The Issue Whether St. Joseph's Hospital, Inc.'s application for certification as a State Approved Pediatric Trauma Referral Center should be approved.
Findings Of Fact The Hillsborough County Hospital Authority d/b/a Tampa General Hospital ("TGH" or "Petitioner") is a licensed general acute care hospital in Tampa, Florida and is a verified level I trauma center. By definition, a level I trauma center is required to include an adult trauma center and a state-approved pediatric trauma referral center ("SAPTRC"). The Department of Health and Rehabilitative Services ("DHRS" or "Respondent") is the state agency with statutory responsibility for certification and regulation of trauma centers in Florida. St. Joseph's Hospital ("SJH" or "Intervenor") is a licensed general acute care hospital in Tampa, Florida and is a verified level II trauma center. SJH was provisionally approved as a level II trauma center on May 1, 1991 and was verified on July 1, 1992. A level II trauma center is not required to operate a SAPTRC. By letter of August 17, 1993, the DHRS notified the chief executive officers for all Florida hospitals of next trauma center application review cycle. Pursuant to statute, letters of intent were due by October 1, 1993 for the referenced review cycle. A letter of intent to apply for certification as a trauma center is an nonbinding expression of intent. Frequently a hospital files a letter of intent to become a trauma center but and then fails to file the application. A hospital seeking trauma unit certification must submit a letter of intent by the October 1 preceding the April 1 application deadline. A letter of intent is only valid for the application review cycle for which it is submitted. A hospital which submits a letter of intent but does not file the subsequent application must submit another letter of intent in order to file an application in a later review cycle. Pursuant to Section 395.4025(2)(a), Florida Statutes, a hospital that operates within the geographic area of a local or regional trauma agency must certify that its intent to operate as a state-approved trauma center is consistent with the trauma services plan of the local or regional trauma agency, as approved by the department, if such agency exists. The cited statute specifically provides that this requirement does not apply to any hospital that is certified as a provisional or verified trauma center on January 1, 1992. A trauma agency ("agency") is a planning unit of one or more county governments which plans for the development of the trauma system in that county or multi-county region. The DHRS is charged with review and approval of all local trauma agencies, the trauma systems plans adopted by such agencies and annual updates and amendments to local trauma plans. The Hillsborough County Trauma Agency ("HCTA"), is the DHRS-approved local trauma agency for Hillsborough County, Florida and is responsible for trauma service area #10. The Petitioner asserts that the SJH application will increase the number of service area #10 trauma centers beyond the limit of two imposed by statute and rule. There are currently two trauma centers in Hillsborough County (service area #10) including the Petitioner and the Intervenor. The expansion of services proposed by SJH will not increase the number of trauma centers in service area #10. If SJH is awarded the certification, there will still be two trauma centers. The trauma services plan submitted by the HCTA and approved by the DHRS does not expressly address whether or not any need exists for a second SAPTRC in service area #10. The 1990 amendment to the local plan references SJH's interest in operating a SAPTRC, but does not state whether need exists for a second SAPTRC. By letter of intent dated September 23, 1993 and received by the DHRS on September 30, 1993, SJH filed notice of intent to apply for certification as a state approved pediatric trauma referral center. By letter of October 14, 1993, the DHRS acknowledged receipt of SJH's letter of intent. The SJH letter of intent does not certify that the SJH's planned pediatric trauma referral center was consistent with the local trauma agency's plan. The failure of SJH to certify that the proposed SAPTRC is consistent with the local trauma agency plan is of no consequence. Section 395.4025(2)(a), Florida Statutes, specifically exempts any hospital that is certified as a provisional or verified trauma center on January 1, 1992. SJH was provisionally approved as a level II trauma center on May 1, 1991. Consideration of whether the local plan indicates need for an additional SAPTRC or whether the SJH proposal is consistent with the local trauma plan is not required. Until immediately prior to this case being heard, and despite the aforementioned exemption for some facilities, the DHRS required all hospitals located in areas where local or regional trauma agencies exist to submit some type of certification that the proposed trauma unit was consistent with the local plan. Since adoption of the 1992 statutory amendments, the DHRS has failed to appropriately apply the referenced exemption. Immediately preceding commencement of the hearing in this matter, the DHRS position was revised to reflect the exemption. The SJH application for certification as a SAPTRC was filed with the DHRS on or before April 1, 1993. On May 13, 1993, the DHRS notified SJH of certain omissions and requested additional information. On May 19, 1993, SJH filed its response to the request for information. Thereafter, the DHRS performed a preliminary review of the application to determine whether SJH met the requirements for approval as a "provisional" SAPTRC. Included in the information considered by the DHRS in evaluating the SJH application were documents submitted by representatives of the HCTA related to whether the SJH application was supported by the local agency and was consistent with the local trauma plan. The HCTA documents submitted are immaterial because, as previously addressed, SJH is exempted from the requirement related to local trauma plan consistency. The DHRS determined that the SJH application met the required critical standards for provisional approval. The DHRS notified SJH of the provisional approval on May 31, 1994. TGH challenged the DHRS determination that the SJH application met the critical standards. A hospital which meets the "critical elements" set forth in statute may receive provisional approval as a SAPTRC. Section 395.4025(2)(c), Florida Statutes, provides as follows: ....The department shall conduct a provisional review of each application for the purpose of determining that the hospital's application is complete and that the hospital has the critical elements required for a state approved trauma center. This critical review will be based on trauma center verification standards and shall include, but not be limited to, a review of whether the hospital has: Equipment and physical facilities necessary to provide trauma services. Personnel in sufficient numbers and with proper qualifications to provide trauma services. An effective quality assurance program. Submitted written confirmation by the local or regional trauma agency that the verification of the hospital as a state-approved trauma center is consistent with the plan of the local or regional trauma agency, as approved by the department, if such agency exists. This subparagraph applies to any hospital that is not a provisional or verified trauma center on January 1, 1992. As previously stated, because SJH was a provisionally approved trauma center on January 1, 1992, it is not required to submit written confirmation by the local or regional trauma agency that verification of the hospital as a state-approved trauma center is consistent with the plan of the local or regional trauma agency. The parties stipulated that the SJH application meets the standards regarding staffing, facilities, equipment, and quality assurance required for provisional approval, except as to the following: Whether St. Joseph's will have adequate surgeon coverage and support to meet the require- ments to be a provisional SAPTRC. Whether St. Joseph's will have adequate physician coverage in its pediatric ICU to meet the requirements to be a provisional SAPTRC. Whether St. Joseph's meets the statute and rule requirements for provisional review as they relate to quality of care to pediatric trauma alert patients. There was attention directed at the hearing to the fact that the DHRS application form fails to accurately track the applicable rules setting forth the requirements for certification as a SAPTRC. Notwithstanding the agency's failure to create an accurate application form, the minimum standards for review for Provisional SAPTRCs as identified in Rule 10D-66.109(d)2, Florida Administrative Code, are the following portions of HRSP 150-9, October 91: STANDARD Type of Hospital Surgery Department; Division; Services; Sections: A Surgical Specialties Availabilities: A 1, 2, 3 & 4 Non-Surgical Specialties Availabilities: 1, 8 & 13 Emergency Department (ED): A, B, D & H Operating Suite Special Requirements: A IX. Pediatric Intensive Care (P-ICU): A, C, 1 XVI. Quality Management: A, B, C, D, & E The booklet identified as "State-Approved Trauma Center and State- Approved Pediatric Trauma Referral Center Approval Standards, HRSP 150-9, October 91" provides specific information related to each standard. The following constitutes review of the minimum standards for Provisional SAPTRCs as related to the application submitted by SJH. Standard I. Type of Hospital SJH is a level II trauma facility and is a general acute care hospital with independent pediatric trauma patient care services within the facility, from emergency department admission through rehabilitation, separate and distinct from adult patient care services. SJH meets the Standard I requirement. Standard II. Surgery Department; Division; Services; Sections: A SJH offers the required types of surgery, including general surgery, orthopedic surgery and neurosurgery. Orthopedic surgery and neurosurgery are divisions within the Department of Surgery. SJH meets the Standard II A requirement. Standard III. Surgical Specialties Availabilities: A 1, 2, 3 & 4 SJH meets the Standard III A requirement. SJH offers general surgery, neurosurgery, orthopedic surgery and otorhinolaryngologic surgery on call and promptly available 24 hours a day. Standard V. Non-Surgical Specialties Availabilities: 1, 8 & 13 SJH meets the specified Standard V requirement. SJH offers the required types of non-surgical specialties, including anesthesia, pediatric intensive and critical care medicine, and radiology including diagnostic x-ray and computerized tomography. The specialists in each area have special competence in the care of the pediatric trauma patient in their specialties. Standard VI. Emergency Department (ED): A, B, D & H SJH meets the specified Standard VI A requirement. SJH has an identifiable intake and resuscitation area specifically equipped for pediatric trauma patients . The SJH pediatric trauma area is located in the Emergency Department and is easily accessible to land and air transportation. SJH meets the specified Standard VI B requirement. SJH's Emergency Department has a designated medical director/physician for pediatrics, a trauma/general surgeon, emergency department physicians, a nursing staff and respiratory therapy staff. The personnel have special competence in the care of the pediatric trauma patients. SJH Emergency Department staff are available as follows: At least one E.D. physician is present in the E.D. 24 hours a day; Nursing staff is present in the E.D. 24 hours a day; and Respiratory therapy staff are on call and immediately available in-hospital 24 hours a day. SJH meets the specified Standard VI D requirement. SJH has a radio communication system that conforms to the State EMS Communications Plan and telephone and paging equipment to contact trauma team members. The equipment is functional and is located in the trauma center intake area. SJH meets the specified Standard VI H requirement. SJH has written protocols for the immediate response to the emergency department from the blood bank, laboratory, respiratory therapy and operating room. Standard VII. Operating Suite Special Requirements: A SJH meets the specified Standard VII A requirement. SJH has a fully staffed and equipped operating room, available 24 hours a day for immediate use. Written operating procedures for 24 hour a day operating room availability for pediatric trauma patients and staffing are available for review by the DHRS. Standard IX. Pediatric Intensive Care (P-ICU): A, C, 1 SJH fails to comply with Standard IX as set forth in Rule 10D- 66.109(d)2, Florida Administrative Code, referencing "State-Approved Trauma Center and State-Approved Pediatric Trauma Referral Center Approval Standards, HRSP 150-9, October 91." Standard A, C, 1 specifically requires that the P-ICU medical director or a physician designated by the P-ICU medical director must be available in the unit 24 hours a day. SJH does not propose to place the P-ICU medical director or a physician designated by the P-ICU medical director in the unit 24 hours a day. SJH proposes to make the P-ICU medical director or a physician designated by the P-ICU medical director available to the unit 24 hours a day. "Available to" the unit does not require that the identified employee be present in the hospital. As much as 30 minutes could pass before the P-ICU medical director or his designee arrives at the P-ICU. Although the evidence establishes that the DHRS has accepted such arrangements in previous applications, the rule specifically requires that the referenced personnel be located in the P-ICU. There is no legal authority for the DHRS to disregard the requirement set forth in its own rules. Standard XVI. Quality Management: A, B, C, D, & E SJH meets the specified Standard XVI A requirement in that it has a comprehensive quality management plan in operation. SJH meets the specified Standard XVI B requirement. SJH's quality management plan include protocols for 1) pediatric trauma patient triage and the issuance of an in-hospital trauma alert; 2) response of trauma team and documentation of response time in each patient record for members of the trauma team, neurosurgical, laboratory, x-ray, social work, pastoral, consultants and elapsed time for laboratory results. Protocols are also included related to trauma, medical and nursing staff patient care responsibilities, trauma operating room team response, assuring operating room and operating room staff availability to the pediatric trauma patient, pediatric trauma patient care in ICU, post-anesthetic recovery room and wards, transport of the pediatric trauma patient to the operating room, x-ray suites, CT scanner, ICU, and other hospital areas and hospital transfers. SJH meets the specified Standard XVI C requirement. SJH plan includes, and SJH will implement and perform monthly trauma quality management, consisting of a trauma quality management committee that will meet at least monthly to review pediatric trauma cases, including cases involving morbidity and mortality. The pediatric trauma service medical director or trauma nurse coordinator will review specified cases including all pediatric trauma alert cases, all critical admissions for traumatic injuries, all pediatric trauma Operating Room admissions from the emergency department and/or state-approved trauma center, any critical pediatric trauma transfers into or out of the emergency department and/or trauma center, and all traumatic deaths. Review of such cases will include application of "audit filters" as identified in the rule. Appropriate records will be maintained in-hospital, of all cases to which audit filters were applied. Pediatric trauma cases will be evaluated by the medical director of the trauma service and/or trauma nurse coordinator. The trauma nurse coordinator and the medical director will present a summary of the reviewed cases not referred to the committee, along with cases requiring further evaluation where there is no clear and appropriate reason for a situation to have occurred. Cases referred to the trauma quality management committee for which the committee can find no clear and appropriate reason for the situation to have occurred will be sent to appropriate persons or committees responsible for corrective action. The medical director of the trauma service will report back to the trauma quality assessment committee the resolution of each case. The SJH trauma quality management committee is composed of the trauma nurse coordinator, a trauma surgeon (other than the pediatric trauma service medical director), an emergency physician, a surgical specialist (other than trauma surgeon), a representative from SJH administration, the operating room nursing director, the Emergency Department nursing director and the intensive care unit nursing director. At least 75 percent attendance of the committee members is required at the monthly trauma quality management committee meetings. SJH will maintain minutes of all trauma quality management committee meetings for at least three years and are readily available for review by the DHRS. The minutes shall include at a minimum, the names of the attendees and the subject matter discussed, and actions toward resolution(s) of identified problems. The trauma quality management committee will prepare and submit a quarterly report to the DHRS at the end of each calendar year quarter by the 15th of the month following the end of the previous quarter. The report will list every case selected for corrective action by the trauma quality management committee and will provide identify the hospital case number, the trauma registry number (from HRS Form 1728, "Trauma/Head Injury/Spinal Cord Injury Registry"), a description of questionable care, and the corrective action taken. If corrective action is not necessary, an explanation is required. The medical director/chair of the trauma management committee will compile monthly statistics on each trauma surgeon on the trauma call roster. The statistics will be available for the DHRS review or will be submitted upon request. The statistics for each surgeon shall reflect the total number of cases per calendar month for which each trauma surgeon was notified to respond to a pediatric trauma alert and the total number of cases for which the trauma surgeon did not meet the pediatric trauma alert patient at the time of the trauma alert patient's arrival at the SAPTRC. SJH will conduct a monthly multi-disciplinary trauma conference for case management and education. When appropriate, the conference will include review of the local/regional emergency medical service system, individual case management, the SAPTRC, solution of specific problems including organ procurement and donations, and trauma care education. The attendees will include representatives from trauma services, the emergency department, neurosurgery, orthopedics, nursing, social work, rehabilitation medicine, laboratory, x-ray, prehospital providers and hospital administration. At least 50 percent attendance will be required at the monthly multi-disciplinary trauma conference. Minutes from these conferences, including the names of the attendees and subject matter discussed, will be maintained at the SAPTRC for a minimum of three years and will be readily available for review by the DHRS upon request. SJH meets the specified Standard XVI D requirement relating to file maintenance. The trauma unit will have on file credentials of all surgeons in the trauma service as well as consultants, morbidity and mortality figures for the pediatric trauma service, CME data on all physicians participating in the pediatric trauma service, research and CME activities on all surgeons participating in the trauma services, nursing credentials, nursing CEU, any nursing research, a written plan of how the trauma nurse coordinator and the trauma service medical director's duties and responsibilities are integrated, a written disaster plan, the county or regional disaster plan and evidence of disaster drill activities. SJH meets the specified Standard XVI E requirement relating to file maintenance. The SAPTRC will fully participate in the trauma registry
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order denying the application of St. Joseph's Hospital for certification as a State-Approved Pediatric Trauma Referral Unit. DONE and RECOMMENDED this 3rd day of March, 1995, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of March, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-3669 The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner Tampa General Hospital The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 1-14. Rejected, irrelevant. 15-20. Rejected, unnecessary. It is not unreasonable to address free standing units or new trauma centers differently that service expansions to existing facilities. 21-22. Rejected, irrelevant. 24-79. Rejected, irrelevant. 81. Rejected, unnecessary. 83-120. Rejected, irrelevant. 121. Rejected, unnecessary. 123-128. Rejected, irrelevant. 130-134. Rejected, irrelevant. Rejected, irrelevant. The rules which set forth the specific requirements for certification supersede application form. Rejected, irrelevant. Respondent Department of Health and Rehabilitative Services The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 11-13. Rejected, unnecessary. Rejected, subordinate. Rejected, unnecessary. 17. Rejected, unnecessary. 19. Rejected, unnecessary. 21-23. Rejected, subordinate. 24. Rejected, irrelevant. 25-27. Rejected, subordinate. 28-29. Rejected, unnecessary. 30. Rejected, not supported by credible evidence. 32. Rejected, unnecessary. 34. Rejected, irrelevant. 36. Rejected, irrelevant. 38-40. Rejected, irrelevant. 41. Rejected, unnecessary. 42-58. Rejected, irrelevant. 59. Rejected, unnecessary. 60-81. Rejected, irrelevant. 82. Rejected, not supported by the greater weight of the evidence. 83-86. Rejected, unnecessary. Rejected, not supported by the greater weight of the evidence. Rejected, irrelevant. 89-91. Rejected, unnecessary. 92. Rejected, contrary to law. The rules set forth the specific requirements which must be met for certification as a provisional SAPTRC. The rule unambiguously requires that the Pediatric Intensive Care Unit medical director or a physician designated by the P-ICU medical director must be available in the unit 24 hours a day. There is no legal authority for the DHRS to disregard the requirement, notwithstanding the agency's apparent failure to enforce the rule in previous instances. Intervenor St. Joseph's Hospital The Intervenor's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 7-9. Rejected, unnecessary. 13-14. Rejected, unnecessary. 16-17. Rejected, unnecessary. 19-31. Rejected, unnecessary. 64-65. Rejected, not supported by the greater weight of the evidence. Despite the DHRS practice, the rule specifically requires that the referenced personnel be located in the P-ICU. The rule is not satisfied by the SJH proposal. 82. Rejected, not supported by the greater weight of the evidence. COPIES FURNISHED: Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Kim Tucker, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Elizabeth McArthur, Esquire Radey Hinkle Thomas & McArthur 101 N. Monroe Street, Suite 1000 Post Office Drawer 11307 Tallahassee, Florida 32302 Robert P. Daniti, Esquire Senior Attorney Emergency Medical Services Department of Health and Rehabilitative Services 1317 Winewood Blvd. Tallahassee, Florida 32399-0700 Bruce D. Lamb, Esquire Christopher J. Schulte, Esquire 201 East Kennedy Blvd., Suite 1000 Tampa, Florida 33602
Findings Of Fact Background On September 28, 1988, First Hospital Corporation of Florida d/b/a First Hospital of Palm Beach County (First Hospital) filed a timely application for the July 1993 planning horizon with the Department of Health and Rehabilitative Services (Department) for a certificate of need (CON) to construct a 48- bed short-term psychiatric specialty hospital, dedicated to the care of children and adolescents, in District IX. 1/ District IX is comprised of Palm Beach, Martin, St. Lucie, Indian River, and Okeechobee Counties. On February 3, 1989, the Department published notice in the Florida Administrative Weekly of its intent to grant First Hospital's application. Petitioners, Lake Hospital & Clinic, Inc. d/b/a Lake Hospital of the Palm Beaches (Lake Hospital), and Community Hospital of the Palm Beaches, Inc. d/b/a Humana Hospital Palm Beaches (Humana), existing providers of psychiatric services to adolescents in Palm Beach County, filed timely petitions for a formal administrative hearing to oppose the grant of the subject application. The matter was referred to the Division of Administrative Hearings for the assignment of a hearing officer to conduct a formal hearing pursuant to section 120.57(1), Florida Statutes, and Savannas Hospital Limited Partnership (Savannas), an existing provider of psychiatric services to adolescents in St. Lucie County, was granted leave to intervene. 2/ The proposed facility At issue in this proceeding is the application of First Hospital for a CON to construct a 48-bed short-term psychiatric specialty hospital dedicated to the care of children and adolescents. This project is, however, only a portion of an 80-bed facility that First Hospital proposes to construct on a 30-acre parcel of land adjacent to Wellington Regional Memorial Hospital in western Palm Beach County. As sited, the proposed facility would be located west of the Florida Turnpike; on the west side of State Road 7 and approximately .2 miles north of Forest Hills Boulevard. The 80-bed facility that First Hospital proposes to construct would consist of a central core area and three attached wings or units. Two of the wings, each containing 24 beds, will be dedicated as short-term psychiatric beds, with one wing for young adolescents (10-14 years of age) and one wing for older adolescents (14-18 years of age). The third wing, consisting of 32 beds, will be dedicated as a residential treatment center (RTC) for adolescents. The central core area would include administrative, therapy, kitchen and dining, gymnasium classroom areas and other support functions, and is essential to the operation of the psychiatric units, but will be shared with the residential treatment unit. A therapeutic preschool program, for children 3-5 years of age, as well as a partial hospitalization program for adolescents, are also proposed to be offered, and will be located in the central core area. 3/ The psychiatric program proposed by First Hospital for its 48-bed short-term psychiatric facility will address emotional and behavioral disorders that may affect adolescents, and which require admission to a short-term acute care facility for treatment. In its application, First Hospital estimates an average length of stay of 45 to 60 days. The availability, quality of care, efficiency, appropriateness, accessibility, extent of utilization and adequacy of like and existing health card services in the service district As a touchstone for assessing need within a service district, the Department has established a short-term psychiatric bed need methodology that must normally be satisfied before a favorable need determination will be found. That methodology, codified in Rule 10-5.011(1)(0)(4), Florida Administrative Code, contains two identifiable parts. The first part deals with the mathematical derivation of a net bed need for the planning horizon by assuming a gross bed need ratio of .35 beds per 1,000 population, and reducing that figure by the number of existing and approved beds. Based on the population projections of the Executive Office of the Governor, July 1988 release, application of this methodology derives a net need for 48 short-term psychiatric beds for the July 1993 planning horizon (gross bed need of 480- existing and approved beds of 432 = 48 net bed need. 4/ The second part of the Department's need methodology addresses occupancy standards for existing facilities that must be satisfied before a favorable need determination will normally be found. For short-term child and adolescent beds, the rule mandates an average annual occupancy rate of not less than 70 percent for all such existing facilities for the preceding 12- month period. Here, the proof demonstrates an average annual occupancy rate in excess of 70 percent for the 12-month period preceding the Department's need calculation, and satisfaction of the second part of the Department's need methodology. On August 12, 1988, the Department, pursuant to Rule 10-5.008(2)(a), Florida Administrative Code, published notice of the hospital fixed need pool for the July 1993 planning horizon in the Florida Administrative Weekly. Pertinent to this case, such notice erroneously established a net need for 33 short-term psychiatric beds in District IX. Following publication of the fixed need pool, the Department received information that its calculation of the net need for short-term psychiatric beds in District IX was erroneous. Upon review, the Department established that its initial calculation was in error, and on August 26, 1988, the Department published a notice of correction in the Florida Administrative Weekly, which correctly established a net need for 48 short-term psychiatric beds in District IX for the July 1993 planning horizon. This adjustment to the fixed need pool did not result from any intervening changes in population estimates, bed inventories, or other factors which would lead to different projections of need, but from an error in the Department's mathematical calculation. Under the circumstances, the Department's correction of the fixed need pool was appropriate and timely, and a need for 48 short-term child and adolescent psychiatric beds for the July 1993 planning horizon has been demonstrated. Of the 432 short-term psychiatric beds approved and existing within the district on August 17, 1988, 119 beds were reported to the local health council as dedicated to short-term child and adolescent psychiatric services, and the balance of 313 beds as dedicated to adult psychiatric services. Allocation of the 119 short-term child and adolescent beds was reported as follows: Lake Hospital 26 beds, Fair Oaks 27 beds, Humana 27 beds, Savannas 15 beds, and Lawnwood (Harbour Shores) 24 beds. Lake Hospital is a 98-bed freestanding psychiatric specialty hospital located in Lake Worth, Palm Beach County, Florida, that treats adolescents and adults for psychiatric disorders and substance abuse. As of August 17, 1988, Lake Hospital was licensed to operate 56 short-term psychiatric beds, 26 long- term psychiatric beds, and 16 short-term substance abuse beds. Of the 56 short- term psychiatric beds, 26 beds were approved for adolescent care and 30 beds were approved for adult care. During calendar year 1987, Lake Hospital enjoyed an occupancy rate of 91.8 percent for its 26 short-term psychiatric beds, which were dedicated to the care of adolescents, ages 12- 17. In January 1988, Lake Hospital opened a replacement facility on its campus consisting of a two-story structure with four 18- bed units, and reported to the local health council that two of those units (36 beds) were dedicated to short-term adolescent care in January and February 1988, and that thereafter only 18 beds were dedicated to short-term adolescent care. Based on such utilization, Lake Hospital enjoyed an occupancy rate of 95 percent for the first four months of 1988 and a 93.9 percent occupancy rate for calendar year 1988 for its adolescent beds. 5/ Fair Oaks is a 102-bed free standing psychiatric specialty hospital located in Delray Beach, Palm Beach County, Florida, that treats children, adolescents, and adults for psychiatric disorders and substance abuse. As of August 17, 1988, Fair Oaks was licensed to operate 70 short-term psychiatric beds, 15 long-term psychiatric beds, and 17 short-term substance abuse beds. Of the 70 short-term psychiatric beds, 27 beds were approved for child and adolescent care and 43 beds for adult care. During the calendar year 1987, Fair Oaks' second year of operation, it achieved an occupancy rate of 73.1 percent for its 27 short-term child and adolescent psychiatric beds. For the first four months of calendar year 1988, Fair Oaks enjoyed an occupancy rate of 99.7 percent, and for all of calendar year 1988 an occupancy rate of 91 percent. 