice of, or the ability to practice, osteopathic medicine." Respondent did not challenge the factual allegations of the Administrative Complaint. On March 5, 2013, the Board of Osteopathic Medicine entered a Final Order in Case No. 2011-15165. The Final Order found Respondent guilty of the alleged violations, reprimanded his license, administered a fine in the amount of $5,000, restricted his practice, and suspended his license for a period of six years. The Final Order found as a mitigating factor that Respondent had provided free medical services to the underserved community. The restriction on his practice, as set forth in the Final Order under the heading "Permanent Practice Restriction," is as follows: Respondent shall not own, operate, or work in a Pain Management Clinic as defined by Section 459.0137, Florida Statutes. Further, Respondent is permanently restricted from prescribing or dispensing any schedule II controlled substance as defined by Chapter 893, Florida Statutes. The suspension of his license, as set forth in the Final Order under the heading "Suspension," is as follows: Respondent’s license to practice osteopathic medicine in the State of Florida is hereby suspended for a period of six (6) years and until such time as he appears before the Board and can demonstrate that he is clinically safe to practice osteopathic medicine by: 1) submitting evaluations by either the University of Florida CARES program; the Center for Personalized Education for Physicians (CPEP) clinical assessment, or by other Board-approved equivalent, and comply with the prerequisite recommendations of the evaluation. The Board reserves jurisdiction to set terms and conditions, including probation, at the time of reinstatement; or 2) be accepted into and practice only in a residency program and appear before the Board after successful completion of the residency program. The Board reserves jurisdiction to set terms and conditions, including probation, at the time Respondent appears before the Board. Respondent worked part-time at East West Physicians in Broward County from June 2009 to October 2010. Although Respondent prescribed pain medication while employed at East West Physicians, there was no evidence that East West Physicians was a pill mill. Respondent worked at Palm Beach Wellness and Rejuvenation after federal authorities closed Executive Pain Clinic. Respondent testified, credibly, that he worked at Palm Beach Wellness and Rejuvenation for 22 days over a period of five and one-half months. Palm Beach Wellness and Rejuvenation was a pill mill. On September 20, 2011, prior to the Administrative Complaint involving the federal proceeding, DOH filed an Administrative Complaint before the Board of Osteopathic Medicine against Respondent alleging certain facts pertaining to his practice at Palm Beach Wellness and Rejuvenation. DOH designated that Administrative Complaint as Case No. 2011-02478. Respondent did not challenge the factual allegations of the Administrative Complaint. On March 14, 2012, the Board of Osteopathic Medicine entered a Final Order that contained the following under the heading "FINDINGS OF FACT": The allegations of fact set forth in the Administrative Complaint are approved, adopted, and incorporated herein by reference as the findings of fact of the Board. There is competent, substantial evidence to support the Board’s findings and conclusions. The Final Order imposed against Respondent an administrative fine in the amount of $10,000.00; ordered him not to own, operate, or work in a pain management clinic; and suspended his license to practice for a period of one year. The Administrative Complaint in Case No. 2011-024783/ included the following factual allegations in paragraphs 5-76, which were incorporated in DOH's Final Order as findings of fact: At all times material to this Complaint, the Respondent was a dispensing practitioner. At all times material to this Complaint, the Respondent was practicing at Total Medical Express of Boca Raton, which was also known as Palm Beach Pain and Rejuvenation (clinic). The Respondent was practicing pain management while he was at the clinic. The Respondent prescribed controlled substances such as Ambien, Ativan, Flexeril, Lisinopril, oxycodone (also known as Roxicodone), Percocet, Valium and Xanax to his patients. Ambien is the brand name for zolpidem, which is prescribed to treat insomnia. According to Title 21, Section [sic] 1308.14, Code of Federal Regulations, zolpidem is a Schedule IV controlled substance. Zolpidem can cause dependence and is subject to abuse. Ativan is the brand name for lorazepam, which is a benzodiazepine, and is prescribed to treat anxiety. Lorazepam can decrease mental alertness and affect judgment. According to Section [sic] 893.03(4), Florida Statutes, lorazepam is a Schedule IV controlled substance that has a low potential for abuse relative to the substances in Schedule III and has a currently accepted medical use in treatment in the United States. Abuse of lorazepam may lead to limited physical or psychological dependence relative the substances in Schedule III. Flexeril is the brand name for cyclobenzaprine hydrochloride. Flexeril is prescribed as an adjunct to rest and physical therapy for relief of muscle spasms associated with acute, painful musculoskeletal conditions. Flexeril is not a scheduled drug. Lisinopril is the brand name for a drug of the same name. Lisinopril is prescribed to treat hypertension. Lisinopril is not a scheduled drug. Oxycodone is an opioid commonly prescribed to treat pain. According to Section [sic] 893.03(2), Florida Statutes, oxycodone is a Schedule II controlled substance that has a high potential for abuse and has a currently accepted but severely restricted medical use in treatment in the United States. Abuse of oxycodone may lead to severe psychological or physical dependence. Opiate, or opioid, drugs have similar actions as the drug opium and are typically prescribed to treat pain. Opioid drugs are synthetically manufactured, while opiate drugs are naturally occurring, but the terms opioid and opiate are often used interchangeably. Opioid drugs are addictive and subject to abuse. Percocet is the brand name for a drug that contains oxycodone and is prescribed to treat pain. According to Section [sic] 893.03(2), Florida Statutes, oxycodone is a Schedule II controlled substance that has a high potential for abuse and has a currently accepted but severely restricted use in treatment in the United States. Abuse of oxycodone may lead to severe psychological or physical dependence. Roxicodone is the brand name for an immediate release formulation of oxycodone. Valium is the brand name for diazepam and is prescribed to treat anxiety. According to Section [sic] 893.03(4), Florida Statutes, diazepam is a Schedule IV controlled substance that has a low potential for abuse relative to the substances in Schedule III and has a currently accepted medical use in treatment in the United States. Abuse of diazepam may lead to limited physical or psychological dependence relative to the substances in Schedule III. Xanax is the brand name for alprazolam and is prescribed to treat anxiety. According to Section [sic] 893.03(4), Florida Statutes, alprazolam is a Schedule IV controlled substance that has a low potential for abuse relative to the substances in Schedule III and has a currently accepted medical use treatment in the United States. Abuse of alprazolam may lead to limited physical or psychological dependence relative to the substances in Schedule III. Facts Specific to Patient J.W. J.W. was a resident of Irvine, Kentucky. On or about February 24, 2010, J.W. presented to the clinic for the first time with complaints of lower back pain. On or about March 26, 2010, the Respondent saw J.W. and diagnosed him with lower back pain, lumbar spine stenosis, lumbar disk displacement, and chronic pain secondary to trauma. On or about March 26, 2010, the Respondent prescribed 180 tablets of Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 60 tablets of Xanax 1 mg to the patient. People who travel from out-of-state to Florida for pain management are associated with aberrant drug behavior, such as drug abuse or diversion, and are considered high risk patients. The Respondent did not evaluate the patient for drug abuse or drug diversion despite the fact that the patient was from Kentucky. The Respondent inappropriately prescribed multiple immediate release opioids to treat J.W. The Respondent placed J.W. at risk of a drug overdose by prescribing multiple release opioids in conjunction with a benzodiazepine. Facts Specific to Patient W.T. W.T. was a resident of Louisa, Kentucky. On or about January 25, 2010, W.T. presented to the clinic for the first time with complaints of lower back and left shoulder pain. On or about March 25, 2010, W.T. presented to the Respondent, who diagnosed the patient with lower back pain, lumbar disk displacement, chronic pain, and pain in the left shoulder. On or about March 25, 2010, the Respondent failed to perform an adequate physical examination of the patient, or the Respondent failed to document that he performed an adequate physical examination. On or about March 25, 2010, the Respondent failed to offer the patient pain management techniques other than stretching. On or about March 25, 2010, the Respondent prescribed 180 tablets of Roxicodone 30 mg, 90 tablets of Roxicodone 15 mg, and 60 tablets of Xanax 2 mg to the patient. The Respondent inappropriately prescribed multiple immediate release opioids to W.T. The Respondent put W.T. at risk of a drug overdose by prescribing multiple immediate release opioids in conjunction with a benzodiazepine. People who travel from out-of-state to Florida for pain management treatment are associated with aberrant drug behavior, such as drug abuse or diversion, and are considered high risk patients. The Respondent did not evaluate the patient for drug abuse or drug diversion despite the fact that the patient was from Kentucky. Facts Specific to Patient M.P M.P. was a resident of Hancock, Maine. On or about December 30, 2009, M.P. presented to the clinic for the first time with complaints of lower back pain. On or about December 30, 2009, the patient tested positive for tetrahydrocannabinols (THC). THC is the psychoactive ingredients in marijuana, or cannabis. According to Section [sic] 893.03(1), Florida Statutes, THC is a Schedule I controlled substance that has a high potential for abuse and has no currently accepted medical use in treatment in Florida. Its use under medical supervision does not meet accepted safety standards. THC is a central nervous system depressant. On or about March 26, 2010, M.P. presented to the Respondent, who diagnosed the patient with lumbar disk degeneration, chronic lower back pain, degenerative disk disease of the lumbar spine and lumbosacral root lesions. On or about March 26, 2010, the Respondent failed to perform a physical examination of the patient or the Respondent failed to document that he had performed a physical examination of the patient. On or about March 26, 2010, the Respondent prescribed 60 tablets of Valium 10 mg, 30 tablets of Lisinopril 20 mg, 30 tablets of Flexeril 10 mg, 180 tablets of Roxicodone 30 mg, and 60 tablets of Roxicodone 15 mg to the patient. The Respondent inappropriately prescribed multiple immediate release opioids to the patient. The Respondent put the patient at risk of an overdose by prescribing a benzodiazepine and opioids. The Respondent compounded the patient’s risk of an overdose by prescribing Flexeril in addition of a benzodiazepine and opioids. On or about March 26, 2010, the patient tested positive for THC again. The Respondent did not send the patient’s sample out to a laboratory for confirmation to verify that the patient had been positive for THC. The Respondent failed to address the patient’s use of illegal substances in the medical records. The Respondent put the patient at high risk for a drug overdose by prescribing 60 tablets of Valium 10 mg, 30 tablets of Lisinopril 20 mg, 30 tablets of Flexeril 10 mg, 180 tablets of Roxicodone 30 mg, and 60 tablets of Roxicodone 15 mg to the patient while the patient was taking THC. People who travel from out-of-state to Florida for pain management treatment are associated with aberrant drug behavior, such as drug abuse or diversion, and are considered high risk patients. The Respondent did not evaluate the patient for drug abuse or drug diversion despite the fact that the patient was from Maine. Facts Specific to Patient D.S.1 D.S.1 was a resident of Florida, and lived approximately 130 miles away from the clinic. D.S.1 first presented to the clinic on or about March 2, 2010, with a primary complaint of upper, middle and lower back pain and shoulder pain. On or about April 1, 2010, D.S.1 presented to the Respondent, who diagnosed the patient with cervical, thoracic and lumber disk degeneration, lumbar root lesions, chronic pain and muscle spasms. On or about April 1, 2010, the Respondent prescribed 30 tablets of Flexeril 10 mg, 180 tablets of Roxicodone 30 mg and 60 tablets of Roxicodone 15 mg to the patient. The Respondent inappropriately prescribed the patient two immediate release opioids. Facts Specific to Patient D.S.2 Patient D.S.2 was a resident of Middlesboro, Kentucky. On or about March 11, 2010, D.S.2 presented to the clinic for the first time with complaints of lower back pain. On or about April 8, 2010, D.S.2 presented to the Respondent, who diagnosed the patient with thoracic and lumbar disk displacement, chronic lower back pain, degenerative disk disease and lumbar and thoracic spinal stenosis. On or about April 8, 2010, the Respondent prescribed 30 tablets of Ativan 2 mg, 30 tablets of Ambien 10 mg, 180 tablets of Roxicodone 30 mg, and 90 tablets of Roxicodone 15 mg to the patient. The Respondent inappropriately prescribed the patient two immediate release opioids. The Respondent put the patient at risk of overdose by prescribing the patient a combination of Ambien, Ativan, and oxycodone. People who travel from out-of-state to Florida for pain management treatment are associated with aberrant drug behavior, such as drug abuse or diversion, and are considered high risk patients. The Respondent did not evaluate the patient for drug abuse or drug diversion despite the fact that the patient was from Kentucky. Facts Specific to Patient S.F. S.F. was a resident of Florida and lived approximately 24 miles from the clinic. On or about March 10, 2010, S.F. went to the clinic for the first time but his intake form does not indicate what his chief complaint was. On or about April 9, 2010, S.F. presented to the Respondent, who diagnosed the patient with chronic lower back pain, degenerative disk disease and lumbar spinal stenosis. On or about April 9, 2010, the Respondent prescribed 180 tablets of Roxicodone 30 mg and 60 tablets of Roxicodone 15 mg to the patient. On or about April 9, 2010, the Respondent wrote in the medical records that the patient drank a six pack of alcohol a day, five days a week and the patient was "drinking excessively." The Respondent prescribed high doses of opiates to S.F. despite the patient’s excessive use of alcohol. The Respondent put the patient at risk of an overdose by prescribing 180 tablets of Roxicodone 30 mg and 60 tablets of Roxicodone 15 mg when the patient was using alcohol excessively. The Respondent failed to counsel the patient about the dangers of using oxycodone with the levels of alcohol that the patient was imbibing or he failed to document that he counseled the patient. S.F.’s medical records include a magnetic resonance imaging (M.R.I.) study, dated March 20, 2010. S.F.’s M.R.I. indicated that he had an abdominal aortic aneurysm that would be adverse to hypertension. The Respondent failed to refer S.F. to an in-patient detoxification center despite the patient’s use of alcohol and abnormal M.R.I. If his license to practice osteopathic medicine is reinstated in Florida, Respondent intends to practice in South Florida in a practice area other than pain management. Section 409.913(17) contains the factors that Petitioner must consider in determining the length of time a Medicaid provider, such as Respondent, should be terminated from the Medicaid program. Mr. West considered those factors in reaching the conclusions that a termination lasting 20 years is the appropriate sanction to be imposed against Respondent. Petitioner considers the seriousness of the misconduct to be the strongest factor to be considered. Pill mills cause serious problems in the State of Florida, and have been the focus of both regulatory agencies and law enforcement agencies on the state and federal level for several years. Medicaid patients in South Florida are not underserved, and there will be little or no impact on access by recipients to Medicaid services if Respondent is terminated as a provider. The United States Department of Health and Human Services, through its Office of Inspector General, has suspended Respondent's participation in all federally funded health care programs for a period of eight years.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Agency for Health Care Administration enter a final order adopting the findings of fact and the conclusions of law set forth in this Recommended Order. It is further RECOMMENDED that the final order terminate Robert J. Meek, D.O., as a Florida Medicaid provider for a period of ten years. DONE AND ENTERED this 28th day of February, 2014, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of February, 2014.
