97-004290CON Bert Fish Medical Center, Inc., D/B/A Bert Fish Medical Center vs. Agency For Health Care Administration Status: Closed Recommended Order on Thursday, March 12, 1998.

Summary: Petitioner's application for adult kidney transplant program demonstrates compliance with statutory and rule criteria.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BERT FISH MEDICAL CENTER, INC., )

d/b/a BERT FISH MEDICAL CENTER, )

)

Petitioner, )

)

vs. ) Case No. 97-4290

)

AGENCY FOR HEALTH )

CARE ADMINISTRATION, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

A formal hearing was conducted in this case on

December 16-19, 1997, in Tallahassee, Florida, before

Suzanne F. Hood, a duly designated Administrative Law Judge with

the Division of Administrative Hearings.

APPEARANCES

For Petitioner: R. Terry Rigsby, Esquire

Wendy A. Delvecchio, Esquire

Blank, Rigsby and Meenan, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

For Respondent: Richard Patterson, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Building 3, Suite 3431

Tallahassee, Florida 32308-5403

STATEMENT OF THE ISSUES

The issue is whether Respondent Agency for Health Care

Administration properly denied Petitioner Bert Fish Medical

Center, Inc.'s application for a certificate of need to establish

an adult kidney transplant program at its existing hospital

located in Volusia County.

PRELIMINARY STATEMENT

On or about July 11, 1997, Respondent Agency for Health Care

Administration (ACHA) notified Petitioner Bert Fish Medical

Center, Inc. d/b/a as Bert Fish Medical Center (BFMC) that the

agency intended to deny BFMC's application for a certificate of

need (CON) to establish an adult kidney transplant program. ACHA

published its decision preliminarily denying the application in

the Florida Administrative Weekly, Vol. 23, No. 30, on

July 25, 1997.

BFMC filed a Petition for Formal Administrative Hearing with

AHCA on August 15, 1997. AHCA referred the petition to the

Division of Administrative Hearings on September 10, 1997.

The parties filed a Response to Prehearing Order on

October 2, 1997. A Notice of Hearing dated October 8, 1997,

advised the parties that the formal hearing would commence on

November 18-21, 1997.

AHCA filed a Motion for Continuance on October 30, 1997. An

order dated October 31, 1997, rescheduled the case to be heard on

December 15-18, 1997.

On November 5, 1997, BFMC filed a Motion to Modify

Commencement Date of Final Hearing. An order dated November 6,

1997, rescheduled the case to be heard on December 16-19, 1997.

The parties filed a Joint Prehearing Stipulation on

December 12, 1997.

When the hearing commenced on December 16, 1997, AHCA filed

a Motion to Hold Record Open for Late Filed Exhibit. That same

day, BFMC filed a response in opposition to this motion.

During the hearing, Petitioner presented the testimony of

11 witnesses. Petitioner offered 12 exhibits which were accepted

into evidence.

Respondent presented the testimony of four witnesses.

Respondent offered seven exhibits which were received into

evidence.

At the conclusion of the hearing, the undersigned denied

AHCA's Motion to Hold Record Open for Late Filed Exhibit.

The first two volumes of the transcript were filed with the

Division of Administrative Hearing on January 6, 1998. Volumes

three through seven of the transcript were filed on

January 14, 1997.

Petitioner filed a Motion to Exceed Page Limit on

February 5, 1998. An order dated February 6, 1998, granted this

motion.

Respondent filed a Motion for Extension of Time to file

proposed recommended orders on February 10, 1998. An order dated

February 12, 1998, granted this motion.

BFMC filed its Proposed Recommended Order on

February 19, 1998. AHCA filed its Proposed Recommended Order on

February 20, 1998.

FINDINGS OF FACT

I. THE APPLICANT

1. BFMC is a not-for-profit hospital located in New Smyrna

Beach, Volusia County, Florida. The hospital is a 116-bed,

Class 1, general acute-care hospital.

2. BFMC proposes to establish an adult kidney transplant

program on its third floor next to the inpatient unit. The

applicant will designate seven acute-care beds for use in the

program. The hospital currently offers no other special programs

or tertiary services.

3. BFMC is located in health planning District 4 which is

comprised of seven counties.

4. BFMC is located in organ Transplant Service Area 3 which

is comprised of ten counties located within the following four

health planning districts: District 4, Volusia County; District

3, Lake County; District 7, Orange, Seminole, Osceola, and

Brevard Counties; District 9, Indian River, St. Lucie, Martin,

and Okeechobee Counties.

5. BFMC is a part of the Southeast Volusia Hospital

District (SVHD) which encompasses southeastern Volusia County,

including New Smyrna Beach, Edgewater, Oak Hill, and the

unincorporated areas of south Volusia County. The legislature

created the SVHD as a special taxing district to provide health

care to all citizens without regard to their ability to pay.

6. The SVHD commissioners are appointed by the Governor.

They also serve as the directors of BFMC.