6/ Humana is a 250-bed general hospital located in West Palm Beach, Florida. Of its existing beds, 162 are dedicated as medical/surgical beds, and 88 as short-term psychiatric beds. For calendar year 1987, Humana reported to the local health council that 27 of its 88-bed complement of psychiatric beds were dedicated to short- term adolescent services, but declined or neglected to report its utilization so that an average length of stay could be calculated. In fact, Humana did not operate a short-term adolescent program for 1987, but operated a long-term program without Department approval. Pertinent to this conclusion, the proof demonstrated that Humana applied for the development of an 88-bed psychiatric pavilion in 1983. Certificate of Need No. 2647 was issued to Humana on November 17, 1983, for 80 short-term psychiatric beds consisting of 48 adult psychiatric beds, 24 geriatric beds, and 8 adult special beds; and, on January 8, 1985, Humana received CON No. 3237 for the additional 8 short-term adult psychiatric beds. Humana opened its psychiatric pavilion in November 1986, and by January 1987 was serving adolescents, ages 13 through 18, in a 27-bed unit notwithstanding the absence of Department approval. As to the services provided in that unit, the proof is compelling that it was dedicated to long-term adolescent psychiatric services with an average length of stay of approximately 280 days. At some point thereafter, but not earlier than July 1989, Humana also began providing short-term adolescent psychiatric services at its facility. 7/ Following the Department's investigation into Humana's operation of a long-term adolescent psychiatric program, Humana applied for a modification of its CON Nos. 2647 and 3237 to allow it to operate a district adolescent unit. On July 14, 1989, Humana received Department approval, and such CON's were modified to allow 15 short-term adolescent psychiatric beds. This modification is, however, currently the subject of an appeal to the District Court. In the interim, on December 14, 1988, Humana received CON No. 5294 for the addition of 15 short-term beds for adolescents and adults, and on February 25, 1989, Humana received CON No. 5722 for the redesignation of 15 short-term psychiatric beds to 15 long-term beds. Currently, Humana has available 30 short-term psychiatric beds for adolescent use, and 15 long-term beds, but its short-term program is in a start-up mode. Savannas is a 70-bed freestanding psychiatric hospital located in Port St. Lucie, St. Lucie County, Florida, approximately 40 miles north of Palm Beach County, that treats adolescents and adults for psychiatric disorders and substance abuse. As of August 17, 1988, Savannas was licensed to operate 50 short-term psychiatric beds and 20 short-term substance abuse beds. Of the 50 short-term psychiatric beds, 15 beds were approved for adolescent care and dedicated to patients ages 14- 17, and 35 beds were approved for adult care. Savannas opened its facility in October 1987, and for that calendar year reported 1,215 patient days for its short- term adolescent unit, For calendar year 1988, its first full year of operation, Savanna's adolescent unit achieved 3,589 patient days, or an occupancy rate of 65.5 percent. Lawnwood (Harbour Shores) is a general hospital located in Fort Pierce, St. Lucie County, Florida, that, as of August 17, 1988, was licensed to operate 60 short-term psychiatric beds. Of the 60 short-term psychiatric beds, 24 beds were approved for child and adolescent care, and 36 for adult care. The date Lawnwood commenced operations does not appear of record; however, during calendar year 1987, it achieved a 62 percent occupancy rate for its 24-bed adolescent unit. For calendar year 1988, Lawnwood maintained a similar occupancy rate even though Savannas was drawing patients from the same service area to its new facility. Considering the availability, accessibility, extent of utilization and adequacy of short-term child and adolescent beds in the service district at all times pertinent to this case, there exists a need for the 48 beds requested by First Hospital, and such beds should be located in Palm Beach County consistent with the local health plan, discussed infra. The need for the proposed facility in relation to the district plan and state health plan Applicable to this case is the 1985-87 state health plan, which contains the following goals and objectives pertinent to short-term inpatient psychiatric beds: GOAL 1: ENSURE THE AVAILABILITY OF MENTAL HEALTH AND SUBSTANCE ABUSE SERVICES TO ALL FLORIDA RESIDENTS IN A LEAST RESTRICTIVE SETTING. OBJECTIVE 1.1: The ratio of short term inpatient hospital psychiatric beds to Florida's population should not exceed .35 beds per 1000 population thru 1987. RECOMMENDED ACTIONS: a: Restrain increases in the supply of short term inpatient hospital psychiatric beds to no more than .35 beds per 1000 population. OBJECTIVE 1.2: Through 1987, additional short term inpatient hospital psychiatric beds should not normally be approved unless the average annual occupancy rate for all existing and approved adult short term inpatient psychiatric beds in the service district is at least 75% and average annual occupancy for existing and approved adolescent and children beds is at least 70%. RECOMMENDED ACTIONS: a. Restrict approval of additional short term inpatient psychiatric beds to these service districts which have an average annual occupancy of 75% for existing and approved adult beds and 70% for existing and approved adolescent and children beds. GOAL 2.: PROMOTE THE DEVELOPMENT OF A CONTINUUM OF HIGH QUALITY, COST EFFECTIVE PRIVATE SECTOR MENTAL HEALTH AND SUBSTANCE ABUSE TREATMENT AND PREVENTIVE SERVICES. OBJECTIVE 2.1: Define, develop and implement policy regarding the appropriate treatment settings and the role of each setting in the delivery of mental health and substance abuse services by 1987. GOAL 3: DEVELOP A COMPLETE RANGE OF ESSENTIAL PUBLIC MENTAL HEALTH SERVICES IN EACH HRS DISTRICT. First Hospital's application is consistent with the goals and objectives of the state health plan. Here, First Hospital proposes to provide a 24-hour-a-day therapeutic milieu, with an average length of stay of 60 days or less, for children and adolescents suffering from mental health problems which are so severe and acute that they need intensive, full-time care. As such, First Hospital will offer care for those individuals for whom short-term inpatient psychiatric care is the least restrictive setting appropriate, and which care, consistent with the Department's need methodologies, will complement the range of mental health services needed in the district. Also applicable to this case, is the 1988 District IX local health plan. Pertinent to this case, the local health plan divides District IX into two subdistricts when planning for short-term psychiatric beds. Subdistrict one consists of Indian River, Martin, St. Lucie and Okeechobee Counties, and subdistrict two consists of Palm Beach County. In allocating short-term psychiatric beds between subdistricts, the local plan provides: When bed need is shown in District IX for either short-term psychiatric services or substance abuse services in accordance with Chapter 10-5.11 of the Florida Administrative Code, the method for allocating beds among subdistricts shall be based upon projected subdistrict occupancy figures as determined by use-rates during the most recent calendar year in combination with projected subdistrict population figures. New beds shall be allocated to the subdistrict showing the highest projected percent occupancy, to the extent that the projected percent occupancy equal that of the other subdistrict. When projected occupancy figures show parity, any remaining beds shall be allocated based upon each subdistrict's percentage of projected patient days for District IX. All projections shall be five years into the future to correspond with the planning horizon governing the addition of psychiatric and substance abuse beds as set forth in state rule. Applying the local plan's methodology to the facts of this case demonstrates that the beds identified by the Department's need methodology should be allocated to subdistrict two, Palm Beach County, which is the county within which First Hospital proposes to locate. The local plan also requires an examination of an applicant's commitment or record of service to medicaid/indigent and underserved population groups. The First Hospital facility will be a specialty hospital and therefore not eligible to provide medicaid services; however, First Hospital has committed to dedicate 8 percent of its patient days to indigent care. Under such circumstances, First Hospital's application is, on balance, consistent with the local plan. The ability of the applicant to provide quality of care and the applicant's record of providing quality of care First Hospital is a wholly owned subsidiary of First Hospital Corporation, an established provider of psychiatric services to children and adolescents since 1983. As of this date, First Hospital Corporation owns and operates 15 hospitals nationally, and has demonstrated the commitment and ability to provide quality care to its patients. Here, First Hospital's staffing is reasonable, and while the program proposed by First Hospital is generic in nature, and similar to that offered by other short-term providers of such services, it will assure, in light of demonstrated need, that patients needing acute short-term psychiatric services in the district will continue to receive quality care. To the extent that the needs of the district may subsequently evidence the need for more specialized programs, First Hospital has demonstrated its ability to address such needs, and to provide quality programs and services. The availability and adequacy of other health care facilities and services in the service area which may serve as alternatives for the health care facilities and services proposed by the applicant The Department's short-term psychiatric bed rule addresses the need for psychiatric facilities that will treat emotional and behavioral disorders which require admission to a short-term acute care facility for treatment. Where such short- term psychiatric care is indicated, any other type of placement would not be appropriate under existing rules (not long-term, residential treatment, group home, or out-patient care), and there are no alternatives for the services proposed by First Hospital. The availability of resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation First Hospital has demonstrated that it either has or can obtain all resources, including health manpower, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. As heretofore noted, First Hospital Corporation, the parent of the applicant, has provided psychiatric services to children and adolescents since 1983, and currently owns and operates 15 hospitals nationally. It has never experienced any serious difficulty in financing its operations, either start-up or operational, and has in place an existing program for the recruitment and training of medical, administrative, clerical and other personnel that might be needed for the proposed facility. First Hospital Corporation has no other new projects pending at this time, and has committed itself to the project proposed by its subsidiary. Additionally, Dr. Ronald Dozoretz, who is president, chairman of the board, and the principal stockholder of First Hospital Corporation, has the available resources to finance the subject project, and has also committed to do so if necessary. 8/ The extent to which the proposed services will be accessible to all residents of the service district, and the applicant's past and proposed provision of health care services to Medicaid patients and the medically indigent As a freestanding psychiatric facility, First Hospital is not eligible to receive Medicaid funds for the treatment of psychiatric disorders; however, it has committed to provide 8 percent of its patient days to the care of patients who qualify as indigent, and has agreed that its CON be so conditioned. In view of this commitment, as well as the demonstrated need within the district for the proposed services, approval of First Hospital's application will increase accessibility to all residents of the district. The probable impact of the proposed project on the costs of providing health services proposed by the applicant. The proof demonstrates that existent facilities in Palm Beach County are operating near capacity, and that to meet expected demand at the planning horizon an additional 48 short- term psychiatric beds are needed. Under such circumstances, approval of First Hospital's application will stimulate competition and promote quality assurance and cost-effectiveness. While the proof establishes the need for 48 additional beds at the horizon year, the protestants to First Hospital's application contend that, due to the finite number of qualified professionals within the area to staff the facility and the finite number of patients requiring such care, they will be adversely impacted if the application is approved. Succinctly, they contend that they may lose staff or be compelled to pay higher salaries, and that they may lose patients and therefore revenue, if the facility is approved. The protestants' proof regarding potential impact to their existing staff or competition for staff was unpersuasive. In light of the number of existing facilities that already offer mental health type services within the district, and therefore currently compete for the same professionals, First Hospital's entry into the market should not significantly impact existing competition. As importantly, the protestants failed to quantify any such impact or otherwise persuasively demonstrate that, assuming they were compelled to pay more to retain or attract competent staff, such increased expense would adversely affect their operation. With regard to the protestants' concerns regarding lost patient days and revenue, the demonstrated need for the additional 48 beds at the horizon year mitigates the potential for any adverse impact to existent providers in the long term. However, this does suggest that First Hospital's application, as proposed, does not demonstrate a potential to significantly adversely affect existent providers in the short term. To the contrary, should First Hospital achieve the level of utilization it projects in its application, its facility would have a significant adverse impact on existing programs. In this regard, First Hospital's application projects that it will achieve 8,956 patient days in 1991, its first year of operation, and 13,193 patient days in 1992, its second year of operation. Through 1991, there will only be a growth of approximately 3,498 patient days over those that were served by existing facilities in 1988, and through 1992, there will only be a growth of approximately 4,664 patient days over those that were served by existing facilities in 1988. Therefore, to achieve it's projected occupancy levels, First Hospital would have to capture 5,458 patient days in 1991 and 8,529 patient days in 1992 from the patient base that had previously been served at existing facilities. Such impact to those facilities, should First Hospital be able to achieve its projected levels of occupancy, would be significant and adverse. 9/ The costs and methods of the proposed construction As heretofore discussed, First Hospital proposes to construct an 80- bed facility on approximately 30 acres of land in Palm Beach County, Florida, which will include the 48 short-term psychiatric beds which are the subject of this proceeding, as well as the 32 residential treatment beds which the Department concluded were not subject to CON review. The 80-bed facility proposed, at 49,142 gross square feet, will consist of a central core area of approximately 25,000 square feet, which includes three wings; an education and activity wing, a food service wing, and an administrative wing. These wings will house the therapy, kitchen and dining, gymnasium, classrooms, administrative offices, and other services necessary to support the psychiatric facility. Attached to the core area, are two psychiatric wings, at 7,592 square feet each, which will each contain 24 beds dedicated to short-term psychiatric care, and one wing, at 8,944 square feet, which will contain 32 beds dedicated as residential treatment beds. On the adjacent grounds, First Hospital also proposed a swimming pool, tennis courts, baseball field, and sports filed. In its application, First Hospital estimated its total project cost for the proposed psychiatric facility at $4,213,522. This project cost was composed of development cost of $61,500, financing/refinancing costs of $259,800, professional services of $162,000, construction costs of $2,503,162, equipment costs of $480,000, and other related costs of $150,000. But for the construction cost category ($2,503,162), First Hospital derived its estimate of total project costs by allocating 60 percent of the cost of each component of the total cost to the psychiatric facility and 40 percent to the residential treatment facility (the 60/40 methodology). In the case of construction costs, First Hospital based its estimate on the square footage of the psychiatric wings and 60 percent of the core area, which derived a gross square footage for this cost item based on 30,184 square feet, to which it added 60 percent of its estimated costs for site preparation and contingency of construction. Based on this premise, First Hospital's proposal is driven by a $76.33 per square foot cost of construction. 10/ Assuming the propriety of First Hospital's 60/40 allocation of costs, its estimate of project costs is still significantly understated. Here, the proof demonstrates that, as opposed to the $76.33 per square foot cost for construction and site preparation costs estimated by First Hospital, the cost for such work will be $105 per square foot, inclusive of construction and site preparation costs. Based on the 30,184 square feet First Hospital allocated to the project, such cost will amount to $3,169,320, which, when added to the 5 percent contingency factor, the $96,000 allocated for the proposed pool, and the addition of 460 square feet to patient rooms needed to meet Department standards, derives a construction cost figure of $3,472,086, as opposed to the $2,503,162 estimated by First Hospital. In addition to straight construction costs, First Hospital also underestimated its equipment costs. In this regard, First Hospital's equipment list omits many necessary items, including: nurse call equipment, a security system, an emergency generator, therapy and recreational equipment, gym equipment, ice machines, defibrillators, crashcarts, educational materials, media equipment, graphic artwork, interior design items, shelving/lockers for staff and patients, housekeeping items, medication carts, and other necessary equipment. Had First Hospital properly calculated its equipment costs, it would have derived a cost of at least $1 million for movable equipment and at least $150,000 for fixed equipment for the 80--bed facility as opposed to the $700,000 for movable equipment and $100,00 for fixed equipment it estimated. Under such circumstances, applying First Hospital's 60/40 methodology would establish an equipment cost for the subject project at $690,000, as opposed to the $480,000 estimated by First Hospital. 11/ Since financing costs and professional services fees would also require an upward adjustment because of the increase in construction and equipment costs, the total cost for the subject project, utilizing First Hospital's 60/40 methodology, would reach at least $5,488,843, as opposed to the $4,213,522 estimated by First Hospital. 12/ The foregoing analysis of construction costs assumed the reasonableness of First Hospital's 60/40) allocation methodology. For reasons discussed infra, First Hospital's allocation methodology is not reasonable, and its construction costs are therefore dramatically understated. In this regard, the proof demonstrated that the core area, consisting of 25,000 square feet, would be necessary to support the 48-bed psychiatric units whether the 32-bed residential treatment unit were built or not, and that it would be more appropriate to combine the core area and the psychiatric area to assess the subject application. When this is done, the construction cost alone for the project calculates to $4,638,501. 13/ In addition to straight construction costs, all of the other estimated project costs appearing on Table 25 of First Hospital's exhibit 1 are also suspect because of its 60/40 methodology; however, for purposes of this analysis item a, project development costs, and item f, other related costs are assumed accurate, as are construction supervision costs and loan fees. Notably, capitalized interest would increase to at least $355,621, architectural/engineering fees would increase to approximately $242,969, and equipment costs would increase to approximately $726,000. With these adjustments alone, the cost of the 48-bed psychiatric project, which includes the core area, comes to approximately $6,821,000, or over $2,607,000 more than First Hospital estimated. 14/ The unreasonableness of First Hospital's 60/40 methodology To assess the financial feasibility of the proposed project, First Hospital's pro formas address only the expected financial performance of the 48 psychiatric beds and ignore the financial feasibility of the 32-bed residential treatment unit, even through First Hospital postulates that such unit will support 40 percent of the cost of the hospital's core area. At hearing, the explanation offered by First Hospital and the Department for not addressing the financial feasibility of the residential treatment unit, as well as the out-patient services, was their contention that such services are not CON reviewable because First Hospital, as regards the residential treatment unit, is not yet a "health care facility" and, as regards the outpatient services, that such services are exempt from review. In this regard, they point to the provisions of Section 381.706(1), Florida Statutes, which provides; . . . all health-care-related projects, as described in paragraphs (a)-(n), shall be subject to review and shall file an application for a certificate of need with the department . . . (c) A capital expenditure of $1 million or more by or on behalf of a health care facility . . . for a purpose directly related to the furnishing of health services at such facility; provided that a Certificate of Need shall not be required for an expenditure to provide an outpatient health service . . . (Emphasis added) They also point to the provision of Section 381.702, Florida Statutes, which contains the following definitions: (7) "Health care facility" means a hospital. . . . (12) "Hospital" means a health care facility licensed under chapter 395. Based on these statutory provisions, First Hospital and the Department conclude that the residential treatment unit and the outpatient services are not CON reviewable because First Hospital is not yet licensed or the outpatient services are exempt. While the logic of First Hospital's and the Department's conclusion seems questionable where, as here, the projects are proposed to be integrated and constructed simultaneously, the Department's reading of the statute comports with its literal reading and is accepted. However, although the residential treatment unit and outpatient services may not be subject to CON review does not suggest that their financial feasibility is not relevant to this proceeding. To the contrary, their financial feasibility is critical if First Hospital's 60/40 methodology is to be considered rational. Here, the 48-bed psychiatric facility proposed by First Hospital is comprised of two 24-bed units and a core unit that provides all necessary support functions, including administrative, therapy, kitchen and dining, gymnasium and classroom areas, for those units. That core area, of 25,000 square feet, is an essential part of the proposed psychiatric hospital; without it there would be no psychiatric hospital, and at a lesser square footage the project would be lacking sufficient space to provide necessary services. When licensed by the Department, the two 24-bed units and the core area will be licensed as a psychiatric hospital. Notwithstanding, the fact that the 25,000 square foot support area is an integral and essential part of the proposed hospital, the Department chose to ignore 40 percent of its costs and expenses in assessing the financial feasibility of the project. The basis for the Department's action was its conclusion that the non-CON reviewable residential treatment unit comprised 40 percent of the overall population of the entire facility (80-beds overall), and that since it would share the core area, 40 percent of the costs of constructing that area, as well as subsequent operating expenses, were not pertinent to an evaluation of the proposed hospital. Here, the Department's reasoning and its conclusion, be they incipient policy, do not have evidentiary support. The psychiatric hospital proposed by First Hospital is, as heretofore noted, the two 24-bed units and the core area. This is the only portion of the project over which the Department has control, and necessarily the only portion that it can assure will be built as proposed; it has no control over whether the residential treatment unit will ever be built or be built as proposed. Therefore, since the core unit is an essential part of the psychiatric hospital, and the residential treatment unit is exempt from CON review, an assessment of the subject application must consider the cost of the entire core area as part of the project under review. While economies of scale permit utilization of the core unit by the residential treatment unit without additional space, this does not detract from the conclusion that the cost of the core is a cost of the hospital. Rather, such excess capacity is fortuitous for First Hospital, and may permit it to spread the expenses of its operation over a larger population base if the residential treatment unit is built. However, to reasonably assess whether those expenses of operation can be spread to or supported by the residential treatment unit to any extent, much less 40 percent, requires an analysis of the financial feasibility of those services. Here, First Hospital offered no proof of the financial feasibility of the residential treatment unit, and there is no rational basis on which any allocation of operating expenses for the core area can be demonstrated to be supportable by it. Accordingly, to assess the financial feasibility of the proposed psychiatric hospital it is necessary to attribute the cost of the core area to the proposed project, as well as the costs of carrying and operating that part of the proposed hospital. 15/ The immediate and long-term financial feasibility of the proposal To assess the financial feasibility of the proposed project, First Hospital's pro forma assumes that it will achieve 8,956 patient days in its first year of operation and 13,193 patient days in its second year of operation, with a per diem patient charge of $500 in year one and $525 in year two, and that it will thereby achieve a gross revenue of $4,478,000 in its first year of operation and a gross revenue of $6,926,325 in its second year of operation. While the proposed patient charges are reasonable, First Hospital's occupancy projections are not supported by persuasive proof and, therefore, it has failed to demonstrate what revenues it could reasonably expect to generate. A facility's projected patient days are typically a product of an informed analysis of projected admissions and projected average length of stay. Here, First Hospital undertook no such analysis, but simply assumed a number of patient days, without any rational predicate in an effort to demonstrate financial feasibility. Notably, there is a clear trend toward shorter lengths of stay in psychiatric hospitals, which was even recognized by First Hospital's Dr. Dozoretz who reasonably expected an average length of stay at the proposed facility of 30 to 40 days. However, First Hospital assumed in its pro forma an average length of stay ranging from 45 to 60 days. Such assumption could not have been the basis for any considered analysis of utilization since it is excessive, as well as too imprecise. Moreover, in testing the reasonableness of a utilization projection, it is also important to consider physician support, the extent of waiting lists, community support, the extent of competition, and the depth of local needs assessment. Here, there is no persuasive proof that First Hospital enjoys any support from local physicians, that there are any waiting lists, that the market is not competitive, that there is any community support for the project, or that it undertook any reasonable assessment of local need. In addition to its failure to demonstrate what utilization level it could reasonably achieve in its first two years of operation, and therefore establish a reasonable estimate of its gross revenue, First Hospital's pro forma also, significantly underestimated building depreciation, equipment depreciation, and interest expense because of its failure to adequately address construction and equipment costs, discussed supra. Had First Hospital properly assessed such costs, by subsuming the psychiatric hospital to include 100 percent of the psychiatric wings and core area, it would have calculated building depreciation at $176,230 per annum, equipment depreciation at $72,600 per annum, and interest at $750,360 per annum. At these rates, assuming the validity of First Hospital's projection of gross revenue, the facility's projected loss in year one would increase from $115,629 to $529,848, and its projected profit in year two of $442,184 would be reduced to $27,965. 16/ As well as underestimating the foregoing expenses, First Hospital's pro forma also significantly underestimates a number of other expenses, including deductions from gross revenue, supplies and other expenses, and the indigent care tax assessment. In this regard, the proof demonstrates that First Hospital underestimated its deductions from revenue by $367,000 in year one and $214,000 in year two; underestimated its supplies and other expenses in year one by at least $645,000, and in year two by at least $561,000; and omitted the indigent care tax assessment of $56,000 in year one and $75,000 in year two. Considering these additional adjustments, First Hospital's project, even assuming its gross revenue projections are reasonable, is not financially feasible in either the short-term or long-term. 17/ The criteria on balance In evaluating the application at issue in this proceeding, none of the criteria established by Section 381.705, Florida Statutes, or Rule 10- 5.011(1)(o), Florida Administrative Code, has been overlooked. First Hospital's failure to demonstrate the financial feasibility of its proposal is, however, dispositive of its application, and such failure is not outweighed by any other, or combination of any other, criteria.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: As to Case NO. 89-1415, that a final order be entered denying First Hospital's application for Certificate of Need. As to Case NO. 89-1438, that a final order be entered dismissing Humana's petition for formal hearing. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 23rd day of May 1990. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of May 1990.
The Issue Whether Florida Administrative Code Rule 64J-2.010 enlarges, modifies or contravenes the specific provisions of law implemented, or is arbitrary or capricious, and thus constitutes an invalid exercise of delegated legislative authority.