The Issue Whether the Certificate of Need application of the South Broward Hospital District (CON 9459) to establish a 100-bed hospital in Health Planning District 10, Broward County, should be granted by the Agency for Health Care Administration?
Findings Of Fact The Parties AHCA The Agency for Health Care Administration is the state agency with the authority to review and issue Certificates of Need in Florida. SBHD, the Applicant The applicant in this proceeding is South Broward Hospital District ("SBHD" or the "District"). Created by the Legislature in 1947 "at the request of voters to meet the healthcare needs of the South Broward community" (District No. 2, Vol. 1, pg. 7), SBHD is a special taxing district. The District receives tax revenues in order to support SBHD as the health care provider of last resort in South Broward County with a long demonstrated history of serving medically indigent patients. Id. From its inception in 1947 to today with the support of local tax revenue, the mission of SBHD has remained unchanged: to provide health care to all residents of the community regardless of ability to pay. There are three acute care hospitals in the "Memorial Health Care System" operated by SBHD: Memorial Regional, Memorial Pembroke Pines and Memorial West. These three hospitals make the District the dominant provider of health services in south Broward County. The District's market share of admissions to hospitals located in south Broward County is 85%. The other 15% of hospital admissions are to Hollywood Medical Center. (These percentages do not account for admissions of South Broward County residents to hospitals outside of the borders of SBHD.) Memorial Regional Hospital, a Medicaid disproportionate provider, is located 13.6 miles from the proposed Miramar hospital site. Without question, the predominant provider of care to indigent patients in south Broward County, Memorial Regional is licensed for 489 acute care beds. Memorial Regional had an acute care occupancy rate of 76.5% in 2000. From time-to-time in recent years, it has experienced unacceptably high occupancies particularly within individual units. It presently has patient care units that often operate above capacity, resulting in patient flow problems within the hospital. Memorial West Hospital, located 5.7 miles from the proposed Miramar site, is currently licensed for 164 acute care beds. It had an acute care occupancy rate of 88.9% in 2000. Memorial West currently operates 14 "labor-delivery- recovery" observation beds ("LDR" beds) that are not among the hospital's licensed beds. The hospital has recently received a CON for 36 additional beds to be utilized for acute care and further authorization via a CON exemption to add another 16 beds licensed for acute care provided certain occupancy levels are achieved. These additional 52 licensed beds are projected to become operational in 2002. Furthermore, Memorial West is adding 36 additional LDR beds and 20 acute care observation beds and doubling the size of its emergency room. When the expansion is complete, Memorial West will have 216 acute care beds, 20 acute care observation beds and 50 LDR beds. As matters stood at the time of hearing, peak occupancies in some departments at Memorial West such as obstetrics, routinely exceeded 100%. With the additional beds slated for opening in 2002, demand for acute care services in southwest Broward County will continue to produce high occupancy rates at Memorial West. It is reasonably projected that the growth in demand for acute care services in southwest Broward County with the additional beds will cause Memorial West to operate at 87% occupancy in 2005 and 99% occupancy in 2010 unless the hospital proposed by SBHD for Miramar is built. Memorial West opened in 1992 as a 100-bed hospital, in part fulfilling SBHD's vision to expand services into what was then projected to be a rapidly growing southwest part of the county, a suburban area more affluent than the District as a whole. Approved by AHCA's predecessor, SBHD's strategy in opening Memorial West was to gain access to this more affluent suburban market in order to help off-set the rising care of indigent care. The strategy has worked. Memorial West has made a profound contribution to the financial success and viability of the District. In 2001, Memorial Hospital West accounted for almost half of the District's bottom line profit. The profitability of Memorial West has allowed the District to continue to provide growing levels of indigent care, while at the same time decreasing tax millage rates. In fact, the millage rates levied by the District have decreased three times since Memorial West opened. During this same period of decreasing millage rates, the District has been able to increase its ratio of uncompensated care to tax revenues from 3-1 to 5-1. The District's third hospital, Memorial Hospital Pembroke was leased by the District for the first time in 1995. Now leased until June 2005 from HCA, Inc., HCA announced its intention at hearing to re-take the facility so that the District will lose Memorial Pembroke as one of its hospitals at the expiration of the lease. Licensed for 301 beds, Memorial Pembroke is located 10.6 miles from the proposed Miramar site. Memorial Pembroke's occupancy rate from July 1999 to June 2000 was 26.2%. This low rate of occupancy is due, at least in part, to significant physical plant constraints and deficiencies. Although licensed for 301 beds, the physical plant can only reasonably support 149 beds. When its daily census reaches 140 patients, the hospital's operational and support systems begin to fail. Prior to 1995, Memorial Pembroke was operated by a series of for-profit owners. Just as it does now, Memorial Pembroke suffered from chronically low utilization under all prior management. Before the District leased the facility from Columbia-HCA, the hospital had become stigmatized in the community; many patients and physicians were reluctant to use it. Due to a number of factors (some tangible, such as an out-of-date physical plant - others intangible) that stigma continues today. The District has invested considerable management and financial resources to improve the quality of care, the condition of the facility and the community reputation of Memorial Hospital Pembroke. Because the hospital serves as a "safety valve" for the high utilization at the District's other hospitals, especially Memorial West, Memorial Pembroke's census between 1995 and 2000 has been on the rise. Nonetheless, the facility continues to be regarded as a "second tier" hospital and to suffer a stigma within the community. Whatever the source of the stigma afflicting Memorial Pembroke, it is unlikely that occupancy rates at Memorial Pembroke will dramatically improve unless significant and substantial investment is made in the hospital. It does not make sense for SBHD to make such an investment since it will lose the facility in three years. Whether HCA will make the investment required to cure the facilities utilization woes remains an open question. (See paragraphs 103 and 104, below.) Through the three hospitals in the Memorial Healthcare system, Regional, West and Pembroke, and a number of clinics that are off-campus, the District provides a full range of health care services to residents of south Broward County. These include: general acute care; tertiary care; adult and pediatric trauma care under trauma center designation; a specialty children's hospital designated by the state as a Children's Medical Services provider for children with special needs for cardiac care, hematology and oncology, and craniofacial services; outpatient services; and primary care services. The District is the only provider, moreover, of many health care services within the boundaries of the South Broward Hospital District, all of Broward County south of SW 36th Street. (The North Broward Hospital District includes all of Broward County north of SW 36th Street.) These services include obstetrics, pediatrics, neonatal intensive care, adult and pediatric trauma at a Level I trauma center, and teen pregnancy prevention and education. Consistent with its mission, the District also operates the only system of primary care clinics for the indigent in the South Broward Hospital District. The District is clearly the safety net provider of acute care hospital and other services for south Broward residents. In 1999, the District provided 5.9% of its total revenue or approximately $63 million in charity care and 5.4% or approximately $58 million to Medicaid recipients. During the same time period, Cleveland Clinic in terms of total revenue provided 1% charity care and 1.8% to Medicaid recipients while Westside provided 0.6% charity and 2.3% Medicaid. In dollars worth of care devoted to indigent and Medicaid patients, SBHD provides over ten times more Medicaid and indigent care than Cleveland Clinic and Westside combined. Tax revenues, although supportive of the District's ability to maintain its mission, do not come close to compensating the District in full for the care it provides to charity and indigent patients. In fact, the District expends five dollars in uncompensated care for every dollar of tax revenue it receives. Still, as a significant source of income to the District, these tax dollars contribute to SBHD's robust financial health. Cleveland Clinic Cleveland Clinic Hospital is owned by TCC Partners, a partnership between the Cleveland Clinic Foundation and Tenet Healthcare Systems. Originally located in northeast Broward County in Pompano Beach, Cleveland Clinic obtained approval in 1997 to relocate its 150 beds to Weston near the intersection of I-75 and Arvida Parkway. Operation at the site of the relocation began in July of 2001. The new site is within one of the ten-zip codes SBHD has chosen as the proposed primary service area for its new hospital in Miramar, but it is outside the South Broward Hospital District. The new site of Cleveland Clinic is in the North Broward Hospital District, 1.5 miles to the north of the boundary line between the two hospital districts that divides Broward County into two distinct health care markets. Cleveland Clinic has an established history as a regional and national tertiary referral center. It is also an advanced research and education facility that benefits from the outstanding reputation of the Cleveland Clinic Foundation and the hospitals under its umbrella. Cleveland Clinic is not a typical community hospital. It follows a distinctive model of medicine based on a multi- disciplinary approach and a closed medical specialty staff. The medical staff is open to community primary care physicians but not to community specialists or sub-specialists. All of the specialists on its staff are salaried employees of the Cleveland Clinic. This means that physician specialists who are not employees of the Clinic do not have privileges to admit or treat patients at the Cleveland Clinic Hospital. The Cleveland Clinic offers tertiary acute care services, such as kidney transplantation and open-heart surgery. It also provides specialty services in colorectal surgery, voiding dysfunction and limb reattachment. Among its specialty programs are an adult spine program, an acute stroke program, an epilepsy clinic, and an orthopedic center of excellence in sports medicine. At the time of hearing and since opening, Cleveland Clinic's average daily census has been approximately 44 patients. Westside Founded 26 or so years ago in what was then considered western Broward Count from the standpoint of population (hence its name), Westside is a 204-bed acute care hospital. Slightly less than nineteen miles from the proposed Miramar site, the site of the hospital is "now somewhat central [to Broward County]" (Westside No. 39, p. 8), given the location of the population today and the growth that has occurred to the west of Westside. Westside, like Cleveland Clinic, is in the North Broward Hospital District. It is located in the City of Plantation on West Broward Boulevard. Among the variety of acute care services offered by Westside is open heart surgery ("OHS"). The OHS program, implemented two years ago has increased the hospital's occupancy rate to a near 70%. (In 2000, the hospital had an acute care occupancy rate of 69.3%). The occupancy rate is expected to increase as the open heart surgery program expands and matures. Recent capacity constraints in the ICU, for example, led to a capital project to expand the unit "about a year and a half ago." (Id. at 13). With regard to questions about whether the hospital had experienced capacity constraints or "bottlenecks" in units, Michael Joseph, the chief executive officer of Westside, answered this way: We did in tele, and that's when we did the overflow on the fifth floor. So at this time we are -- in the peak season of March, from time to time, sure. But on the annualized basis, we are in the 75 percent occupancy level. And sometimes there [are other issues] that all hospitals go through. (Id., at 14). At the time of Mr. Joseph's deposition, October 23, 2001, for the most recent year the average daily census has been "in the 175 range." (Id.) At present, therefore, Westside's occupancy is close to ideal. Westside is financially strong. It had strong financial performance in 2000 and at the time of hearing was expected to perform strongly in 2001. Replication of West Faced with both the potential loss in 2005 of Memorial Pembroke and the high occupancies at Memorial Regional and Memorial West, SBHD began investigating the opportunity to replicate the Memorial West model of success. During the investigation, the District came to believe what it suspected from obvious signs: there is a large and growing population to be served in the Miramar area. Although land was limited, the District was able to purchase within the City of Miramar a 138-acre parcel. The parcel is the site of the subject under consideration in this proceeding as detailed in CON Application 9459: SBHD's proposed project. SBHD's Proposed Project The District proposes to construct a 100-bed acute care hospital at the intersection of SW 172nd Avenue and Pembroke Road. The site is a large one. It has sufficient land available to serve ultimately as a "health park" with medical office buildings, outpatient facilities, and additional health care related facilities typical of a modern medical campus. If, on the other hand, the District decides it is in its best interest to "sell off balances" (tr. 486) of the property, it retains that option. The hospital will provide basic acute care services and be composed of 80 adult medical/surgical, 8 pediatric, and 12 obstetric beds. On the third floor, the hospital will have 28 observation status beds, in addition to its 100 licensed beds. The design of the hospital is cost efficient. It meets all license and life safety code requirements. All patient rooms are private and meet the square footage requirements of AHCA's license standards. The hospital design, costs, and methods of construction are reasonable. The project has several goals. First, it is intended to provide increased access to affordable and quality