7. East Volusia County is well developed, from Edgewater in

the south, to the northern end of the county. Areas along the

beaches, the Indian River, and the Halifax River are densely

populated. Other areas of the county are less populated.

8. BFMC is located two blocks east of highway U.S. 1.

State Road 44, a four-lane highway, connects New Smyrna Beach to

Interstate 95. The applicant is located approximately 50 miles

from Florida Hospital in Orlando, Florida. Florida Hospital-

Orlando currently is the only adult kidney transplant center in

Transplant Service Area 3.

9. BFMC offers the following inpatient and outpatient

services: surgery (including a 14-bed intensive care unit for

surgical and medical patients); medical and radiation oncology;

cardiac catheterization; diabetic center; invasive radiology;

MRI; CT scanning; and outpatient surgery. The hospital has an

emergency room which is staffed on a 24-hour basis. BFMC

operates a home health agency, a rehabilitation center, a

diagnostic center, a primary care center and a clinic for the

medically needy.

10. The medical staff at BFMC consists of 128 physicians.

Eighty-two percent of the doctors are board-certified in their

respective medical fields. The remaining 18 percent of doctors

are board-eligible in a medical specialty.

11. The physicians at BFMC have medical specialties in the

following areas: urology, nephrology, internal medicine, general

surgery, vascular surgery, anesthesiology, cardiovascular

surgery, transplant surgery, pain management, pathology,

pulmonology, neurology, orthopedics, and orthopedic surgery.

12. The 260 member nursing staff at BFMC includes 172

licensed nurses. Eighty-seven percent of the nurses are

registered nurses.

13. BFMC is a member of Halifax-Fish Community Health

(Halifax-Fish), a partnership of the Halifax Hospital Medical

Center (HHMC) and the SVHD. The goal of Halifax-Fish is to

eliminate unnecessary duplication of services and to reduce

health care costs.

14. The HHMC owns and operates Halifax Medical Center, a

general acute-care hospital located in Daytona Beach. Halifax

Medical Center operates the third busiest emergency center in the

state. Halifax Medical Center provides the following services

which are not available at BFMC: (a) an adult bone-marrow

transplant program; (b) adult and adolescent inpatient

psychiatric services; and (c) a neonatal intensive care unit.

15. The Halifax-Fish partnership provides the residents of

eastern Volusia County with the following services: (a) two

acute-care hospitals; (b) bone-marrow transplantation; (c) an

HMO; (d) a PPO; (e) home health; (f) hospice; (g) long-term care;

and (h) skilled nursing care.

16. Halifax Medical Center filed a letter of intent to

establish an adult kidney transplant program in the same batching

cycle as BFMC. Subsequently, Halifax Medical Center withdrew its

letter and offered its support to BFMC's application.

17. The Organ Procurement and Transplant Network (OPTN)

coordinates the listing of potential transplant recipients and

the distribution of donated organs on a local, regional, and

national level. The United Network for Organ Sharing (UNOS) is

the entity that operates OPTN.

18. UNOS has established standards for transplant surgeons,

transplant physicians, and for certification of transplant

centers. Most of the standards in AHCA's transplant rule, Rule

59C-1.044, Florida Administrative Code, are based on UNOS

guidelines.

19. UNOS has approved BFMC's membership application.

Membership in UNOS signifies that BFMC has met applicable federal

guidelines for the establishment of a kidney transplant program.

It also means that UNOS will permit BFMC to participate in the

national organ sharing program pending state authorization.

20. There are six existing adult kidney transplant programs

in Florida. These programs are located in the following

districts and services areas: (a) Shands Hospital, District 3,

Service Area 1; (b) Methodist Medical Center, District 4, Service

Area 1; (c) Tampa General Hospital, District 6, Service Area 2;

(d) Southwest Florida Regional Medical Center, District 8,

Service Area 2; (e) Florida Hospital-Orlando, District 7, Service

Area 3; and (f) Jackson Memorial Hospital, District 11, Service

Area 4.

II. PREHEARING STIPULATION

21. The parties agree that BFMC timely filed its CON

application, including the letter of intent, initial application,

and response to omissions, with AHCA and the local health

council. The initial CON application was filed on March 26,

1997. The response to omissions was filed on May 12, 1997.

22. The parties agree that BFMC's CON application meets the

publication requirements of Section 408.039(2)(d), Florida

Statutes (1995), and Rule 59C-1.008(1)(i), Florida

Administrative Code.

23. The parties agree that BFMC's CON application meets the

following requirements of Section 408.037, Florida Statutes:

(a) the application contains a certified copy

of the resolution of its board of directors

authorizing the filing of the CON application

pursuant to Section 408.037(4), Florida

Statutes;

(b) the application contains all of the

minimum content items required by Section

408.037; and

(c) the application contains Schedules 1, 2,

3, 4, 6, 7, and 8 which are complete and

reasonable and which properly document the

required information.

24. Other statutory and rule review criteria are addressed

below.

III. CERTIFICATE OF NEED REVIEW CRITERIA

(A) Need in Relation to State and District Health Plans:

Section 408.035(1)(a), Florida Statutes .

