90-001036RP Florida League Of Hospitals, Inc. vs. Department Of Health And Rehabilitative Services Status: Closed DOAH Final Order on Friday, September 28, 1990.

Summary: Proposed amendment to substance abuse Certificate Of Need rules abolish short/long term distinction and create separate adult/child registration-valid with a few exceptions

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA LEAGUE OF HOSPITALS, )

INC., et al., )

)

Petitioners, )

and )

)

HORIZON HOSPITAL, and CHARTER )

MEDICAL CENTER, )

)

vs. ) CASE NO. 90-1036RP 90-1037RP

) 90-1038RP 90-1045RP

DEPARTMENT OF HEALTH AND ) 90-1046RP 90-1047RP

REHABILITATIVE SERVICES, ) 90-1048RP 90-1049RP

) 90-1050RP 90-1051RP

Respondent. ) 90-1052RP 90-1053RP

and ) 90-1054RP 90-1055RP

) 90-1056RP 90-1057RP

HEALTH MANAGEMENT ASSOCIATES, ) 90-1058RP 90-1059RP

INC., UNIVERSITY PAVILION ) 90-1060RP 90-1061RP

HOSPITAL, and GLENBEIGH, INC. )

)

Intervenors. )

_________________________________)

FINAL ORDER

Rule 10-5.011(1)(o) and (p), Hospital Inpatient General Psychiatric

Services.

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Hearing Officer, Mary Clark, held a formal hearing in the above-

styled cases on March 19-21, April 30, May 1-4, and June 25-27, 1990, in

Tallahassee, Florida.

APPEARANCES

FLORIDA LEAGUE OF Steven T. Mindlin, Esquire

HOSPITALS, INC., John Gilroy, Esquire

306 North Monroe Street

Post Office Box 10095

Tallahassee, Florida 32302

DEPARTMENT OF HEALTH AND Edgar Lee Elzie, Jr., Esquire

REHABILITATIVE SERVICES & Kelly

Post Office Box 82

215 South Monroe Street

Tallahassee, Florida 32302

NME HOSPITALS, INC., C. Gary Williams, Esquire

d/b/a HOLLYWOOD MEDICAL Michael J. Glazer, Esquire

CENTER; NME HOSPITALS, Steven P. Seymoe, Esquire

INC., d/b/a WEST BOCA Ausley, McMullen, McGehee

MEDICAL CENTER; PIA Carothers & Proctor

PSYCHIATRIC HOSPITALS, Post Office Box 391

INC.; and PIA SARASOTA Tallahassee, Florida 32302

PALMS, Inc. d/b/a

SARASOTA PALMS HOSPITAL

HUMANA, INC.; HUMANA OF James C. Hauser, Esquire

FLORIDA, INC.; HUMANA Foley & Lardner

OF FLORIDA, INC., d/b/a Post Office Box 508

HUMANA HOSPITAL PASCO, Tallahassee, Florida 32302-0508

and HUMANA, INC., d/b/a

HUMANA HOSPITAL SOUTH

BROWARD SARASOTA COUNTY

PUBLIC Robert A. Weiss, Esquire

HOSPITAL BOARD, d/b/a John M. Knight, Esquire

MEMORIAL HOSPITAL, Parker, Hudson, Rainer & Dobbs

SARASOTA The Perkins House

118 North Gadsden Street

Tallahassee, Florida 32301

SOUTH BROWARD HOSPITAL Paul H. Amundsen, Esquire

DISTRICT Terry Rigsby, Esquire

Julie Gallagher, Esquire

Blank & Amundsen

204-B South Monroe Street

Tallahassee, Florida 32301

ADVENTIST HEALTH SYSTEMS Stephen K. Boone, Esquire

INC., d/b/a FLORIDA John Koda, Esquire

HOSPITAL ADVENTIST HEALTH Boone, Boone, Klingbeil,

SYSTEM/SUNBELT, INC., Boone & Roberts, P.A.