health care for the residents of southwestern Broward County. Second, the project will allow Memorial Regional and Memorial West the opportunity to decompress and operate at reasonable and efficient occupancies into the foreseeable future without the operational problems caused by the current over-utilization. Third, the project will replace the loss of Memorial Pembroke. Finally, the project will give the District a second financial "engine that drives the train" (tr. 141) in the manner of Memorial West. The project will enable the District to maintain its financial strength and viability and continue to serve so effectively as the safety net provider for the indigent in South Broward County. Stipulated Facts In their prehearing stipulation, filed on October 31, 2001, the parties stipulated to the following: On January 26, 2001, AHCA published a fixed need pool for zero additional acute care beds in District 10, Broward County, for the January 2001 batching cycle. The South Broward Hospital District ("SBHD" or "District") timely and properly filed a Letter of Intent, initial CON Application, and Omissions Response in the batching cycle. On May 16, 2001, AHCA filed a Notice of Intent to issue the CON together with a State Agency Action Report ("SAAR") recommending approval of the CON for the proposed hospital. AHCA's Notice of Intent to approve the CON for the proposed hospital was challenged by Cleveland Clinic and Westside. Hollywood Medical Center ("HMC") also filed a petition challenging the preliminary approval but later withdrew as a party from these proceedings. Broward County has been divided by the Florida Legislature into two hospital taxing districts. The SBHD includes all areas of the county south of SW 36th Street, and the North Broward Hospital District ("NBHD") includes all areas north of the demarcation line. SBHD, Cleveland Clinic, and Westside each have a history of providing high quality of care. All of SBHD's hospital facilities are JCAHO accredited. Accordingly, the quality of care provided by these parties is not at issue in this proceeding except as it may be impacted by staffing issues. The proposed staffing and salary projections included on Schedule 6 of CON Application No. 9459 are reasonable and are not in dispute, although the parties specifically preserved the right to present evidence concerning the SBHD's ability to recruit the staff projected, and whether the projected salaries will cause or accelerate the loss of staff at existing hospitals. The parties agree that the SBHD has available management personnel and funds for capital and operating expenditures. However, Petitioners assert that the District's use of such resources for this project is neither wise nor prudent and is not in keeping with appropriate health planning principles. The parties agree that the SBHD has a history of providing health care services to Medicaid patients and the medically indigent. (Section 408.035(11), Florida Statutes.) However, Petitioners do not agree that proposed Miramar Hospital can meet the levels of charity care proposed in the application for the Miramar Hospital. With regard to Schedule 1 of the Application, the parties stipulate that the Land Costs (lines 1-11) are reasonable and are not disputed; and the Project Development Costs (lines 26-31) are reasonable and not disputed. The parties agree that Schedule 3 of the Application (sources of funds) is reasonable and not disputed. The SBHD does not contest Petitioners standing in this proceeding. At hearing, the parties stipulated that SBHD has the ability to recruit and retain the staff needed for the proposed hospital. The parties also stipulated that the SBHD has in place the staff recruitment and retention programs described at pages 132-139 of the CON application. The stipulation at hearing did not preclude either Westside or Cleveland Clinic from presenting evidence with respect to the impact of the SBHD's recruitment on other programs and other hospitals. No Numeric Need As indicated by the AHCA Bed Utilization Data for CY 2000, the occupancy rate in Broward County was 48.42%. There is, moreover, a surplus of 1,786 beds. This surplus has been increasing over time and has grown by nearly 60 beds between the January 2001 and July 2001 planning horizons. The hospitals within the District's proposed primary service area had an occupancy rate of 53% in the July 2001 planning horizon and a surplus of 456 beds, a number "somewhat proportionate to the distribution of patient days as well as licensed beds within the district." (Tr. 1639.) If the 152 non- functional beds at Memorial Pembroke are deducted from the surplus then the surplus is 304 beds. Not surprisingly therefore, the Agency's fixed need formula for acute care beds produced a fixed need of zero beds in Health Planning District 10 for the January 2001 batching cycle. (Broward County composes all of Health Planning District 10). The fixed need pool of zero was published by the Agency in January of 2001. Again in July 2001, AHCA published a fixed need for zero acute care beds in Health Planning District 10. In light of the zero fixed need pool, SBHD bases its application for the proposed Memorial Hospital Miramar on "not normal circumstances." Not Normal Circumstances "Not normal circumstances" are not defined or limited by statute or rule. Nonetheless, a number of "not normal" circumstances have been recognized repeatedly by AHCA . These recognized "not normal circumstances" are generally grouped into categories of access, quality and cost-effectiveness. None of them are present in this case. "There [are] no financial access, geographic access or clinical access circumstances [in this case] that rise to the level of not-normal circumstances." (Tr. 1633). Nor are there any quality or cost-effectiveness deficiencies claimed by the District in its application. The District bases its claim of "normal circumstances" on eight factors. They are: 1) explosive population growth; 2) a mal-distribution of beds within the health planning district; the effects of not having a hospital facility in the area proposed; 4) continued and projected high occupancies at nearby hospitals; 5) inability to expand inpatient capacity at the nearby hospitals with high occupancy rates; 6) the limited functionality and uncertain future of one of the hospitals that might serve the area where the new hospital is proposed to be located; 7) the increasing retraction of access for residents to other hospitals; and, 8) the need to assure that the applicant will remain a strong competitor able to fulfill its unique role and mission that would be served by granting the application. Population Growth Broward County is one of the fastest growing counties in the United States. "According to the census 2000 data, [over the last decade] it was the fastest growing county in all of the United States based on total population gain . . . ." (Tr. 617.) The population growth was spurred in the latter part of the previous decade by the devastation wreaked by Hurricane Andrew in 1992. The hurricane's south Dade County victims used insurance proceeds to move to southwest Broward County. This migration helped to produce growth in southwest Broward County at a faster rate than the county as whole in the decade of the nineties. Growth in pockets of southwest Broward during this period of time has been phenomenal. For example, Pembroke Pines population increased 109 percent between 1990 and 2000. For the same time period, the population of Miramar (now the second fastest growing municipality in Florida) increased 78 percent. This growth was more than just steady during the 10 years before 2000; as the decade proceeded, the growth rate accelerated. In short, it is not a misnomer to describe the population increase in southwest Broward County and the Miramar area during the last decade as "explosive." (Tr. 626) With its attendant residential and commercial development, it has transformed southwest Broward County from a rural community into a suburban one. Population growth in southwest Broward County is expected to continue into the future. Substantial land in the area is under development or is available for residential development. By 2006, the population is projected to grow to 337,000, from the 2000 population of 289,000. This rate, while not comparable to the explosive rate in some pockets of the county in the last decade, is not insignificant. By way of contrast, the projected growth rate of 16.7% over the next five years in southwest Broward compares to a projected rate for the county as a whole of 8.4% and for Florida of 7.1%. In and of itself, the projected population growth in southwest Broward County is not a "not normal" circumstance. However one might characterize the projected growth rate in southwest Broward County, moreover, the acute care hospital bed need rule takes population into account in its calculations and projections. But, the bed need formula does not take into account the significant number of beds at Memorial Pembroke that are not functional. Nor does it take into account that Cleveland Clinic is not a typical community hospital. Nor does it take into account other factors such as that Memorial West and Memorial Regional are experiencing capacity problems or the division of the health planning district into two hospital taxing districts recognized as distinct medical markets, a recognition out of the ordinary for health planning districts in Florida. A geographical fact pertinent to arguments made by Cleveland Clinic and Westside with regard to the location of the population is that Memorial Miramar's proposed primary service area is divided by Interstate 75, a north-south primary travel corridor. On a percentage basis, there is faster population growth projected for areas west of I-75. But for the foreseeable future, the actual number of people populating the area west of I-75 will remain less than the number east of I-75. The area west of I-75, with the exception of one zip code in which a retirement center has been built, has a younger projected population that should produce lower use rates and average lengths of stay in hospitals than the area east of I-75. The support these facts lend to the District's opponent's arguments that bed need is greater east of I-75 than west is diminished by the absence of any hospitals west of I-75 in the South Broward Hospital District and the presence of four hospitals in the hospital district east of the interstate. Distribution of Beds Consistent with the recognition by the Legislature, AHCA, and its predecessor state agency, north and south Broward County are two distinct medical markets demarcated by the division of the county into two hospital districts. There are 3.52 beds per 1000 population in the North Broward Hospital District, 2.35 in the south. A greater number of under-utilized acute care beds are located in the northern half; a greater percentage of highly utilized hospitals are located in the southern half. Of the four hospitals located in south Broward County, both Memorial Regional and Memorial West had average annual occupancies in excess of 80% in the calendar year 2000. By contrast, of the 13 hospitals located in the northern half of the County, none had occupancy in excess of 80%, and only one had an average annual occupancy in excess of 70%. These statistics point toward an over-distribution within the health planning district of beds in the north and an under-distribution in the south. At the same time, beds are distributed between the two hospital districts in approximate proportion to the number of patient days experienced by each. In 2000, NBHD had 71% of the patient days for District 10 and 73% of the acute care beds. As one might expect, therefore, the relationship between patient days and acute care beds during the same period was similar for the SBHD: 28.9% of the patient days for District 10 and 27% of the beds. An analysis of bed to population ratio is only meaningful when occupancy rates are also considered. Occupancy rates are mixed in the south part of the county: very high for some, especially Memorial West, and very low for Memorial Pembroke. This breadth of this disparity is unusual. Effects of No Hospital in Miramar Thirty to 60 minutes to reach an acute care hospital is a reasonable driving time in an urban area. There are five existing acute care facilities within 30 minutes of southwest Broward County. In fact, most of the residents in Memorial Miramar's proposed service area are within 15 minutes or less of an existing acute care facility. Nonetheless, without a hospital in Miramar, residents must leave their immediate community to gain access to acute care services. As a matter of sound health planning, "[n]ot every city, town or hamlet can or should have its 'own' hospital." So correctly posit Cleveland Clinic and Westside. See pgs. 13-14, Cleveland Clinic and Westside PRO. But as the City Manager of Miramar wrote, "[t]he addition of a new hospital is one of the last missing links in the City [of Miramar]'s master plan . . . The city is looking to build the best possible future for its residents." District Ex. 2, Attachment G. A new hospital in Miramar would not only be a featured complement of the City of Miramar's plans for the future, it would also enhance access to acute care services and address access concerns caused by skewed utilization among the SBHD hospitals due to the unusual state of affairs at Memorial Pembroke and the high demand at West. Of great concern is that residents of southwest Broward County in need of emergency services are sometimes not able to gain access to those services at Memorial West, the closest available hospital. Memorial West operates the third busiest Emergency Department in Broward County with 65,000 visits in 2001. In Calendar Year 2000, Memorial West's emergency room went on diversion 123 times, averaging 7.7 hours per diversion. In the first months of 2001, the hospital went on diversion 89 times, with an average diversion time of 16.3 hours. These diversions have a dual effect. They mean that patients wait longer for beds. They also mean that providers of emergency medical services in ambulances are forced out of the community for extended periods of time unable to render services within the community that may be needed during that time. Diversions at Memorial West are becoming more and more problematic. Wait times are getting longer; the total time on diversion is growing. At first blush, the problems appear to be less significant at Memorial West than they might be elsewhere in District 10 because of its low "emergency room visits to hospital admissions" ratio. The Health Planning District average shows that about 20% of emergency room patients are admitted to the hospital. At Memorial West, the ratio is 8.7%, the lowest in the County. While normally this might reflect that patients visiting Memorial West have a lower acuity than patients visiting emergency rooms district-wide, the lower ratio for Memorial West is due, at least in part, to the high volume of pediatric patients seen at West who are transferred to Joe DiMaggio's Children's Hospital. The pediatric transfers, in the words of Frederick Michael Keroff, M.D., a Board-certified emergency physician who has worked in hospital emergency departments in South Florida for 24 years, create a false sense of what is actually being seen on the adult side of the emergency room department. On the adult side . . . [the ratio] varies somewhere between 12 and 16 and a half percent which is comparable with any other facility. . . . [W]hen you mix in such a large pediatric population into the adult population, obviously it dilutes out the number and drops [the ratio] down . . . . (Tr. 2568.) A solution to emergency room diversion at Memorial West and an alternative to the construction of Memorial Miramar proposed by Cleveland Clinic and Westside is more SBHD urgent care centers in the Miramar area. SBHD operates seven urgent care centers. Of these seven, the proposed Miramar PSA has only one. Additional urgent care centers more readily accessible in the 10 zip code area that comprises Memorial Miramar's PSA might reduce the number of visits to the ER at Memorial West. But they might not. Patients don't self-triage when they are presented with a problem. They go to the hospital. [Triage is a medical