25. There is no published fixed need pool applicable here.

Nevertheless, BFMC must show that its service area needs an

additional adult kidney transplant program. The demonstration of

need requires consideration of the following state and local

health plan preferences.

(a) State Health Plan

26. The state health plan has eight preferences which apply

to all proposed transplant programs.

27. The parties agree that BFMC's application complies with

Preference 1. That preference requires the applicant to make a

commitment to accept patients for organ transplants regardless of

their ability to pay.

28. Preference 2 favors applicants with a history of

providing a disproportionate share of charity care and Medicaid

patient days. BFMC is entitled to partial credit for this

preference because it provides a high percentage of charity care.

However, BFMC does not meet the Medicaid disproportionate share

criteria.

29. Preference 3 favors applicants with other existing

organ transplantation programs. As the sole applicant, BFMC does

not meet this criteria. However, BFMC's partner in the Halifax-

Fish partnership, Halifax Medical Center, has a bone-marrow

transplant program.

30. Preference 4 favors teaching hospitals for the

establishment of any organ transplantation program. BFMC does

not meet this criteria because it is not a teaching hospital.

However, Rule 59C-1.044, Florida Administrative Code,

specifically excludes kidney transplant programs from the type of

transplant programs which are restricted to teaching hospitals.

31. Preference 5 favors applicants that are members of

UNOS. The parties agree that BFMC meets this preference.

32. The parties agree that BFMC meets the requirements of

Preference 6. That preference favors an applicant that can

demonstrate successful implementation of the Uniform Anatomical

Gift Act.

33. BFMC is not a teaching hospital. Therefore, it cannot

receive credit for Preference 7. That preference favors teaching

hospitals that document the establishment of a residence program

related to the proposed organ transplantation program.

34. Preference 8 favors facilities approved by the National

Institute of Health (NIH) and Medicare for the establishment of

additional transplant programs. BFMC does not meet the

requirements of this preference because it is not an NIH approved

facility or a Medicare designated center. Additionally, BFMC is

seeking to establish an initial program, not an additional

transplant program.

35. As to state health plan preferences that apply to

transplant programs, BFMC meets the requirements of at least

three preferences and partially meets the requirements of at

least two other preferences.

(b) Local Health Plan

36. District 4 has eight local health plan preferences.

Only six of these preferences are applicable here. The parties

agree that Preference 5 and Preference 6 do not apply to BFMC's

proposed project.

37. Preference 1 favors applications for transplant centers

to be located in a major metropolitan area. This preference

defines "major metropolitan area" as a county with a population

of 250,000 or more. BFMC meets this requirement because Volusia

County's population exceeds 250,000.

38. Preference 2 favors applicants who document that they

have written relationships with a broad spectrum of other health

care providers for patient transfer, tissue procurement, and/or

joint venture with regard to the proposed service. BFMC meets

the requirement of this preference. BFMC has agreements for

transfer with nursing homes for the transfer of patients and

emergency services. It has an agreement with a UNOS-designated

organ procurement organization. The hospital has an agreement

for laboratory services. BFMC and Halifax Medical Center provide

an integrated health care system through the Halifax-Fish

partnership. The partnership helps ensure continuity of care and

non-duplication of costly services.

39. BFMC does not meet the requirements of Preference 3.

It is not recognized as a stand alone regional or national

referral center. It does not have its own regional or national

clientele.

40. Preference 4 favors applicants that play a significant

role in regional or national efforts such as comprehensive cancer

centers designated by the National Cancer Institute. Pursuant to

Preference 4, an applicant plays a "significant role" if it

serves as the contracting agency for government medical research

grants or if it has a formal affiliation with the lead agency and

engages in active medical research with the lead agency. BFMC

deserves partial credit for this preference based on its

affiliation with Halifax Medical Center which participates

actively in cancer research and operates a bone-marrow

transplantation program. In cooperation with Halifax Medical

Center, BFMC operates an Oncology Center which is dedicated to

the outpatient treatment and management of a variety of cancers.

41. The parties agree that BFMC meets the requirements of

Preference 7. BFMC has submitted a plan to increase local organ

donations.

42. Preference 8 favors applicants who formally commit to a

program of charity care, with the commitment spelled out in their

CON application. BFMC's application meets this preference.

SVHD's mission is to provide medical services to residents

without regard to their ability to pay. BFMC's application is

conditioned on the provision of 4 percent charity care, which

equates to one person in each of the first two years of

operation.

43. Of the six applicable local health plan preferences

from District 4, BFMC meets the requirements of four preferences

in full and one preference in part.

44. BFMC's application did not address the local health

plan preferences for transplant programs in Districts 3, 7 and 9.

45. AHCA sent an application packet to BFMC which indicated

that District 4 was the applicable health planning district for

BFMC's application. The application packet included a copy of

the District 4 preferences. AHCA's omissions letter did not

inform BFMC that it should address all local health plans for

each district in Transplant Service Area 3.