Findings Of Fact The Parties Bayfront is a 480-bed tertiary hospital located in St. Petersburg, Pinellas County, Florida. In addition to serving as a teaching hospital, Bayfront is designated as a Level II trauma center pursuant to chapter 395, Part II, Florida Statutes. Bayfront had a $3.6 million operating deficit in 2009 and a positive operating margin below one percent ($1.969 million) in 2010. Due to its financial strife in recent years, Bayfront has been forced to defer needed capital projects due to a poor liquidity position, inadequate borrowing capacity and insufficient cash flow. Tampa General is a major tertiary hospital that is designated by the state as a Level I trauma center. TGH also serves as a teaching hospital for the University of South Florida, College of Medicine ("USF"). TGH is located in Tampa, Hillsborough County, Florida. Like Bayfront, TGH has also experienced significant financial challenges in recent years. For fiscal year 2011, TGH's budget reflected only a $7 million (one percent) operating margin. However, due to subsequent events, including Medicaid cuts and flat utilization year-to-date, TGH now expects to do no better than break-even, and may even incur a $4 million operating loss in FY 2011. This is significant because TGH has reached its borrowing capacity and must rely on its operating margin to build cash that will be used to fund needed capital projects and expenditures. Maintaining a positive and substantial operating margin is therefore critical to TGH's ability to replace equipment and infrastructure. St. Joseph's Hospital has served the Tampa area for 75 years and has approximately 800 licensed acute care beds. SJH offers a broad array of acute care services, including tertiary health care, serves as a comprehensive regional stroke center, and has been repeatedly recognized as a Consumers Choice hospital. SJH operates a Level II trauma center, and in 2010, treated approximately 2,700 trauma patients. SJH also has one of the busiest emergency departments in the state, with approximately 145,000 patient visits in 2010. Shands Jacksonville is an existing Level I trauma center. It is one of only seven such Level I providers in the state of Florida. Located in Jacksonville (Duval County), Shands treats approximately 4,000 trauma victims every year. Respondent Department of Health is the state agency authorized to verify and regulate trauma centers in the state of Florida pursuant to chapter 395, Part II, Florida Statutes and Florida Administrative Code Rule 64J-2.001 et seq. The Division of Emergency Medical Operations, Office of Trauma, oversees the Department's responsibilities with respect to the statewide trauma system. Intervenor Bayonet Point is a general acute-care hospital located in Pasco County, Florida. Bayonet Point is currently seeking to obtain designation as a trauma center. As of the date of the hearing in this matter, Bayonet Point's application for designation as a trauma center was not complete and Bayonet Point was in the process of developing the facilities and retaining the medical staff necessary to meet the standards and criteria required for its application to be deemed complete. Intervenor Blake Medical Center is a general acute care hospital located in Manatee County, Florida. Blake is currently seeking to obtain designation as a trauma center. As of the date of the hearing in this matter, Blake's application for designation as a trauma center was not complete and Blake was in the process of developing the facilities and retaining the medical staff necessary to meet the standards and criteria required for its application to be deemed complete. Although not a party to this case, HCA/Orange Park Medical Center ("Orange Park") is also currently in the process of applying for trauma center designation. Orange Park is located in Clay County, immediately to the south of Duval County. The Florida Trauma System For purposes of organizing a statewide network of trauma services, the Florida Legislature directed the Department to "undertake the implementation of a statewide inclusive trauma system as funding is available." § 395.40(3), Fla. Stat. The statewide trauma network includes not just verified trauma centers, but all other acute care hospitals in the State, as well as ground and air emergency medical services providers, and "every health care provider or facility with resources to care for the injured trauma victim." § 395.40(2), Fla. Stat. The network is premised on the basic principle that a trauma victim who is timely transported and triaged to receive specialized trauma care will have a better clinical outcome. § 395.40(2), Fla. Stat. A trauma victim's injuries are evaluated and assigned an Injury Severity Score ("ISS"). § 395.4001(5), Fla. Stat. Patients with ISS scores of 9 or greater are considered trauma patients. § 395.402(1), Fla. Stat. Trauma experts speak in terms of "a Golden Hour," a clinical rule of thumb that postulates no more than 60 minutes should elapse from the occurrence of an injury to the beginning of definitive treatment. There is, however, no current consensus on what constitutes the "Golden Hour" for transport times. A 1990 Department study recommended travel time of 25-35 minutes as the outside range for optimal outcomes. A 1999 Department study favored a goal of 30 minutes transport time by ground, and a 50-mile radius by helicopter. By contrast, a 2005 study conducted for the Department used 85 minutes "total evacuation time" as "acceptable." Because of the necessity for rapid transport, key components of the trauma network are ground and air EMS transportation. It is important to get the trauma victim to the nearest trauma center as rapidly as possible, because "you can't do surgery in the back of an ambulance." Each EMS provider operates pursuant to Uniform Trauma Transport Protocols and inter-facility guidelines which give guidance for how, where and when trauma patients should be transported. Trauma centers are required to have numerous different kinds of physician specialists at the ready at all times. For instance, with respect to surgical services, a Level I trauma center must have "a minimum of five qualified trauma surgeons, assigned to the trauma service, with at least two trauma surgeons available to provide primary (in-hospital) and backup trauma coverage 24 hours a day at the trauma center when summoned." Further, in addition to having at least one "neurosurgeon to provide in-hospital trauma coverage 24 hours a day at the trauma center," a Level I provider must also have surgeons "available to arrive promptly at the trauma center" in 11 other specialties, including (but not limited to) hand surgery, oral/maxillofacial surgery, cardiac surgery, orthopedic surgery, otorhinolaryngologic surgery and plastic surgery. Level II trauma centers must comply with similar physician specialist standards. Not surprisingly, it is a constant struggle for existing trauma centers to ensure the availability of qualified clinical staff, technicians, specialty physicians and other personnel and resources necessary to continually meet the rigorous programmatic requirements of a trauma center. In general, trauma centers are not profitable due to the intensity of resources necessary to achieve an appropriately functioning trauma program, and the scarcity of such resources. The Challenged Rule In 1992, the Department of Health and Rehabilitative Services ("HRS") adopted Florida Administrative Code Rule 64J- 2.010, (the "Rule"). Respondent Department of Health assumed administration of the Rule in 1996, when the Legislature split HRS into two new agencies, the Department of Health and the Department of Children and Families. The Rule is a statement of need, sometimes referred to as "open slots" for a specific number of trauma centers allocated among 19 geographic service areas ("trauma service areas" or "TSAs") in the state. The current version1/ of rule 64J-2.010, the subject of this rule challenge, reads in its entirety as follows: 64J-2.010 Apportionment of Trauma Centers within a Trauma Service Area (TSA). The number and composition of TSAs shall be in accordance with section 395.402, F.S. The number of trauma centers in each TSA shall be in accordance with the maximum number set forth in the table below. Each trauma service area shall have at least one Level I or Level II trauma center position. The number of trauma center positions for each TSA is as follows: TSA Counties Trauma Centers 1 Escambia; Okaloosa; Santa 2 Rosa; Walton 2 Bay; Gulf; Holmes; Washington 1 3 Calhoun; Franklin; Gadsden; 1 Jackson; Jefferson; Leon; Liberty; Madison; Taylor; Wakulla 4 Alachua; Bradford; Columbia; 2 Dixie; Gilchrist; Hamilton; Lafayette; Levy; Putnam; Suwannee; Union 5 Baker; Clay; Duval; Nassau; St. 2 Johns 6 Citrus; Hernando; Marion 1 7 Flagler; Volusia 2 8 Lake; Orange; Osceola; 3 Seminole; Sumter 9 Pasco; Pinellas 3 10 Hillsborough 2 11 Hardee; Highlands; Polk 3 12 Brevard; Indian River 2 13 DeSoto; Manatee; Sarasota 3 14 Martin; Okeechobee; St. Lucie 1 15 Charlotte; Glades; Hendry; Lee 2 16 Palm Beach 2 17 Collier 1 18 Broward 3 19 Dade; Monroe 6 TOTAL 42 The trauma center will be assigned by the department according to section 395.402(4), F.S. Specific Authority 395.405 FS. Law Implemented 395.401, 395.4015, 395.402, 395.405 FS. History–New 12-10-92, Formerly 10D-66.1075, Amended 6-9-05, 12-18-06, Formerly 64E-2.022. A hospital seeking to establish a new trauma center must file an application with the Department. If a TSA has fewer trauma centers than the number allocated to the TSA in the Rule, the Department deems need to exist without reference to any additional analysis or data. Accordingly, if a hospital's application to establish a new trauma center complies with trauma center programmatic requirements, the Department will approve the application. As will be discussed in greater detail infra, the Department believes it is bound by the determination of need set forth in the Rule and that it does not have authority to deny an application that meets programmatic requirements so long as there is an "open slot" for a new trauma center within a particular TSA. Indeed, the Department has never denied an application that met the programmatic requirements when need existed under the Rule. History of the Rule In 1989, the Legislature directed HRS (DOH's predecessor) to submit a report by February 1, 1990, (the "1990 Report"). The 1990 Report was to include a proposal for funding trauma centers that "will result in funding of the number of strategically placed trauma centers necessary to ensure adequate trauma care throughout the state." Ch. 89-275, § 6, Laws of Fla. The 1990 Report was to include "an estimation of . . . the approximate number and generalized location of state-sponsored trauma centers needed to ensure adequate trauma care throughout the state . . . ." Id. The 1990 Report was prepared by the Committee on State-Sponsored Trauma Centers (the "1990 Committee"). Although HRS timely submitted the Committee's report to the Legislature on February 1, 1990, HRS indicated that it did not "fully support all of the conclusions and recommendations contained in the task force report." In its report, the 1990 Committee recommended the creation of 19 trauma service areas. The boundary of each TSA was drawn to include a "nucleus county" along with its sending (later referred to as "feeder") counties. A nucleus county was one that retained at least 90 percent of its resident trauma alert patients, but also included any county that had a retention rate greater than 75 percent (but less than 90 percent) if no contiguous county had the requisite 90 percent retention rate. Any county that retained less than 75 percent of its trauma alert patients was designated a feeder county. This feeder county was then grouped with the nucleus county that received a majority of the feeder county's outbound patients. After reviewing 1988 patient flow data and applying the above rules, the 1990 Committee created and assigned counties to 19 trauma service areas. Under the 1990 Committee's methodology, a nucleus county was a candidate for a trauma center, but a feeder county was not. Table 3.3 of the 1990 Report set forth the Committee's recommendation as to the number of trauma centers to be allocated to each of the 19 TSAs: Table 3.3 Recommended Trauma Service Areas and Number of Trauma Centers 1988 Number Treated 1988 Number Residing Recommended No. Trauma Centers Service Area ISS Level 9+ ISS Level 16+ ISS Level 9+ ISS Level 16+ Min Max 1 1332 275 | 1166 223 2 3 2 489 117 | 452 105 1 1 3 815 185 | 701 152 1 2 4 1183 269 | 1011 226 2 3 5 2268 662 | 2566 546 2 3 6 869 138 | 877 143 1 2 7 1376 225 | 1286 190 2 3 8 3756 698 | 3329 592 3 4 9 3978 626 | 3709 552 3 4 10 2458 604 | 2222 507 2 3 11 1834 302 | 1665 290 3 4 12 1487 220 | 1433 218 2 3 13 1900 264 | 1810 247 3 4 14 687 105 | 698 102 1 2 15 1455 243 | 1386 236 2 4 16 2310 365 | 2233 371 2 3 17 476 73 | 436 75 1 1 18 4238 670 | 4204 652 4 5 19 7346 1370 | 6633 1176 6 7 Total 40857 7411 | 37817 6603 44 60 Table 3.3 indicates a total trauma center need ranging from 432/ to 60 trauma centers, although only 12 trauma centers were in existence at the time of the report. As the table reflects, the need estimate was apparently based on only one factor: the number of trauma patients residing and treated within each TSA in 1988. However, the 1990 Report indicates that members of the "number and location subcommittee" may have considered other factors in arriving at their recommendation: The study design formulated by the CHSPA called for identification and analysis of trauma patient incidence and patient flow for a one-year period based on the HCCB detailed case mix data. This data analysis effort alone, however, would not specifically identify the number of trauma centers needed in the state, nor their generalized location. The patient incidence and flow information needs to be considered in relation to the following factors in order to reach sound recommendations: . . . The injury severity level for which trauma center care is required; the minimum number of cases which should be treated at a trauma center in order to maintain skill proficiencies consistent with high quality outcomes; appropriate travel times from accident location to a trauma center; and, the existing level of facility resources available in an area upon which one or more trauma centers could be built. While information on certain of these points was available through trauma care literature and previous research, its applicability to Florida’s circumstances was not clear in all instances. Therefore, the Department sought recommendations on these issues from the committee and, especially, from the number and location subcommittee. The subcommittee’s recommendations, as ratified by the full committee, were integral to the development to the approximate number and generalized locations of state-sponsored trauma care throughout the state. However, no methodology was provided within the Report to show how the number of trauma centers was allocated among the TSAs based upon the data considered by the committee. The committee also cautioned that their estimate did not take into account other relevant factors or local conditions within each TSA that should be assessed before deciding how many trauma centers were in fact needed, including resource availability. As stated in the 1990 Report: It was the full committee's feeling that the number of hospitals able to apply to be state-sponsored trauma centers would be limited by the lack of resources in the service area. For instance, the standards require that trauma centers have certain physician specialists committed to the facility for availability 24 hours a day, seven days a week. There are not enough specialists available in any area of the state to staff more than a few trauma centers. The reality of the situation lead the full committee to believe that there cannot be a proliferation of trauma centers. Dialogue between the state and local/regional agency would be essential to making the decision on the number of trauma centers needed. The 1990 Report did not include data or analysis relating to factors such as the availability of physician specialists within geographic areas, existing trauma center patient volumes, patient outcomes, or the capacity and adequacy of existing trauma centers. Following receipt of the 1990 Report, the Legislature amended the trauma statute by adopting the 19 trauma service areas proposed in the 1990 Report. Chapter 90-284, § 5, at 2188-89, Laws of Fla. However, the Legislature did not consider the trauma service area boundaries to be permanent or static. Instead, the Legislature provided that: [t]hese areas are subject to periodic revision by the Legislature based on recommendations made as part of local or regional trauma plans approved by the department . . . These areas shall, at a minimum, be reviewed by the Legislature prior to the next 7-year verification cycle of state sponsored trauma centers. As part of the 1990 trauma statute amendment, the Legislature provided that, in addition to complying with the trauma center standards, a trauma center applicant must "be located in a trauma service area which has a need for such a center." Ch. 90-284, § 6, at 2191, Laws of Fla. In this regard, the Legislature directed HRS to "establish [within each service area] the approximate number of state-sponsored trauma centers needed to ensure reasonable access to high quality trauma services." Id. (emphasis added). This need determination, which must be promulgated via rule, was to be "based on the state trauma system plan and the [1990 Report]." Id.; § 395.402(3)(b) ("[t]he department shall allocate, by rule, the number of trauma centers needed for each trauma service area"). However, the Legislature rejected the 1990 Report's recommended minimum of 43 and maximum of 60 trauma centers. Instead, the Legislature stipulated that there should be a minimum of 19 trauma centers (i.e., one trauma center in each service area) and "no more than" 44 trauma centers. Ch. 90-284, § 5, at 2189-90, Laws of Fla. In 1992, HRS promulgated rule 64J-2.010. The Rule adopted the column in Table 3.3 of the 1990 Report reflecting the "minimum" recommended number of trauma centers, and stated that "[t]he number of trauma centers in each TSA shall be in accordance with the minimum number set forth in the table.3/” The trauma center need allocated by rule 64J-2.010, which merely replicates Table 3.3, has remained unchanged since 1992 with the exception of TSA 18. Subsequent Developments In 1998, the Legislature directed DOH via a committee (the "1999 Committee") to prepare a report by February 1, 1999, (the "1999 Report") "on how best to ensure that patients requiring trauma care have timely access to a trauma center." In furtherance of this objective, the 1999 Committee was required to "study . . . the strategic geographical location of trauma centers . . . ." Id. In its report, the 1999 Committee recommended that "[t]he goal for timely access to trauma centers should be to assure that every trauma victim can be delivered to a trauma center, either by emergency medical ground or air transport, within 30 minutes of beginning transport." As stated in the 1999 Report: There must be an adequate number of trauma centers distributed statewide in order to ensure timely access. . . [T]he ideal trauma system would assure that every trauma victim can be delivered to a trauma center within 30-minute air or ground transport. The geographical locations of the 19 trauma centers either verified or provisional as of July 1998 are shown on Map 1 in Appendix F. The circles around each trauma center location illustrate a fifty-mile flight radius, which translates into an average 30- minutes transport time by helicopter for a trauma victim. Helicopter transport time is used for this illustration because air medical transport allows trauma victims to be transported further distances within the 30-minute timeframe. The 1999 Committee found that some areas in Florida were not within a fifty-mile flight radius of one of the 19 existing trauma centers, which meant residents in these areas could not access a trauma center within 30 minutes. In fact, at that time, only 80 to 85 percent of Florida residents were within 30 minutes of a trauma center.4/ The committee therefore concluded "Florida does not have an adequate number of trauma centers distributed statewide to ensure timely access to appropriate trauma care." As a result of its findings, the 1999 Committee "developed two additional criteria for use by the department: 1) the overall goal of 30-minute transport time to trauma centers, and; 2) its equivalent, 50 miles, for helicopter flight times." The committee stated that these access criteria "should be considered by [DOH] in developing administrative rules for the planning and development of additional trauma centers . . ." The 1999 Committee made no attempt to quantify the number of additional trauma centers that were needed statewide, or within each TSA, to achieve the 30-minute goal.5/ Nor did the committee seek to update the Rule (i.e., Table 3.3) using the 1990 Report's methodology. However, the committee cautioned that: [r]etaining the limit on the number of trauma centers was . . . essential in order to maintain a reasonable volume of patients who are trauma victims as well as to avoid conflicts between competing trauma centers for recruitment of key professional staff. The 1999 Committee recommended giving DOH the "statutory authority to assign counties to trauma service areas" and that DOH "conduct a review of the regional structure of the 19 trauma service areas and the assignment of the counties between these areas and make changes, if found to be appropriate." The 1999 Report offered the following explanation for this recommendation: The committee did recommend that authority to assign counties to trauma service areas should be given to the department. Current authority resides with the Legislature. Shifting this authority to the department will allow flexibility in the system to more quickly respond to changing needs at the local level. Consistent with the 1999 Committee's recommendation, the Legislature repealed the statutory provision that made the trauma service areas subject to periodic review and "revision by the Legislature." Ch. 99-397, § 195, at 164, Laws of Fla. This repealed provision was replaced with an amendment to section 395.402(3) that delegated to DOH the statutory duty to review and revise the TSA boundaries, which stated as follows: Trauma service areas are to be used. The department shall periodically review the assignment of the 67 counties to trauma service areas. These assignments are made for the purpose of developing a system of trauma centers. Revisions made by the department should take into consideration the recommendations made as part of the regional trauma system plans approved by the department, as well as the recommendations made as part of the state trauma system plan. These areas must, at a minimum, be reviewed in the year 2000 and every 5 years thereafter. Until the department completes its initial review, the assignment of counties shall remain as established pursuant to chapter 90-284, Laws of Florida. Ch. 99-397, § 195, at 163-64, Laws of Fla. (Emphasis added). In response to the Legislature's directive, DOH initiated a review of the service areas and prepared a draft report entitled “Trauma Service Area Study-Year 2000” (the "2000 Draft Study"). However, for reasons unknown in this record, DOH apparently never finalized that study, and it was received in evidence in draft form only. In the 2000 Draft Study, DOH noted that the "primary purpose" of the TSA review mandated by section 395.402(3) "is to determine if the 19 trauma service areas . . . continue to be rational service areas." Based on the 1990 Report's methodology, the draft study's tentative recommendation was not to change the trauma service areas, although DOH "should continue to study and review the trauma service areas . . . to determine if different county configurations might lead to more timely access . . . ." At the same time, after analyzing more recent data, the draft study recommended the allocation of a different number of trauma centers to TSAs 9, 10, 11, and 12 as compared to the Rule.6/ Additionally, the 2000 Draft Study made the following finding: Because of the substantial financial commitment made by a hospital to be a trauma center, patient volume becomes an important factor for a hospital in terms of being financially viable and having enough work for trauma surgeons to maintain their skills. The old adage of practice makes perfect is particularly applicable to those treating the seriously injured trauma patient. . . To meet [the American College of Surgeons] caseload recommendations, locating trauma centers in areas where skill levels can be maintained by trauma surgeons is an important factor. Furthermore, to recruit and retain well-qualified surgeons to work in a trauma center, it is important to have a sufficient number of patients to treat, especially to the surgeon. Thus, the 2000 Study emphasized that trauma centers must see enough patients to be financially viable and for trauma surgeons to maintain their skills, and referenced the American College of Surgeons recommendation that Level I trauma centers treat 600 to 1000 patients annually and Level II trauma centers treat 350 to 600 patients annually. The 2000 Study concluded: -No change in trauma service areas should be made at this time. This study found that minimal change occurred in those counties identified as nucleus counties. Furthermore, the relationship between nucleus counties and those identified as sending or "feeder" counties remains intact. -The 19 trauma service areas should continue to serve as the geographical basis for the allocation of the 44 authorized trauma center slots. -The 44 authorized trauma center slots in chapter 395.401 Florida Statutes [now section 395.402(4)(c) should remain as the maximum number required to meet trauma patient care demands. 2004 Amendments to the Trauma Statutes and the 2005 Assessment In 2004, the Legislature made substantial revisions to the trauma statute. Chapter 2004-259, Section 6, Laws of Florida amended section 395.402 to direct the Department to complete a statewide assessment of the trauma system by February 1, 2005 ("the 2005 Assessment"). § 395.402(2), Fla. Stat. The scope of this assessment was defined in paragraphs (2)(a) through (g) and subsection (3) of section 395.402. An appropriation of $300,000 was authorized for the Department to contract with a state university to perform the actions required under the amended statute. Ch. 2004-259, § 10, Laws of Florida. One objective of the 2005 Assessment was to "[c]onsider aligning trauma service areas within [sic] the trauma region boundaries as established in" section 395.4015(1). §395.402(2)(a), Fla. Stat. In a related 2004 amendment, the Legislature added a sunset provision that, upon completion of the 2005 Assessment, ended the statutory mandate to use the service areas created in 1990. See § 395.402(2) ("[t]rauma service areas as defined in this section are to be utilized until [DOH] completes" the 2005 Assessment) (emphasis added); § 395.402(4) ("[u]ntil the department completes the February 2005 Assessment, the assignment of counties shall remain as established in this section.") The obvious intent of the above statutory change was for the section 395.402(4) service areas to be replaced by the service areas DOH established or adopted once it had the results of the 2005 Assessment. "Annually thereafter" (as opposed to every five years per the 1999 version of the statute) DOH was required to "review the assignment of the 67 counties to trauma service areas . . . ." Ch. 2004-259, § 6, at 13, Laws of Florida (amending § 395.402(3)). Another objective of the 2005 Assessment was to "establish criteria for determining the number and level of trauma centers needed to serve the population in a defined trauma service area or region." § 395.402(2)(c), Fla. Stat. Based on these criteria, DOH was then to "[r]eview the number and level of trauma centers needed for each trauma service area to provide a statewide integrated trauma system." § 395.402(2)(b), Fla. Stat. As part of this need assessment, DOH was required to consider the "[i]nventories of available trauma care resources, including professional medical staff," as well as the "[r]ecommendations of the Regional Domestic Security Task Force" and "the actual number of trauma victims currently being served by each trauma center." § 395.402(3), Fla. Stat. However, unlike the situation with the 1990 Report, the Legislature did not intend for DOH to rely on the 2005 Assessment indefinitely. To avoid this, the Legislature therefore required DOH to update the 2005 Assessment by annually reviewing "the requirements of paragraphs (2)(b )-(g) and subsection (3)" of section 395.402. This meant that each annual review, like the initial 2005 Assessment, had to "[r]eview the number and level of trauma centers needed for each trauma service area or region" by, among other things, considering "[i]nventories of available trauma care resources, including professional medical staff." §§ 395.402(2)(b) and (3)(e). The need determinations resulting from these annual reviews would then have to be codified in a rule per section 395.402(4)(b) ("[t]he department shall allocate, by rule, the number of trauma centers needed for each trauma service area"). The 2004 Legislature clearly intended for DOH to rely on the updated need assessments required by section 395.402(4), rather than the need allocation in the 1990 Report (which was incorporated into the Rule). This is evident from the fact that the 2004 Legislature repealed the provision that previously required DOH to establish need based on the 1990 Report. See chapter 2004-259, § 7, at page 14, Laws of Florida (amending section 395.4026(1)), which states in relevant part: Within each service area and based on the state trauma system plan, the local or regional trauma services system plan, and recommendations of the local or regional trauma agency, and the 1990 Report and Proposal for Funding State Sponsored Trauma Centers, the department shall establish the approximate number of state approved trauma centers needed to ensure reasonable access to high-quality trauma services. The Using the guidelines and procedures outlined in the 1990 report, except when in conflict with those prescribed in this section, the department shall select those hospitals that are to be recognized as state approved trauma centers . . . [emphasis added] By repealing the statutory reference to the 1990 Report, the Legislature expressly required the Department to discontinue any reliance on the 1990 Report as a basis for allocating trauma center need. In addition, the 2004 Legislature imposed a moratorium on the submission of applications for new trauma centers in any TSA that already had one trauma center until the 2005 Assessment was complete, regardless of whether the Rule indicated a need for an additional trauma center within the TSA. § 395.4025(14), Fla. Stat. It is reasonable to infer that the imposition of a moratorium notwithstanding unmet need in several of the TSA's under the Rule indicates that the Legislature considered the Rule to be outdated and no longer valid. The moratorium therefore had the effect of maintaining the status quo until the Rule could be updated with a new assessment. The Department timely submitted its 2005 Assessment to the Legislature on February 1, 2005. The assessment itself was conducted by a group of investigators from the University of South Florida and the University of Florida. This group was assisted by a National Steering Committee "composed of recognized experts in the fields of trauma care and trauma system analysis " In its transmittal letter to the Legislature, DOH specifically noted that the assessment included a recommendation regarding “the number and level of trauma centers needed to provide a statewide integrated trauma system. . . .” In contrast with HRS' contemporaneous objections to the 1990 Report, the DOH transmittal letter identified no areas of disagreement with the 2005 Assessment. The 2005 Assessment included 5 "Recommendations", including: 3. Designation of additional trauma centers should be based on the need as determined by trauma region.7/ Deployment of additional trauma centers should take place based not only on the number of patients served per trauma center, but according to a concept of “trauma center capacity,” which would be determined by the staffing levels of medical specialists and other healthcare professionals. An annual regional assessment is also recommended to analyze pre-hospital resources, ICU beds, capacity, trauma center performance including trauma registry data, and other medical resources based on per population estimates to plan for response and improvements. (Emphasis added) Thus, unlike the 1990 Report (and the Rule), the authors of the 2005 Assessment recommended that the availability of existing resources should be taken into account in determining the need for new trauma centers. In evaluating need based on DSTF region, the 2005 Assessment identified an unmet need for only four more trauma centers in the state,8/ which "would provide access to a trauma center for 99 percent of the people in Florida." Given the 20 trauma centers in existence at the time, this meant that the total trauma center need was 24, which is substantially below the need established by the Rule of 42 trauma centers. This lower need determination was due in part to the fact that the 2005 Assessment took "trauma center capacity," and not just the number of patients served per trauma center, into account. According to the 2005 Assessment, the recommended four new trauma centers were needed in DSTF Regions 1, 2, 3 and 5. However, the assessment concluded there was no need for another trauma center in DSTF Region 4 (Tampa Bay), which was found to have "adequate trauma center access at this time." This contrasts with the Rule, which purports to authorize five more trauma centers in the counties assigned to Region 4. In particular, under the Rule, there is a net need for two new trauma centers in Pasco County (TSA 9), two new trauma centers in Manatee County (TSA 13) and one new trauma center in either Citrus or Hernando County (TSA 6). The only legislative response to the 2005 Assessment was an increase in funding to trauma centers. Likewise, the Department has not amended the Rule to implement the recommendations contained in the Assessment. In 2008, the Department held rule development workshops in order for trauma system constituents to indicate whether trauma center allocations contained in the Rule should be changed. Pursuant to stakeholder requests arising out of the workshops, the Department began consideration of an increase in the maximum number of trauma center positions allocated to TSA 1 (Escambia, Santa Rosa, Fort Walton and Okaloosa Counties). Following numerous public workshops and hearings, the Department filed notice of its intent to amend the Rule to increase the allocation of trauma centers in TSA 1 from 2 to 3. However, the amendment did not become final due to matters unrelated to the determination itself and was withdrawn by the Department.9/ The January, 2011 TSA Report In 2011, a study was completed for DOH entitled "Florida Trauma Service Area Analysis" (the "2011 TSA Report") that relied on the 1990 Report's patient flow methodology for assigning counties to trauma service areas. However, this study did not take into account all of the section 395.402(3) criteria. The 2011 TSA Report disclosed this deficiency, stating: This study provides an analysis of TSAs and counties to assess retention of trauma alert patients within the county. Rules for designating counties as nucleus counties for trauma centers and counties for consideration for trauma centers were defined in analyses of TSAs conducted for the office of Trauma in 1990 and 2000. * * * This report analyzes hospital discharges by TSA from 2000 to 2009. Hospital discharge data from [AHCA] is used to analyze the county of residence and treating facility for all trauma patients with an Injury Severity Score (ISS) of 9 or greater, as deemed by statute . . . . Other considerations required, by statute, in the assignment of counties to TSAs include recommendations of regional trauma system plans, stakeholder recommendations, geographical composition to assure rapid access to trauma care, inventories of available trauma care resources, transportation capabilities, medically appropriate travel times, recommendations by the Regional Domestic Security Task Force, and any appropriate criteria. These considerations are not integrated into this analysis of TSAs. (Emphasis added). Although the 2011 TSA Study used the same methodology as the 1990 Report, the 2011 TSA Study supports a different TSA configuration than the one established in the 1990 Report because patient flow patterns have changed since 1990. For example, in the 1990 analysis, the primary treatment county for Manatee County was Sarasota County. Because Manatee served as a feeder county for Sarasota (a nucleus county), it was grouped in the 1990 Report with Sarasota County in TSA 13. However, the updated information in the 2011 TSA study shows that the primary treatment county for Manatee County residents is now Pinellas (TSA 9's nucleus county), which requires that Manatee County be reassigned to TSA 9 per the 1990 Report's methodology. A similar shift in patient flow also dictates the reassignment of Hernando County from TSA 6 to TSA 10 (Hillsborough County). Indeed, it appears that all of the counties in TSA 6 would have to be merged with other trauma service areas since Marion County, which was designated as TSA 6's nucleus county in the 1990 Report, no longer qualifies as a nucleus county. The Department maintains that its employees are continuously reviewing trauma volume, injury severity scores, population and other data and that this activity qualifies as the annual need and trauma service area reviews required by section 395.402(4). However, DOH has not established a need methodology by rule, policy or otherwise that it could apply to this data to quantify the number of trauma centers needed in each TSA. In the absence of an articulable need methodology, it is not possible to verify or replicate any assessment DOH may have done based on the data it claims to have reviewed. More significantly, the Department has itself acknowledged the problem of not having a methodology or process in place for conducting regular assessments. In its "2011-2015 Florida Trauma System Strategic Plan" (the "2011 State Plan"), DOH identified as a "threat" to the achievement of Goal 8 (Regional Trauma System Evaluation) the "[l]ack of effective evaluation criteria, tools and a systematic and periodic process to evaluate trauma service areas and apportionment of trauma centers." In furtherance of Goal 8, DOH also recognized the need to "[c]onduct a statewide comprehensive assessment of the Florida Trauma System access to care based on s. 395.402, F.S., the Western-Bazzoli criteria and other criteria to evaluate access to care and the effectiveness of the trauma service areas/regions." The specified timeline for this future assessment was "December 2011, with annual reviews thereafter as funding is available." On May 19, 2011, the Department's State Surgeon General signed an "Issue Paper" approving a "Florida Trauma System Special Study." This study is intended to "assist the department in developing a process and evidence-based guidelines to be utilized by [DOH] in determining the need for trauma center locations throughout the state." According to the Department's witness, Susan McDevitt (former Director of the Office of Trauma), DOH intends to use this study to develop a formula or methodology for determining the need for new trauma centers in the state. DOH determined this study was needed because the "trauma network has matured and changed" since 2005 when the "last comprehensive assessment of the Florida trauma system" was done. However, December 2011 is the earliest anticipated date for completion of this study, and DOH has no timeline for when this study may result in any rule amendment. As noted, the 1990 Report forms the basis for the configuration of the existing 19 TSA's as well as the need allocated to each of the TSA's within the Rule (with the exception of the reduction in Broward County). However, Dr. Lewis Flint, an expert in trauma surgery and trauma system assessment, credibly explained how Florida's trauma system has "matured and changed" since the 1990 Study was completed: Q. Now, Doctor, can you describe what changes there have been in the trauma system since the 1990 study was