decision.] Patients usually come to the hospital, even [with] urgent care centers down the block, because they don't know what the problem is and they allow the hospital to make the decision about what the problem is. (Tr. 2571.) Additional urgent care centers would not solve the problem created when diversion is a result of the lack of acute care beds for Memorial West ER patients who need to be admitted to the hospital for treatment beyond that provided in the ER. Cleveland Clinic hospital is not likely to offer much of an alternative. Because of the closed nature of the Cleveland Clinic specialty staff, it will not be a hospital of choice for community physicians in the South Broward Hospital District. Nor will it be a hospital of choice for patients able to elect the hospital at which to seek emergency services. It is apparent from the demand on Memorial West, despite the number of beds and other emergency departments within acceptable reach, that a Memorial West-type facility is what the residents of southwest Broward County prefer and opt for even if it means they have will have to wait for emergency services. In cases of patients transported from southwest Broward County via ambulances forced to go to Cleveland Clinic in Weston to deliver patients in need of emergency services, the transport presents difficulties of their own. It is not efficient management of emergency services due to their very nature to require ambulances to leave their service areas. There are no clear solutions to the problems emergency room diversions present for patients, their families, physicians, and the emergency medical system in general in southwest Broward County other than construction of new acute care hospital in Miramar. Construction of a new acute care hospital in Miramar will help to alleviate the high occupancies and emergency room diversions currently experienced at Memorial West. It will reduce disruptions to Miramar residents and will provide an easily accessible alternative to southwest Broward County residents, thereby enhancing access to emergency services. High Occupancy Rates at West and Regional The current and reasonably-projected high occupancies at Memorial West and Memorial Regional are extraordinary circumstances for a health planning district with as many excess beds as District 10. The calculation under AHCA's formula for hospital bed need for the January 2001 batching cycle yielded an excess of 1,717 beds. Calculation by the Agency using the same formula for the July 2001 batching cycle showed an excess of 1,786 beds or 59 more excess beds than just six months earlier. The import of these results was described at hearing by Scott Hopes, Westside's expert health planner: Obviously when you have a situation like this, the default is a zero published fixed need which is what was published. But the importance here is that there are so many excess beds. And if you look also on the line [of Westside Ex. 23] that deals with occupancy rate, the occupancy rate is about 48 percent, and it hasn't varied much between the six-month period. In fact, the occupancy rate in Broward County has been under 50 percent for some quite sometime. (Tr. 2076-7). It is extraordinary that a health planning district with so many excess beds would also have two hospitals, Memorial West and Memorial Regional, with capacity problems. Memorial West, by any standard, is a successful hospital. Since it opened in 1992, the inpatient volume there has tripled. Opening as a 100-bed facility, Memorial West now has 184 licensed beds, an expansion aimed to meet the demand for its services. As alluded to elsewhere in this order, because there are often not enough available acute care beds at Memorial West, some patients have to wait in the ER six hours or more. It is not unusual for more than 40 patients to wait at one time. Despite these conditions, patients, when offered the opportunity for a transfer to another hospital, rarely accept the offer. More often than not the patients do not wish to go. The reputation of Memorial Hospital West, the loyalty factor, if you will, to Memorial, to the medical staff, the patients want to remain at the facility. (Testimony of Memorial West Administrator Ross, Tr. 152-3.) Memorial West plans expansion but even with its current planned bed expansion, it is reasonable to expect it to reach unacceptably high occupancy rates by 2006 if Memorial Miramar is not built. Furthermore, the only obstetric programs in south Broward are at Memorial West and Memorial Regional. Memorial West performed 4,400 births last year, and its obstetrics unit often operates in excess of 100% occupancy. The only constraint on additional births at West is the limited physical capacity of the facility. Memorial Regional experienced even more births last year than West with about 5,000 deliveries. Memorial Regional is operating at or exceeding its functional capacity in other departments. The current medical/surgical occupancy at Memorial Regional is approximately 80% year round. Some units experience much higher occupancies. The intensive care unit's occupancy frequently exceed 100%, as does the cardiac telemetry unit. In certain medical/surgical units, peak occupancy is as high as 125%. Memorial Regional's capacity to handle its high patient volume is limited by certain factors. Semi-private rooms are limited to use by members of the same sex. As a tertiary facility, there are specialty patients who must be served by nurses trained in that patient's specialty, with appropriate monitoring equipment. Without approval of Memorial Hospital Miramar, Memorial Regional will reach 85% occupancy by 2008 and 88% occupancy by 2010. These occupancy rates create an inefficient and untenable environment in which to deliver the mix of specialized and tertiary services offered by Memorial Regional. The overcrowding at Memorial West and Memorial Regional is dramatic and continuing. There are simply more patients seeking care at these hospitals than the hospitals can serve appropriately. This overcrowding exists despite the excess of acute care beds within the health planning district. In sum, despite the plentiful nature of the number of acute care beds in the health planning district, a need exists to either decompress Memorial Regional and Memorial West by some means such as the proposed new hospital in Miramar or to expand one or both of the two hospitals by way of new construction or conversion of LDR and observation beds. A decompression alternative to the new hospital is to transfer beds from existing hospitals to create a satellite hospital. Because of high occupancy rates at West and Regional and because Pembroke's lease will expire in 2005, transfer of existing beds is not a feasible option. That leaves expansion, as the only alternative to a new hospital in Miramar. Cleveland Clinic and Westside argue there are ample opportunities at the two hospitals for expansion. Expansion New Construction In pre-CON application evaluation, SBHD commissioned a study from Gresham, Smith and Partners, an architecture firm. The firm studied the three Memorial facilities to determine whether expansion of the acute care bed complement at any of them was feasible. In a "Memorial Health System Facility Expandability and Master Plan Review Report" the firm concluded that it was clearly not feasible to expand either Memorial Pembroke or Memorial Regional and there were problems with expanding Memorial West. With significant problems including its aged plant and its uncertain future, expansion at Memorial Pembroke would not be cost-effective. It would cost $31 million in capital improvements to maintain Pembroke's functional capacity at 149 beds. If the present location of nursing administration, hospice and other necessary services were moved out of the hospital, the hospital's function could be expanded to 215 beds. No evidence was presented with regard to the advisability of moving those services or the additional costs associated with this alternative. HCA's willingness to make the investment necessary to renovate the facility at Pembroke was not supported by any specifics. HCA's announced its intention, "to take the hospital back at the end of the lease and run it," (tr. 1511-2) but, in fact, the company has not taken any action to evaluate the potential for assuming operation of the hospital in 2005. Nor has it even begun the process it must go through before final decisions are made. The overarching intention to "re-take the hospital and run it," at this point in time, does not mean HCA will be willing to make the investment necessary to renovate the facility either during the term of SBHD's lease or afterward. It still needs to "do a very detailed discounted cash flow analysis to make a final decision on the investment needed and the return on that investment." (Tr. 1514.) Memorial Pembroke's uncertain future makes it an unlikely candidate for expansion. However unlikely such a result, with the problems that afflict Memorial Pembroke, there is, moreover, no guarantee that HCA's intended analysis will convince it even to continue operation of the hospital. Memorial Regional has different problems from Memorial Pembroke. It takes up an entire block surrounded by residential property and parking garages. There is almost no opportunity for growth on the site. Of the few areas that could be expanded vertically, only one would be conducive to bed addition. "[I]t is so remote, it doesn't tie back to the main nursing care areas." (Tr. 482.) Expansion at Regional would also be plagued with concurrency problems and zoning issues. Of the three hospitals, Memorial West presents the best option for expansion. A facility master plan for Memorial West provides for the addition of a patient tower on the north side of the facility ("the north tower"). The addition of the north tower could add as many as 50 beds to Memorial West at a cost substantially less than the construction of Memorial Miramar. Still, SBHD's architects, Smith and Gresham, concluded that expansion of the size necessary to alleviate the overcrowding at West was not cost-effective. The force of the Smith and Gresham opinion is tempered by the firm's standing to benefit financially to a much more significant degree if Memorial Miramar is built than if the planned-for tower is constructed to add 50 beds to Memorial West. But the opinion is not groundless. Put simply, construction of an additional tower at West is no simple solution to its capacity problems. The tower was planned for maternal services but like the minimal opportunity for expansion at Regional, it would be "remote from the rest of the nursing function . . . [it would, moreover] trigger huge upgrades to the infrastructure." (Tr. 480.) The hospital site is constricted already because of additions that have almost completely built out the campus. A new north tower would add inefficiencies in hospital operations because of the increase in travel distance for materials delivery and meeting the dietary needs of patients. Despite the master plan for growth, an improvement the size of the north tower would begin to turn West into another Memorial Regional: a huge hospital, overdeveloped for its site. The improvement, like every improvement thereafter, would require patient shuffles and disruptions in patient care. Like Memorial Regional, expansion at West, too, would have concurrency issues and could create a land use dispute with neighbors, the outcome of which is uncertain. In light of these obstacles, SBHD prefers the option of constructing the new hospital in Miramar over expansion at West. There is, however, in the view of SBHD's opponents, another option for expansion of existing facilities: conversion of LDR and observation beds. Expansion through conversion of LDR and Observation Beds Cleveland Clinic and Westside contend that another option to relieve overcrowding is conversion of observation and LDR beds to acute care hospital beds. But these beds are used to meet the need of observation and maternity service patients. There are patients who need closely supervised medical care but whose care has not been determined to require admission to the hospital. Observation patients, sometimes referred to as "23 hour" patients, may suffer from various conditions, including chest pain, fever, abdominal pain, rectal bleeding or nausea. Given the high number of births at Memorial West, many obstetrical patients present at the hospital in "false labor" or for antipartum testing, complications of pregnancy, or symptoms that should be treated as observation or on an inpatient basis. It would be impractical for Memorial West to convert observation and maternity service beds, whether existing or still planned for, to inpatient acute care beds. If these beds were converted, Memorial West would find itself once again in its present straits of not enough beds for observation purposes particularly for obstetrical patients for whom there is little choice where to obtain obstetrical services in the South Broward Hospital District. Limited Functionality and Uncertain Future of Memorial Pembroke Memorial Pembroke has undergone seven ownership changes since it first opened. Perceived as a hospital where neither patients nor physicians want to go, it has suffered from a stigma within the community. Even with recent gains in utilization, it achieved an occupancy rate of only 24% in calendar year 2000. Pembroke suffers from physical and infrastructure limitations that reduce its functional bed capacity to 149 beds. Its mechanical and heating, ventilation and air conditioning systems are outdated and inadequate. For example, a primary generator is vented to the outside by a 6-foot hole in the ceiling. The electrical panels are at absolute capacity. The first floor has an outdated, plenum air return with no ducts in the ceiling. The generators have transfer switches that require them to be turned on manually. Facilities management personnel are reluctant to do so for safety reasons. The semi-private patient rooms at Pembroke are too small for modern care and do not have adequate space for the monitors, IV equipment, pumps and other technology required by today's health care delivery system. Many rooms do not have showers. The hospital has a number of three bed wards woefully outdated by the standards of modern care. It would cost $31 million in capital improvements to simply maintain Pembroke's functional capacity at 149 beds, to upgrade the facility to bring it into compliance with existing code and to otherwise modernize inadequacies. Whether Pembroke will continue to operate after 2004 is unknown. While HCA stated its intention to do so, it has not made a final decision to assume operations. It still needs to conduct a financial analysis sufficiently detailed to determine whether the necessary expenditures to bring the hospital up to par are practical. Any capital investment by HCA in excess of $1 million requires the approval of HCA's national office, approval that has not yet been provided. The level of capital investment required at Memorial Pembroke is significant and it cannot be assumed that HCA will make this investment. (See paragraph 89, above.) Increasing Retraction for Access in SW Broward Of the three hospitals located within the ten zip codes that constitute southwest Broward County: Memorial West, Memorial Pembroke and Cleveland Clinic, each poses some manner of access impediment for the residents of the area. Memorial West is overcrowded. Memorial Pembroke's future is uncertain, its present clouded by significant physical plant problems and stigma that keeps its occupancy low. Cleveland Clinic's distinctive character, its closed specialty staff and its regional, national and international draw discourages utilization by southwest Broward residents seeking routine acute care hospital services at a community hospital. The Cleveland Clinic medical staff is open to community primary care physicians. "[W]ith the qualification that if there's a specialty for some reason that is not adequately manned, the clinic can go out and contract with community physicians to provide the services" (District No. 55, p. 39), the Cleveland Clinic medical staff is not open to community specialists or sub-specialists. Its specialty and sub- specialty staff, therefore, is closed. The medical staff building, moreover, located on the campus is also closed