46. District 3 has one CON preference for transplantation

programs. This preference favors programs at teaching hospitals.

Shands Hospital, a teaching hospital in Gainesville, Florida, is

located in District 3. BFMC does not meet this criteria.

47. District 7 has two local preferences which address

organ transplantation in general. The first favors applicants

with residency programs. BFMC is not entitled to this

preference.

48. The second preference from District 7 favors applicants

that agree to provide charity care. This preference requires the

applicant to provide data detailing, by county and payor source,

the admissions to the facility for the last year, and copies of

any letters of support from referral facilities indicating their

past good experiences in placing patients in need in the

applicant's facility. BFMC is entitled to partial credit for

this preference based on its commitment to provide charity care.

49. District 9 does not have any local health plan

preferences which apply to BFMC's application.

(B) Need in Relation to Rule Criteria: Rule 59C-1.044,

Florida Administrative Code .

50. The parties stipulated that BFMC's application met the

threshold need determination set forth in Rule 59C-1.044(8),

Florida Administrative Code. This rule requires each existing

kidney transplant program in the transplant service area to have

performed a minimum of 30 transplants in the most recent calendar

year. Additionally, the applicant must document that it will

perform a minimum of 15 transplants within two years of

operation.

51. The only hospital currently providing adult kidney

transplant services in Transplant Service Area 3, Florida

Hospital-Orlando, performed in excess of 100 transplants in the

most recent calendar year.

52. BFMC projects that it will perform 19 kidney

transplants in its first year of operation, and 25 transplants in

its second year of operation. BFMC based these projections on

the number of persons on dialysis in Transplant Service Area 3.

53. Nationally, about 50 percent of the persons on dialysis

might be candidates for a kidney transplant. For persons below

the age of 65, approximately 75 percent of the persons on

dialysis could be candidates for a kidney transplant.

54. In Transplant Service Area 3, there are about 2,161

persons on dialysis. Approximately 40 percent of those persons

are not suitable for transplantation. Therefore, only 1,297

persons may be candidates for transplantation.

55. Of the 1,297 persons that might be suitable for

transplantation, only nine or ten percent will actually be

willing to undergo a transplant. The number of persons willing

to be listed as a candidate for a transplant is expected to

increase by 12 percent annually.

56. BFMC's projections have been adjusted for the

relatively small number of pediatric cases in the transplant

service area. The projections also consider the number of

procedures performed by Florida Hospital-Orlando. The

projections are reasonable based on the number of persons on

dialysis in the transplant service area.

57. On a statewide basis, there is a positive correlation

between the number of available transplant centers, the number of

people on the kidney transplant waiting list, and the number of

transplants performed.

58. Statistics from the Health Care Financing

Administration (HCFA) indicate that, on a statewide basis, a

greater number of transplant centers will result in a larger

number of dialysis patients on the kidney transplant waiting

list, and a larger number of transplants performed. Currently,

Florida's percentage of transplant centers, compared to the total

dialysis population, is significantly less than this same

percentage for other states with similar numbers of persons on

dialysis. Florida also lags behind other states with similar

dialysis populations in the percentage of people on the

transplant list and the number of transplants per the dialysis

population.

59. Volusia County is the appropriate location for an

additional adult kidney transplant program within the ten-county

area that comprises Transplant Service Area 3. Volusia County is

second only to Orange County in the number of persons afflicted

with one or more of the diseases which cause renal failure.

Brevard County, which is located immediately adjacent to south

Volusia County, is third. Together, Volusia County and Brevard

County have more people on dialysis than Orange County.

(C) The Availability, Quality of Care, Efficiency,

Appropriateness, Extent of Utilization, and Adequacy of Like and

Existing Health Care Services in the Service District: Section

408.035(1)(b), Florida Statutes .

60. There is no evidence that any patient on the UNOS

waiting list has ever been turned away from a kidney transplant

center in Florida.

61. The kidney transplant program at Florida Hospital-

Orlando has been in existence for 25 years. It performs four

times the minimum number of transplants necessary before a new

program may be considered in the service area.

62. Despite its significant growth in the past few years,

there is no evidence that Florida Hospital-Orlando is operating

inefficiently. It has not reached its capacity for performing

kidney transplants. Nevertheless, a new kidney transplant

program at BFMC would improve access for patients who otherwise

would not seek placement on the transplant waiting list.

63. Patients that are appropriate candidates for placement

on the kidney transplant waiting list often refuse that

opportunity due to the distance from their home to the transplant

center. They are not willing to travel very far from home for

evaluation, for surgery, and for maintenance and follow-up after

surgery. Kidney transplant patients require lifetime monitoring

of immunosuppressants as well as continued treatment for the

underlying disease. These patients are more willing to be placed

on the waiting list and to consider a transplant, as an

alternative to continued costly dialysis, if the transplant

facility is close to their family and home.

64. There is no evidence that BFMC's proposed program will

adversely impact any other existing provider of kidney

transplants.