completed? A. Well, in 1990, there were fewer trauma centers than there currently are. I believe there were only about 12 designated centers in 1990. There are 22 now. The availability and the efficiency and quality of pre-hospital care has changed in a major way since 1990. We have far more advanced life support staff on ambulances than we had in 1990. We have far more plentiful air evacuation capability than we had in 1990, and the quality and efficiency of the existing trauma centers has changed in a major way as the centers have matured. So that the combination of greatly improved pre-hospital care and significant improvements in efficiency and in-patient outcomes in the existing trauma centers has meant that this system has matured into a very effective trauma system. It is not free of shortcomings, it is not an entire system yet. It has some holes in it, but the system as such has changed in a major way since 1990, such that it was our view at the close of the 2005 comprehensive assessment, that a decision about deployment of trauma centers that was based solely on distance and geography was not going to be an optimum method of determining how the system should be deployed. Whether or not the 1990 Report was valid when issued, its recommended service area configurations and need allocations have been rendered obsolete by the passage of time, changes in patient flow patterns, and significant advances in the trauma care delivery system since the Rule was adopted. Reasonable health planning requires the use of the most recent data available and systematic evaluation of the multiplicity of factors that determine the appropriate number and location of trauma centers in the state. No doubt that is why the Legislature directed DOH to conduct assessments annually. § 395.402(4). Here, the 1990 Report's recommendations were predicated on 1988 information that is now more than two decades old.10/ It is inappropriate to rely on 1988 data to justify the service area configuration or need allocation in 2011, particularly given the major changes and maturation of the trauma system since 1988. The 1990 Report (and rule) also fails to take into account criteria that must now be considered pursuant to the 2004 amendment to section 395.402. In particular, section 395.402(3) as amended, requires the DOH annual need and service area reviews to take into account Regional Domestic Security Task Force recommendations, transportation capabilities (including air transport), and inventories of available trauma care resources (including professional medical staff). The 1990 Report took none of these factors into account in making the need recommendations that were eventually incorporated into the Rule. Notably, had the availability of professional medical staff been factored into the analysis, need would likely have been reduced, as the 1990 Report itself observed, stating: It was the full committee's feeling that the number of hospitals able to apply to be state-sponsored trauma centers would be limited by the lack of resources in the service area. For instance, the standards require that trauma centers have certain physician specialists committed to the facility for availability 24 hours a day, seven days a week. There are not enough specialists available in any area of the state to staff more than a few trauma centers. The reality of the situation lead the full committee to believe that there cannot be a proliferation of trauma centers. (Emphasis added). Standing Petitioners TGH and SJH are located in TSA 10 (Hillsborough County). Petitioner Bayfront is located in Pinellas County in TSA 9 (Pinellas and Pasco Counties). Intervenor Bayonet Point is also located in TSA 9, but in Pasco County. Intervenor Blake is located in Manatee County, in TSA 13 (Manatee, Sarasota, and DeSoto Counties), adjacent to TSA 9. Petitioner Shands is located in TSA 5 (Baker, Clay, Duval, Nassau, and St. Johns Counties). Trauma center applicant Orange Park (a non-party) is located in TSA 5 but in a different county (Clay) from Petitioner Shands (Duval). As noted earlier, because of the intensity of resources that must be devoted to a trauma center, hospitals generally lose money in their operation. Specifically, in FY 2010 Tampa General's Level I trauma center had a $15.7 million net loss, while Bayfront's Level II trauma center had a $3 million net loss. Similarly, Shands lost approximately $2.7 million and SJH lost $8.3 million from the operation of their trauma centers in FY 2010. Of the 42 trauma center positions available statewide, the Rule allocates three to TSA 9 and three to TSA 13. Because TSA 9 currently has one designated trauma center (Bayfront) while TSA 13 has none, the Rule establishes a net need for two more trauma centers in TSA 9 and three more trauma centers in TSA 13. The Intervenors' pending trauma center applications propose to establish Level II trauma centers at Regional Medical Center Bayonet Point in Pasco County, (TSA 9), and at Blake Medical Center in Manatee County (TSA 13). The filing of the Intervenors' applications triggered the application review process set forth in section 395.4025(2). Pursuant to this statute, the deadline for submitting a trauma application is April 1 of each year. § 395.4025(2)(c). The filing of an application triggers a 30-day provisional review period (which in this case is delayed until October 1, 2011, due to an 18-month extension request made by Intervenors). The limited purpose of this provisional review is to determine if the hospital's application is complete "and that the hospital has the critical elements required for a trauma center." Id. The "critical element" portion of the review is based on the trauma center standards and includes a review of whether the hospital meets the equipment, facility, personnel and quality assurance standards. Id. Any hospital that (i) submitted an application found acceptable in the provisional review (i.e., meets the trauma center standards) and (ii) is located in a TSA that has a need for a trauma center may operate as a provisional trauma center after the 30-day provisional review period has concluded. §§ 395.4025(2)(d) and (5). Based upon the facts of record, there is a reasonable probability that the Intervenor hospitals will achieve provisional trauma center status by October 30, 2011, (the end of the 30-day provisional review period that will start October 1, 2011). First, Intervenors' witness James Hurst, M.D. (who is assisting Intervenors and Orange Park in recruiting trauma surgeons and in the application process) testified without contradiction that the HCA applications would be complete and in compliance with the applicable trauma center standards by the extended October 1st application submission deadline. Second, both Intervenor hospitals are located in trauma service areas with a need as established by the Rule. As confirmed by Ms. McDevitt, if the applications meet the programmatic requirements as determined by the provisional review, and there is a need indicated by the Rule, DOH will approve the applications and award the Intervenor hospitals in TSA 9 and 13 provisional trauma center status. Likewise, it is reasonable to expect that the Orange Park application will be approved if it meets the programmatic requirements, given the available slot in TSA 5. Upon receiving the provisional trauma center designation, the EMS providers will be required to treat Bayonet Point, Blake, and Orange Park as trauma centers. This means that the EMS providers will have to revise their protocols to redirect the transport of trauma alert patients from other existing trauma centers to the new centers. See, Fla. Admin. Code R. 64J-2.002(3)(g). A "trauma alert" patient is defined as a "person whose primary physical injury is a blunt, penetrating or burn injury, and who meets one or more of the adult trauma scorecard criteria . . . ." Fla. Admin. Code R. 64J-2.001(14). Pursuant to the DOH Trauma Transport Protocols Manual (which all EMS providers must follow), EMS providers must transport all trauma alert patients to the closest trauma center that is "within 30 minutes by ground or air transport or within 50 miles by air transport." As a result, any trauma alert patient who is closest to Bayonet Point, Blake, or Orange Park will have to be transported to one of those hospitals once they are designated as provisional trauma centers. A provisional trauma center at Bayonet Point would become the closest trauma center for Pasco, Hernando, and Citrus residents (the "northern Tampa Bay region"). Trauma alert patients from these counties would therefore have to be transported to Bayonet Point instead of to the existing trauma centers in Hillsborough (SJH and Tampa General) or Pinellas (Bayfront). Likewise, a provisional trauma center at Blake would become the closest trauma center to Manatee and Sarasota (the "southern Tampa Bay region") requiring transport of their trauma alert patients to Blake rather than to the Hillsborough or Pinellas trauma centers. In 2010, 669 trauma alert patients (16 and over) were transported to Bayfront from the counties in the northern and southern regions of Tampa Bay. This represents 42 percent of all the trauma alert patients (16 and over) transported to Bayfront. From the same area and during the same time period, 120 trauma alert patients (16 and over) were transported to Tampa General. All of these trauma alert patients would be redirected away from Bayfront and Tampa General and transported to the closer Intervenor trauma centers per the EMS transport protocols. The redirection of these trauma alert patients to Bayonet Point and Blake would substantially and adversely affect both Bayfront and Tampa General. In Bayfront’s case, the lost contribution margin caused by the annual diversion of even 400 trauma patients would reduce Bayfront's total margin by at least $2.3 million each year. Likewise, the yearly diversion of 120 trauma patients from Tampa General would result in an annual lost contribution margin and reduction in total margin in excess of $1 million. Notably, for both hospitals this represents the minimum potential loss of trauma patients and revenue as a result of the approval of the Intervenors' trauma centers. Annual losses in excess of a million dollars would be material to both Bayfront and Tampa General given the financial challenges both hospitals are already facing. Although physically located in TSA 10 (Hillsborough County) SJH now receives trauma patients from Hillsborough, Pasco, Citrus, Hernando, and Sumter counties. If approved, the trauma center at Bayonet Point would become the closest trauma center for Pasco, Hernando, and Citrus residents and would likely result in the immediate loss of between 149 and 307 from SJH's trauma program. If the Orange Park trauma center is approved, it is reasonable to expect that all of Shands trauma patients originating from Clay County would instead be redirected to Orange Park. This would represent a loss of approximately 1,000 patients annually, or 25 percent of Shands current trauma volume. With fewer cases to absorb the high fixed costs of trauma preparedness, Shands expects that it would lose $3,400 per case, on a fully allocated basis, rather than the $665/case it now loses. Thus, whereas Shands' trauma center currently loses $2.7 million annually, that loss would increase to approximately $10 million per year. And on a contribution margin basis (where fixed costs are excluded) Shands will experience a decline in contribution margin of $6-7 million annually once the Orange Park trauma center becomes operational. In addition to the direct loss of trauma patients and corresponding revenue, it is reasonable to anticipate that the approval of new trauma centers in relatively close proximity to existing centers will result in increased competition for scarce surgical subspecialists currently associated with the existing trauma programs. Specifically, the opening of new trauma centers in TSA's 5, 9, and 13 are likely to increase the difficulty and escalate the cost of ensuring adequate on-call specialty physician coverage for the Petitioner's hospitals and to adversely affect their ability to retain highly skilled nurses, technicians, and other trauma program staff.
The Issue At issue is whether obstetrical services were delivered by a participating physician in the course of labor, delivery, or resuscitation in the hospital.
Findings Of Fact Fundamental findings Jackson Joseph Fischler (Jackson) is the legally adopted son of Kenneth J. and Laura P. Fischler. He was born a live infant on June 1, 1992, at Memorial Hospital West, a hospital located in Pembroke Pines, Florida, and his birth weight was in excess of 2,500 grams. During the course of labor, delivery or resuscitation in the immediate post-delivery period in the hospital, Jackson sustained an injury to the brain or spinal cord caused by oxygen deprivation and/or mechanical injury which rendered him permanently and substantially mentally and physically impaired. As a consequence of the foregoing, the sole issue to be resolved in deciding whether this claim should be accepted for compensation is whether obstetrical services were delivered by a participating physician in the course of labor, delivery, or resuscitation in the immediate post-delivery period in the hospital, as required by Subsections 766.309(1)(b) and 766.31(1), Florida Statutes. The birth of Jackson Joseph Fischler At or about 7:09 p.m., June 1, 1992, the Pembroke Pines Fire Department, Emergency Medical Services (EMS), arrived at the residence of Shirley George, Jackson's birth mother, in response to a 911 call. At the time, Ms. George reported that she was at term, with a caesarean section scheduled 5 days hence for a breach presentation and that her "water may have broken." Subsequent medical records reflect a spontaneous rupture of the membrane at 7:00 p.m. When examined by EMS, Ms. George was experiencing contractions approximately 2 minutes apart, lasting 30-40 seconds. EMS transported Ms. George to Memorial Hospital West, where she was admitted through the emergency room at approximately 7:15 p.m., in labor. Ms. George was then taken to an examination room, and the labor and delivery unit was requested to provide a nurse to examine her. At or about 7:17 p.m., a labor and delivery nurse performed a pelvic examination of Ms. George and immediately diagnosed a prolapse of the umbilical cord, and a fetal heart rate of approximately 60 beats per minute. A prolapsed umbilical cord is a obstetrical emergency, which in the instant case required prompt surgical intervention to address fetal distress. Consequently, Ms. George was immediately rushed to the operating room for an emergency caesarean section. At the time, the on-call obstetrician, Robert Klein, M.D., was at Hollywood Memorial East, where he had been called for surgery. Therefore, shortly after 7:17 p.m., Dr. Klein was advised by telephone of the emergency involving Ms. George, and was requested to come to Memorial Hospital to attend to the situtation. Consequently, according to Dr. Klein, he "unscrubbed the patient of mine at Hollywood Memorial East . . . and in my greens I drove to Memorial Hospital West." Following notice to Dr. Klein and prior to his arrival at Memorial Hospital West, an overhead page was made for any obstetrician or surgeon in house to call the operating room, and 2-3 minutes later a blue alert to the operating room was called. The emergency room physician responded to the blue alert. Upon arrival in the operating room, he was apparently advised that the fetal heart rate was in the 40 beat per minute range and was asked if he could perform a caesarean section. The emergency room physician, not being qualified to perform the operation, declined, and Rudy Zepeda, M.D., the house physician, who was also present, agreed to perform the caesarean section "to save the baby's life." At this point in the factual narrative it is worth observing, considering the central issue in this case, that Dr. Zepeda, an unlicensed house physician, was not, at anytime material to this case, a "participating physician" in the Florida Birth-Related Neurological Injury Compensation Plan (the Plan), as defined by Section 766.302(7), Florida Statutes. Conversely, Dr. Klein, the on-call obstetrician, albeit not in attendance at the time, was a "participating physician" in the Plan. In the operating room, Ms. George was on the table at 7:23 p.m., anesthesia was started at 7:25 p.m., and Dr. Zepeda commenced the operation at 7:38 p.m. Jackson was delivered at 7:48 p.m., and the placenta at 7:49 p.m. Upon delivery, Dr. Zepeda handed Jackson to Dr. McIntyre, the on-call neonatologist, and he was immediately intubated and bagged with 100 percent oxygen, with good response in heart rate and color only, and first gasp was noted at 7 minutes. Apgar scores were 2 at one minute, 3 at 5 minutes, and 4 at 10 minutes, and at or about 8:00 p.m. Jackson was transferred to the neonatal intensive care unit (ICU) with positive ventilator support. Following Dr. Zepeda's delivery of Jackson and the placenta, but before Jackson's transfer to the neonatal ICU, Dr. Klein entered the operating room. Observing the situation, Dr. Klein reportedly asked Dr. Zepeda to finish the case on his own, but Dr. Zepeda "told him to scrub in." Dr. Klein was noted to have entered the operative field at 7:55 p.m., at which time he observed "the uterus was closed in the first layer," which would be the first step in the procedure after delivery of the placenta, and he proceeded to complete the operation. According to his operative report, Dr. Klein provided, inter alia, the following services incident to the caesarean section: . . . UPON ENTERING THE OPERATIVE FIELD THE UTERUS WAS [observed to have been] CLOSED IN THE FIRST LAYER AND I USED NUMBER 0 CHROMIC TO CLOSE THE SECOND LAYER. IT WAS VERY DIFFICULT TO FIND THE BLADDER FLAP WHICH WAS NOT CREATED UPON ENTRY TO THE UTERUS. TWO VIALS OF METHYLENE BLUE WERE INJECTED INTRAVENOUS BY THE ANESTHESIOLOGIST. APPROXIMATELY TEN MINUTES LATER METHYLENE BLUE DYE WAS NOTED IN THE FOLEY BAG. UPON CLOSURE OF THE UTERUS THE OVARIES AND TUBES WERE FOUND TO BE WITHIN NORMAL LIMITS. THE PERITONEUM WAS NOT CLOSED BUT APPROXIMATED. THE MUSCLE WAS CLOSED IN THREE SEGMENTS CREATING NORMAL LOOKING MUSCLE, APPROXIMATING LONGITUDINAL AND VERTICAL INCISION OF THE MUSCLE WHICH WAS DONE UNDER EMERGENCY CONDITIONS BY THE SURGICAL RESIDENT. THERE WAS MODERATE AMOUNT OF BLEEDING, HOWEVER, THIS WAS CONTROLLED WITH THE BOVIE AND THREE PIECES OF SURGICEL WERE PLACED OVER THE MUSCLE ABOVE THE FASCIA. THE FASCIA THEN WAS CLOSED WITH NUMBER 0 VICRYL IN A CONTINUOUS INTERLOCKING FASHION IN TWO SEGMENTS. SUBCUTANEOUS TISSUE WAS IRRIGATED. HEMODYNAMICALLY THE PATIENT WAS UNDER GOOD CONTROL AND THERE WAS NO EVIDENCE OF LOW PRESSURE DURING THE SURGERY. SHE WAS GIVEN FLUIDS AND PITOCIN 20 UNITS AND FULL LITER OF HALF NORMAL SALINE. SHE WAS ALSO GIVEN TWO GRAMS OF MEFOXIN BY THE ANESTHESIOLOGIST THE SKIN WAS APPROXIMATED AND CLOSED WITH STAPLES. COVERED WITH TELFA, 4X4, STERILE TAPE. THE URINE OUTPUT WAS ADEQUATE MIXED WITH METHYLENE BLUE. ROUTINE POSTOP ORDERS WERE WRITTEN IN THE CHART. The services Dr. Klein provided Ms. George, albeit post-delivery, were an integral part of the caesarean section delivery procedure, and were unquestionably obstetrical services. 1/ Moreover, such services were provided, at least in part, while Jackson was being resuscitated in the immediate post- delivery period. 2/ 16 As heretofore noted, Jackson was transferred to the neonatal ICU, with positive ventilator support, at or about 8:00 p.m. Upon arrival in the ICU, Jackson was placed on a respirator ("Baby Bird" mechanical ventilator support), with initial settings being an IMV of 50, pressure of 22/4 and 100 percent oxygen. Jackson's first movement, which consisted of some flexion of the extremities, was noted at or about 30 minutes of life, and there was some associated twitching of the lower jaw, which was thought to represent seizure activity. At or about 10:30 p.m., June 1, 1992, Jackson was discharged from Memorial Hospital West and transported to the neonatal ICU at Hollywood Memorial East. At the time he was on stable ventilator settings, and his seizures were under control with phenobarbital. Diagnosis on discharge was perinatal asphyxia secondary to prolapsed cord, and seizure disorder. Jackson remained at Memorial Hospital until discharged on June 23, 1992. At the time, examination revealed "slight increased tone, intermittent arching of back and retracting of head, cortical thumbs bilaterally with excessive fisting, brisk DTR's bilaterally, moro present, . . . and oral thrush." An MRI of June 6, 1992, "showed abnormal brain signal in each parietal lobe and decreased white matter signal in the basal gaglion, brain stem, mid brain and cerebellar hemispheres, possible watershed ischemia." Following maturation, neurologic examination revealed evidence of four limb spasticity with double hemiparesis, marked expressive language and motor delay. Severe swallowing and sucking difficulties necessitated gastrostomy placement.
The Issue DOAH Case No. 01-3148: Whether the Respondent's licensure status should be reduced from standard to conditional. DOAH Case No. 01-4649: Whether the Respondent committed the violations alleged in the Administrative Complaint dated October 15, 2001, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: AHCA is the state agency responsible for licensing and regulating the operation of nursing home facilities, including ensuring that nursing homes are in compliance with criteria established by Florida statute. Chapter 400, Part II, Florida Statutes (2001). AHCA is authorized in Section 400.23(8), Florida Statutes, to impose administrative fines on nursing home facilities that fail to meet the applicable criteria. Florence Treakle conducted surveys of Life Care on May 9, 2001, and June 12, 2001, as a result of complaints received by AHCA. Because the surveys were conducted as a result of complaints received by AHCA, Ms. Treakle was the only AHCA surveyor conducting the surveys. The results of the surveys were reported on a form identified as "HCFA-2567," which is generated by the federal Department of Health and Human Services, Health Care Financing Administration, and is commonly referred to as a "Form 2567." Several deficiencies were identified in the Form 2567s completed for the May 9, 2001, and June 12, 2001, surveys, which were each cited to a federal "tag number" designated as "F" tags,1 to the applicable provision of the Code of Federal Regulations, and to the applicable Florida administrative rule. Each deficiency was also classified under Florida law as either a Class II or a Class III deficiency, and a factual narrative was included to support each deficiency cited. May 9, 2001, survey.2 The Form 2567 for the May 9, 2001, survey included a citation for a Class III deficiency under F-279, "Resident Assessment," and Section 483.13(c), Code of Federal Regulations. This citation involved the care provided to residents L.D. and A.M. and was supported by the assertion that, "[b]ased on observation and record review[,] . . . the facility did not have comprehensive care plans in place for healing of the residents [sic] pressure sores." A care plan is a tool used by the nursing staff to ensure that the resident is getting consistent care and is compiled from data included in a resident's Comprehensive Assessment. An entry in a care plan includes the identification of a problem, a goal for resolving or improving the problem, and the approaches, or means, to be used to reach the goal. Resident L.D. L.D. came into Life Care with pressure ulcers, including a Stage IV pressure ulcer3 on his coccyx, which is located at the bottom of the backbone. L.D. was receiving wound care both at Life Care and at a wound care center pursuant to a physician's order dated April 4, 2001, which contained the following requirement: "[O]ffload[] all boni [sic] prominences as much as possible." In accordance with this order, L.D. was turned and repositioned in bed every two hours, and he was provided with a special, pressure-relieving mattress. L.D. was a very quiet person, but he had no cognitive impairment and was able to communicate his needs to staff. L.D.'s wife visited him every day; she usually arrived in mid-morning and left in mid-afternoon, and she returned for a few hours in the evening. Both L.D. and his wife made it clear to the Life Care staff that L.D. wanted to sit in a wheelchair as much as possible so that he could move around the facility, take walks outdoors with his wife, and have his meals sitting up. L.D. used a special, high-backed wheelchair that he provided for his use while he was a resident of Life Care. The chair reclined so that pressure on his coccyx could be relieved somewhat, and Life Care furnished him a gel cushion for his wheelchair, also to help relieve pressure on his coccyx. On May 9, 2001, Ms. Treakle observed L.D. sitting in his wheelchair for over two hours, from 10:20 a.m. until 1:00 p.m. She found nothing in L.D.'s Care Plan regarding the amount of time L.D. would be permitted to sit in a wheelchair. Resident A.M. A.M. entered Life Care with a Stage III pressure ulcer on his left buttock. A.M. was receiving wound care at Life Care in accordance with the approaches included in his Care Plan. A.M. was not cognitively impaired, and he could communicate his needs to staff. His granddaughter and one year-old great-grandson visited him every day, and he enjoyed sitting outside in a wheelchair with his great-grandson on his lap. A.M. also liked to spend most of his time outside his room, moving himself around the facility in a wheelchair. Life Care provided a gel cushion for his wheelchair to help relieve pressure on A.M.'s buttock. On May 9, 2001, Ms. Treakle observed A.M. sitting in a wheelchair from 2:00 p.m. until 3:30 p.m. A.M.'s Care Plan did not contain an entry establishing the amount of time A.M. would be permitted to sit in a wheelchair. Summary. AHCA has failed to establish by even the greater weight of the evidence that the Care Plans developed for L.D. and A.M. were deficient. AHCA failed to present credible evidence of the contents of L.D.'s Care Plan,4 but the evidence is uncontroverted that L.D.'s wound care orders contained approaches for healing his pressure sores. A.M.'s Care Plan included several approaches for healing his pressure sores, and AHCA has not alleged that the required wound care was not provided to either L.D. or A.M. Rather, AHCA's specific complaint regarding the Care Plans of L.D. and A.M. is that there was no approach specifying the amount of time L.D. and A.M. would be permitted to sit in their wheelchairs. This complaint is based exclusively on the expectations of Ms. Treakle. Ms. Treakle expected to find this approach in the Care Plans because, in her opinion, pressure on the coccyx and buttocks can never be completely relieved when a resident is sitting,5 and any pressure on a pressure ulcer impedes healing because it decreases blood flow to an area. Accordingly, Ms. Treakle "would expect good practice would [sic] be for the Care Plan to indicate how long the resident was going to sit on this pressure sore."6 AHCA did not, however, submit any evidence of a standard of care requiring that the duration of time a resident can sit in a wheelchair be included as an approach in the care plan of a resident with a pressure ulcer, especially when the resident is alert, mobile, and able to communicate with staff. June 12, 2001, survey. The Form 2567 for the June 12, 2001, survey cited Life Care for three deficiencies: A Class II deficiency was cited under F-224, "Staff Treatment of Residents," and Section 483.13(c)(1)(i), Code of Federal Regulations, involving the care provided to residents E.G. and N.D. and supported by the assertion that "[b]ased on observation, record review and interview[,] the facility did not monitor and supervise the delivery of care and services." A Class III deficiency was cited under F-279, "Resident Assessment," and Section 483.20(k), Code of Federal Regulations, supported by the assertion that, "[b]ased on review of the care plan for resident #1 [N.D.], . . . the facility did not complete a comprehensive care plan that was revised to reflect all fall risks." A Class II deficiency was cited under F-281, "Resident Assessment," and Section 483.20(k)(3)(i), Code of Federal Regulations, supported by the assertion that, "[b]ased on citations at F 224[,] F 279 and F 324[,] the facility nursing staff did not provide care that met professional standards for residents #1 [N.D.] and #2 [E.G.]." Resident E.G. Diabetes management. Pertinent to these proceedings, E.G. was diagnosed with insulin-dependent diabetes; his blood sugar generally ranged from 150 to 270, which is in the mid-range, although it once reached 348. E.G. was alert, oriented, self-ambulatory, and somewhat grouchy. E.G.'s brother visited him about three times each week, and E.G. often left the facility with his brother for a meal. He did not adhere strictly to his diet, but often ate fried foods when he went out with his brother, and he kept a supply of orange juice in the small refrigerator in his room. Both fried foods and orange juice are contraindicated for diabetics. Pursuant to physician's orders, E.G.'s blood sugar was to be monitored four times a day, before each meal and at bedtime,7 and insulin was to be administered on a sliding scale, in an amount to be determined based on his blood sugar level. This order was transcribed on E.G.'s Medication Record, which, for each day of the month, included spaces for the time, the blood sugar level, the insulin coverage (the dosage expressed in number of units administered), and the site of injection, together with the initials of the staff member providing the care. Life Care staff also maintained glucose monitoring sheets, which included spaces for the date, the time, the blood sugar level, the dosage of insulin administered, and the initials of the staff member providing the care. There is no documentation in E.G.'s Medication Records, his glucose monitoring sheets, or the Nurses Notes that his blood sugar was checked at 11:30 a.m. on June 7, 2001. When his blood sugar was checked at 4:30 p.m. on June 7, it was 317, which is substantially higher than usual. For the 6:30 a.m. checks on June 2, 3, and 8, 2001, E.G.'s blood sugar level was documented and there are notations that insulin was given, but the dosages and sites of injection were not noted; E.G.'s blood sugar at the 11:30 a.m. checks on these days was either virtually the same as, or less than, the levels noted at the 6:30 a.m. checks. For the 6:30 a.m. check on June 4, 2001, E.G.'s blood sugar level was documented, but there is no notation that insulin was given; E.G.'s blood sugar at the 11:30 a.m. check on June 4 was less than the level noted at the 6:30 a.m. check. Wound Care. On June 5, 2001, a dermatologist removed a lesion from the top of E.G.'s left hand. The dermatologist prescribed Bactroban ointment, which was to be applied to the wound twice a day. Wound care instructions were included with the prescription, which provided as follows: Leave bandage on for 24 hours only without getting wet. Remove bandage after 24 hours and then do not apply another bandage. Leave the area open and clean the wound twice daily with warm water. Pat the wound dry and then apply Bactroban Ointment. Bactroban Ointment is a topical antibiotic that can be purchased without a prescription. Continue to do this until the wound has healed. Normal bathing can be resumed after the bandage is removed. Some redness and swelling are normal in the immediate area of the wound. If the wound develops significant redness, tenderness or a yellow drainage, please contact this office immediately . . . . A physician's order dated June 5, 2001, was written for E.G. for "Bactroban oint to wound on L hand, 45gm." The order did not state how often the ointment was to be applied or include the other instructions accompanying the prescription. The order was transcribed on E.G.'s Treatment Record on June 5, 2001, but the entry provided only that Bactroban ointment was to be applied to the wound once a day. There is nothing in E.G.'s Care Plan, Treatment Record, or Medication Record to document that his wound was treated between June 5 and June 12, 2001, nor was there any indication in E.G.'s chart that anyone signed for the Bactroban ointment. Marion Neuhaus, the Director of Nursing at Life Care at the times pertinent to these proceedings, observed E.G.'s wound every day because E.G. came to her office to show her the wound and other bumps and scrapes he accumulated as he walked around the facility. Ms. Neuhaus noted that the wound was scabbed, that there was a pink area around the wound, and that there was no swelling or drainage. Treatment was begun on the wound on June 12, 2001, and it healed without any complications. Summary. AHCA has established clearly and convincingly that Life Care did not provide E.G. with the wound care that was ordered by his physician. AHCA has, however, failed to establish by even the greater weight of the evidence that the healing process of E.G.'s wound was compromised by this lack of treatment. Ms. Treakle observed E.G.'s wound on June 12, 2001, and noted that it was scabbed and red around the edges. Ms. Treakle concluded that this redness alone indicated that the wound was infected. This conclusion is undermined by the notation in the wound care instructions included with E.G.'s prescription from the Dermatology Center that "[s]ome redness and swelling are normal in the immediate area of the wound." Furthermore, Ms. Treakle did not follow E.G.'s wound after June 12, 2001, and the evidence presented by Life Care that E.G.'s wound healed in a timely manner is uncontroverted. AHCA has established clearly and convincingly that there are several omissions in the documentation of Life Care's monitoring of E.G.'s blood, but these omissions do not reasonably support the inference that Life Care failed to monitor E.G.'s blood sugar and administer insulin on these dates as required by the physician's orders; rather, Life Care's failure on these occasions was inadequate documentation, not inadequate care. AHCA has, however, established clearly and convincingly that Life Care did not monitor E.G.'s blood sugar as required by his physician's order at 11:30 a.m. on June 7, 2001; this inference may reasonably be drawn based on the lack of documentation and E.G.'s elevated blood sugar at the next check at 4:30 p.m. Ms. Treakle assumed that E.G. suffered actual harm as a result of this omission because, in her view, hyperglycemia, or elevated blood sugar, always causes damage to the body; Ms. Treakle could not, however, identify any specific harm to E.G. caused by this one omission. AHCA has failed to establish by even the greater weight of the evidence that E.G.'s physical well-being was compromised by Life Care's failure to monitor his blood sugar on this one occasion. Resident N.D. Fall from Shower Chair.8 At the times pertinent to these proceedings, N.D. was a 79 year-old woman who had been a resident of Life Care since October 26, 1999. According to the assessment of N.D. included in the Minimum Data Set completed on May 3, 2001, N.D. suffered from Alzheimer's disease, had long- and short-term memory problems, and was severely impaired and unable to make decisions; as of June 12, 2001, N.D. was almost entirely dependent on staff for all of the activities of daily living. N.D.'s Care Plan for November 6, 2000, which was updated with handwritten notes, reflects that she had poor safety awareness. The Interdisciplinary Notes maintained by Life Care reflect that, on June 5, 2001, a nurse observed N.D. leaning forward in her wheelchair at breakfast; this was the first mention of this behavior in N.D.'s chart. Dr. Gil, N.D.'s physician, included a notation in the Physician's Progress Notes for June 8, 2001, that he observed N.D. leaning forward but was unable to assess her abdomen because of her anxiety. The Interdisciplinary Notes reflect that Dr. Gil visited N.D. on Saturday, June 9, 2001, and that she was again leaning forward in her wheelchair, "almost falling out of [her] chair." Dr. Gil ordered an ultra-sound of N.D.'s abdomen and a "lap buddy while in w/c [wheelchair] to prevent falls." Dr. Gil's order was noted in the Interdisciplinary Notes for June 9, 2001, as well as on a physician's order form signed by Dr. Gil on June 10, 2001. According to Life Care's written policy, physician orders are to be transcribed into a patient's care plan, treatment plan, or medication administration record, depending on the nature of the order. Dr. Gil's order for a lap buddy had not been transcribed into N.D.'s November 6, 2000, Care Plan at the time Ms. Treakle conducted her survey on June 12, 2001.9 A lap buddy was used on N.D.'s wheelchair beginning on the morning of June 11, 2001. On the evening of June 11, 2001, CNA Nova Coleman was caring for N.D. Ms. Coleman had been working for Life Care for only a short time, and N.D. was one of the first patients Ms. Coleman cared for after finishing her initial training. Ms. Coleman was, however, not an inexperienced CNA, having previously worked at another nursing home. At approximately 8:30 p.m., Ms. Coleman and another CNA had just finished showering N.D., and N.D. was sitting in a shower chair; her hair had been toweled dry, and she was dressed in her night clothes. The second CNA left the room, and Ms. Coleman, who had been standing in front of N.D., moved to the back of the shower chair so she could push N.D. out of the shower area. As she moved around the chair, N.D. pitched forward and fell face-first onto the floor. Ms. Coleman tried to grab N.D. to stop her from falling, but N.D. toppled over so quickly that Ms. Coleman could not reach her. N.D. suffered severe bruises to her face and a laceration on her lip as a result of the fall, but she did not break any bones. Ms. Coleman had not been advised prior to the fall of N.D.'s tendency to lean forward in her chair. N.D.'s tendency to lean forward in her wheelchair should have been entered in her Care Plan, together with the requirement that a lap buddy was to be used whenever she was in a wheelchair. In addition, Ms. Coleman should have been briefed on N.D.'s condition, including her tendency to lean forward, before Ms. Coleman was allowed to care for N.D. Although a lap buddy was not ordered for the shower chair and, in fact, could not appropriately have been used on a shower chair, the former Nursing Director of Life Care conceded that there were other means by which N.D.'s fall could have been prevented.10 The former Nursing Director also conceded that the failure to brief Ms. Coleman on N.D.'s condition probably contributed to the fall from the shower chair. Summary. AHCA has established clearly and convincingly that Life Care failed to provide N.D. with the services necessary to prevent her from falling from the shower chair and injuring herself, that Life Care failed to provide services that met professional standards, and that Life Care failed to revise N.D.'s Care Plan to include the risk of her falling forward while seated and the approaches Life Care would take to prevent her from injuring herself. Life Care conceded that the Care Plan should have included N.D.'s tendency to lean forward while seated and Dr. Gil's order of June 9, 2001, that N.D. be provided with a lap buddy when she was in the wheelchair. Life Care also conceded that the CNA should have been briefed on N.D.'s condition before she was assigned to care for N.D. Life Care further conceded that, even though Dr. Gil did not specifically prescribe a restraint to be used in the shower chair, measures could have been taken to ensure that N.D. did not fall out of the shower chair. AHCA has also established clearly and convincingly that Life Care's failure to provide proper care to N.D. resulted in her suffering significant injuries to her face. Although the injuries were to soft tissue and ultimately healed, N.D.'s physical well-being was adversely affected. In addition, AHCA has established clearly and convincingly that, even had N.D. not fallen and suffered injuries, the failure to include in N.D.'s Care Plan her tendency to lean forward and its failure to transcribe the physician's orders regarding the lap buddy into the Care Plan could have caused a lapse in the care provided to N.D. that could have possibly resulted in injury.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a final order Sustaining the reduction in the licensure status of Life Care Center of Port Saint Lucie to conditional for the period extending from June 12, 2001, to August 17, 2001; and Imposing an administrative fine in the amount of $5,000.00. DONE AND ENTERED this 15th day of May, 2002, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 15th day of May, 2002.