to community practitioners even to those primary care physicians with privileges at the hospital to manage their patients care. Like the specialty medical staff, the building is restricted to Cleveland Clinic salaried specialists. Due to the closed nature of the specialty staff at Cleveland Clinic, any patient admitted to the Cleveland Clinic hospital will be seen by a Cleveland Clinic physician. This sets up reluctance on the part of community physicians to use the Cleveland Clinic hospital. As expressed by the hospital's CEO, "it's sometimes difficult to convince a primary care physician that he needs to change his referral patients, so yes, there is some concern [about the willingness of community physicians to utilize the hospital]." Id., p. 40. In multiple prior CON applications approved by AHCA, Cleveland Clinic projected that up to 30% of its patients would come from outside Broward County and that it would draw patients from throughout Broward County, rather than having a more traditional, limited service area typical of a community hospital. Patient origin data for Cleveland Clinic when at its old location in Pompano Beach shows the hospital, unique among Broward County hospitals, has a broad county-wide, regional and national draw. While all other hospitals in Broward County can identify fewer than 25 zip codes that generate the first 75% of patient admissions in 1999, 60 zip codes generated the first 75% of Cleveland Clinic's admissions. Similarly, while all other hospitals in Broward County can identify fewer than 25 zip codes that generate the first 90% of their patient admissions in 1999, the first 90% of patient admissions at Cleveland Clinic's hospital were generated by no less than 287 zip codes. Cleveland Clinic presented evidence of its intention to be available to the local community. It has marketed in Broward County by means of newspaper and television advertisements and various community programs. It has also conducted outreach and training programs with the emergency medical service providers in the Broward County area, not only to improve the quality of care for the patients of Broward County but also to educate the emergency medical service providers about Cleveland Clinic. The patient origin data for Cleveland Clinic's first three months of operation in Weston, however, verifies its continued broad draw. This data shows that within Broward County, only 30% of patients originated within the 9 southwest Broward zip codes that Cleveland Clinic identifies as its "immediate service area"; the other 70% of its patients come from outside the immediate service area. Cleveland Clinic is not a typical community hospital. Its previous CON applications have been granted in part on its unique characteristics. Whether its image or persona will change with the move to Weston to attract more patients from southwest Broward County is an open question. Given its nature and the focus of the health care it is likely to deliver, however, it is not likely that it will be utilized regularly by residents of southwest Broward County seeking routine hospital care either because not their hospital of choice or because of community physician referral patterns. h. Assurance that SBHD Can Fulfill its Mission The final "not normal" circumstance relied on by SBHD relates to the affluence of the patients in southwest Broward County and the profits that are reasonably expected to be generated by virtue of the proposed hospital's location in this affluent area. The expected profits will both subsidize SBHD's charity care and support its ability to be competitive. The importance of SBHD remaining competitive and able to serve the indigent in Broward County was explained at hearing by Jeffrey Gregg, Chief of AHCA's Bureau of Health Facility Regulation: [A]s a major indigent care provider for the State of Florida, [SBHD is] providing a service that extends far and wide that benefits everyone. In our state we have indigent care concentrated in relatively few facilities … [I]t is a very important resource that needs to be nurtured and protected to the greatest extent possible because it is fragile and vulnerable. We have many uninsured people in the state, somewhere between two and three million. It is reasonable to expect now with the economic downturn that we are going to be seeing an increase in uninsured people, so the value of hospitals that function as safety net providers is . . . very important. (Tr. 1240-1). This rationale supported the District's CON application for Memorial West. Because of SBHD's financial success to which Memorial West has been a major contributor, SBHD has achieved a significant degree of financial stability in this day of decreasing reimbursements, managed care, and increased health care costs. It is not contested that its financial position is sound. For fiscal year 2002, SBHD was running ahead of revenue and profit projections at the time of hearing. Nonetheless, if hospitals are constrained and the payor mix becomes less favorable, financial conditions can change quickly. Only three years ago, the District posted an $18 million debt. The capacity constraints at Memorial West will limit its ability to generate additional profits. At the same time, the District must accept all charity care patients. This requirement coupled with capacity constraints has the potential for an unfavorable payor mix for the District. The addition of Memorial Miramar will help to ensure that the District maintains its strong market position and will sustain a favorable payor mix. The profits expected to be generated by Memorial Miramar will ensure that the District can continue to provide care to the indigent without raising, and perhaps by lowering, the tax rate for the tax payers of Broward County. The Proposed Primary Service Area The District's proposed primary service area ("PSA") is a 10 zip code area in southwest Broward County. It excludes zip codes in Dade County that might have been included as well as the eight easternmost zip codes in south Broward County. Usually a set of contiguous towns or minor subdivisions or zip codes that represent a substantial majority of a hospital's patients, there is no single way of defining a hospital's primary service area. Some health planners use a region from which 75% of the patients come but a range of 60 to 80 percent is not unreasonable. There are other approaches to defining primary service areas: zip codes, for example, in which a threshold level of market share was achieved or that account for a minimum percentage of the hospital's patients. While one method may be more usual than another, any of a number of ways of defining a PSA may be reasonable. Cleveland Clinic's health planner, Ms. Patricia Greenberg sees Dr. Finarelli's PSA for the Miramar hospital as not rational from the perspective of health planning. The zip codes Dr. Finarelli chose include a number that are to the east of Memorial West. Ms. Greenberg asserts that it is unlikely that patients will drive from the east past Memorial West in order to reach Memorial Miramar. It would have made much more sense, in her view, for the PSA to have included three zip codes to the north of the PSA in western Broward County: zip codes 33327, 33326 and 33325. But these zip codes, entirely within North Broward Hospital District, are not South Broward Hospital District zip codes. Nor are three other zip codes that Ms. Greenberg sees for the Miramar PSA as more rational choices than zip codes east of Memorial West that Dr. Finarelli chose. Ms. Greenberg's other choices outside Dr. Finarelli's PSA are not only not in the hospital district, they are not in AHCA Health Planning District 10. They are in Dade County. Determinations of bed need do not always rise and fall on the selection of the primary service area. To the contrary, as Dr. Finarelli stated at hearing, "[h]ow and where the boundaries are drawn between the primary and secondary service area is less important [than] making sure that any analysis of bed need and demand incorporates both the primary and secondary service areas." (Tr. 724). This statement loses its potency, however, and the import of the choice of the primary service area is raised in light of the population-based bed need projections made by Dr. Finarelli within the PSA in support of the application. Population Based Bed Need Projections within the PSA Dr. Finarelli conducted a standard population based bed need analysis to determine the gross bed need within the PSA selected for the proposed hospital. His bed need calculations were computed separately for adult medical, surgical, pediatric and obstetric beds. The assumptions used by Dr. Finarelli were reasonable and appropriate. The level of detail in Dr. Finarelli's model was described by another of SBHD's expert health planners who testified in this case, Mr. Balsano and who has been qualified as an expert in health planning and health care financial feasibility approximately 20 times over the last decade, as the most detailed model he had ever seen. Dr. Finarelli's analysis accounted for the current and projected population as well as the current and projected hospital discharge rate per 1000 population within the PSA. Multiplying the population (in thousands) by the discharge rate yields the total number of current and projected hospital discharges by PSA residents for the planning horizon. The total number of hospital discharges was then multiplied by an appropriate average length of stay ("ALOS") to determine the total number of current and projected patient days by PSA residents. The total patient days were divided by 365 (days in the year) to arrive at the current and projected hospital average daily census ("ADC"). Finally, the ADC was divided by the desired 75% occupancy rate to arrive at a gross bed need for the PSA. The calculations result in a projected need in the 2006 planning horizon for a total of 457 acute care beds; including 386 adult medical surgical, 25 pediatric, and 46 obstetric beds. Based only on projected population growth within the PSA, there will be an incremental gross bed need for 75 acute care beds; 67 medical/surgical, 3 pediatric and 5 obstetric. Existing Inventory and Bed Supply The three hospitals located within the 10 zip code PSA have a total of 667 licensed acute care beds, existing or approved. Including the 36 approved and 16 conditionally approved beds at West, Memorial West has 216 beds. Memorial Pembroke has 301 and there are 150 licensed beds at Cleveland Clinic. This total, however, is "simply not a reasonable or realistic measure of how many beds in those three hospitals are truly available to the residents of Southwest Broward County . . . ." (Tr. 837-8.) Patient origin statistics and representations made by Cleveland Clinic in its certificate of need applications bear out that it is not a typical community hospital. Appropriate to its mix of tertiary services and its focus on education and research, it has a broad service area reaching far beyond Broward County. Consistent with the nature of the hospital, in its first three months of operation at Weston, 35% of its patients came from outside Broward County and only 16% have come from southwest Broward County or the 10 zip code PSA used by SBHD in its application for the Miramar hospital. Based on available data and information, it is reasonable to project that Cleveland Clinic will draw approximately 26% of its patients from within Memorial Miramar's PSA. It is reasonable, therefore, to allocate 26% of Cleveland Clinic's 150 beds to meet the population based demand for adult medical surgical beds in the PSA, for a net contribution of approximately 40 beds. With its functional capacity of 149 beds, it is not reasonable to consider all of the 301 beds at Memorial Pembroke. Fifty-four percent of its patients come from within the Memorial Pembroke PSA. The product of 149 beds multiplied by 54% is approximately 80 beds available to meet the population-based demand of the residents of southwest Broward County. There is, moreover, some doubt about whether any beds will be available at Memorial Pembroke after the expiration of SBHD's lease with HCA. Given the stigma Memorial Pembroke suffers and its uncertain future, an estimate of 80 beds is a reasonable projection for the number of beds at the hospital available to meet the needs of the residents of southwest Broward County. With 65% of its patients coming from within the proposed PSA for the Miramar Hospital, Memorial West is the hospital of choice for the residents of the proposed PSA. With 186 adult medical surgical beds, 120 meet the needs of patients coming from Miramar's PSA. Thus, there are approximately 240 adult medical surgical beds (120 at West, 80 at Pembroke and 40 at Cleveland Clinic) available to meet the projected need of 386 adult medical surgical beds in the 2006 planning horizon. Subtracting the 240 beds from the 386 needed yields a net need of 146 beds to serve residents of the Miramar PSA. Although some patients will continue to seek services outside the PSA, Dr. Finarelli's projection that there is a sufficient net need to support the 80 adult medical surgical beds proposed at Memorial Miramar is reasonable. Building Memorial Miramar will help reduce the percentage of people who leave the area for acute inpatient adult medical surgical services from its current level of about 50% to approximately 25%. This will improve access to health care for the residents of southwest Broward County. Memorial West is the only provider of obstetrical services in southwest Broward County, and only one of two in all of south Broward (the other being Memorial Regional). Both Memorial West and Memorial Regional are operating above capacity in their obstetrical units. In calendar year 2000, Memorial West's 24-bed obstetric unit operated at 130% occupancy. Hollywood Medical Center recently closed its obstetric unit thereby increasing the pressure on Memorial Regional and Memorial West to provide services to area patients. With a projected gross need for 46 obstetric beds in the planning horizon, there is a net need for at least 22 more obstetric beds. The proposed 12-bed unit at Memorial Miramar will help to meet that need. Memorial Hospital West's 6-bed pediatric unit is the only unit of its kind in southwest Broward County. The only other provider of pediatric services in all of south Broward is Memorial Regional's Joe DiMaggio Children's Hospital. Dr. Finarelli reasonably projects that one-half of the pediatric patient beds needed in southwest Broward would continue to be filled by Joe DiMaggio's Children Hospital. This leaves a net need for at least 7 pediatric beds in southwest Broward; the proposed 8-bed unit at Memorial Miramar will fill that need. Patient Days, Utilization and Market Share Projections To project utilization and market shares for the proposed hospital, Dr. Finarelli used a geographic area comprised of 28 zip codes that represent the primary and secondary service areas of the proposed hospital. The areas are expected to account for 90% of the hospital's admissions. The 28 zip codes were divided by Dr. Finarelli into four geographic clusters: the 10 zip code PSA or "Southwest Broward", 9 zip codes in "Other South Broward", 3 zip codes in "North Broward" and 6 zip codes in north Dade County or "Select North Dade." Based on historical and current data and market trends, Dr. Finarelli assigned current and projected inpatient market shares in each zip code cluster to each hospital in south Broward County and to select hospitals in north Broward County and north Dade County, with and without the existence of Memorial Hospital Miramar. He also assigned market shares and projected patient days separately by service category for adult medical/surgical, obstetric and pediatric services. Dr. Finarelli's market share assumptions for the proposed hospital were as follows: for Southwest Broward County in the Adult Service Category, 6% and 18%, in OB, 7% and 20%, in Pediatrics, 7% and 20%, all for the years 2005 and 2010, respectively; for Other South Broward County, in the Adult Service Category, 0.3% and 1%, for OB, 0.3% and 1%, for pediatrics, 0% and 0%, all for the years 2005 and 2010, respectively; for North Broward in the Adult Service Category, 0.6% and 2%, for OB, 0.8% and 3% and for pediatrics, 0.8% and 3%, all for the years 2005 and 2010, respectively; and