65. No provider of transplant services intervened in this

proceeding to challenge BFMC's program. On the other hand, BFMC

received support for its proposed program from numerous hospitals

through out the transplant service area and in the adjacent

transplant service area.

66. An additional kidney transplant program will lead to a

potential increase in the number of available donors. It will

improve accessibility and availability of kidney transplant

services, as well as the efficiency, appropriateness, and

adequacy of the service in Transplant Service Area 3.

(D) The Ability of the Applicant to Provide Quality of Care

and the Applicant's Record of Providing Quality of Care: Section

408.035(1)(c), Florida Statutes .

67. The parties agree that BFMC's has a record of providing

quality of care. BFMC's application demonstrates that it has the

ability to provide quality of care for the proposed kidney

transplant program.

68. BFMC is accredited by the Joint Commission on

Accreditation of Healthcare Organizations (JCAHO). The

mechanisms for identifying and correcting potential problems are

already in place at BFMC.

69. BFMC's nursing staff has the necessary training and

experience to deliver quality care to kidney transplant patients.

70. BFMC is not a teaching or research hospital. Apart

from its association with Halifax Medical Center, BFMC does not

offer any tertiary services. However, the statutory and rule

criteria do not require BFMC to be a teaching or research

hospital in order to receive a CON for an adult kidney transplant

program.

71. BFMC is a "small" hospital. Nevertheless, it offers

the essential services for a kidney transplant program. For

example, BFMC performs cardiac catheterization which is required

in a small percentage of kidney transplant cases.

72. BFMC is already performing procedures which are more

complex than kidney transplants. In addition to major

cardiovascular procedures with cardiac cath, BFMC performs the

following procedures: (a) stomach, esophageal and duodenal

procedures greater than age 17 with cardiac cath; and (b)

tracheostomy, except for mouth, larynx or pharynx disorder.

73. Of all the transplant procedures, kidney carries the

lowest DRG (diagnosis related group) weight. The DRG weight is

an indication of the complexity and resource utilization of a

procedure.

(E) The Availability and Adequacy of Other Health Care

Facilities and Services in the District Which May Serve as

Alternatives for the Services to be Provided by the Applicant:

Section 408.035(1)(d), Florida Statutes .

74. The parties agree that a patient in need of kidney

transplant services has no acceptable alternative for long-term

treatment.

75. Dialysis is an interim outpatient alternative for

patients who are candidates for a kidney transplant. Dialysis

has higher long-term costs than transplantation. It is not the

preferred treatment.

76. A kidney transplant eliminates a patient's dependence

on dialysis. It encourages personal and health care

independence. A successful transplant greatly improves a

patient's quality of life.

77. BFMC's proposed program will lead to an increased

awareness of the need for organ donors. The proposed project

will result in the addition of persons on the transplant waiting

list, the increased availability of organs for transplantation,

and a growth in the number of transplants performed. An

additional adult kidney transplant program in Transplant Service

Area 3 will have a minor short-term impact, if any, on the kidney

transplant program at Florida Hospital-Orlando.

(F) Probable Economies and Improvements in Service That May

be Derived from Operation of Joint, Cooperative, or Shared Health

Care Resources: Section 408.035 (1)(e), Florida Statutes .

78. The parties stipulated that this provision does not

apply to BFMC's proposed project.

(G) Need in the Service District for Special Equipment and

Services Which are Not Reasonably and Economically Accessible in

Adjoining Areas: Section 408.035 (1)(f), Florida Statutes .

79. As discussed above, BFMC is located appropriately for

the establishment of an additional adult kidney transplant

program in Transplant Service Area 3. The proposed project is

needed to improve access to the service.

(H) Need for Research and Educational Facilities, Health

Care Practitioners, and Doctors of Osteopathy and Medicine at the

Student, Internship, and Residency Training Levels: Section

408.035(1)(g), Florida Statutes .

80. BFMC's proposed project will provide educational

opportunities for the general public as well as medical

professionals, residents, and students. If the project is

approved, family practice residents from Halifax Medical Center

will rotate through the program. Nursing students and allied

technical support students, such as physical therapists, will

receive training in the program.

(I) Availability of Resources Including Manpower,

Management Personnel, and Funds for Project Accomplishment and

Operation; Effects the Project Will Have on Needs of Health

Professional Training Programs in the District: Section

408.035(1)(h), Florida Statutes .

81. AHCA stipulated that BFMC has the necessary resources

to establish and operate the proposed project. These resources

include health manpower, management personnel, and funds for

project accomplishment and operation. BFMC is willing to

condition approval of its CON application on the performance of a

study that would be defined by AHCA for the benefit of health

care in the state.

(J) Immediate and Long-term Financial Feasibility of the

Proposal: Section 408.035(1)(i), Florida Statutes .

82. The parties have stipulated that BFMC's proposed

project is financially feasible, immediately and in the long-

term.

(K) Special Needs of Health Maintenance Organizations:

Section 408.035(1)(j), Florida Statutes .

83. The parties agree that this criteria does not apply to

BFMC's CON application.