Findings Of Fact The Petitioner herein petitioned the Division of Administrative Hearings seeking a determination of the validity of proposed Rule 100-86.008, Florida Administrative Code, in accordance with Section 120.54(4), Florida Statutes. Petitioner has demonstrated its standing to participate in the formal hearing to consider the validity of Rule 100- 86.008, Florida Administrative Code. The parties stipulated that to determine standing, no proof of the facts with regard to standing as alleged within the original Petition would be required and that these might be taken as admitted. Petitioner is a non-profit corporation organized and maintained for the benefit of the 220 governmental- investor-owned- and nonprofit hospitals which comprise its membership and all of Petitioner's 220 members are hospitals subject to the verification requirements of Section 395.031, Florida Statutes and the Proposed Rule. Respondent Department of Health and Rehabilitative Services' (DHRS') contention that Petitioner cannot show injury in fact since only 31 hospitals are currently verified and only 30 more are expected to seek verification within the next biennium is without merit. In the first placed that latter 30 applicants figure is determined to be arbitrary and capricious elsewhere within this order. DHRS also suggests that even if all of the 31 already verified trauma centers were members of Petitioners which they are not, this figure cannot constitute a "substantial number" as discussed in Florida Home Builders Association v. Department of Labor and Employment Security, 412 So.2d 351 (Fla. 1982) of a membership as high as 220. This suggestion begs the question. DHRS thereby illogically assumes that in every case, the more members a Petitioner represents, the less standing to represent them Petitioner has. DHRS' last contention that Petitioner cannot show standing in fact because the trauma center verification program is voluntary in nature is also without merit. To accept DHRS' position that there is no standing since the program is voluntary in nature and no hospital is forced or required to apply for verification would, carried to its reasonable end, mean that no hospital would ever have standing to challenge the Proposed Rule even though the Proposed Rule clearly affects those hospital members of Petitioner who will soon face biennial recertification or reclassification plus other members who may hereafter desire initial certification. Petitioner has standing to bring this challenge. The Economic Impact Statement supports this finding as does the prior participation of Petitioner in the rule-making process. The challenge to the subject rule as offered by Petitioner was timely made. The parties by stipulation have waived the time limitations set forth in Section 120.54(4), Florida Statutes. The thrust of Petitioner's allegations are that Proposed Rule 100- 86.008 is arbitrary, capricious, without rational basis in fact and constitutes an invalid exercise of delegated legislative authority by imposing higher verification fees upon hospitals which desire verification of their emergency rooms as trauma centers than are reasonably needed or authorized under Chapter 395, Florida Statutes. Furthers Petitioner claims that the Economic Impact Statement for this proposed rule is inadequate and unfair and has "impaired the correctness of the rule adoption proceedings," primarily upon the allegation that there is no relationship of fee by proposed rule to the statutory authorization and purpose. Petitioner challenges an amendment to Rule 10D-86.008 which seeks to increase the cost of the verification fee which must be paid by each hospital emergency room applicant for every initial verification, for any reclassification and for continued verification every two years as a "trauma center. Using strike-throughs for the deletions and underlining for the additions, the proposed rule seeks to amend current Rule 10D-86.08 as follows: 10D-86.008 Fees. The Department shall charge fees to each applicant hospital. The fee shall be submitted with each application. All such fees will be used solely to defray the cost of the verification program. The following fee schedule shall apply to initials reclassification and continued verification applications: (a) Level I ... 3,000.00 $11,000.00 (b) Level II ... 2,000.00 $11,000.00 (c) Level III ... 1,500.00 $11,000.00 Statutory authorization for the existing and for the proposed rule is found in Section 395.031, Florida Statutes, which provides in pertinent part, as follows: * * * (3) Any hospital licensed in the state that desires to be verified as a trauma center shall submit to the department a request for verification as a trauma center. * * * (5) Biennially thereafter- the department shall review the trauma center to verify its compliance with the standards set forth by subsection (6). The department shall notify the hospital of such verification. If the department finds that the trauma center does not comply with those standards the department shall within 30 days, notify the hospital of its findings. Within 30 days after receiving such findings the hospital may request a hearing in which to contest the findings of the department. The hearing shall be held in accordance with chapter 120. If a hospital does not desire to contest the findings of the department but desires to continue its verification as a trauma center, the hospital shall be given 90 days in which to comply with the standards set forth in subsection (6). After verification of compliance with those standards- the department shall continue the verification of the hospital as a trauma center or verify a reclassification of the trauma center pursuant to the standards set forth in subsection (6). * * * (7) The cost of verification shall be borne by the applicant, based on a fee schedule set by the department not to exceed the cost of verification. (Emphasis supplied.) The trauma center verification program (see Chapter 100- 86, Florida Administrative Code) establishes procedures and fees to verify that facilities and services-of licensed hospitals that apply for trauma center verification meet current standards of the American College of Surgeons. DHRS is the only state agency with any responsibility for verification of trauma centers. A hospital may offer the same services as are offered by a bona fide trauma center without being verified but it may not hold itself out as a trauma center without being verified by DHRS. Upon this limited basis, the program is voluntary as to the hospitals applying and is administered by DHRS' Emergency Medical Services Section. The Emergency Medical Services Section (EMS) is divided into two subsections. One is "Regulatory Services" in which all licensing functions other than trauma center verification are placed and includes such diverse matters as licensing of ambulance services, non-emergency transportation services, emergency medical technicians and paramedics. The licensing of trauma centers is logistically placed within "Program Development," which subsection administers certain grants and which has as its principal function general planning activities pursuant to EMS' statutory responsibility to produce a state plan for emergency medical services. DHRS characterizes the categories of trauma center as follows: a Level I Trauma Center" is the top level and requires a surgeon in the emergency room 24 hours per day as well as a demonstrated commitment to research and training in the area. A "Level II Trauma Center" is quite similar to the Level I center except that it does not have the mandatory commitment to trauma research and training. A "Level III Trauma Center" is largely found in rural areas where the population base is insufficient to support a Level I or Level II trauma center, but represents a maximum commitment to trauma center service based on available resources. Although only a single application form is utilized, it may be logically inferred that the category or level" of verification sought by the applicant to be verified will affect the size, scope, detail, and supporting documentation of its initial application and likewise will affect the scope of the agency procedure leading either to verification or denial of the initial application of each applicants and to any reclassification or continued verification of a previously verified trauma center. This inference was apparently codified in the existing rules by charging application fees graduated by level of verification requested. It is recognized by DHRS that the three respective levels have different configurations of services, equipment, and general effort towards the treatment of trauma and that a Level I application is "significant" in comparison to the other levels. Nonetheless, the proposed rule amendment seeks to establish only the same fee amount or "cost of verifying" the application for all applicants regardless of level of verification requested. When the original trauma center verification program fees were promulgated (Rule 100-86.08), on-site visits (live inspections by an accreditation or verification team) to applicants' trauma centers and program overhead were not calculated into the fees as established because on-site visits were not originally contemplated by the verification program as a whole. When the original trauma center verification program fees were promulgated, it was anticipated that 65 or 70 trauma centers would apply for verification over the first biennium. This estimate was based on a survey of all licensed hospitals. However, in the first year, only 15 trauma centers applied for verification. However, the trauma center verification process, as planned into the next biennium, (1985-1987) now contemplates application and document reviews plus on-site visits as direct costs and overall program overhead as indirect costs. The new proposed fee schedule within Proposed Rule 10D- 86.008 was derived by using anticipated expenses for the 1935- 1987 biennium as a base. DHRS anticipated the total amount needed for the trauma center verification program and program compliance as $329,904. This figure lumps together salaries, expenses and travel for employees of DHRS' Emergency Medical Services Section within the trauma center verification program, physician review of applications, trauma center on-site visits, legal expenses for denial hearings pursuant to Section 120.57(1) and (2), Florida statutes, and expenses of contracting with a medical records consultant and medical director. DHRS candidly admits that these expenses have been calculated into the new proposed fee schedule and maintains that these expenses should be calculated into any fee schedule established. Petitioner's view is that it is only the costs attributable to the actual processing of individual applications which may properly be included as a "cost of verification ... borne by the applicant" pursuant to Section 395.031(7), Florida statutes, and asserts that inclusion of any other costs is arbitrary, capricious, excessive, and not statutorily justified. By its proposed findings of fact as well as by the direct evidence of all of its witnesses, DHRS acknowledges that it has considered the cost of compliance 1/ in devising the non-graduated fee schedule within the Proposed Rule. In calculating the proposed fee schedule, DHRS divided the total amount needed for program operation and compliance (the $329,904 previously referenced) by the estimated number of trauma centers (the 15 per year based on the first year's experience multiplied by 2 for the two-year biennium horizon) to yield a verification fee per trauma center of $10,996.80. The agency then rounded this amount to $11,000 per anticipated applicant for the 1985-1987 biennium, and thus the non-graduated fee in the Proposed Rule was devised. This method does not bear any logical or rational relationship to the size, scope, detail and supporting documentation of the applications as they vary among Levels I, II, and III. Nor can it be said that this method takes into consideration any of the logical or rational differences inherent in the paperwork processing and physician review as it differs by level applied for, or in the type of projected on-site compliance review of the physical plants of applicants for the differing levels. Moreover, although it may be appropriate to begin with the assumption that 15 is a representative idea of the number of initial applications that may require processing in each year, there is simply no documentation or rationale provided by the agency to determine whether the number of initial applications will diminish or increase as the finite number of potentially verifiable hospitals is approached. Therefore, this divisor figure of 15 x 2 borders on mere estimation or speculation and is not statutorily justified. It is not saved by an intention without guarantee of a biennial review of the rule. Unless it somehow embraces a rational projected calculation of reclassifications from one level to another and biennial reviews for compliance with the verification standards, the 15 x 2 figure is further skewed. Since there is testimony that EMS can only hope to do 6 annual on-site reviews at random (presumably encompassing all three categories) , the (15 x 2 30) divisor remains askew, arbitrary, capricious and unjustified. It is interesting that DHRS acknowledges, to a point at least that the 11,0O0 fee schedule figure is inaccurate. Specifically, despite DHRS' rounding up to the nearest thousand dollar amount so as to reach $11,000, it is DHRS' position that its procedure for establishing the non-graduated fee schedule actually underestimates or understates the amount required to fund the verification program. Neither rounding "up" versus rounding "down" nor rounding to the nearest even $1,000 as opposed to the nearest dollar amount was specifically raised as an issue by the parties. However, since it is partly through DHRS' contention that it has actually understated the amount required to fund the verification program that DHRS attempts to parry Petitioner's assertion that DHRS is seeking to cause trauma center verification applicants to bear the cost of the entire trauma center program instead of merely requiring applicants to bear the cost of the single application verification function of that program, some assessment of this "rounding" methodology is in order. DHRS has not demonstrated any specific reason to "round" in this manner, nor how "rounding" relates, if at ally to understatement of fees needed or how it relates, if at ally to precise calculation of the funding amounts actually required. It is easy to appreciate that $11,000 looks better in a printed, codified rule and is easier to administer than an odd number but even those shallow rationales have not been advanced by those rule drafters who testified. Even if one could accept the reasoning that because of the high amounts of fixed costs for the improved verification program DHRS is somehow justified in spreading the cost of the entire verification program equally among all applicants instead of graduating the fees by level, there remains the unrefuted testimony of Mr. Lawn an accepted expert in the area of accounting matters in state government, that the Statement of Justification does not identify which costs are fixed and which costs are variable and does not determine the relevant range of activity which affects allocation of fees to the number of applicants. Thus, the conclusion must still be reached that the $11,000 fee is unreasonable, without rational basis in fact, and without statutory justification. As calculated by Larry Jordan, EMS Administrator, and as reflected in the Statement of Justification prepared by Terry Davis, Program Analyst within the EMS Section, Programs Subsection, and supervisor of the trauma center verification Program, part of the $329,904 figure reflects salaries, expenses, and travel. That portion for salaries is represented as $187,995. Supposedly, the relevant portion of six individual employees' actual salaries was a component. On the other hand, full time equivalents (FTEs) were devised according to the percentage of time Larry Jordan would or could permit these EMS Section employees to devote to the trauma center verification program. FTEs derived in the context of rational experience or mathematical certainty may constitute a portion of a valid formula for fixing a fee schedule but that cannot be said to have occurred with regard to this Proposed Rule. The methodology employed for calculating these particular FTEs lumps a lot of "guesstimating" and conjecture with very little viable quantification of time allotments. Jordan determined, on the basis of what he described as "an educated guess" after review of a staff roster with Terry Davis that although 7.8 FTEs were required for program compliance only 2.5 FTEs could be allotted to the trauma center verification program. It is largely upon the basis of all of DHRS' witnesses' evidence in connection with this FTE computation that the determination must be reached that when agency personnel refer to the calculation of "costs of compliance" they do not mean merely biennial review pursuant to Section 395.031(5) to ensure that subsection (6) statutory standards continue to be met by a hospital once it has been verified as a trauma center. Inclusion of those types of compliance cost figures in the verification program is clearly authorized by the statute. No, rather, the DHRS drafters use the word "compliance" with the implied meaning of encompassing all of the operations of the EMS Section relative in any respect to trauma center matters. In line with its position that the proposed fee schedule is understated, DHRS suggested at hearing that contrary to the Statement of Justification, actual experience has shown that a slightly higher amount of employee time is devoted to the trauma center verification program than is reflected by the 2.5 FTE figure: 2.5 FTEs (allowed) as opposed to 2.73 FTEs (actual) which Mr. Caldwell calculated at hearing would result in a $12,556.79 fee per application for the 1986-1988 biennium. This is not the biennium originally calculated for the rule or projected in its published Statement of Justification. As serious as this is; confession of an originally inaccurate FTE computation figure and inaccurate Statement of Justification is problematic in light of the total lack of logic and rationality with regard to the method of arriving at either the original 2.5 or the recalculated 2.73 FTE figure. The time sampling study does not render 2.73 FTEs rational. 2/ Mr. Jordan, who could not even describe the process of application approval or rejection is credited in the original FTE calculation for the Statement of Justification with 20 percent of his time and salary component devoted to the verification program. Jaime Caldwell Program Development Supervisor, also could not describe the process of application approval or rejection and his testimony reflects that rather than the 40 percent credited in the original FTE calculation for his time and salary component for direct supervisory responsibility over trauma center verification matters, he, Caldwell was equally at ease assessing his own time and salary component as either 35 percent or between 3 and 5 percent. The change and range assigned by Mr. Caldwell is as unsupported as the initial 40 percent assessment made by Jordan and Davis together in April 1985. (Davis actually denied having significant input to the initial assessment). This discrepancy and range are not explainable reconcilable, or justified on the basis of Mr. Caldwell's vague testimony concerning a recent time sampling based on the overall trauma center program which embraces far more than just the trauma center verification process and procedures. 3/ Of those who testified, only Terry Davis had a working knowledge of the existing process by which a trauma center verification application is initially approved or denied. He personally handles all applications from the time one is received until it is approved or denied. Using the maximum amount of time estimated by Mr. Davis, it has taken roughly 12 hours of his time spread over the 60 days provided by statute to process each of the applications received. Davis also denied that Jordan's estimate of his (Davis') time at 100 percent for the verification program was accurate. Davis confirms that the involvement of both Jordan and Caldwell has been infrequent. No witness could delineate with any certainty what, if any, involvement a secretary, a word processor, and Mr. Jordan's personal secretary did in relation to actually processing trauma center verification applications. Although Mr. Davis volunteered someone must do his typing during the application process, this record exhibits no justification for assigning percentages of 60 percent, 20 percent, and 10 percent respectively of each of these clerical employees' time to the verification program for purposes of arriving at an FTE component. These figures appear to have sprung directly from "up front" line item budgeting based on position assignments which by actual testimony are directly contrary to experience that these positions do not participate directly or to any meaningful degree in the verification process. Based on this evidence, and also upon the tacit admission of both Caldwell and Davis that the FTEs reflect EMS employees' percentage of time in the trauma center program as a whole, the methodology employed to obtain the FTE figures must be deemed to be arbitrary and capricious. As calculated by Larry Jordan and as reflected in the Statement of Justification prepared by Terry Davis, expenses and travel were also calculated using FTEs and the percentage of trauma center verification program time for each employee was multiplied by the relevant object category in the Legislative Budget Request: Standards for New Positions 1985-1987. This figure is skewed by the 2.5 FTE figure for all of the reasons already discussed and is likewise arbitrary and capricious. It is also arguable, but not conclusively demonstrated, that this figure is skewed arbitrary, and capricious in anticipated travel and expenses by duplication of some costs and expenses as regards the physician and medical records consultant to be assigned to on-site reviews. See infra. In the Statement of Justification, with respect to "Physician Review of Applications," a figure of eight applications per year was selected based on anticipation that since there are 8 trauma centers in Jacksonville, Florida and the present trauma center verification program's Medical Director, Dr. Raymond Alexander resides in Jacksonville and is employed at a Level I trauma center there potential conflicts of interest exist if any of these entities become applicants for any of the three levels of verification and that if any did, the agency would have to contract with a different physician for review of these eight applications at $200 per application reviewed. It was also anticipated that due to fluctuations in workload and the desire of Dr. Alexander that some Level I applications elsewhere in the state receive a backup application review by another physician, these situations might also require contracting with physicians other than Dr. Alexander. Although DHRS' motives are commendable at first glance it strains credibility that out of 15 per year (total 30) eight (total 16) will come from the finite "Jacksonville 8" number or arrive at a peak workload period. There is no evidence of record what criteria besides Dr. Alexander's request will be used to decide which Level I applicants will get dual reviews and there is a suggestion that there is going to be duplication of effort on these applications for the purpose of avoiding even the appearance of conflict. There is no evidence of record to show how reclassification or continued verification reviews or on-site reviews, if any, work into this figure either. Nonetheless, the parties appear to accept this figure of 16 spread over the biennium. If the figure of 16 is accepted, a remainder of 14 applications (based on DHRS' questionably anticipated 30 applications for the biennium horizon) remain for Dr. Alexander's review. DHRS assigned a 50 percent time allotment (based on Dr. Alexander's annual $42,600 contract) to its Statement of Justification. Incongruously, Dr. Alexander's contract itemizes 15 percent of his time for the combined duties of listing other physicians willing to review applications and his own time reviewing these applications. Petitioner desires the inference to be drawn that either Dr. Alexander is being paid slightly more than $3,000 per application review ($42,600 divided by 14) as compared to $200 per review by other physicians or that the 15 percent figure should be used instead of the 50 percent time/salary component. Neither inference is fully supported by the record as a whole nor by mathematics. However, even assigning the deference due to the discretion afforded an agency in the exercise of its rulemaking authority, that quality of deference will not withstand Larry Jordan's characterization of this 50 percent figure as coming from the attachment at the "front end" of an arbitrary percentage. Although submission of subsequent reports by Dr. Alexander supposedly justify that 50 percent figure as being paid from the trauma center verification activities budget, these reports are not before the undersigned, and Mr. Jordan admits that no analysis was done to establish this 50 percent figure in relation to time/salary solely related to verification. Therefore, the use of this figure of 50 percent is at least arbitrary and capricious in that there is nothing to substantiate what it means with regard to actual medical director duties concerning verification. In the Statement of Justification, with respect to "Trauma Center Site Visits", Larry Jordan determined that an on- site visit for each application is necessary in order to comply with the statutory mandate of Section 395.031(5) that DHRS ensure that the statutory standards set forth in Section 395.031(6) are maintained by trauma centers subsequent to their initial verification. This is permissible discretion within the agency administering the statute. Upgrading its methods of meeting its statutory mandate is a laudable goal of the executive branch and ought not to be violated except where it can be clearly shown that the method exceeds the statutory mandate. That has not been shown here with regard to establishing on-site reviews for the future. Jordan decided to phase in on-site visits commencing with 6 per year. Nothing in this decision to start with 6 a year first has been demonstrated to be arbitrary, capricious, or outside the statutory mandate. However, the dollar amount is another matter. The dollar amount for this upgraded procedure was taken from information from the Joint Committee on Accreditation of Hospitals who conduct similar hospital site visits for accreditation purposes of entire hospitals. Relative to the on- site inspection fee cost calculation contained in the Statement of Justification which is set forth as $54,736 (including a medical records consultant figure discussed infra.) there is no clear indication of whether this figure is based on a prognosis of entire hospital review as with the model accreditation team or upon review of just the emergency room. Trauma is a life-threatening injury a/k/a surgical disease. Since availability of surgeons, surgery rooms, and anesthesiologists as opposed to emergency room physicians is crucial to trauma center qualification it is conveivable that more than just emergency rooms will be inspected but there is insufficient indication even by job description of exactly who will be assigned to the team, what the on-site reviews will cover, what the team duties will entail or how the balance of the $54,736 figure relates to these items. Past agency experience with a single on-site review using existing agency personnel resulted in total expenses of $400.00. The agency also regularly meets the Section 395.006(3)(a) directive to inspect whole hospitals at a cost of not more than $12.00 per bed. By contrast with this information- EMS' component of cost for on-site review of trauma centers is arbitrary, capricious, excessive, and not statutorily justified. In the Statement of Justifications with respect to "Legal Expenses for Denial Hearings," Larry Jordan estimated that $6,000 was a minimal amount that would-be needed for denial hearings. Although testimony is clear that there had never been a denial hearing or even a denial of a trauma center application, provision for such hearings is clearly set out in Section 395.031(4) and (5), and it is naive in the extreme to assume that in meeting its statutory mandate, the agency will never deny any initial applications reclassification- or continued verification application or that of those denied none will ever seek a hearing in accord with Chapter 120, Florida Statutes. There is, however, no rationale within the record for why the figure of $6,000 was arbitrarily selected. In the Statement of Justification, with respect to "Medical Records Consultant Contract," it was determined that such a position is necessary to the trauma center verification program and would be paid approximately $16,000 per year. The asserted justification for a medical records consultant is to support the proposed six on-site visits per year. This purpose is plausible and reasonable within the discretion normally afforded agencies and supportable by the laudable goal to upgrade the method of meeting this agency's statutory mandate already discussed, but DHRS has neither legislative nor budgetary authorization for the medical records consultant position and this renders speculative its inclusion at this time in the calculations for the fee schedule rule. Even recognizing that sometimes an indication that the position can be supported by outside fees is a necessary prerequisite to getting an agency position authorized, inclusion of this speculative cost in this fee schedule is not justified by the statute which requires that the verification program fees to applicants not exceed its cost. Petitioner has adequately demonstrated that an undesignated amount of time of various employees utilized in calculating the FTE function was devoted to legislation, rules drafting, grant disbursal, and meetings of the EMS Advisory Council not directly related to the trauma center verification program and that these elements included within the FTE calculation have skewed the fee need calculations and rendered the fee excessive and not statutorily justified. The record does not support DHRS' contention that the fee increase is necessary to cover its operation deficit or that the cash deficit discussed in the Statement of Justification applies to the verification program alone. It is Petitioner's view that DHRS, in fact performing two distinct functions concerning trauma centers, one of which may be designated "the trauma center program" encompassing every activity of DHRS' Emergency Medical Services Section relative to trauma center matters (including preparation of a statewide medical services program, drafting, analysis, and lobbying of legislation, public education, service in connection with the mandate of the EMS Advisory Council, preparation, negotiation, and litigation concerning promulgation of this and other rules, and non-specific administrative time) and the other function being the "trauma center verification program" pursuant to which applications filed with the EMS Section are received and approved or denied. Petitioner further contends that it is only costs attributable to the latter function, the cost of processing individual applications of hospitals for trauma center verification which may properly be included as a "cost of verification borne by the applicant" pursuant to Section 395.031(7), Florida Statutes. Petitioner seems to suggest that only the 12 hours of Mr. Davis' time multiplied by the number of projected applications should be calculated into the proposed fee. Petitioner's view is too narrow in regard to the full mandate of the statute. The trauma center verification program cannot operate in a vacuum and except as set out in previous findings of fact Petitioner has failed to demonstrate that any elements used in the agency's calculations are not integral parts of the verification program. However, for all the reasons set forth in the preceding findings of fact it is clear that an excessive, arbitrary and capricous calculation of components have rendered the rule itself arbitrary and capricious and its fee schedule excessive to the point of being confiscatory. As such, the fee schedule embodied in the Proposed Rule exceeds the statutory mandate of Sub-Section (7). The foregoing findings are not altered by Respondent's negotiating during the rule making process a $9,000 reduction from an originally anticipated $20,0OO ungraduated fee by the deletion of two additional plans to upgrade the trauma center verification program.