for Select North Dade, in the Adult Service Category, 0.8% and 2.5%, for OB, 1% and 3%, and for pediatrics, 0.8% and 2.5%, all for the years 2005 and 2010, respectively. Taking into account available data and projected trends in each of the zip code clusters, these market share projections are reasonable. Dr. Finarelli applied his market share assumptions to overall projections of hospital discharges for each zip code cluster to arrive at the projected number of discharges for the proposed hospital in its first and second year of operation. He included an additional 9% to 10% in projected discharges to account for patients admitted from outside the 28 zip codes, such as patients from areas elsewhere in Broward, Dade, other parts of Florida and out of state. It is typical for hospitals in Broward County to receive approximately 10% of patients from outside of their primary and secondary service areas. By multiplying the projected number of hospital discharges by a reasonable length of stay for each category of service, Dr. Finarelli arrived at his projections of patient days. His "average length of stay" assumption was less than the District average. These calculations demonstrate that Memorial Miramar will have total acute care utilization of 19,958 patient days in its first full year of operation, and 25,503 patient days in its second full year of operation. Dr. Finarelli's projections of market shares, admissions and patient days for the new hospital appear to be reasonable. The Statutory Criteria Section 408.035, Florida Statutes, provides the review criteria for CON applications. The parties agree that subsections (3) and (4) are not in dispute. Section 408.035(1) concerns whether the proposed project is supported by and consistent with the applicable district health plan (the "Plan"). The Plan contains recommendations, preferences and priorities. The majority of the preferences and priorities contained in the Plan are not applicable to this application. The Plan recommends that there should be a reduction of licensed beds in Broward County until a ratio of 4.0 beds per 1,000 population is less than 4.0 beds per thousand and/or an overall occupancy rate of 85% is achieved. Although the bed population ratio is less than 4.0 beds per thousand, the annual occupancy rate is below 50%. This criterion, quite obviously, is not met by SBHD. But its importance diminishes in light of the "not normal" circumstances in support of the application, particularly the overcrowding at Memorial West and Regional. The Plan states that "priority consideration for initiation of new acute care services or capital expenditures shall be given to applicants with a documented history of providing services to medically indigent patients or a commitment to do so." SBHD promises to provide 3.21% of gross revenue for charity care and 4.14% of its patient days for Medicaid patients at Memorial Pembroke. These figures are not unattainable. Memorial West provided 3.2% of its revenues toward charity care in the most recent year. The effect of the expiration of SBHD' lease without renewal at Memorial Pembroke may increase pressure on Memorial Miramar's charity care services. On the other hand, in light of Memorial West's history in meeting its charity care commitment and the relative affluence of the Miramar's PSA, there is some question as to whether Memorial Miramar can meet the commitment contained in the application. West has fallen far short of its 7.0% commitment. Less than 1% of its admissions were charity care admissions between 1997 and 2000 and only 2.6% of its gross revenues were for charity care in 1999, for example. Whatever West's experience bodes for Miramar's future, it is clear that SBHD has a documented history of providing services to the medically indigent. It is committed, moreover, to do so throughout the hospital district whether it achieves its commitment at Memorial Miramar or not. The preferences of the Plan related to the provision of care for the indigent is clearly met by SBHD. Section 408.035(2) addresses the availability, quality of care, accessibility and extent of utilization of existing health care facilities and health services in the service district of the applicant. There is no problem with quality of care in the district. The extent of utilization of all the facilities in the district is not high. Nonetheless, there is an access problem that constitutes not normal circumstances. Memorial West, in particular, is overcrowded. A new hospital in Miramar will enhance access for the residents of the hospital district who want to access one of the District's hospitals and so directly meets the criterion in Section 408.035(7), the "extent to which the proposed services will enhance access to health care for residents of the service district." Section 408.035(5) addresses the needs of research and educational facilities including facilities with institutional training programs and community training programs for health care practitioners at the student, internship and residency training levels. The District's affiliation with medical schools provides some satisfaction with this criterion but on balance, SBHD receives little credit under this criterion. Section 408.035(6), Florida Statutes is "[t]he availability, of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation." The parties stipulated that SBHD has the ability to recruit and retain the staff needed for the proposed hospital. Cleveland Clinic and Westside argue that SBHD's recruitment of staff will have a detrimental impact on existing providers. A shortage of skilled nurses and other allied professionals exists nationally, in Florida and in Dade and Broward Counties. The nursing shortage has intensified in recent years due to the decline in the number of licensed nurses further compounded by a drop in the number of nurses enrolled in nursing schools. As a result it has become increasingly difficult for hospitals to fill nursing vacancies. In order to ensure adequate staffing in the midst of the nursing shortage, especially during the peak season of late fall and the winter months, Westside and Cleveland Clinic are forced to utilize "agency" or "pool" nursing personnel. These nurses command higher wages than non-agency nursing personnel. The District's application projects a need for 128 registered nurses who will be full-time employees ("FTE"s). This need increases to 167. New hospitals are usually able to attract staff from other facilities who prefer to work with new equipment in a new setting. Recruitment of personnel to staff the Miramar Hospital will come at the expense of existing providers such as Cleveland Clinic and Westside. Subsection (8) of the Review Criteria is "[t]he immediate and long-term financial feasibility of the proposal." The District has the financial resources to construct the hospital and meet start-up costs. There was no challenge to SBHD's demonstration of short-term financial feasibility. Projections of revenues and expenses were based on SBHD experience at Memorial West and its other hospitals. These projections are reasonable. Based on Dr. Finarelli's patient day projections, showing a net profit of $1.6 million in year 2, the project is feasible in the long-term. Subsection (9) of the Review Criteria is "[t]he extent to which the proposal will foster competition that promotes quality and cost-effectiveness." Aside from the impact the new facility will have on Cleveland Clinic and Westside's ability to recruit and retain staff, the evidence failed to show that either Cleveland Clinic or Westside would suffer significant impact if SBHD's application is approved. No matter which experts projections of lost case volume are accepted, both Cleveland Clinic and Westside should generate substantial net profits. The future of Memorial Pembroke, after the expiration of the current lease, is too speculative to factor into the impact to HCA. Subsection (10) of the Review Criteria relates to the costs and methods of the proposed construction. The District satisfies this criterion. (See paragraph 34, above). Subsection (11) addresses the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent. As stated above, while there is legitimate doubt whether or not SBHD can meet the conditions it proposes in its application, there is no question about its past provisions of services to Medicaid patients and the medically indigent. Rule Criteria There are two rule criteria that relate to the application. Rule 59C-1.038, acute care bed priority considerations and Rule 59C-1030, additional review criteria. Under the Rule 59C-1.038 there are two priorities, only the first of which (documented history of providing services to medically indigent patients or a commitment to do so) is applicable. Stated in the disjunctive, just as its corollary statutory criterion, SBHD clearly meets the criterion based on its documented history regardless of the case Cleveland Clinic and Westside present relative to doubts based on the history of condition compliance at Memorial West. The criteria in Rule 59C-1.030 generally address the extent to which there is a need for a particular service and the extent to which the service will be accessible to underserved members of the population. The application did not identify an underserved segment of the population that is in need of the services proposed for Memorial Miramar. As for the remainder of the criteria under the rule, there is a need for the proposed project as concluded below in this order's conclusions of law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration grant South Broward Hospital District's CON Application 9459 to establish a 100-bed acute care hospital in southwest Broward County. DONE AND ENTERED this 3rd day of July, 2002, in Tallahassee, Leon County, Florida. DAVID M. MALONEY 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 3rd day of July, 2002. COPIES FURNISHED: C. Gary Williams, Esquire Michael J. Glazer, Esquire Ausley & McMullen 227 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 Stephen A. Ecenia, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32302-0551 Robert A. Weiss, Esquire Parker, Hudson, Rainer & Dobbs, LLP The Perkins House, Suite 200 118 North Gadsden Street Tallahassee, Florida 32301 F. Philip Blank, Esquire Geoffrey D. Smith, Esquire Blank, Meenan & Smith, P.A. 204 South Monroe Street Post Office Box 11068 Tallahassee, Florida 32302-3068 George N. Meros, Jr., Esquire Michael E. Riley, Esquire Gray, Harris & Robinson, P.A. Post Office Box 11189 Tallahassee, Florida 32302 Gerald L. Pickett, Esquire Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308-5403 William Roberts, Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308-5403 Virginia A. Daire, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive Building Three, Suite 3431 Tallahassee, Florida 32308-5403
Conclusions THE PARTIES resolved all disputed issues and executed a Settlement Agreement. The parties are directed to comply with the terms of the attached settlement agreement. Based on the foregoing, this file is CLOSED. DONE and ORDERED on this the L x. of , 2014, in Tallahassee, Florida. Be At yf. yor’ ABETH DUIEK, SECRETARY Agency for Health Care Administration 1 AHCA vs. Roberto Uriel, M.D., South Florida Pediatrics, C.}. 13-0344-000 Final Order Filed May 8, 2014 1:44 PM Division of Administrative Hearings A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Beverly H. Smith Assistant General Counsel Agency for Health Care Administration Office of the General Counsel (Interoffice Mail) Christopher A. Parrella, J.D., CHC, CPC, CPCO The Health Law Offices of Anthony C. Vitale, P.A. Law Center of Brickell Bay 2333 Brickell Avenue, Suite A-1 Miami, FL 33129 (U.S. Mail) Richard Zenuch, Chief, Medicaid Program Integrity Finance and Accounting Health Quality Assurance Florida Department of Health 2 AHCA vs. Roberto Uriel, M.D., South Florida Pediatrics, C.I. 13-0344-000 Final Order CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished to the above named addressees by U.S. Mail or other designated method on this the Bas of 45 , 2014, Richard Shoop, Esquire Agency Clerk State of Florida Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308-5403 (850) 412-3630/FAX (850) 921-0158 3 AHCA vs. Roberto Uriel, M.D., South Florida Pediatrics, C.1. 13-0344-000 Final Order
Findings Of Fact In April, 1987, DOA submitted recommendations to the Florida Legislature which included proposed changes in the state employees' group insurance program. Among the recommendations was a proposal that would require the Department to competitively bid HMO contracts in the state health program on the basis of cost, service area, plan benefits, and accessibility. The stated objective of the recommendation was to: encourage HMOs in a geographic location to structure their premiums to reflect actual cost experience and to provide the lowest possible cost for the state and state employees, while at the same time changing the current concept of the state's contributions to HMOs..." At the time of the DOA legislative recommendation, existing state law provided that persons eligible to participate in the state group health insurance program had the option to elect membership in any qualified HMO engaged in providing basic health services in the HMO service area where the employee resided in lieu of participating in the state self-insurance plan. Section 110.123(3)(d), Florida Statutes, Rule 22K-1.1003(21), F.A.C. A "qualified" HMO was defined as an entity qualified under the federal Public Health Service Act, 42 U.S.C. 300e-9, or certified under Part II of Chapter 641, Florida Statutes, which had entered into a contract with the State, and had achieved a designated level of participation by state employees. Rule 22K- 1.1003(21), F.A.C. Effective October 1, 1987, Chapter 87-156, Laws of Florida (now codified as Section 110.123(3)(d), Fla. Stat.) was amended to add the following: (3) STATE GROUP INSURANCE PROGRAM. -- * * * (d) * * * 2. Effective January 1, 1988, the Department of Administration shall, by rule, contract with health maintenance organizations to participate in the state group health insurance plan through the competitive bid process based on cost, service area, plan benefits, and accessibility. Effective January 1, 1988, all employees participating in the state group health insurance plan, irrespective of whether or not the member participates in a health maintenance organization, shall be subject to the same total premium, regardless of the state or employee's share. THE REQUEST FOR PROPOSALS Dennis Nye, then the DOA Director of the Office of State Employees Insurance and administrator of the state health insurance program, was directly responsible for implementing the new legislation regarding the HMO contracts. He initially determined that procurement of HMO contractual services was governed by Section 287.057, Florida Statutes. The Request For Proposals For Health Maintenance Organization Coverage was issued on July 31, 1987, as "Bid No. 88-05." It scheduled a presubmission conference on August 12, 1987, and established the deadline for receipt of proposals of August 28, 1987, with a contemplated date of award of contract on September 14, 1987, and an effective contract date of January 1, 1988. The Department clearly set forth the general purpose of the RFP in Section II as requiring each proposal to meet the benefit objectives and to provide high quality benefits and services to state employees. More specific objectives were as follows: A proactive approach to cost containment, including an emphasis on aggressive claims management, utilization review and superior statistical reporting Quality medical care which encourages health promotion, disease prevention, early diagnosis and treatment. Stability in the financial structure of offered health plans. Professional, high quality service in all administrative areas including claims processing, enrollment, membership services, grievances, and communications. Competitive premium rates which take into account the demographics and, if appropriate, the claims experience of State employees. DOA stated other objectives to be as follows: Have each county or contiguous group of counties be considered one service area. Award no more than two contracts per service area; however, the awards will be based on the HMO's ability to