(L) Needs and Circumstances of Those Entities Which Provide

a Substantial Portion of Their Services or Resources, or Both, to

Individuals Not Residing in the District: Section 408.035(1)(k),

Florida Statutes .

84. BFMC has not provided evidence that it currently

provides a substantial portion of its services or resources to

individuals residing outside of its health planning district,

District 4. However, BFMC proposes to serve the ten-county area

comprising Transplant Service Area 3. This service area includes

portions of health planning Districts 3, 4, 7, and 9.

(M) Probable Impact of the Proposed Project on the Cost of

Providing Health Services Proposed by the Applicant: Section

408.035(1)(l), Florida Statutes .

85. The parties stipulated that BFMC's application

demonstrates compliance with this criteria.

(N) Costs and Methods of the Proposed Construction and the

Availability of Alternative, Less Costly, or More Effective

Methods of Construction: Section 408.035(1)(m), Florida

Statutes .

86. The parties stipulated that BFMS's application

demonstrates compliance with this criteria.

(O) The Applicant's Past and Proposed Provision of Health

Care Services to Medicaid Patients and the Medically Indigent:

Section 408.035(1)(n), Florida Statutes .

87. The parties stipulated that BFMS's application

demonstrates compliance with this criteria.

(P) The Applicant's Past and Proposed Provision of Services

Which Promote a Continuum of Care in a Multilevel Health Care

System: Section 408.035(1)(o), Florida Statutes .

88. Halifax-Fish is a multilevel health care system. As

discussed above, it provides a continuum of care through the

services of a HMO, PPO, home health agencies, tertiary care (NICU

and bone-marrow transplant), adult and adolescent psychiatric

beds, skilled nursing beds, hospice, and long-term care.

(Q) Whether Less Costly, More Efficient, or More

Appropriate Alternatives to the Proposed Inpatient Services are

Available: Section 408.035(2)(a), Florida Statutes .

89. Less costly, more efficient, or more appropriate

alternatives to BFMC's proposed project are not available.

Expanding the existing program at Florida Hospital-Orlando would

not improve access for patients who are unwilling to travel to

Orlando for evaluation, surgery, and follow-up services. BFMC

has the necessary staff and facilities to establish a successful

kidney transplant program. The applicant's utilization

projection is reasonable.

(R) Whether the Existing Facilities Providing Similar

Inpatient Services Are Being Used in an Appropriate and Efficient

Manner: Section 408.035(2)(b), Florida Statutes .

90. Florida Hospital-Orlando is being used in an

appropriate and efficient manner. Florida Hospital-Orlando draws

patients primarily from Orange County, certain other counties in

the transplant service area, and out-of-state. It does not

attract a large percentage of transplant patients from Volusia

County. Florida Hospital-Orlando's patient origin for kidney

transplants indicates that there is an existing geographic

barrier to service for residents in the service area.

(S) That Patients Will Experience Serious Problems in

Obtaining Inpatient Care of the Type Proposed, in the Absence of

the Proposed New Service: Section 408.035(2)(d), Florida

Statutes .

91. As discussed above, many persons now on dialysis, who

are potential candidates for transplant, do not seek a transplant

because they do not have access to a program close to their home.

BFMC's proposed project will make it possible for these people in

Service Area 3 to obtain a transplant in or nearer to their

community. The project will definitely improve access to the

proposed service for handicapped and minority persons who find it

especially difficult to travel. BFMC has a history of providing

services to the chronically underserved.

IV. RULE CRITERIA

92. Rule 59C-1.044(3)(c), Florida Administrative Code,

requires an age-appropriate (adult or pediatric) intensive care

unit which includes facilities for prolonged reverse isolation.

The applicant's proposal meets this requirement. Additionally,

AHCA stipulated that BFMC's application meets all architectural

and construction requirements.

93. BFMC has demonstrated compliance with Rule 59C-

1.044(4)(f), Florida Administrative Code. The proposed program

includes nutritionists with expertise in the nutritional needs of

transplant patients. Ms. Jayne Meade is a dietitian with

experience in working with renal patients. Through the

partnership with Halifax Medical Center, Ms. Kim Koeving will act

as a consultant renal dietitian. Based on Ms. Meade's

experience, supplemented by the expertise of Ms. Koeving, BFMC

complies with this criteria. Furthermore, AHCA stipulated that

BFMC's CON application met the specific criteria of

Rule 59C-1.044(8)(a)3, Florida Administrative Code, which

requires the applicant to demonstrate the availability of

ancillary services, including post transplantation nutritional

services.

94. BFMC also demonstrated compliance with Rule 59C-

1.044(4)(g), Florida Administrative Code. That rule requires the

proposed program to include respiratory therapists with expertise

in the needs of transplant patients. BFMC has at least four

respiratory therapists with expertise in the needs of transplant

patients. Two of the therapists are on duty at all times.