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Agency is a state government licensing and regulatory agency. Respondent is now, and has been since June 16, 1980, a physician licensed to practice medicine in the State of Florida. She holds license number ME 0036758. Since the completion of her residency at Engelwood Hospital in New Jersey in 1974, Respondent has specialized in internal medicine, although she is not board-certified. Until December of 1987, when she relocated to Florida, she had her own practice in New Jersey. Following her arrival in Florida, she initially went into private practice. In June of 1990, Respondent went to work part-time at Humana's Urgent Care Center (hereinafter referred to as the "UCC") in Plantation, Florida, a walk-in clinic servicing Humana members who needed to see a physician but, because of the unexpected nature of their illness, did not have a scheduled appointment with their primary care physician. 7/ In February of 1991, Respondent was hired as the full-time Director of the UCC. She remained in that position until her resignation in February of 1994. She presently has her own practice in Fort Lauderdale, Florida. On or about April 22, 1992, patient L.K., an 80-year old female, slipped and fell. Later that same day, at around noon, L.K., accompanied by two companions, presented to the UCC with complaints of right groin pain and difficulty walking after the fall. L.K. did not have any of her medical records with her, nor did her primary care physician provide the UCC with these records in advance of her visit. L.K. was greeted by the receptionist at the UCC. The receptionist asked L.K. for her name, address, telephone number and social security number. L.K. provided the information requested, which the receptionist recorded on a "priority care record" form (hereinafter referred to as the "PCR Form"). Thereafter, a nurse escorted L.K. from the reception area to an examining room. Once in the examining room, the nurse questioned L.K. as to the reason for L.K.'s visit to the UCC and also inquired about any medications L.K. might be taking and allergies she might have. In response to these inquiries, L.K. told the nurse that: she was 80 years old; she had fallen that morning and, as a result, was experiencing pain in her right groin and had "great difficulty walking;" she was taking insulin 8/ and Ecotrin, among other medications; and she was allergic to sulfur. The nurse documented these responses on the PCR Form. By now, it was approximately 12:30 p.m. The nurse then took and recorded on the PCR Form L.K.'s vital signs, which were within normal limits. L.K.'s temperature was 98.6 degrees Fahrenheit, her pulse rate was 68, her respiratory rate was 20 and her blood pressure was 110 over 60. The nurse and L.K. were soon joined in the examining room by Respondent. Upon entering the examining room, Respondent asked L.K. "what had happened." L.K. told Respondent that she had slipped and fallen and that she had pain in her right groin. Respondent recorded this information on the PCR Form. Respondent also noted on the PCR Form that L.K. was "dragging [her] leg." Although Respondent's records do not so reflect, L.K. also complained to Respondent that she had pain in her lower back and that before falling, she had been feeling fine and had not been experiencing any chest pains or dizziness. It was apparent to Respondent, based upon her conversation with L.K., that L.K. was oriented as to person, place and time. Respondent then conducted a thorough physical examination of L.K., but failed to document that she did so or to note the results of the examination on the PCR Form or elsewhere in her records. In not recording any of the findings of her physical examination of L.K., Respondent was following her practice of "charting by exception," that is noting only positive findings or abnormalities in her records. "Charting by exception" is not uncommon in hospital emergency room and walk-in clinic settings. As part of her examination of L.K., Respondent rechecked L.K.'s blood pressure. It was still 110 over 60. She listened to L.K.'s heart and lungs and discovered no abnormalities. She inspected L.K.'s skin. There were no scratches, bruises or abrasions. L.K.'s skin color was "good." She palpated L.K.'s abdominal, pelvic and groin areas. No masses or hernias were found. The abdomen was soft and not tender. The spleen and liver were normal to the touch. She tested the range of motion of L.K.'s hip. The test revealed that it was unlikely that L.K. had suffered a hip fracture. She performed a rectal examination of L.K., which included a guaiac test of L.K.'s stool. The test did not reveal the presence of any blood in the stool. She observed L.K.'s eye movements and found them to be normal. There was no indication from the physical examination Respondent conducted that L.K. had any respiratory, metabolic, hemodynamic or other problem requiring immediate hospitalization. Respondent did not order or perform any tests be done on L.K.'s blood, such as a complete blood count or prothrombin time. In failing to do so, Respondent did not act in a manner that was inconsistent with what a reasonably prudent internist, in view of L.K.'s clinical presentation, would have recognized as being acceptable and appropriate. Notwithstanding that her physical examination of L.K. revealed no signs of any fracture, Respondent, as she noted on the PCR Form, ordered that x- rays be taken of L.K.'s right hip and pelvic area. Humana's x-ray facilities were in a building adjacent to the UCC. L.K. was brought to the building in a wheelchair and the x-rays Respondent had ordered were taken. The radiologist on contract with Humana to read x-rays taken at this site, David Francis, M.D., was not at his station. L.K. returned to the UCC with the x-rays. She told Respondent that the radiologist was unavailable. Respondent telephoned Dr. Francis' office and was told that he had left for the day. Respondent then looked at the x-rays. The x-rays were difficult to read because of the presence of bowel gasses, feces and a pessary and the osteopenic condition 9/ of the x-rayed bone structures. Respondent had obtained L.K.'s medical records from L.K.'s primary care physician and, upon a review of those records, learned, among other things, that L.K. had a "history of osteoporosis," which made her more susceptible to bone fractures. 10/ Nonetheless, as she noted on the PCR Form, Respondent did not see any fractures when she looked at the x-rays. Respondent so informed L.K. and her companions, but added that she was not a radiologist and therefore was not certain that L.K. had not sustained a fracture. She told them that she would have a radiologist look at the x-rays "first thing in the morning" and that she would make arrangements to have L.K. seen by an orthopedic specialist thereafter. Under the circumstances, it was appropriate for Respondent, who was, and did not hold herself out to be anything other than, an internist without any specialized skills or training in either radiology or orthopedics, to seek the input of a radiologist and an orthopedist. Moreover, there was no reason for Respondent to believe that there was any need to have a radiologist or an orthopedist involved in the matter any sooner than the following day. Based upon her reading of the x-rays and the other information she had gathered, Respondent preliminarily determined that L.K. had a lumbosacral sprain, which she noted on the PCR Form by writing, under "assessment," "L/S Sprain." Respondent reasonably believed that there was no present need to hospitalize L.K., particularly inasmuch as she had been assured by L.K.'s companions that there would be someone available at home to watch L.K. at all times. Respondent therefore instructed L.K. to go home and rest. She ordered a walker or a wheelchair for L.K. to use at home when she needed to get out of bed. Respondent told L.K. and her two companions that if there was any increase in L.K.'s pain or discomfort, or if any new problems developed, L.K. should go directly to the Humana/Bennett Hospital emergency room. 11/ That Respondent sent L.K. home is reflected on the PCR Form, however, the form does not indicate what, if any, instructions Respondent gave L.K. Before L.K. left the UCC, she was given injections of Toradol, an anti-inflammatory drug, and Norflex, a muscle relaxant. The injections appeared to make L.K. feel considerably more comfortable. L.K. was also given prescriptions for Indocin and Soma. Respondent listed these medications (Toradol, Norflex, Indocin and Soma) on the PCR Form under "plan." No other entries were made under this heading on the form. Following L.K.'s departure from the UCC, Respondent took L.K.'s x-rays to Dr. Francis' office and laid them on his desk, along with a note requesting that, upon his return to the office, he read the x-rays and call Respondent to tell her of his findings. Respondent also telephoned an orthopedic specialist to schedule an appointment for L.K. for the next day. On the morning of April 23, 1992, Dr. Francis read the x-rays that Respondent had left on his desk the day before. His reading of the x-rays revealed that L.K. had multiple pelvic fractures. Because the anatomy of the pelvis is atypical, it is not uncommon for internists and other primary care physicians who do not have the specialized skills and training of a radiologist or an orthopedist to miss pelvic fractures on x-rays, as did Respondent in the instant case. Respondent's failure to identify the pelvic fractures on L.K.'s x-rays, however, did not result in Respondent rendering care and treatment to L.K. that was inadequate or otherwise inappropriate. Given L.K.'s clinical presentation, whether she had a fractured pelvis or not, sending her home with instructions to rest (as opposed to hospitalizing her) was not inappropriate. Reasonably prudent physicians do not routinely hospitalize patients simply because they have pelvic fractures. After reading L.K.'s x-rays, Dr. Francis telephoned Respondent and advised her that the x-rays revealed that L.K. had fractured her pelvis. Respondent thereupon placed a telephone call to L.K.'s residence. The person who answered the telephone informed Respondent that L.K. had been taken to the Humana/Bennett Hospital emergency room because she was in a great deal of pain. L.K. arrived at the emergency room at approximately 10:30 a.m. complaining of weakness and dizziness. She had a temperature of 95 degrees Fahrenheit (taken orally). Her blood pressure was 98 over 60 and her pulse was 96. Laboratory testing done at the hospital indicated that L.K.'s blood sugar was very high (750 milligrams, which was twice as high as normal), that her hemoglobin 12/ and blood pH were low, 13/ and that she had an enzyme profile indicative of a myocardial infarction. An electrocardiogram administered at the hospital also lent support to the conclusion that L.K. had a myocardial infarction. It appears likely, particularly in light of L.K.'s very high blood sugar, that the myocardial infarction was the product of a diabetic acidosis. X-rays taken at the hospital revealed that L.K. had sustained multiple fractures of her pelvis, but that there was no significant bone displacement. The fracture sites were not near any major arteries or blood vessels. L.K.'s condition quickly deteriorated after her arrival at the hospital. At 2:15 p.m. she was pronounced dead. Thereafter, an autopsy was performed by Stephen Nelson, M.D., of the Broward County Medical Examiner's Office. The following are the "Autopsy Findings" set forth in in Dr. Nelson's Autopsy Report: Atheroscerotic vascular disease, multifocal 14/ Calcific aortic valve Pulmonary congestion, with calcific vessels Ateriolonephrosclerosis Pelvic fracture Cystic encephalomalacia, left putamen, remote Status post resuscitation Edentulous mouth In his report, Dr. Nelson listed the following as the "CAUSE OF DEATH," "CONTRIBUTORY CAUSE OF DEATH" and "MANNER OF DEATH": CAUSE OF DEATH: Pelvic fracture CONTRIBUTORY CAUSE OF DEATH: Coronary atherosclerosis MANNER OF DEATH: Accident Although Dr. Nelson listed "pelvic fracture" as L.K.'s cause of death, in his Autopsy Report, he did not state that he found evidence of tears or lacerations of any major arteries or blood vessels, nor did he indicate that he discovered the loss of an amount of blood sufficient to have caused or contributed to L.K.'s death. He did note, however, the following: Hemorrhage is noted dissecting within the planes of the rectus abdominis muscle extending from umbilicus to pubic symphysis. Hemorrhage is subsequently traced to a 1 inch wide ragged displaced fracture at the pubic symphysis par- ticularly prominent on the left side. There is tearing of the peritoneum, though, no free or clotted peritoneal fluid is noted. There is hemorrhage along the anterior surfaces of the urinary bladder and the serosa of the urinary bladder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that the Board of Medicine enter a final order dismissing Count One of the Administrative Complaint, finding Respondent guilty of the violation of subsection (1)(m) of Section 458.331, Florida Statutes, alleged in Count Two of the Administrative Complaint, and disciplining her for having committed this violation by issuing her a reprimand. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 14th day of March, 1995. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1995.
The Issue The issue for consideration in this matter is whether Respondent, NME's application for a Certificate of Need to provide comprehensive medical rehabilitation beds in Department District X should be approved.
Findings Of Fact At all times pertinent to the allegations contained herein, the Department was the state agency with the authority to and the responsibility for evaluating and approving CON applications for health care facilities in this state. Department District X is a single county district which encompasses the whole of Broward County, Florida. Broward County consists of two distinct service areas for health care providers; the north and the south. Facilities located in the northern part of the county, for which the dividing line is accepted as State Road 84 and Interstate 595, which run east/west across the county, primarily serve the northern area of the county. By the same token, those providers located south of the dividing line are primarily in service to residents in the southern portion of the county. Legitimate basis exists for the distinction between the north and south county segments. The county is divided into two taxing districts which generally follow the service district boundaries and these taxing districts are utilized to provide and reimburse for health care services. In addition, physician practice patterns show generally that physicians stay, refer, and admit to facilities within that portion of the county where they live and practice. There is little medical intercourse between the sections. A third basis for distinction is the fact that generally patients follow physicians, and will normally present for treatment at those facilities located in the section in which they reside and their practitioner locates. At the present time, of the five providers which offer CMR services in Broward County, (District X), four are located in the northern section of the county, and the fifth, Memorial, is located in the south. Memorial currently has 22 of the 213 existing and approved CMR beds in the District. This constitutes approximately 10% of the total number or approved and existing beds in the District while 32% of the population of the District resides in that service area. By the same token, if one considers the number of CMR beds per 100,000 population, the number in the north service area is approximately 4 times that in the south. Petitioner, Memorial, is a 618 bed acute care regional public hospital providing numerous specialized acute care services to District X as well as adjoining areas in the southeast region of the state. It is operated by the South Broward Hospital District, a taxing entity created by the Florida Legislature in 1947, and has a history of being a disproportionate share provider of medical services to the indigent through Medicare and Medicaid programs as well as other charity care programs. In fact, Memorial provides the sixth highest level of indigent care in this state. Memorial currently has provided CMR services since 1985 and operates a 22 bed CMR unit. It also offers open heart surgery, neurosurgery, pediatric cardiac catheterization, pediatric trauma, pediatric open heart surgery, and pediatric oncology and hematology. The facility has recently submitted a letter of intent to the Office of Emergency Medical Services requesting to be designated as a regional adult trauma center. HMC is a 334 bed acute care hospital also located in the southern service area of District X, in a six story building containing approximately 300,000 square feet and an adjacent five story medical office building. It also offers a broad range of general acute care services as well as specialized programs in the treatment of diabetes, laser surgery, eating disorders and oncology. It also provides intensive care, coronary care, and progressive care beds, though all may not be considered as active tertiary care services. HMC has a large medical staff consisting of over 400 physicians representing almost all medical specialties. More than 90% of the staff are board certified and the rest are board eligible. The medical staff of HMC and Memorial tend to overlap almost in its entirety. HMC's medical staff also includes five physicians who specialize in physical medicine and rehabilitation, (physiatry), all of whom are board certified except for one who has recently taken the board examination. HMC is a subsidiary of NME Hospitals, Inc., a national publicly held health care company which owns, manages or operates more than 150 acute care, rehabilitation, and pediatric hospitals throughout the United States and overseas. NME has a rehabilitation division which specializes in comprehensive rehabilitation services. This division would manage the CMR unit at HMC if approved. HMC is accredited by the Joint Commission of Accreditation of Health Care Organizations and maintains extensive quality assurance activities. On March 11, 1991, HMC filed a Letter of Intent to apply for a CON to convert 30 existing acute care medical surgical beds to 30 CMR beds. Somewhat later, but still during March, 1991, both Memorial and HMC filed applications for a CON for CMR beds. Memorial's application sought the addition of 4 CMR beds to its existing 22 bed unit. Both applications were preliminarily approved by the Department. Thereafter, both Memorial and HMC filed Petitions in opposition to the preliminary approval of the other applicant's application. HMC ultimately dismissed its Petition in opposition to Memorial's 4 beds, and that application is not in issue here. Prior to hearing, the parties agreed that the provisions of Section 381.705(1)(m), Florida Statutes, as they relate to costs of construction and construction methods and itemization and costs of equipment of HMC and its application are not in issue. Memorial, however, did not waive its right to challenge the plan and design of the plan as to quality care considerations in HMC's application. The parties also agreed that Section 381.709(2)(c), Florida Statutes, was in issue but that sup-paragraphs a, b, and d of that section were not. The Hearing Officer's resolution of Petitioner's objections on this matter established that the Letter of Intent was timely filed in the appropriate place and the proper notice published. HMC's Letter of Intent included therewith a resolution of the NME Board of Directors which was accompanied by a certificate as to its accuracy. The corporate resolution certificate, dated March 5, 1991, indicating the resolution was enacted on February 19, 1991, was executed by Mr. McKay, Vice President and Assistant Secretary of NME Hospitals, Inc. Memorial questioned Mr. McKay's authority to sign the certificate as custodian of the corporate records. The evidence presented indicated, however, that Mr. McKay is a keeper of the corporate seal and custodian of corporate records pertinent to the eastern region of NME Hospitals, Inc., and as such he was an appropriate custodian of the records and competent to execute the certificate. The issue as to the date on the certificate appears to be no more than a scrivener's error. The errors which exist are harmless. The documentation contains all certification necessary for a valid Letter of Intent. Daniel J. Sullivan, a consultant in health care management, did a need analysis study of the Broward County District for HMC to determine whether a CMR facility was needed within the District and if so, where. He first looked at the planning area and what services were available, both those in existence and those approved but not yet on line. He also looked at utilization of CMR services in the area and trends toward service utilization, geographic distribution of existing services, the fixed need pool, relevant Department rules relating to numeric need and other factors, and in that connection, any other unusual factors bearing on need. Mr. Sullivan's study clearly established to his satisfaction that HMC does not serve all of Broward County - only, primarily, those patients residing in Hollywood, Hallendale, and Dania, all of which are in the southeast corner of Broward County. The secondary service area goes down into Dade county and up to Ft. Lauderdale. The data for this study and the need analysis comes from the Hospital Cost Containment Board, (HCCB), and is considered to be reliable. Mr. Sullivan also did an analysis of areas served by other providers in the county and determined that Memorial's service area is similar to that of HMC. North Broward Medical Center serves the very northeast part of the county. Holy Cross Hospital serves the lower north to northeast part of the county. Based on this, he concluded that facilities in the northern part of the county serve the northern county area. Only Petitioner and HMC serve the southern part of Broward to any measurable extent. Utilization of CMR beds is very high district-wide, both historically and currently. Occupancy in the District for the relevant period was 91.21% county-wide, with Memorial Hospital having an occupancy rate of 99.32%. This is not, in Sullivan's opinion, a historical aberration. The same trend goes back to the mid 1980's. In 1989 for example, utilization was at 89% and it has gone up since that time. In Sullivan's opinion, the system is now near capacity and the occupancy rate remains high. Both Holy Cross and North Broward Medical Center have 20 new beds each as of the last quarter of 1991. When those beds came on line, the utilization rate still remained very high NBMC's new program was at about 75% occupancy after less than one year operation. These north county beds will be used by north county patients and will not, for the most part, be available to south county residents. Rule 10-5.039, F.A.C., is the Department's rule regarding need determination, and it contains a numeric need formula for projecting future needs for service ((2)(a)). The Department publishes a fixed need pool every six months to identify need. The last one published before this application showed a zero bed need in the fixed need pool. Mr. Sullivan believes, however, this is not an accurate predictor of bed need since the realities of the market place are not related to the Department's fixed need pool. Mr. Sullivan's calculations show a gross bed need in 1990 of 88 beds considering the existing 213 licensed and approved beds. Since these are running at an occupancy rate higher than 90%, this shows the rule grossly underpredicts the need for the service. In fact, the Department has prepared State Agency Action Reports, (SAAR), in both the NBMC and St. Joseph applications and the Memorial application which reflects this trend. Mr. Sullivan believes the need formula is not a good predictor of future needs because it assumes, incorrectly, that the number of patients needing the service is directly related to acute care hospital discharges. Historically, however, this has not been the case. Since 1986, the ratio of CMR discharges to acute care discharges has grown and has never closely approximated the rule's standard ratio of 3.9. Other factors are provided for in subparagraph (2)(b) of the rule. The District's population trends show a relatively older population, (more than 20% of the population is over 64 years old), and by 1996 that percentage will increase somewhat. Since July, 1989 approximately 33% of the people with the top ten conditions utilizing CMR services were from South Broward County. Extrapolating this indicates a net need of 11 beds if an 85% occupancy rate is experienced. Since the actual occupancy rate remains, in fact, higher than 85%, Mr. Sullivan believes this method is accurate. A modification of this need, relating to discharge rates, was done in the Omissions Response herein which shows a need, by 1996, of 39 beds, not including the 4 beds approved for Memorial. As to population, the elderly are most at risk for conditions requiring CMR care since they, by far, experience the largest percentage of strokes and orthopedic related conditions. With the elderly and very elderly percentage of the total population increasing, this would tend to drive the need for CMR services and beds. Mr. Sullivan calculated need for the purposes of the application for the southern portion of the District along, utilizing a method which, though not officially recognized, uses the same criteria for analysis used in the District analysis. Doing so, he concluded there would be a 1990 need for 53 additional beds. Utilizing the 17(a) method to project into the future, he calculates a 1996 need for 57 beds. Concerning subparagraph (2)(B)3 of the rule, considering the growth rate of CMR admissions per 1,000 population, (from 1.41 to 2.24 during the period 1986 through 1990), at HMC, Mr. Sullivan also concluded that the growth rate would be plus or minus 4.5% over the next 5 years. He also concluded that the length of stay will remain at 21 days over the next 5 years and feels this is conservative when compared to the rest of the state and the 28 day figure used in the rule. There is some pressure to have patients discharged as soon as possible which impacts on length of stay. Considering all these factors, Mr. Sullivan expects a District X need as a whole of 65 beds in 1996, not including the 4 beds approved for Memorial. This would result in an actual 61 bed need by 1996. All this means that if the number needed is the same for the South County and the County as a whole, then the number is acceptable and all the need is in the South County. As to trends in the utilization by third-party payees, this factor has driven the growth. Medicare and insurance companies recognize the efficacy of CMR services as opposed to the fragmented treatment otherwise provided. They consider that every dollar spent on CMR saves money for the health care system. Subparagraph (c)1 of the rule requires a unit have at least 20 beds. In the instant application, HMC is seeking 30 beds and this clearly meets the rule criteria. The occupancy standard of 65% in the first year, as outlined in sub- paragraph (c)2 of the rule, is estimated to be met easily, and the 85% requirement for existing providers will also be met. All together, there appears to be a high demand for CMR services in Broward County in general and in the south half of the county in particular, and it is reasonable to assume that the 30 beds for HMC, as well as the additional beds sought by Memorial, could be approved without adversely affecting any existing providers. Regarding the rule's accessibility standard which requires 90% of the target population to reside within 2 hours diving time of the proposed facility, this is clearly met since all of Broward is within 2 hours driving time of both HMC and Memorial. Turning to the provisions of Section 381.705, Florida Statutes, specifically (1)(a), (b) and (2)(a),(b) and (d), all are highly interrelated. While geographic availability may not be of concern, the availability of empty beds is of great concern. Historically, the District has operated well above the 85% occupancy rate for over 3 years. The system currently is clearly inadequate and the existing alternatives, home care and outpatient services, do not replace the services in issue but supplement and are follow-ons to inpatient CMR care. Concerning economies of shared service, Mr. Sullivan feels certain economies will accrue as a result of this conversion if approved. Existing space will be used and can share administrative and overhead expenses; the contractor to be used to accomplish the project is qualified and experienced and knows how to economize. Impacts on competition will be minimal if any, given the high level of need. As to any impact on HMC, the sharing of costs and services between the integrated portions of the facility would generate economies. At the present time there is no existing competition other than the beds at Memorial. If HMC is granted its certificate and becomes an existing provider, the resultant competition should be beneficial to both institutions. There are no alternatives to this service which are less costly or more efficient. Any alternatives would be either more expensive or inappropriate. The facilities are currently being used in a very efficient manner and this would not change. If the application is not approved, according to Mr. Sullivan there are and will be patients who are in need of and who will be denied CMR services in South Broward County. He believes the 1989 Florida State Heath Plan and the District's 1990 Health Plan, those applicable here, are consistent with this application. The preferences called for in the plans will be met and satisfied. HMC agrees to accept Medicaid patients and has committed 1% of its service to the indigent. It should be noted that Memorial's projected need for CMR beds is identical to that of this applicant, and this tends to indicate Memorial also feels there is a need for additional beds in the south county. It's application was filed subsequent to the initial approval of the 30 beds in issue here. It is immaterial at this point that District X has more CMR providers and more licensed CMR beds than any other district in the state. Also not controlling is the fact that under the state's bed need methodology, as outlined in the rule, there is a 125 bed excess projected by 1996 for District X. It must be noticed here that CMR services are defined by rule as tertiary health services which are generally specialized services using specialized equipment and personnel. They should be centralized in a centralized location to encourage better utilization of resources. HMC is a community hospital which does not now have any other tertiary hospital services but Dr. Jay S. Mendelsohn, a psyiatrist testifying on behalf of HMC claims that the majority of rehab problems are not so specialized as to require tertiary services and are mainstreamed. Dr. Mendelsohn, a specialist in physical medicine and rehabilitation, as a physiatrist, coordinates care on a rehabilitation unit including actual treatment, nursing care, and social work relative to the patient's condition. A physiatrist sees, on an inpatient basis, patients with such infirmities as stroke, hip fractures, multiple sclerosis, multiple trauma, and other similar conditions. The patients are usually those with neuromuscular or musculoskeletal problems, though he does, on occasion, see those with arthritis complications. Dr. Mendelsohn has privileges at several hospitals in Broward County including both Memorial and HMC. He practices mostly at Memorial where he was, from 1985 through 1991, Medical Director of the rehabilitation unit. His associate, Dr. Novick, is the current Medical Director. CMR patients are usually referred for this service by other physicians. Hip fractures and strokes are primarily from orthopaedic surgeons and neurologists, but internists, family practitioners, and physicians practicing in other disciplines also refer as appropriate. To Dr. Mendelsohn's knowledge, South Broward County is somewhat unique. Physicians there generally stay in that area and do not practice or draw patients from north of I-595. Another group practices primarily in the northeast portion of the county and a third group practices in the northwest county. Most physicians use the hospitals in the area in which they practice. In the south county, patients needing inpatient rehabilitation can at present, from a practical standpoint, go only to Memorial Hospital since it has the only rehabilitation beds available in the area. His experience indicates substantial difficulty in getting patients admitted to that unit since it generally fills its rehabilitation beds with patients primarily from it own patients already admitted to other services. Patients from other hospitals or from the community normally have great difficulty getting admitted, and this problems has existed for quite some time, (over 5 years). He has encouraged Memorial's staff to apply for more rehabilitation beds. If a Memorial patient is unable to get into the rehabilitation unit at Memorial, that patient then has to obtain the needed rehabilitation treatment on an acute care ward. Patients at other facilities often are not admitted at all, and this situation affects the course of treatment and reduces the amount and the beneficial effects of therapy by approximately one-half. The providers in the northern part of the county are not a good source of therapy to patients from the southern portion