respond to the needs of employees and on accessibility by employees. Have reciprocal agreements between locations, if an HMO has multiple service areas. For example, an employee covered in Miami with a covered dependent living in Gainesville, should be provided similar services. Enter into a two year, non-experience rated contract. A provision will be included tying renewal action at each of the two renewals to the Consumer Price Index (CPI) for Medical Care Services. This will become part of the contract. Section III of the RFP stated that to be considered as a "qualified" HMO, the proposer must be licensed by the Department of Insurance pursuant to Part II of Chapter 641, Florida Statutes. Each proposer was required to submit the following: Form PUR 7033, properly completed and signed. The completed Questionnaires Requirements Section (Please answer questions in the same order as they appear in that Section; do not reformat). The completed Cost Proposal forms (Please use the enclosed form on page 43 and 44; do not reformat). The completed Statement of Compliance on page 47. Documentation in support of the above. Section III further provided in part as follows: Proposals are to be submitted only on the forms and formats provided in this RFP. All exhibits requested must be submitted with your proposal along with answers to all questions contained in this RFP. Section IV of the RFP provided that each contract would be for a 24 month term, beginning January 1, 1988. The Department reserved the right to renew the contracts on the same terms and conditions of the initial contract for two additional one-year periods. Section VI of the RFP, concerning "Required Benefits and Services," listed the minimum benefits that must be provided, and also required that a complete list of all other intended services for each service area be provided. Section IX specified the following criteria for evacuation of the proposals: Premium Cost Extensiveness of Service Areas by County and/or contiguous Counties. Note: The State's objective is to award no more than two contracts per services (sic) area; however, the awards will be based on the HMO's ability to respond to the needs of employees and on accessibility by employees. Plan Benefits as follows: Covered services Limitations and exclusions Co-payments, deductibles and co-insurance features Range of providers including specialists and number of hospitals Out of service area coverage Grievance procedures Acessibility as follows: Reciprocal agreements Provider locations Number of primary care physicians and specialists, in relation to membership Completeness of proposals The RFP did not provide information on DOA's evaluation of the legislatively required criteria concerning the importance of price and other evaluation criteria. The Department weighed cost equal to benefits plus accessibility and determined accessibility was a part of the plan benefits. Section X was a questionnaire with forty-nine questions for the proposers to answer including questions regarding the proposer's license status, corporate structure, reserving practices, reinsurance contracts, service area, employee membership and staff, hospitals and other care facilities, participating physicians, utilization review, and other information regarding the proposer's case management, control mechanisms, statistical reporting, and the like. Each proposer was directed to submit audited financial statements for the last two fiscal years, together with financial statements for the first quarter of 1987. Section XI dealt with cost proposals and provided a form for completion as to proposed premium rates. In an undated addendum to the RFP, the Department added Question 50 to the RFP to provide information for use in a brochure which would allow state employees to compare the benefits offered by the various HMOs. In the pre-submission conference held on August 12, 1987, and attended by representatives of the HMOs, the participants were informed by Mr. Nye that the two criteria of cost and benefits would be weighted on an equal basis. He also advised that the State would enter into a two year, non-experience rated contract, subject to renewal which would tie rate increases to the Consumer Price Index for Medical Care Services. Proposers were told to quote a specific rate for the first year of the contract, and a percentage increase or decrease for each of the following three years. However, he noted that the State would evaluate cost solely on the basis of the premium for the first year. He indicated that two HMOs per service area would be awarded contracts based on the highest number of points received in the bid evaluation process, and not based upon the type of HMO, such as an individual practice association (IPA) or staff model. Then asked whether some factors would be weighted higher than others, Mr. Nye responded that benefits and cost would be weighted higher. THE PROPOSERS 15. Twelve HMOs submitted proposals to the Department for the South Florida area (Dade, Broward, and Palm Beach Counties) in response to the RFP by the deadline, and several of those submitted more than one proposal. There was, however, no prohibition on submitting multiple proposals, and prospective bidders were told that they had that option. In this proceeding, proposals were received from Health Options, Heritage, and Humana to serve Dade, Broward, and Palm Beach Counties, and a proposal from Gulfstream to serve Palm Beach County. Health Options is a for profit subsidiary of Blue Cross and Blue Shield of Florida, and is an individual practice association (IPA) model HMO. Health Options offers HMO services in Dade, Broward, and Palm Beach Counties. It has a total membership of 23,074 members, of which 517 are state employees and dependents. Heritage is a subsidiary of Heritage Health System, Inc., for profit Delaware Corporation, and is an IPA model HMO. Heritage offers HMO services in Dade, Broward, and Palm Beach Counties, and has a total membership of 12,500 members, including 10 state employees and dependents. Humana is a for profit subsidiary of Humana, Inc., and is a combination staff/IPA model HMO. Humana offers HMO services in Dade, Broward, and Palm Beach Counties, and has a total membership of 91,217 members, including 3,273 state employees and dependents. Gulfstream, at the time its proposal was filed, was a limited partnership whose general partner was Equicor Holding Company and whose limited partner was H.C.A. Care of Florida, Inc. The limited and general partners were wholly owned subsidiaries of Equicor, Equitable H.C.A. Corporation, which is owned by Hospital Corporation of America and the Equitable Life Assurance Society of the United States. On January 1, 1988, Gulfstream converted to corporate form, and is now known as Equicor Health Plan of Florida. Gulfstream offers services in Palm Beach County and has a total membership of 12,335 members, including 933 state employees and dependents. THE EVALUATION PROCESS The evaluation of the proposals submitted by HMOs throughout the state for the seven service areas was initially accomplished by employee evaluation teams made up of employees in Dennis Nye's office. He was assisted in his selection by Marie Walker, a benefits analyst in his office. Dennis Nye and Ms. Walker decided which employees could best evaluate the proposals based on the criteria established in the law, including familiarity with benefits and the request for proposal process. The employees selected for these duties had varying degrees of knowledge concerning health plan benefits, HMOs, and bid evaluations. After the initial evaluation was completed, the Department determined that inconsistent methods had been used to score the proposals and further directed Dennis Nye to continue the evaluation process based upon an objective scoring system which limited subjectivity to the maximum extent possible. As Secretary, I was concerned with the financial soundness of each bidder and instructed Dennis Nye to keep that aspect in mind when making his final recommendation. The second or "final evaluation" of the proposals was solely based on the five criteria contained in the RFP, i.e., premium cost, extensiveness of service area, plan benefits, accessibility, and completeness of proposals. In his memorandum of October 6, 1987, Mr. Nye initially recommended that contracts be awarded in the Jacksonville, Pensacola, and Gainesville Service Areas to the two HMOs in each area that had received the top rankings. 1/ However, in the South Florida Service Area, he recommended awarding four contracts based on the need to provide one staff model and one IPA model HMO in each county in the service area. It was Mr. Nye's belief that federal law required that one HMO of each type be offered in each service area, if available. I was concerned about this issue and asked DOA's General Counsel, Augustus Aikens, to review it. He informed me that the federal requirement was not applicable because a state was not included within the definition of "employer" under the applicable federal law. On the bass of this legal advice, directed Mr. Nye to review his previous recommendations as they related to the need to retain one IPA model and one staff model HMO in each service area. In his memorandum of October 26, 1987, Mr. Nye recommended that contracts be awarded to Health Options and to Heritage on the bases that they were "the lowest, best bids for (the) service area." In his memorandum of October 30, 1987, he again recommended that contracts be awarded to Health Options and Heritage. Throughout the entire bidding process, it was my desire to avoid awarding a contract to an HMO which was not in compliance with state law or the rules of the Department of Insurance. I had written to the Department of Insurance seeking its assistance to determine the ability of each bidder to comply with the state law and to meet the needs of the state employees. By letter of October 23, 1987, the Department of Insurance informed DOA that it had approved the rates of Health Options and Heritage. EVALUATION OF THE PROPOSALS Premium Costs The Department specifically designed the RFP to require each proposer to list separate costs in categories of "employee only" and "family" for active employees and retired employees under sixty-five. Required rates for Medicare recipients were to be shown separately listing rates for retirees, retiree and spouse (both on Medicare), and retiree and spouse (one with Medicare, with or without other eligible dependents). A fixed premium cost was required for calendar year 1988 and a percentage of that rate was to be shown for the successive three years. Rates for those last three years were to be "established as a percentage of the first year's premiums" with the maximum increase "limited to the increase, if any, in the overall medical portion of the Consumer Price index." (RFP, Section XI) The rates bid by each HMO were as follows: 2/ A. Heritage (low bid): Employee Only Family Dade, Broward, 66.46 166.15 and Palm Beach B. Health Options (low bid) Dade and Broward: 78.00 195.00 Palm Beach: 75.00 185.00 C. Humana, Dade: 85.02 206.01 Broward: 83.01 199.22 Palm Beach: 77.44 185.86 D. Gulfstream, Palm Beach: 78.92 197.28 (The instructions provided that the total cost of the "family plan" shall not be greater than 2.5 times the total cost of the "employee only" plan.) DOA evaluators computed a "mean" premium cost by adding the premiums for all bidders, dividing by three, and comparing each premium to the "mean," which was then given five points. A premium above the mean gave a bidder less than five points while a premium below the mean gave the bidder more than five points. The same method was used for the "employee only" plan, the "family" plan and the three Medicare retiree groups. Based on the Department's estimate that active employees constituted 90 percent and retirees 10 percent of an HMO membership, the final point calculations were: A. Heritage (low bid): Combined (Dade, Broward and Palm Beach) 9.35 B. Health Options (low bid) Dade and Broward: 7.75 Palm Beach: 9.1 Combined (Dade, Broward and Palm Beach) 8.17 C. Humana Dade: 5.72 Broward: 6.26 Palm Beach: 8.65 Combined: 6.57 D. Gulfstream Palm Beach: 6.61 The Hearing Officer evaluated the above process and found that the Department's action was reasonable even though "the cost proposals were evaluated solely on the basis of premium for 1988." He based his conclusion on: First, Nye announced at the pre-bid conference that proposals would be evaluated solely on that basis. Second, premium costs in succeeding years were limited to the lower of the cost proposed or the future and presently unknown Consumer Price index for Medical Care Services. Accordingly, no meaningful evaluation could have resulted from a consideration of premium costs for succeeding years. (R.O., page 17) Extensiveness of Service Area At the pre-submission conference, proposers were told that they should designate their service areas and that bids would be awarded on the basis of the entire service area. DOA's evaluators awarded two points for each full county and one-half point for each partial county and proposers received 2, 4, or 6 base points depending on whether their proposal was being evaluated on one, two, or three county service area. Heritage submitted one proposal, and designated its service area as Dade, Broward, and Palm Beach Counties. Its proposal was evaluated on a composite or combined basis. Health Options submitted one proposal and designated its service area as Dade, Broward, and Palm Beach Counties. Its proposal contained two separate premium costs: one for Dade and Broward Counties, and one for Palm Beach County. The Department evaluated Health Options' proposal as it related to the individual counties of Dade, Broward, and Palm Beach County, and on a combined basis (Dade, Broward, and Palm Beach Counties). Humana submitted three separate proposals, which designated three separate service areas: Dade, Broward, and Palm Beach Counties. The Department evaluated Humana's proposal for each county and on a combined basis. Gulfstream submitted one proposal, and designated its service area as Palm Beach County. The Department evaluated Gulfstream's proposal for Palm Beach County. The Hearing Officer found that the above evaluation procedure "was reasonable and a valid exercise of the agency's discretion." (R.O., page 35) ACCESSIBILITY The Department evaluated accessibility criterion on the basis of ten points each for reciprocal agreements provided statewide and national services, ten points for each county of the service area in which a hospital was located, two points for each specialty provider in each county, and one point for each provider physician and specialist. These raw scores were then evaluated further to obtain a "mean" score for each proposer as follows A. Heritage (low bid), Combined: 5.8 B. Health Options (low bid), Dade and Broward: 8.71 Palm Beach: 1.1 Combined: 9.51 C. Humana, Dade: 4.16 Broward: 3.32 Palm Beach: 1.31 Combined: 8.79 D. Gulfstream Palm Beach: 1.18 The Hearing Officer found that the above evaluation procedure "was reasonable and a valid exercise of the agency's discretion." (R.O., page 36) COMPLETENESS OF PROPOSALS The original statutory criteria contained in Chapter 87-156, Laws of Florida, included the areas of "cost, service area, plan benefits, and accessibility." To these criteria, DOA added the fifth criterion of completeness of proposals." The Hearing Officer ruled that "(t)he Department's inclusion of this criterion was reasonable." (R.O., page 22) TOTAL POINTS Total points were calculated by adding the base points to a weighted score. In deriving the weighted score, the criteria were weighted as follows: premium costs at 3.5 times, plan benefits at 2.5 times, accessibility at 1 time, extensiveness of service area at 1 time, and completeness of proposal at 1 time. In evaluating the proposals, the Department first evaluated bids solely against other bids for the same service area. For example, Gulfstream's bid was first evaluated against only those other bids that proposed to provide services in that county. In this manner, Gulfstream ranked fourth out of the five bidders in Palm Beach County, and thirteenth overall. The points and ranking assigned by the Department to the top six proposers and to Gulfstream were as follows: HMO Base