95. As to Rule 59C-1.044(8)(a)2., Florida Administrative

Code, BFMC has demonstrated that outpatient services for the

proposed program are available. These services include renal

dialysis and ambulatory renal clinic services. BFMC meets this

requirement through an agreement with Southeast Acute Care

Services.

96. As to Rule 59C-1.044(8)(b)3., Florida Administrative

Code, BFMC's transplant team includes physicians who are board-

certified or board-eligible in the areas of anesthesiology,

nephrology, and psychiatry. There is no board certification for

vascular surgery. Dr. Morris, the transplant surgeon, is board-

certified in general surgery with a certificate in transplant

surgery. Dr. Morris practices general, vascular, and thoracic

surgery. Dr. Toub, the back-up transplant surgeon, is board-

certified in surgery. Dr. Toub practices general, vascular and

non-cardiac thoracic surgery. He also has experience in kidney

transplantation.

97. BFMC's program will have two transplant physicians.

Dr. Chattopadhyay is board certified in internal medicine and

nephrology. Dr. Latif is certified in internal medicine and

board eligible in nephrology, awaiting the results of his boards.

98. The proposed project will have a board certified

urologist, Dr. Green, on the team.

99. As to Rule 59C-1.044(8)(b)4., Florida Administrative

Code, BFMC's application demonstrates that it includes a renal

dietitian on its own staff as well as on the staff at Halifax

Medical Center. Additionally, the team will include an

experienced nephrology nurse, Valerie Holley, R.N. Ms. Holley

has extensive experience with patients who have chronic renal

failure.

100. As to Rule 59C-1.044(8)(b)6., Florida Administrative

Code, BFMC demonstrated that Dr. Gramer is an anesthesiologist

with experience in both kidney and heart transplants.

101. As to Rule 59C-1.044(8)(d)3., Florida Administrative

Code, BFMC submitted data and information indicating a projected

utilization of 19 transplants in the first year of operation, and

25 transplants in the second year of operation. These

projections appear to be reasonable and achievable. They are

based on a reasonable calculation of the percentage of persons

currently on dialysis in the transplant service area who are

potential candidates for transplantation.

102. Despite the requirement of AHCA's rule, there is no

evidence of a state or national standard which can serve as

"commonly accepted criteria" for determining the number of

dialysis patients who are potential kidney transplant recipients.

103. BFMC's CON application demonstrates compliance with

all other applicable rule criteria.

CONCLUSIONS OF LAW

104. The Division of Administrative Hearing has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to Sections 120.569 and 120.57(1), Florida

Statutes.

105. An applicant has the burden of establishing its

entitlement to a CON for an adult kidney transplant program.

Boca Raton Artificial Kidney Center, Inc. v. Department of Health

and Rehabilitative Services , 475 So. 2d 260 (Fla. 1st DCA 1985).

106. Balanced consideration of all applicable statutory and

rule criteria demonstrates that BFMC has met its burden in this

case.

(A) State and Local Health Plans

107. BFMC's application is consistent with a significant

number of the District 4 health plan recommendations and the

state health plan preferences.

108. BFMC's argument that the 1993 State Health Plan does

not apply to its application is not persuasive. In 1997, the

Legislature deleted the criteria in Section 408.035(1)(a),

Florida Statutes, regarding need in relation to the applicable

state health plan. However, Section 408.035(1)(a), Florida

Statutes (1997), does not apply to CON applications filed prior

to July 1, 1997. Ch. 97-270, Sections 2, 14, and 15, Laws of

Fla. Any evaluation of a CON application filed prior to that

date must consider state health plan preferences as a statutory

requirement. BFMC filed its application on March 26, 1997. The

1993 State Health Plan was still in effect at that time.

109. Of the eight state health plan preferences that apply

to all proposed transplant programs, BFMC demonstrated full

compliance with three preferences and partial compliance with at

least two other preferences.

110. District 4 has six local health plan preferences which

apply here. BFMC demonstrated full compliance with four of these

preferences and partial compliance with one additional

preference.

111. Local health plan preferences for Districts 3, 7, and

9 are not applicable here. The plain language of Section

408.035(1)(a), Florida Statutes, as well as the specific rule

provisions governing transplantation services, demonstrate that

BFMC only has to comply with District 4 health plan allocation

factors.

(1) The agency shall determine the

reviewability of applications and shall

review applications for certificate-of-need

determinations for health care facilities and

services, hospices, and health maintenance

organization in context with the following

criteria:

(a) The need for the health care facilities

and services and hospices being proposed in

relation to the applicable district plan and

state health plan, except in emergency

circumstances which pose a threat to the

public health.

Section 408.035(1)(a), Florida Statutes. (Emphasis Added.)

112. Section 408.032(5), Florida Statutes, defines

"district" as "a health service planning district composed of the

following counties: . . . District 4.--Baker, Nassau, Duval,

Clay, St. Johns, Flagler, and Volusia Counties."

113. Rule 59C-1.044, Florida Administrative Code,

establishes four transplant service planning areas, each of which

is comprised of two or more health service planning districts, in

addition to one or more selected counties from other districts.