of the county because: Since south county physicians normally do not go to the north portion of the county, the patient has to have a different physician who is not familiar with either the patient or the condition and who must, therefore, do repeat tests and other diagnostic procedures. The patients' families find it harder to visit the patients in the north part of the county and therefore do not visit as frequently. Family visits are important to the success of the therapy. When the patient goes home, his family does not know how to help out because they did not receive the training they would have ordinarily have received had they been able to visit in the inpatient facility more frequently. Older patients' spouses often do not drive or, if they do, find the extra distance to the north portion of the county too much to travel. As a result of all the above, the continuity of care concept, which is important from a medical care standpoint, is adversely affected. Patients needing treatment at HMC's facility, if approved, would be much like those treated at the currently existing Memorial facility. Dr. Mendelsohn is familiar with Rehabilitation Hospital Services Corporation, which will be contracted with to run the HMC facility if approved. To his knowledge, the quality of care provided by it is good and comparable with that provided elsewhere. Dr. Mendelsohn anticipates he would refer 5 to 10 patients a week from his and his associate's practice to HMC's CMR facility if approved. He feels he could keep the 30 beds filled without taking any patients from Memorial's unit which would still remain operating at capacity. The 21 day stay average at Memorial is shorter than he would expect to see. This is consistent with Sullivan's conclusion, supra. If more beds were available, the stay at both facilities would probably be longer. This is in part because now the patient is getting therapy on the acute care ward while waiting to get into the rehab unit. This pretreatment would be accomplished on the CMR unit if the space were available. As a result, then, the opening of HMC's CMR unit would, in his opinion, in no way adversely affect Memorial's ability to keep its unit full. Dr. Mendelsohn's comments are not biased by the fact that he is a financial investor in the corporation which will operate HMC's unit. Within the pertinent medical community there is a great deal of frustration and anger over the inability to get patients into a rehabilitation center and keep them there for the appropriate length of time. The alternatives to the proposed facility, such as inpatient treatment on other services or in other hospital facilities in the county, or in nursing homes, are not as good. By the same token, outpatient care is not as good because of the unavailability of sufficient treatment due to Medicare and other financial restraints. The difficulties experienced by physicians practicing in the southern Broward County area who desire to admit their patients for CMR service is typified by that of Dr. Jeffrey A. Crastnopol, an orthopedic surgeon practicing in Hollywood since 1984, and a member of the staff at Memorial, HMC, and other hospitals in the area. Dr. Crastnopol sees a wide range of patients from children to the elderly. His practice deals mostly with trauma in children, sports trauma, and trauma related to bone brittleness in the elderly. Almost all his patients live within the southern Broward area. All hospitals where he is on staff are in that area as well. Dr. Crastnopol has chosen not to take patients from outside his geographical area because he has sufficient patients from in his area to keep him busy. In his experience, of all the other orthopedists he knows, none practicing in the southern Broward area is on staff in any of the hospitals in the northern Broward area. Most are on staff at both Memorial and HMC. Most of Dr. Crastnopol's patients are elderly, suffering hip fractures; pelvic, lumbar and spinal fractures; herniated discs; and the complications of arthritis as well as other symptoms. He and his associate saw between 10 and 15 patients with these conditions in the two weeks prior to the hearing. Of that number, he referred at least 3 for inpatient rehabilitation at Memorial and has an additional 4 or 5 other patients now in acute care services who will need CMR services. His trauma cases usually go to the emergency room first or the patient will call him or their primary care physician. The patients frequently request a particular hospital but, if a patient is already admitted to Memorial, he would try to keep that patient there for rehabilitation services. If the patient is at HMC, and if there were a rehab unit there, he would try for admission at that facility. At the present time, only Memorial has rehab beds available for Dr. Crastnopol to refer to and he often has trouble getting a bed for a patient there since it is usually full. The wait for an opening may be from 4 to 5 days or the patient may not be admitted at all. The delay is controlled by physiatrists at Memorial and though they try to be accommodating, frequently patients from outside that facility cannot be admitted. When that happens he then has to consider other institutions further away or nursing homes with less than full rehabilitation services. According to his experience, patients at Memorial will almost always be admitted to Memorial's rehab unit. Patients at HMC may not, and he, as well as all other physicians testifying, indicate there is a difference in the waiting lists. Dr. Crastnopol believes the best thing for the patient is for the doctor to be able to treat these injuries in a rehab unit. To transfer to one where he cannot come is not as good. He believes that patients on rehab units recover faster than those who are in alternative treatment plans. He also contends that home care and outpatient care are not suitable alternatives to inpatient care, especially for the elderly. He agrees with Dr. Mendelsohn that the northern Broward facilities are generally too far from the families of patients from the south. Since he is not on staff up there, he would not be able to provide the continuity of care which he, and all other physicians testifying, feel is so important. Dr. Crastnopol contends that from a clinical standpoint there is need for additional rehab beds in south Broward County. HMC provides a good service, and he has no doubt that it would provide a rehab service of the highest quality if its unit were approved. He would refer patients to it. He treats Medicaid and indigent patients, and in all fairness to Memorial, that installation has never tried to dissuade him from admitting that category of patient to its facility. Dr. Crastnopol took time from his busy practice to travel to Tallahassee to testify here because he feels there is a need for the service applied for. He, too, is an investor in the limited partnership which owns the building in which the hospital is situated, but in no way would this interest prejudice or bias his testimony. At the present time, only between 30 and 40% of his patients are treated at HMC, whereas between 60 to 70% are treated at Memorial. Similar testimony came from Dr. Jose M. Muniz, an internal medicine specialist practicing in Hollywood, Florida for the past 17 years. Dr. Muniz is on staff at both HMC and Memorial and serves as Chief of Staff at HMC. He is also on the utilization review and quality assurance committees there. As with Dr. Crastnopol, his patients are mainly older, 70% of whom are over 65. The other 30% are adult to middle age. Ninety-eight percent of his patients come from Hollywood and the south Broward area. As a result, Dr. Muniz has no hospital affiliation in the north Broward area. Dr. Muniz refers to rehabilitation patients who experience bone fractures and strokes, and he sees patients at both hospitals. He has had some referral problems at Memorial. He feels very strongly about the necessity for continuity of care and asserts it is important for him to continue to see his patients in a rehabilitation unit because they still have an underlying medical problem which he must continue to treat. It is not good for his patients to go far afield for rehabilitation service due to a lack of availability in the immediate area. He cannot continue to treat the patient who thereby feels abandoned, and the family also has additional difficulties in getting to see the patient. Nursing homes, while an alternative to a rehab unit, are not, in Dr. Muniz' opinion, an acceptable one. They have neither the staff nor the equipment to provide the appropriate treatment, and in his opinion, placing a patient who needs rehabilitative services in a nursing home is no more than warehousing that patient. HMC's application has a high level of support in the local medical community. A second rehab unit has been sought by numerous physicians in the area, and Dr. Muniz believes there is a definite need for additional rehabilitation beds to satisfy the need for rehab availability after the acute care condition has been stabilized. He is satisfied that if HMC gets its rehabilitation unit, its quality of care will be as high as that in the other services already provided there. Dr. Jubran Hoche, a Board certified neurologist at Memorial, HMC, and other facilities in the southern Broward area, often has patients who need inpatient rehabilitation services. Most are elderly stroke victims and younger patients with multiple sclerosis, a demographic consistent with prior evidence considered. He sees between 2 and 3 such patients per week. He begins to evaluate his stroke patients for rehabilitation when they stabilize, somewhere between 7 and 10 days after suffering their stroke. He has found rehabilitation beneficial to recovery and currently refers such patients to Memorial from all facilities where he is on staff. He often has trouble getting beds there, however, and over the years has found that patients already in Memorial have a priority over outsiders when it comes to getting into the inpatient CMR unit. Patients from other facilities face a waiting list and as a result, many are transferred outside the southern part of the county for inpatient rehabilitation. This is not a good alternative because it interferes with the beneficial continuity of care cycle and raises numerous other problems. Noting that Memorial plans to open a satellite facility in southwest Broward County and shift beds there, he contends that this will still increase the need for CMR beds in the county. There is already a clear need for more inpatient CMR beds in south Broward. In his experience, HMC provides a good quality service and would provide the same in any approved CMR unit to which he would refer patients from those who presently he cannot get into Memorial's unit. As with the other physicians who testified here, he has taken the time from his practice to travel to Tallahassee on HMC's behalf because of his sincere concern with continuity of care. Testimony in the form of depositions from Drs. Klotz, Bennett, Petti, and Moskowitz, and Mr. Jensen support and reiterate, fundamentally, the direct testimony of the above physicians and administrators. According to Holly Lerner, Administrator and Chief Operating Officer at HMC for several years, NME Hospitals, Inc. is a wholly owned subsidiary of National Medical Enterprises, an international health care corporation. The local facility is a six story hospital with approximately 300,000 square feet in addition to an adjacent office building. Over 400 physicians are on staff from most medical specialties including 5 physiatrists. HMC practices on an open staff basis meaning any qualified physician can apply. Almost all physicians on staff currently are Board certified and there is an internal requirement that all be at least Board eligible. The hospital is accredited by appropriate accrediting agencies. HMC is located approximately 1 mile from Memorial Hospital. It has an active quality assurance program, and any inpatient rehabilitation unit approved would be subject to the same quality review. HMC pays property and indigent care taxes to the taxing authorities. In contrast to Memorial, however, it gets no funds from those taxing authorities for treating indigent patients. It has a Medicare contract and has never turned away a patient because of an inability to pay. If the requested rehab unit is approved, the hospital's current outpatient physical therapy program will move off-site. The new inpatient rehab unit will have physical therapy capability on site. Management of the facility will be by an experienced firm well qualified to run it. All services required for physical therapy by Department rule are currently available and will continue to be provided. The new unit, if approved, will seek CARF accreditation. All variable services are currently provided and will continue to be provided. All optional services, except therapy for children, will be provided. HMC now has transfer agreements with Memorial and various nursing homes within the area. It also has a rehab agreement with Sunrise Hospital and a contract with the state to treat patients at a Medicaid contract rate. If at all possible, management intends to continue this on an inpatient basis. Discussions have been held with the Dean of a nearby osteopathic medical school to have a residency and intern program at the hospital and though it is still in negotiation, the parties have, in essence, formulated a tentative agreement to effectuate this development. Though disputed by Memorial, manpower requirement estimates are considered adequate to properly staff the facility if approved and the personnel costs are also considered reasonable even with cost of living increases over the next 5 years. In that regard, overhead staff has surveyed salaries within the area and tried to stay at the 70% level. HMC's salary levels are somewhat lower than that of Memorial but, nonetheless, HMC has had no difficulty in getting and retaining qualified support staff. Petitioner's evidence in opposition was not persuasive. According to Paul Echelard, Administrator and Chief Executive Officer of Pincrest Rehabilitation Hospital, and Florida Vice President of Rehabilitation Hospital Service Company, (RHSC), a subsidiary of NME which manages rehab hospitals throughout the country and which will operate the rehab unit at HMC, inpatient rehabilitation assesses an individual who has had a debilitating injury, after medical stabilization, for improvement potential, and helps improve his living capabilities. Inpatient rehabilitation helps to restore both motor and cognitive functions. The minimum requirements for a CMR program include 3 hours per day of speech therapy, occupational therapy, and physical therapy, 5 days a week. The actual program administered is tailored to the patient's individual needs. If, for example, the patient cannot take 3 hours per day, it may be less, if such reduction is documented. RHSC operates 31 rehab hospitals ranging from 60 to 101 beds. The contract management division also operates hospitals for others. All are accredited except those which have not yet been open the required 6 months. The management company brings the expertise of NME's rehab division, which has access to hundreds of experts in numerous fields, and provides program management, program development, and program education. Program Management involves the day to day running of the program. Rehabilitation programs and staffing are different from acute care functions. Management personnel are supplied. Program development defines the methodology to be followed in each type of case. It works with the staff, with physicians, and with the community to develop programs designed to fit the needs of that facility and that community. The program education division provides information on benefits of rehabilitation in areas where such is not well known. It educates hospitals in the area as well as physicians and the community. For these services, the company charges a fee of $105.00 per patient per day which includes the salary of the medical director of the rehab unit and several other supervisory personnel. Though one might see complex, high level cases at HMC, where there is a need for a lot of high level supplemental medical treatment or procedures, the patient probably will not be treated at HMC. If HMC's program is approved, transfer agreements will be entered into with Sunrise or Pinecrest Rehabilitation Hospitals to take care of those patients whose conditions are too severe or too complex for the inpatient CMR unit at HMC. South Florida's normally more elderly population generates a higher need for medical rehab services. Also, medical science now saves people who, before, would not survive their basic illness, and these people generate a greater need for medical rehab services. The utilization of rehab services has increased significantly since 1988 as the result of Medicare, and due to an increased awareness of the service by physicians. Also, insurance companies now recognize the benefits of dollar savings of rehab over acute care treatment. Another factor involves the implementation of DRG's which exempted rehab, among other areas, from the DRG limits. With this development, however, services and personal criteria for inpatient rehabilitation patients were developed to insure against abuses. Not all hospitals can meet these criteria, but the number of providers has grown fivefold due to the recognition of the health and financial benefits to society. In Mr. Echelard's opinion, the payer projections by categories of payer found in the application are reasonable and based upon the applicant's experience. The personnel costs are in addition to the $105.00 per day fee charged by RHSC. The assumed 65% utilization figure for the first year can easily be accommodated by the staff which is more than adequate to meet the requirements of good quality of care. Much the same can be said for the second year with the increase in both patient census and full-time employees. The salaries projected in the application are generally reasonable, though a few may be somewhat low. RHSC would help to recruit personnel for HMC's facility. It has a national recruiting program and sends recruiters to universities and conferences across the country. All RHSC facilities are open to serve as clinical training facilities. They advertise widely for personnel though they do not "head hunt" at other hospitals. As a result, Mr. Echelard feels HMC would have no trouble getting enough qualified personnel, and it is so found. Turning to the unit itself, from a physical standpoint Mr. Echelard has no trouble with the currently existing physical therapy unit being geographically separated from the bedroom area. In fact, this may be beneficial as it tends to simulate the real world and may increase patient mobility skills. He considers the proposed layout to be acceptable and to meet accreditation standards. The proposed patient charges of $1,078 per day is considered reasonable and closely approximates the $1,050 per day charged at Pinecrest as well as other competing providers. Sharon Gordon-Girvin, a health care consultant and formerly the chief of the Department's Office of Community Health Services, reviewed HMC's instant application for Memorial. HMC's application describes it as a provider of primary and secondary services, a general description of a normal acute care hospital. It has no licensed tertiary services. Five hospitals in Broward County are licensed to offer CMR services. They include Petitioner, Holy Cross, North Broward Regional Medical Center, St. Johns Hospital and Sunrise . Only one of these, Memorial, is in the south Broward region. District X, with the 5 providers offering a total of 213 CMR beds, has more CMR beds than districts in the rest of the state with the exception of Dade County. Other districts have greater population with fewer licensed beds, but it must be noted that without information on demographics, that statistic is of little import. Under the pertinent Department rule, the planning horizon for CMR beds is 5 years into the future. Bed need determination is provided for in Rule 10- 5.039, F.A.C., and consistent therewith, the Department did a projection of bed need for 1996 which showed a new need of 88. Because the number of existing beds exceeded that figure it determined the need to be zero. Even if there is a zero need, however, the rule provides 4 other factors for consideration, (Rule 10-5.039(2)(b)1-4), but in her opinion, HMC's application is not consistent with these 4 factors. One of these deals with historic, current and projected incidents of illness. This witness does not believe there is adequate evidence or discussion in the application of any historic incidents of disease sufficient to support any future prevalence. There is no data as to sex or group of patients. The second deals with trends by categories. Here the application, she feels, contains no detail of payment trends shown as to categories of payor. As to the third criterion, dealing with existing and projected inpatients in need of rehabilitation services, the application does contain some information in its Exhibit 17. The fourth criterion relates to availability of specialized staff, and the application discusses how the staff will be recruited, but not the availability of qualified personnel to fill the positions. In that regard, it is well recognized, she contends, that this type of staff is in short supply. Other evidence of record would tend to confirm this opinion. Ms. Gordon-Girvin indicates that the 1989 State Health Plan is pertinent to this application. This plan contains 5 preferences to be used in evaluating applications. These include: Conversion of excess acute beds. Here, the application conforms but Ms. Gordon-Girvin cannot say if the per diem costs would be lower by conversion. Specialty rehab services not currently found in the District. Here, no services not already available were proposed. Teaching hospitals. This is not truly a statutorily mandated teaching hospital even though evidence shows staff may be made available as faculty at the osteopathic medical school with which HMC plans a collaboration. A disproportionate share of charity care. Here, Ms. Gordon-Girvin feels that HMC is not such a provider and that its application is not consistent with this preference. Existing comprehensive outpatient rehab facility. This, again, is not met by the applicant. These preferences are, it must be noted, not mandatory for approval. The 1990 Broward Regional Health Plan is also applicable, and it outlines 3 priorities in its review criteria. These are: The applicant agrees to cooperate and provide data on utilization. In this regard, HMC's application is consistent. Unserved populations. Here, Ms. Gordon-Girvin contends that the instant application does not meet the preference since it is not for construc- tion of a new facility. Situations where the institution's occu- pancy is greater than 85%. Here, clearly HMC does not meet this criteria because it does not have a history of 85% occupancy. Again, however, these are merely guidelines to apply among competing applications and are not preconditions to approval. Ms. Gordon-Girvin points out that the need for CMR services is not considered on a less than district-wide basis, since the rule directs an evaluation of tertiary services on a district-wide basis, and, therefore, the breaking down of the district into north and south services areas is inappropriate. She asserts that in her opinion, the existing rule based on need is not an adequate predictor of need within a district. Instead, she feels the methodology used in Exhibit 17 to the application and omissions response is reasonable. However, she disagrees with HMC's calculations therein because, while the model is credible, the wrong data (the length of stay from 1984, rather than the actual current length of stay) was used. She feels district experience for length of stay (21 days) should be used. Ms. Gordon-Girvin also feels that the methodology used on Application Exhibit 18 is also not appropriate because the variables were not kept constant. It used some date from the sub-area which should not be done because of the rule requirement to treat tertiary services on a district-wide basis. She does not explain, however, that if the rule shows a need for 88 beds and there are already 173 beds licensed, the rationale for a subsequent approval of those excess beds. In that regard, then, the question she does not answer is, if one aspect of the rule is disregarded, cannot another also be disregarded with equal validity? HMC has urged the calculation as set forth in Exhibit 20 of its application, but Ms. Gordon-Girvin does not agree with that because it uses a constant rate of increase in the admissions rate. It also does not ground its assumptions on any existing realities. The initial figure for admissions in 1991, she opines, is overstated, and it, too, does not use accurate real information. If the 3,009 figure were corrected to an "actual" figure, it would result in a net loss of 27 beds and an increase of only 9 additional beds by 1996. She contends that Exhibit 20 is not consistent with the existing rule methodology, because the proposed facility to open in 1993, not 1996. As a result, she sees no need to compute the need in 1996. As to her disagreement with the 4.5% growth in annual admissions, she claims the actual rate shows a decrease from 1990 to 1991. Therefore, the table containing that growth assumption is not justified. She also disagrees with Exhibit 21 because it is applied to a subdistrict and her other objections, (no historical basis for utilization numbers), are also pertinent here. Accepting that the current rule is not a good predictor, she looked at the dispersion of population and beds and determined that there are about twice as many elderly in the northern part of the county as there are in the south. Applying this to the southern area, there should be a total of 46 beds there. Therefore, she asserts, that while there is a need for new beds in District X, all should be in the south, but not as many as requested. If the 30 beds applied for by HMC are approved as well as those approved for Memorial, this would result in 56 beds or 10 too many. In her opinion, based on the incidence model with some adjustment, the actual need is for somewhere between 5 and 20 beds district-wide which should all be located in the south county. Her reasoning and conclusions, however, are not persuasive. Ben F. King, Vice-President for Finance of the Florida Region, Eastern Division of NME, and an expert in health care finances, is satisfied from his familiarity with the application in issue here that the project is financially feasible in both the short and long term. The proforma submitted by HMC in the application, and amended in the omissions response, refers, among other things, to patient day projections. These are converted to revenue by taking the days listed and multiplying by the charge for room and board for each year, and he is satisfied that the rates listed are reasonable. The listed revenues are not what is actually collected, however. They are reduced by deductions for Medicare, Medicaid, indigent, and write-offs (discounts) for health maintenance organizations and insurance companies. In year 1, Medicare contractual is calculated based on reimbursement founded not on cost but on DRG (diagnostic related grouping). This results in no additional reimbursement for patients already in the hospital on an admitting DRG. Therefore, the first year revenues are much lower than in the second and subsequent years. Moving on to year 2, however, the operator gets paid for costs of operation of the unit. Medicare tracks the per-diem costs and income from the hospital, and to be conservative in the preparation of this pro forma, HMC took the existing reimbursement rate of slightly more than $700.00. In calculating reductions, indigents are assumed to be a 100% write-off. Private payments are considered to be a 50% write-off, HMO's a 20% write-off, and insurance an 11% write-off. Mr. King considers all these to be reasonable and consistent with the current experience not only of HMC and NME but of other providers as well. In Broward County, indigent patients are funneled to the county hospitals which receive tax funding for that purpose. This is different from other counties which contract with hospitals to provide indigent care. HMC calculates its revenue estimate in what it considers a conservative manner. Taking off the contractual allowances for Medicare and Medicaid and the other write-offs results in a reduction of more than 50% of gross revenue, and from that figure is taken the expenses, depreciation, interest, etc. to get to the net revenue figure. All the expense categories and the factors they include are considered reasonable by Mr. King. The salary and wages figure includes an add- on of 20% for benefits, which is above the figure for salary and wages found in Table 11 of the application. Supplies includes the provision of housekeeping services, laundry and linen, and dietary services. These, too, he considers reasonable. RHSC's management fee of $105.00 per day includes the personnel provided, the marketing services, the management services, and manuals. This is considered a valuable benefit and the fee is considered comparable with other units. The personnel sent to do the actual work are RHSC employees and not hospital employees. The indigent care assessment is 1.5% of net revenue and is a tax paid to the state. Contract costs are ancillary expenses for ancillary services such as laboratory, pharmacy, etc., already provided by the hospital. The cost listed in the pro forma is only for additional patients generated on the unit in issue. General and administrative - other expenses (joint venture rent, recruitment, insurance, utilities, property taxes, maintenance, education, etc.) are also deducted, and taken together, the above results is an operating revenue net loss for the first year. Depreciation and amortization are self explanatory as is interest expense which is calculated at 10%. Interest rates are anticipated to drop in the future, however, and this will help the picture. The net loss projected for the first year does not necessarily mean that the project is not financially feasible since financial feasibility is calculated over a 5 year basis. In the second year of operation, revenues are projected to increase by 6.5%, a figure considered to be reasonable. Expenses were inflated at 5% except for those not fixed to inflation (indigent care assessment and the joint venture rent). NME has the funds to commit the initial capital and working capital for the first year. The 1989 and 1990 NME financial statements submitted with the application are those most current to filing. These statements, along with the 1991 capital budget, show more than $750,000.00 committed to the start-up of HMC's program. Much of the information presented by Mr. King in his testimony comes from the pro forma and the amendment thereto. Primarily, the difference is only in the amount provided for RHSC's management fee. Any other inconsistencies or errors shown to exist are, for the most part, minor. The entire project is based on 30 beds. The figures assumed for both revenue and expense are reasonable, considering the "other" factors testified to by the physicians and noted previously. This is so notwithstanding the fact that HMC has experienced only a 30% use rate in its acute care beds. However, in light of these other factors, there may not be any correlation between acute care and rehab either from the Medicare or other standpoints. According to Madeline Hellman, Administrative Director of Rehab Services for Memorial, CMR is a high intensity program as well as a high cost program because it uses a large number of professionals to treat the patient in a multi-disciplinary program. Memorial's existing unit has 22 beds in semiprivate rooms. It has an admissions process designed to insure that appropriate patients only are admitted. These patients are made up of a high percentage of stroke, orthopedic, and spinal cord and head injury patients. Memorial's program is a program accredited by the state and the unit is accredited by CARF, a national certifying organization dealing with quality of care. The average length of stay on Memorial's unit is presently just under 25 days which constitutes an increase over time due to the more complicated types of cases taken in. In 1991 the occupancy rate was between 98 and 99%. Memorial gets referrals from both in-house and other facilities. The patients are evaluated by the medical director for the potential to go through the rehab process. If inpatients at Memorial, they are evaluated by the therapy staff and a meeting is held to decide on admission. If the patient comes from another facility, he/she gets priority behind Memorial's patients. In order to be admitted, a patient must have a rehab diagnosis; be able to withstand the 3 hour sessions; be motivated; and have the potential to improve his/her own independence. The refusal to admit a patient does not necessarily indicate a Memorial was too full to accept that patient. It may just be the patient is not an appropriate candidate for rehab, or the patient may die or recover without rehab before getting through the admission