Points Weights Total Points Rank Heritage (low bid): 35.34 34.15 70.5 1 Health Options Combined (low bid) 38.59 30.79 59.48 2 Av Med 38.95 24.875 63.825 3 Health Options Dade & Broward (low bid) 34.03 27.73 51.76 4 Heritage (high bid) 34.17 25.925 60.095 5 Humana Combined: 35.05 23.46 58.51 6 Gulfstream Palm Beach: 22.46 22.03 44.49 13 A review of this table shows that the weights altered the relative positions of each of the top six proposers. Mr. Nye testified that the weighting utilized did not affect the ranking of the bids of the proposers and only affected the ranking of one bidder, AV-Med. As the Hearing Officer concluded, the proof was contrary to Mr. Nye's testimony. His finding on this point is supported by competent substantial evidence and is hereby adopted. Based on the results of its evaluation the Department proposed to award the contracts to Heritage (low) and to Health Options (combined-low). HUMANA'S COST/BENEFIT ANALYSIS Humana introduced expert testimony to demonstrate that, benefits and cost were weighted equally, its cost-to-benefits ratio would be comparable to or better than the successful proposers. Two analyses were presented. One actuarial expert adjusted the different benefit patterns of Heritage and Health Options up to the Human a benefit level and adjusted their price according to actuarial information filed with the Department of Insurance. The testimony sought to place the proposers on the same co-payment/benefit level to compare premium costs. The result was that Humana's premium cost was the second lowest for the South Florida Service Area. The second analysis adjusted Humana's benefit pattern down to the benefit/co-payment levels of Heritage and Health Options, and adjusted Humana's premium cost down accordingly based on Humana's filed actuarials. This testimony sought to place the proposers on the same co- payment/benefit level to compare premium costs, and Humana' premium cost was comparable to or lower than the second lowest bidder. The Hearing Officer found that the analyses by the expert witness were not persuasive in demonstrating that Humana was the second lowest proposer in this case, or that its cost/benefits were the second lowest. (R.O., page 26) For example, the fitness did not evaluate the bids based on the five criteria contained in the RFP, nor did he include in the cost/benefit analysis all of the criteria utilized by the Department to evaluate benefits. The findings of the Hearing Officer on this point are supported by competent substantial evidence and are therefore adopted. Plan Benefits The criteria for the evaluation of all proposals was set out in Section IX of the RFP as follows: Covered services; Limitations and exclusions; Co-payments, deductibles and co-insurance features; Range of providers including specialists and number of hospitals Out of service area coverage Grievance procedures Three sections in the RFP requested information which was relevant to the plan benefits. Section VI listed the required minimum benefits and requested a complete list of all other services. Each provider was directed to specify co-insurance, deductible, co-payment and other features for all benefits and services for each service area, and to list all limitations and exclusions for all benefits and services for each service area. Section X was a questionnaire which required each propose to list information concerning hospital, ambulatory care facilities services, available physician specialties, programs for health status evaluation, screening and health promotion, limitations or restrictions relative to organ transplants, range of providers and number of hospitals, availability of skilled nursing benefits, a list of the proposer's physician panel, and out-of-service area coverage. Under the Department's Scoring system, each propose received the following scores: A. Heritage 398 B. Health Options Dade & Broward 308 Palm Beach 165 C. Humana Dade 210.5 Broward 161.5 Palm Beach 184.5 D. Gulfstream Palm Beach 203 Using a similar method to calculate a "mean" score as was needed in the premium cost criteria, the base points were as follows: A. Heritage (low bid), Combined: 7.19 B. Health Options (low), Dade and Broward: 5.57 Palm Beach: 2.28 Combined: 5.91 C. Humana, Dade: 3.38 Broward: 2.92 Palm Beach: 3.34 Combined: 4.59 D. Gulfstream, Palm Beach: 3.57 Limitation to Two Successful Bidders Humana and Gulfstream argued that they should not be excluded from being awarded a contract because there was no foundation which required the limitation of the contracts to two or to any number of HMOs. The Department had considered awarding contracts to more than two proposers but rejected doing so because such action best effectuated the general objectives of the RFP, including that of promoting competitive rates. The Hearing Officer agreed with the Department and correctly found that "there was no showing that the selected HMOs could not adequately satisfy the needs of the state employees." (R.O., page 35). He concluded: "While the statute did not specify a number, it did specify that the Department contract through the competitive bid process. If the contracts are not limited in number, there is no competitive bidding process. Accordingly, it is concluded the Department acted reasonably in limiting the award to two HMOs." (R.O., page 35) Employee Evaluation Teams Yet another contention of the Petitioners was that the DOA employee evaluation teams lacked the experience and knowledge in the health care services field and should have been disqualified as not meeting the requirements of Section 287.057(16), Fla. Stat., which states as follows "A selection team of at least three employees who have experience and knowledge in the program areas and service requirements for which contractual serviced are sought shall be appointed by the agency head to aid in the selection of contractors for contracts of more than the threshold amount provided in s. 287.017 for CATEGORY FOUR." After full consideration of the above provision, the Hearing Officer agreed with the Department and found that the employees met the minimum statutory criteria (R.O., page 35) and had sufficient experience and knowledge in the area to properly evaluate the proposals (R.O., pages 13, 14). Departure From RFP At the pre-submission conference, Mr. Nye announced that cost and benefits would be weighted equally. In its final evaluation, the Department weighted cost at 3.5 and benefits at 2.5. The remaining criteria, accessibility, extensiveness of service area, and completeness of proposal , were weighted at I each. The Hearing Officer found that the Department's final evaluation failed to conform to the weighting factors announced at the pre- submission conference. 45. He further stated that: 43. The Department's failure to accord equal weight to cost and benefits was arbitrary and capricious. Such failure was a material departure from the RFP, as supplemented by the pre-bid conference, and adversely impacted the bid procurement process. ... Plan benefits and accessibility under Section 110.123(3)(d), Florida Statutes, and the RFP were distinct criteria upon which proposers formulated their responses. They were also distinct criteria when the Department told proposers that cost and benefits would be weighted equally, were distinct criteria when evaluated by the Departmen, and had a distinct impact upon the ranking of proposers. Under the circumstances, the Department's failure to accord them equal weight was arbitrary and capricious. Rather than acknowledge the disparity that existed between cost and benefits, the Department contended at hearing that accessibility was a part of benefits, and therefore cost and benefits were weighted equally. The Department's contention, and proof, was not persuasive and is rejected as not credible. (R.O., pages 24, 25) The Department finds that the above findings of fact are supported by competent, substantial evidence and adopts them in this final order. INTERVENORS' EXCEPTIONS TO RECOMMENDED ORDER Exceptions of Heritage Heritage filed six exceptions to the Recommended Order and each exception will be considered separately. Exception Number 1: Heritage argued that the Hearing Officer erred when he found that the Department's failure to accord equal weight to cost and benefits was arbitrary and capricious. While the Department agrees with the cases cited by Heritage which hold that administrative agencies have broad discretion in evaluating contracts for personal services such as health services, the Department is aware of its statutory responsibility to adhere to the bidding requirements of Section 287.057, Fla. Stat., and does not believe that it has the discretion to enter into contracts absent the competitive process. As to the testimony of Mr. Burbank, the Hearing Officer, as the trier of fact, was in the best position to assess his credibility and determine the weight to be accorded to his testimony. Koltay vs. Department of General Services, 374 So.2d 1386 (Fla. 2nd DCA 1979). The Department is unable to reject the Hearing Officer's findings in an area clearly within his responsibility. Exception Number 1 is rejected. Exception Number 2: Heritage next argues that the Hearing Officer erred in applying the arbitrary and capricious standard to the Department's actions relating to the weights given to various factors. The evidence shows that at the presubmission conference, Mr. Nye informed all proposers that the weights to be assigned to premium costs and to plan benefits would be equal. That information was clearly erroneous because, in the actual evaluations, the evaluators used a different weighting system, one that gave premium costs 40 percent greater weight than plan benefits. It is not the weights given to each category that makes the Department's actions arbitrary and capricious but its failure to adhere to and apply its announced weighting factors. On this basis, Exception Number 2 is rejected. Exception Number 3: Heritage urges that the Hearing Officer erred in concluding that the Department's failure to comply with the provisions of Section 287.012(11), Fla. Stat., was fundamental error. The above statute by its terms provides that "(r)equests for proposals shall state the relative importance of price and any other evaluation criteria." (emphasis added). According to the common usage of the term "shall", this language is mandatory (Fla. Tallow Corporation vs. Bryan, 237 So.2d 308 (Fla. 4th DCA 1970); S.R. vs. State, 345 So.2d 1018 (Fla. 1977) and requires that the weight of the criteria must be included in the RFP. Therefore, Exception Number 3 is rejected. Exception Number 4: Heritage argues that the Hearing Officer erred in granting standing to Gulfstream. In Preston Carroll vs. Fla. Keys Aqueduct Authority, 400 So.2d 524 (Fla. 3rd DCA 1981), an unsuccessful bidder who was third low bidder, attempted to overturn the award of the contract to the low bidder. The district court held that while a second low bidder to the award of a contract had the necessary "substantial interest" to contest the award. However, a third low bidder was unable to demonstrate that it was "substantially affected" and therefore lacked standing to protest the award of the contract to another bidder. Under the holding in this case, the Department concludes that Gulfstream did not have standing in this case since it ranked 13th in the ranking of low bidders. According, Exception Number 4 is accepted and included in the Conclusions of Law of this Order. Exception Number 5: Heritage argues that the Hearing Officer erred in concluding that Humana had standing to protest the Department's failure to state the relative importance of price and any other evaluation criteria in the RFP because Humana did not raise this point as an issue in its formal protest. If Humana did not have standing, then it was improperly permitted to protest the award of one of the contracts to Heritage. A review of Humana's protest shows that in Item 9, it argued that: "That the rejection of Humana's response to RFP #88-05, HMO coverage for State employees in Clay, Dade, Broward and Palm Beach Counties was not in accordance with all applicable rules, regulations, procedures, precedents and bid criteria." The rules of the Division of Administrative Hearings (Rule 22I-6.004(3), F.A.C.) provide for the minimum filing requirements in initial pleadings and state as follows: "(3) All petitions should contain: The name and address of each agency affected and each agency's file or identification number, if known; The name and address of the petitioner or petitioners, and an explanation of how his/her substantial interests will be affected by the agency determinations; A statement of when and how petitioner received notice of the agency decision or intent to render a decision; A statement of all disputed issues of material fact. If there are none, the petition must so indicate; A concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle the petitioner to relief; A demand for relief to which the petitioner deems himself entitled; and Other information which the petitioner contends is material." (emphasis added) The requirements of this rule are directory only and not mandatory and are not designed to deny petitioners a hearing in which their "substantial interests" are affected. Section 120.57, Fla. Stat., see Seminole County Board of County Commissioners vs. Long, 422 So.2d 938, 940 (Fla. 5th DCA 1982). The initial protest of Humana complied with the minimum filing requirements of Rule 22I-6.004(3), F.A.C., above, and was sufficient to place Heritage on notice of deficiencies alleged to be in the RFP. Exception Number 5 is rejected. Exception Number 6: Heritage argues that "(t)he Hearing Officer erred in concluding that the Department should invoke its right to reject all proposals." Contrary to Heritage's argument, the Department did not communicate how the criteria would be weighed in accordance with Section 287.012(11), Fla. Stat. It is not possible to cure the deficiency in the RFP by recalculating the proposals. The deficiency can be corrected by re-bidding for proposals for HMO medical services. On this basis, Exception Number 6 is rejected. HEALTH OPTIONS' EXCEPTION TO RECOMMENDED ORDER Health Options as one of the successful bidders filed an exception to the Hearing Officer's finding which stated that DOA had failed to state the relative importance of price and other criteria in the RFP. It argued that this issue was not presented by Humana or Gulfstream in the formal protests and thus could not be considered in the Recommended Order. Therefore, Health Options urged that the Department's award of the two HMO contracts was proper and should be upheld. As previously stated, Humana's protest argued that the rejection of its bid "was not in accordance with all applicable rules, regulations, procedures, precedents, and bid criteria." (Item 9 of Protest). Humana's protest complied with the minimum filing requirements of the Department of Administrative Hearings (Rule 22I-6.004(3), F.A.C.) which provide that petitions should contain: A statement of all disputed issues of material fact. If there are none, the petition must so indicate; A concise statement of the ultimate facts alleged, as well as the rules and statutes which entitle the petitioner to relief; A demand for relief to which the petitioner deems himself entitled; While Gulfstream's formal protest did not state that its protest was founded on the Department's failure to state the relative importance of price and other evaluation criteria in the RFP, all that was necessary for the Hearing Officer to rule on this issue was for one of the petitioner's to raise the issue in its initial protest. Since the issue was raised by Humana, the Exception of Health Options is rejected. DEPARTMENT'S EXCEPTIONS TO RECOMMENDED ORDER The Department also filed timely exceptions to the Recommended Order. After reviewing those exceptions, I find that to the extent they are not adopted and accepted herein, they are inappropriate findings of fact and have not been considered further in this Order.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department enter a final order rejecting all proposals submitted for the South Florida service area. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of March, 1988. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1988.