There is no transplant service area health plan. Likewise, there

is no specific rule provision requiring a transplant applicant to

demonstrate compliance with local health plan allocation factors

for the applicable service in each district within the transplant

service planning area.

(B) Statutory and Rule Criteria

114. AHCA stipulated that BFMC met a significant number of

the applicable statutory and rule criteria. BFMC demonstrated

compliance with the remaining criteria at final hearing.

115. The greater weight of the evidence indicates that the

proposed project is capable of meeting its projected number of

transplant cases during its first two years of operation, is

financially feasible in the immediate and long-term, and will

improve access to quality renal transplantation services in an

underserved area of the state.

116. The proposed program has already been accepted for

membership in UNOS. This membership indicates that BFMC's kidney

transplant program meets all of the national standards. It is

capable of being implemented upon receipt of state approval.

117. BFMC presented persuasive evidence of need for the

proposed program according to the applicable statutes and

administrative rules. Independent data showed that Florida lags

behind states with similar dialysis populations with regard to

the number of transplantation programs per dialysis population.

BFMC demonstrated that Florida transplants fewer kidneys than

would be expected given the number of people on dialysis and the

number of available kidneys.

118. Expanding the capacity for kidney transplants at

Florida Hospital-Orlando will not improve access for patients who

would rather remain on dialysis, at a higher cost to the health

care system, than seek a transplant at a facility located fifty

miles from their home and family.

(C) Need Analysis

119. BFMC has demonstrated compliance with Rule 59C-

1.044(8)(d), Florida Administrative Code. Florida Hospital-

Orlando performed in excess of 100 kidney transplants in the most

recent calendar year preceding BFMC's application. The rule only

required the existing kidney transplant program to perform 30

transplants before a new program could be considered.

120. Additionally, BFMC's application demonstrates that its

projected number of transplants will exceed the minimum number of

15 transplants per year for the first two years of the program.

The greater weight of the evidence indicates that BFMC's

projections are reasonable and achievable based on a percentage

of the number of persons on dialysis who would likely seek out

transplantation, as well as the increase in donations which

typically occurs with the establishment of a new program.

(D) Tertiary Services

121. There is no statutory or rule requirement that a

kidney transplant program be located in a hospital that has a

certain number of inpatient beds, or which offers a "tertiary"

service. While most other transplant programs are required to be

located in teaching hospitals and/or hospitals with research

affiliations, there is no such requirement applicable to kidney

transplantation. See Rule 59C-1.044, Florida Administrative

Code.

122. There is no evidence that kidney transplantation

requires the support of another tertiary service. A successful

kidney transplantation program depends on the medical team, the

availability of needed services, and the level of quality of

care. BFMC has demonstrated that it meets all of these criteria.

123. The purpose of limiting tertiary services to a few

providers is to "ensure the quality, availability and cost-

effectiveness of such service." Section 408.032(19), Florida

Statutes. This statutes was not intended to prohibit the

establishment of needed services. The tertiary nature of kidney

transplant has not prevented AHCA from approving second programs

in three of the four transplant service areas in the state.

124. Of the six existing adult kidney transplantation

programs in Florida, one-half are not located in teaching or

research hospitals.

125. BFMC has demonstrated that its program will be

operated by a team of qualified specialists with demonstrated

expertise in kidney transplantation, that it will be staffed by

qualified and experienced medical and ancillary staff, and that

it will be housed in state-of-the-art facilities which meet each

requirement for establishing an adult kidney transplantation

program.

126. BFMC is already performing complex procedures carrying

much higher DRG weights, signifying higher complexity and use of

resources, than that established for kidney transplantation. Of

all the transplant procedures, kidney transplantation carries the

lowest DRG weight.

127. A new program at BFMC will address the need for an

additional transplant program in the state, and particularly in

transplant service area 3. The program is ready for

implementation upon state approval. The Halifax-Fish partnership

provides that ability to link the services at BFMC with all of

the medical specialties and support available at Halifax Medical

Center.

RECOMMENDATION

Based on the forgoing Findings of Fact and Conclusions of

Law, it is recommended that AHCA enter a Final Order granting

BFMC's CON application No. 8724 for an adult kidney

transplantation program.

DONE AND ORDERED this 12th day of March, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 12th day of Ma rch, 1998.

COPIES FURNISHED:

Richard A. Patterson, Esquire

Agency for Health

Care Administration

2727 Mahan Drive

Tallahassee, Florida 32308-5403

R. Terry Rigsby, Esquire

Blank, Rigsby and Meenan, P.A.

204 South Monroe Street

Tallahassee, Florida 32301

R. Sam Power, Agency Clerk

Agency for Health

Care Administration

Building 3, Suite 3431

2727 Mahan Drive

Tallahassee, Florida 32308

Paul J. Martin, Esquire

Agency for Health

Care Administration

2727 Mahan Drive

Tallahassee, Florida 32308

Douglas M. Cook, Director

Agency for Health

Care Administration

2727 Mahan Drive

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.