process. Some may be referred to nursing home placement instead. Ms. Hellman's figures reflect that in 1990, approximately 42% of those referred to Memorial's unit were admitted. Approximately 35% of those referred were deemed inappropriate. Only 4% were refused admission due to bed unavailability. Many of the non- admittees went home without treatment, went to home care, or came back as outpatients. This witness examined Memorial's admissions records and determined that in 1990/1991, Dr. Hoche, who testified on behalf of HMC's application, referred 9 patients to Memorial of whom 6 were admitted. One went to another facility by choice, 1 was not appropriate, and 1 was not accounted for. Neither Dr. Klotz nor Dr. Pettie referred any patients during that period. Dr. Moscowitz referred 1 in 1990 who was admitted. One patient was referred in 1991 but was not admitted because the patient was not an appropriate candidate. Dr. Bennett referred 1 in 1990 but the patient was not an appropriate candidate. In 1991 he referred 2 but both went to nursing homes instead. During this period Dr. Mendelsohn was the medical director. Dr. Crastnopol referred 12 patients in 1990. Four were admitted; 2 were referred to other facilities; 2 were not considered appropriate candidates, and 2 were not accounted for. In 1991 he referred 17 patients, 8 of whom were admitted. Two of the remainder went to another facility by choice; 1 was refused due to no room; 1 went home; and the rest were unaccounted for. Dr. Manning referred 1 in 1990 who was admitted. Admittedly, according to Ms. Hellman, there is a waiting period of from 1 to 5 days from referral to admission - on the average, probably 3 days. This has decreased somewhat since the summer of 1991. The situation depicted by Ms. Hellman's figures differs radically from that described in the testimony of the physicians to whom she refers. On balance, the physicians' recollections and impressions of the situation are deemed of greater probative value than the bare statistics. Memorial staff salaries went up 9% last year across the board and are anticipated to go up again this year. The ancillary staff devotes 75% of its time to patient care and the other 25% to administration. This extra non- patient time is considered in assessing staffing to insure there is enough staff to do the full therapy load. There is a great deal of competition in the market for both nurses and therapists. A shortage exists which is nationwide and requires heavy recruitment efforts. At Memorial, no contract labor is used to assist in the unit. Benefits constitute an additional 24 - 25% of the salary cost and is not included in Memorial's determination of the salary and wage costs. Ms. Hellman reviewed HMC's proposed staffing as outlined in its application and feels that after taking out 25% clerical time and weekends, the social worker, for example, will only be able to handle 65% of the beds. Speech therapy would require additional people to take up the extra time on other therapies. Taken together, it is her opinion that the staff proposed by HMC is insufficient to provide a quality program. As to salaries, she feels the amount designated by HMC is low. The salaries proposed would be enough to get only new graduates and would force a high turnover. A CMR unit requires an experienced staff, (at least half of the therapy staff), to provide a quality program. Ms. Hellman is of the opinion this cannot be accomplished at the salaries proposed by HMC. In regard to both salaries and staffing level, however, Ms. Hellman's negative comments are offset by those in support of the application, and there is insufficient evidence to the negative to support a finding by a preponderance of the evidence as required that the proposed staffing levels and salaries are insufficient. HMC's 30 bed unit would compete directly with Memorial's existing unit. They are less than a mile apart and use many of the same physicians. They attract the same patients. In addition, Ms. Hellman does not believe HMC's unit will offer any new service not already offered by Memorial, nor will it operate services not already present or offered by existing providers in District X. It is her confirmed opinion that if HMC's unit is approved, it will be difficult for both facilities to attract and retain an adequate professional staff. The majority of patients that Memorial cannot accommodate are referred to Sunrise Hospital, also located in Broward County, which offers a good CMR program. Total referrals in 1990 exceeded 800 patients, and in 1991, in excess of 600 patients. The referral log maintained by Memorial does not include patients who were not referred because their physician felt there was no room anyway. Memorial's records supposedly indicate that in the last two years, only 80 to 90 referrals to its unit came from other institutions. The records were not introduced into evidence, however. Edward J. Maszak, Director of Financial Planning for Memorial, and an expert in health care financing and third party reimbursement, noted that Memorial is a disproportionate share provider under both Medicaid and Medicare. It is a taxing authority which uses funds received in taxes for the care and treatment of indigent patients. It gets $20 million in tax revenue but gives $23 million worth of indigent care in addition to taking $27 million of bad debt write-off. About $10 million of the indigent care cost is funded out of operations. The Hospital Cost Containment Board, (HCCB), statistics submitted by HMC for 1989- 1991 reflect no deduction for charity care in either the 89-90 or 90-91 time-frame. Mr. King, testifying for HMC, indicated there was no advantage to reporting charity care to the HCCB, and it is for that reason that the statistics show no deduction. Mr. Maszak disagrees with Mr. King on this point, and states that to the extent it provides any charity care at all, a facility can raise the prices it charges to some degree. Mr. Maszak reviewed HMC's application and the "incidental cost analysis" basis for the financial pro forma, and in his opinion, HMC's application does not contain a true feasibility study. The projected statement of revenue and expense in the omissions response reflect incremental costs only and do not include the actual, full costs. In a financial statement one looks at a lot of other revenue factors including operating projections and total margins, cash flows and the like, none of which are included in HMC's financial information. The financial feasibility study done by HMC here is not, in Mr. Maszak's opinion, consistent with generally accepted practices and standards. Memorial's CMR unit has lost money over the last 3 years due to the fact that it provides about 70% of its care to Medicare patients. Under that system reimbursement does not fully meet costs. Therefore, the loss has to be covered by income from other payees, (cost shifting). This is not specific to Memorial only, however. Most hospitals experience the same problem. As a result, it is hard to make up the losses from Medicare, Medicaid, and HMO operations from the 9% of patient mix representing full pay patients. In Mr. Maszak's opinion, if HMC gets its approval, in year 3 it would be subject to the same problems experienced by Memorial. Mr. Maszak asserts that with the new beds, HMC's overhead cost allocation will, under Medicare rules, increase by 19% in the first year and by 25% in the second year. This will add at least $570,000.00 additional costs in year 1 and $800,000.00 additional costs in year 2 to expenses. In year 2 the cost will be shifted to Medicare so the expense item in that year will be more by slightly more or less than $200,000.00. With regard to specific defects in HMC's proposal, Mr. Maszak points, with regard to managed care plans, to the HCCB documents which show that the HMC writes off about 65% of its revenue from HMO's. This was for 1991. Pinecrest, for example, wrote off somewhere around 38.5% that year. He believes, therefore, that HMC's figures are inaccurate. Regarding charges for CMR services in District X, HMC's 1993 charges, using its own projections, would be $1,077.00 per day. Sunrise would charge $1,765.00 per day, and Pinecrest, $1,683.00 per day. Memorial will charge $557.00 per day; Holy Cross, $747.00; and North Broward, $564.00 per day. Based on these figures, Mr. Maszak concludes that HMC's HMO estimated income is unreasonable. He contends it will be much less than estimated and more comparable to that of the other providers starting at a discount from $557.00, plus or minus, per day. Mr. Maszak is of the opinion that the insurance estimate indicated by HMC also is unreasonable. The 4% estimated by Mr. King is too low by far, and there are no national HMOs for HMC to contract with for rehab services in District X, he contends. He also believes that as to the salaries and benefits, in 1991 Memorial showed 57.8 full time employees, (FTEs), with an average nursing salary of $27.4 thousand per year. In that regard, benefits as a percent of salary was 32.2%. Sunrise showed an average nursing salary of $29.4 thousand with benefits at 27%. Pinecrest reflected $27.7 thousand and 41% respectively. Based on this, Mr. Maszak believes that the HMC projection of $22.5 thousand for salaries and benefits of 20% are far below current salaries at other NME facilities. It is unreasonable to assume, he asserts, that a provider can start up a competing unit in an open area and attract staff at those figure. Taken together, he considers that the difference between Memorial and HMC's salary figures is a $4 thousand difference for a total of $125 thousand low for HMC without considering inflation for 2 years to 1993. Turning to the issue of payor mix, according to Mr. Maszak, Medicare is reflected at 65% by HMC, but the HCCB data shows only 58% for 1991. The County reports for Memorial showed a rate of 60%. Mr. Maszak believes that HMC's estimate overstates a patient days percentage by 5% which could result in an overstatement of income revenue. Therefore, he believes the entire rehabilitative program, as suggested by HMC, is not feasible in the short term because of a number of expenses which are not figured in. He admits that HMC's current financial position is fair. It is reported to be slow in paying its bills and lost $1 million last year alone. In addition, the interest due NME has not been paid and is increasing. These claims were not supported by actual evidence, however. In addition, 65% of the population in the service area is under Medicare which limits increases to 3.2 % per year. Notwithstanding that, expenses are going up at a higher rate, (5%), and, therefore, he contends, HMC's program is not feasible as well over the long run. According to Mr. Maszak, the opening of HMC's facility would also affect Memorial's status. The staff is much the same for both facilities and many of the physician's on staff at Memorial are also investors in the HMC facility. If HMC gets its unit, Maszak feels many patients will be referred to that facility by its investors instead of to Memorial where they would now go. Based on the number of projected patients, however, this really should not result in a reduction in Memorial's numbers. The rehab service is not the only consideration, however. In addition, the admitting services , (neurology, neurosurgery and orthopedics), would also be impacted. Considering various potential scenarios, from a loss of all HMC business in all services, and no reduction of expense, through others including loss of all services with some expense reduction, loss of rehab only with some expense reduction, to a loss of 50% of all services with some expense reduction, the loss impact on Memorial would extend from a low of $264.5 thousand to $3.1 million. The most likely loss figure, he estimates, would be somewhere around $800 thousand. Therefore, approval of HMC's project, he contends, would have a large impact on Memorial's, operation because of its ongoing expansion plans and their attendant expenses, plus the recent sale of $40 million in revenue bonds. As to the latter, the underwriters of that issue are already unhappy with Memorial's financial picture. Any loss of income might likely result in a need to raise prices, but Memorial is constrained in that regard by the dictates of the HCCB. A second option is to raise taxes in the District, but there the District only has .4 of a mill leeway before reaching its limit of 2.5 mills. A third option is to cut services, but with the economy as it is, and the high level of charity care already being provided, that would be hard to do. Thomas R. Bayless, President of Future Health, Incorporated, a health care consultant and an expert in health care finance, also reviewed HMC's application and omissions response, its audited financial reports, the HCCB reports for HMC and others, and other documents. He believes the cost projections outlined in HMC's omissions response do not account for all contract costs. Thirty new beds would have a greater impact on costs than is estimated. The amount shown on the HCCB cost report for the whole hospital is more than the estimated costs for the whole hospital including the rehab unit in year 1. Mr. Bayless believes that the $366,308.00 figure for the unit in year 1 should be more than $1 million. In year 2 he sees it as $1.3 or $1.4 million as opposed to the $512,602.00 projected. By the same token, the general and administration costs reported at over $6 thousand for the whole hospital in 1991, with the 19% increase for the year, would be over $1 million and a great increase in year 2 over the $394,941.00 projected. Therefore, since all costs were not included to the appropriate degree, he contends in reality there would be a significant increase in the cost of operation of the rehab unit which would result in a much larger net loss than was projected, (plus or minus $2 million) in year 1. In year 2, due to the commencement of reimbursement from Medicare, the impact would be less. Nonetheless, the net income profit would not be as great as projected and might instead result in a loss of some $300 thousand to $400 thousand. Taken together, he concludes that expenses and some allowances are significantly understated. For example, the "other deductions" figure of $477,108.00 should be higher due to the percent of HMO discount which, in Bayless' estimate, should be 60% rather than the 20% utilized. This nearly doubles the amount of the deduction. He also disagrees with HMC's indicated deduction for rent, corporate overhead, salaries and wages, and other expense items, all of which, he believes, should be increased. The "benefits" aspect of salaries should be increased as well since the 20% projected is, in his opinion, insufficient. Memorial's figure, at 24.8%, is the standard for the area, he contends. Making those changes, the year 1 net loss for HMC's operation would be almost $3 million rather than $485,739.00. By the same token, year 2, even with Medicare cost reimbursement would result in a loss of almost $700 thousand rather than a profit of almost $1.4 million as projected. In further years out, ( years 3 - 5 ), due to the limits imposed by TEFRA and projected cost increases of 5%, the loss would be compounded somewhat. This would constitute a continuing loss and Mr. Bayless believes the project is not feasible in either the short or the long term, especially considering the fact that the hospital has been losing money without this unit and, it appears, will continue to do so. The hospital has been living on an infusion of money from the parent corporation, and this does not, to him, appear to be an appropriate use of capital. Mr. Bayless contends that most of what he said about the unit projections applies as well to the consolidated hospital rehabilitative unit projections. The losses from the operation of the rehab unit and the other defects show a loss of $7 million in year 1 and almost $6 million in year 2. Year 3 would also show a loss of almost $6 million. As another problem, Mr. Bayless opines that the statute requirement to provide information on costs during construction and the effect of the project on the applicant's and others' operations was not met. Considering the parties' respective positions, however, it is found that though subject to some debate, HMC's projections as to patient revenue, expenses, and its ability to attract a quality work force without seriously damaging Memorial's ability to provide quality care have not been shown to be unsupportable. They are, therefore, accepted. Morgan Gibson, a review consultant with the Department's Office of Community Medical Facilities, and an expert in health planning, reviewed the instant application in early 1991. When the application was deemed complete, he initiated the formal comparative review of this application and of Memorial's request for 4 beds; did an analysis; and completed the required State Agency Action Report, (SAAR), for each. A fixed need pool was published for this cycle, (January, 1996), showing a "0" numerical need. Gibson's review indicated the project was consistent with the 1990 District X Comprehensive Health Plan which establishes various priorities for the award of CONs. Priority 1 relates to an applicant who demonstrates a willingness to publish information. Both applicants met this priority. Priority 2 relates to applicants who agree to construct additional facilities to provide service to the unserved public. Here, neither application involved new construction, but both applicants were willing to provide charity care with HMC's to be at 1%. Priority 3 applies to those applicants who have a history of operating at greater than 85% utilization. HMC's hospital alone could not meet this level, but the proposed unit was projected to meet it by year 2. Priority 1 of the 1989 Florida State Health Plan relates to facilities which will convert excess beds to comprehensive beds. HMC proposes to do this which is cost effective and gets more beds to the patients. Priority 2 of this plan relates to those who propose specialty services not currently offered. HMC's answer was vague but it agreed to provide a wide range of rehab services, and the fact that it does not focus on a single specialty does not make it less desirable. Priority 3 relates to teaching hospitals. HMC is not a teaching hospital but it has agreed to affiliate with a school of osteopathic medicine in the area. Priority 4 relates to those facilities with a history of providing a disproportionate share of charity and Medicaid. HMC does not now do this but has agreed to provide 1% charity care. Priority 5 relates to those facilities showing a willingness to provide outpatient follow-up rehabilitation services, and HMC has agreed to do this. Mr. Gibson concluded that the HMC project would increase availability and access to services and would improve quality of care. He also reviewed the application against the Rule 10-5 criteria. Existing rehabilitation beds in the area are highly utilized, (Memorial is at a figure close to 100% and is the only provider in the service area). Because of this, he considered the establishment of new beds in South Broward to be better than forcing patients to go to existing beds in the North Broward area. He found that the 30 beds proposed by HMC met the unit size minimum of 20 beds and the projected utilization met the standard of 65% for the first year and 85% for the second year. He concluded that the utilization rates in the district support the program. All but one provider are operating at above 90%. In that regard, since there are only 22 beds currently existing in the south portion of the county, and all providers but one are utilized at over 90%, the new unit could not help but improve the availability to the service in the District. It is so found. The local health council data revealed to Mr. Gibson that while admissions generally decreased by 4.5% from 1985 to 1989, rehab admissions went up 189.4% in the same period. This indicated to him a potential need and increasing utilization. He also concluded that the information provided by HMC was reasonable and not fairly disputable. In that regard, Mr. Gibson concluded that HMC presented information to justify the beds regardless of the rule methodology showing "0" need. The supporting factors for this conclusion were: (1) the high current utilization; (2) the relationship of rehab admissions to discharges; (3) the service pattern; (4) the existing waiting period; (5) the elderly population in the service area; (6) the potential rehabilitation discharges; (7) the conversion of underutilized acute care beds; and (8) the maldistribution of beds between the north and south part of the county. Taken together, Mr. Gibson concluded that the addition of 30 new beds by HMC would have a positive effect, not an adverse one, on the provision of service in the community. HMC indicated its intention to seek CARF accreditation, and it appeared to meet the other quality of care standards. CARF accreditation is important. All the facilities operated by the proposed management corporation are accredited by CARF. In addition, Mr. Gibson saw no adequate alternative to the program. Maintaining the status quo was obviously not effective. Neither was building a new facility. As a result, the conversion of underutilized beds appeared to be the most appropriate resolution of the problem. He also concluded that the proposed plan was reasonable. There was a demonstrated need for additional beds and it appeared this project would meet that need without the necessity to expend millions of dollars to create a new facility. The project did not involve cooperative services or shared facilities, but this is not a disqualifier. By the same token, there is no teaching facility currently available. Neither factor really applies to this project, however. Mr. Gibson determined that HMC had the financial resources to accomplish the proposed project. Its financial statement showed that it and its parent company both were in good financial health. The project cost could easily be met by existing resources. The applicant indicated that staffing levels would be met and the retaining of a management company to operate the facility was a plus factor. Before rendering his opinion, Mr. Gibson consulted with the Department's financial consultants, and based on the applicant's projections and assumptions, if the utilization levels of 65% and 85% for years 1 and 2 respectively were met, the project would be financially feasible in both the short and the long term. Mr. Gibson concluded that the utilization projections were reasonable based on current utilization of existing beds. As to fostering competition and cost effectiveness, Mr. Gibson determined that based on the current high utilization rate, the new beds should have no impact on existing services provided by Memorial in the south and the other existing providers in the north. With regard to charity care, HMC admitted that up until this time it had reported little or no charity care provided. Because HMC admitted that, however, Mr. Gibson was willing to accept its assertion as to what it proposed to do in the area in the future. Turning to the criteria outlined in Section 381.705(2), Florida Statutes, Mr. Gibson found: (1) there was, practically, no less costly or more appropriate alternative to the proposed service; (2) the existing service was being utilized efficiently; (3) there were no reasonable alternatives to conversion; and (4) there was some showing of a shortage of available service and no showing of serious problems existing in providing those services. Based on all the above, Mr. Gibson recommended both this application and Memorial's application be approved conditioned on the provision of a certain percentage of charity care. Mr. Gibson admits there is, on balance, a general shortage of rehabilitation personnel, but cannot say whether or not there is a shortage in Broward County. His conclusion that staff was available to HMC was based on several other factors such as the management contract and the proposed recruitment - all representations by the applicant and not based on his own experience. By the same token, he did not test any of the tables for revenues, costs, salaries, etc. Here again he relied on representations by the applicant. In addition to those aforementioned statutory criteria Mr. Gibson evaluated this application against the Section 381.707 criteria as well, and determined it was complete. It is clear, however, that his evaluation was not done in great detail, nor did he attempt to verify much of the other information submitted in support of the 381.705 criteria. The financial aspects of the project were analyzed by an in-house departmental CPA, Mr. Bell. Gibson's involvement was limited to examining the projected admissions, utilization, charges and the like, and based on those, he relied on Mr. Bell's determination they are reasonable and his opinion on feasibility. Nonetheless, Gibson drew his own positive conclusion of feasibility which was cited above. There appears to be no legitimate reason to reject any of the findings of conclusions drawn by Mr. Gibson. Therefore, they are accepted. Elizabeth Dudek, the Chief of the Department's Office of Community Medical Facilities, met with Mr. Gibson, Mr. Bell, and the architect after reading both the applications and the SAAR and, thereafter recommended the project be approved. After considering the application, the projected utilization, the existing inventory, the state and local health plans, the area where the facility was to be located, and at the provisions of the pertinent statutes and rule, she believed the project proposed was justified. She concluded both HMC and Memorial should be awarded the beds requested. Her reasons therefore conform to the findings of Mr. Gibson regarding existing providers and the high utilization rate. The trade patterns support a division of service between the north and the south. She determined that because this application did not meet all preferences and priorities as outlined in the various health plans did not necessarily mean it should be denied. By the same token, the fact that comprehensive rehab services are considered by the Department to be a tertiary service does not mean that the service must be provided only in teaching hospitals. Ms. Dudek recognizes that Section 381.707(2)(d) requires a detailed statement of income and revenue which includes the two year pro forma assumptions, Table 25, and the list of capital projects. Her review of the matters provided by the applicant and the audit and source of funds referenced led her to the conclusion that requirement was met. There is no basis shown upon which to reject that conclusion or to conclude otherwise.
Recommendation Based on the foregoing Findings of fact and Conclusions of Law, it is, therefore recommended that NME Hospitals, Inc.'s application for a Certificate of Need, Number 6643, for a 30 bed inpatient comprehensive medical rehabilitation unit at Hollywood Medical Center be approved, but that its Motion For Attorney's Fees and Costs be denied. RECOMMENDED this 2nd day of June, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5698 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. Accepted and incorporated herein. 2. - 4. Accepted and incorporated herein. 5. Accepted and incorporated herein. 6. Accepted. 7. & 8. Accepted and incorporated herein 9. Accepted and incorporated herein except for last sentence of first paragraph which is rejected as contra to the evidence. The second paragraph is accepted but is considered irrelevant to the issues. & 11. Accepted and incorporated herein. Accepted. Not a Finding of Fact but a restatement of testimony. First and third sentences are restatements of terstimony. Second and fourth sentences are accepted. Accepted. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Rejected. Not a Finding of Fact but argument. Accepted as to witness' testimony but not as to an an evaluation of its worth. All but the last sentence is a restatement of the witness' testimony. Last sentence is accepted as Petitioner's position. First two sentences accepted and incorporated herein. Balance, though a restatement of testimony is fundamentally accurate and consistent with the evidence. Though consistent with Petitioner's position, and perhaps factually accurate,this ppoposed Findings is rejected as overlooking the "other basis" provisions of the need rule. Accepted as an accurate statement of the factors involved, but this position was rejected in the Findings of Fact portion of the Recommended Order. - 28. Rejected as contra to the weight of the evidence. All but last sentence accepted and incorporated herein. Last sentence rejected. Accepted and incorporated herein. Rejected as argument and contra to the weight of the evidence. Rejected as argument. - 37. Accepted as an accurate restatement of the evidence, but rejected as to the ultimate factual conclusions drawn. 38. - 40. See next above which is reiterated here. & 42. Accepted as to the testimony presented but rejected as to the efficacy of the analysis. Accepted as to content but not as to analysis. & 45. Contents accepted as an accurate restatement of the testimony but conclusions drawn are rejected. Rejected. First paragraph accepted. Second paragraph rejected as speculation. Accepted and incorporated herein. Accepted. First sentence accepted. Remainder rejected as speculative with no historical basis. FOR THE RESPONDENT, NME: - 8. Accepted and incorporated herein. Accepted and incorporated herein. - 14. Accepted and incorporated herein. - 19. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. & 23. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Not a finding of fact but a comment on the evidence. 27. - 29. Accepted and incorporated herein. 30. Accepted and incorporated herein. 31. Accepted. 32. - 34. Accepted and incorporated herein. 35. - 37. Accepted. 38. - 40. Accepted. 41. & 42. Accepted and incorporated herein. 43. Accepted. 44. - 46. Accepted and incorporated herein. 47. & 48. Accepted and incorporated herein. 49. Accepted. 50. - 52. Accepted. 53. & 54. Accepted and incorporater herein. 55. Accepted. 56. - 58. Accepted and incorporated herein. 59. Accepted. 60. Accepted and incorporated herein. 61. - 63. Accepted. 64. - 68. Accepted and incorporated herein. 69. - 75. Accepted and incorporated herein. 76. Accepted and incorporated herein. 77. Accepted. 78. Accepted. 79. Accepted. 80. Accepted and incorporated herein. 81. & 82. Accepted. 83. - 86. Accepted and incorporated herein. 87. Accepted and incorporated herein. 88. Accepted. 89. Accepted and incorporated herein. 90. Accepted. 91. Accepted and incorporated herein. 92. Accepted and incorporated herein. 93. Accepted and incorporated herein. 94. - 97. Accepted and incorporated herein. 98. - 100. Accepted and incorporated herein. 101. & 102. Accepted. 103. - 106. Accepted and incorporated herein. 107. Accepted and incorporated herein. 108. Accepted and incorporated herein. 109. Accepted. 110. Accepted. 111. - 114. Accepted. 115. Accepted and incorporated herein. 116. Accepted. 117. & 118. Accepted but more a comment on evidence than finding of fact. 119. & 120. Not a finding of fact but a comment on evidence. 121. Accepted. 122. - 125. Not findings of fact but comments on the evidence. 126. Accepted. 127. Not a finding of fact. 128. Accepted. 129. Not a finding of fact but more an argument. 130. Accepted. 131. Accepted. 132. - 133. Accepted and incorporated herein. 134. & 135. Accepted. Not a finding of fact but argument. Accepted. Not a finding of fact. Accepted. - 148. Not findings of fact but argument. 149. & 150. Accepted. 151. Not a finding of fact but argument. FOR THE RESPONDENT, DHRS: 1. Accepted and incorporated herein. 2. - 4. Accepted and incorporated herein. 5. - 11. Accepted and incorporated herein. 12. - 15. Accepted and incorporated herein. 16. - 19. Accepted and incorporated herein. 20. Accepted. 21. - 23. Accepted and incorporated herein. 24. Accepted and incorporated herein. 25. - 28. Accepted and incorporated herein. 29. - 35. Accepted and incorporated herein. 36. - 40. Accepted and incorporated herein. 41. Accepted. 42. Accepted and incorporated herein. 43. Accepted. 44. - 46. Accepted and incorporated herein. 47. & 48. Accepted and incorporated herein. 49. Accepted. 50. - 52. Accepted and incorporated herein 53. - 61. Accepted and incorporated herein. 62. & 63. Accepted. 64. Accepted and incorporated herein. 65. Accepted. 66. Accepted and incorporated herein. 67. Accepted. 68. - 75. Accepted and incorporated herein. 76. & 77. Accepted and incorporated herein. Not a finding of fact but a restatement of evidence. Accepted. - 84. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. & 89. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. COPIES FURNISHED: R. Terry Rigsby, Esquire F. Philip Blank, Esquire Blank, Rigsby & Meenan, P.A. 204-B South Monroe Street Tallahassee, Florida 32301 Thomas R. Cooper, Esquire Department of Health and Rehabilitative Services 2727 Mahan Drive - Suite 103 Tallahassee, Florida 32308 C. Gary Williams, Esquire Michael Glazer, Esquire Ausley, McMullen, McGehee, Carothers & Proctor 227 South Calhoun Street Tallahassee, Florida 32302 John Slye General Counsel DHRS 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power Agency Clerk DHRS 1323 Winewood Blvd. Tallahassee, Florida 32399-0700