d/b/a MEDICAL CENTER Post Office Box 1596

HOSPITAL Venice, Florida 34284

HEALTH MANAGEMENT Robert S. Cohen, Esquire

ASSOCIATES, Inc. Haben & Culpepper

Post Office Box 10095

Tallahassee, Florida 32302

UNIVERSITY PAVILION Donna H. Stinson, Esquire

HOSPITAL Tom Beason, Esquire

Moyle, Flanigan, Katz

Fitzgerald & Sheehan

The Perkins House, Suite 100

118 North Gadsden Street

Tallahassee, Florida 32301

FLORIDA MEDICAL CENTER, Eric B. Tilton, Esquire

LTD. 24l-B E. Virginia Street

Tallahassee, Florida 32301

BAPTIST HOSPITAL Ivan Wood, Esquire

Wood, Lucksinger & Epstein

Four Houston Center

1221 Lamar, Suite 1400

Houston, Texas 77010-3015

INDIAN RIVER MEMORIAL Kenneth F. Hoffman, Esquire

HOSPITAL and GLEN Oertel, Hoffman, Fernandez

BEIGH, Inc. & Cole, P.A.

Post Office 6507

Tallahassee, Florida 32314-6507

MORTON S. PLANT HOSPITAL, Cynthia S. Tunnicliff, Esquire

Inc. Martha Hall, Esquire

Carlton, Fields, Ward,

Emmanuel, Smith & Cutler

Post Office Drawer 190

Tallahassee, Florida 32302

HORIZON HOSPITAL Darrell H. White, Jr., Esquire

Chris Barclay, Esquire

McFarlain, Sternstein, Wiley

& Cassedy

Post Office Box 2174

Tallahassee, Florida 32316-2174

CHARTER MEDICAL CENTER Michael J. Cherniga, Esquire

David Ashburn, Esquire

Roberts, Baggett, LaFace &

Richard

101 East College Avenue

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

The issue in these consolidated cases is whether proposed amendments to

Rule 10-5.011(1)(o), and (p) F.A.C. relating to certificates of need for

hospital inpatient general psychiatric services, are invalid exercises of

delegated legislative authority, as defined in Section 120.52(8), F.S.

PRELIMINARY STATEMENT

On January 19, 1990, the Department of Health and Rehabilitative Services

(HRS) published its notice of intent to amend Rule 10-5.011(1)(q), F.A.C. Among

other changes, the proposed amendments abolish the distinction between long and

short-term services, change the bed need formula from a fixed- bed-need ratio to

a utilization-based formula, establish separate need formulae for adult and

children/adolescent services, modify the definition of substance abuse services,

impose advertising restrictions, and create additional application requirements.

Various petitions were timely filed, challenging the validity of the

proposed amendments pursuant to Section 120.54(4), F.S. Those petitions were

assigned to Hearing Officer, Mary Clark.

On January 26, 1990, HRS published its notice of intent to adopt amendments

to Rules 10-5.011(1)(o) and (p), F.A.C., relating to long-term and short-term

hospital inpatient psychiatric services. The amendments proposed are similar to

those described above for substance abuse services.

Petitions were timely filed in opposition to those amendments and were

assigned to Hearing Officer, Diane Kiesling.

All of the petitions were consolidated in an order entered on March 13,

1990. Although identity of issues and evidence justifies the consideration of

the validity of the substance abuse and psychiatric rule amendments in a single

proceeding, at the request of the parties, including HRS, the Hearing Officer is

entering separate final orders on the rules. These orders are substantially

identical, as most of the evidence and argument by the parties was addressed to

both sets of rule amendments.

Petitions to intervene were granted to Health Management Associates, Inc.,

University Pavilion Hospital, Horizon Hospital, Glenbeigh, Inc., and Charter

Medical Center.

Over objections as to standing, leave to intervene was also granted to

Tampa Bay Academy, but its petition was voluntary dismissed on March 22, 1990.

Some intervenors supported the rules, others challenged portions and

supported other portions of the rules.

At the hearing the following testimony and evidence was presented:

NME/PIA presented the testimony of Robert Sharpe, John Robert Griffin,

Elfie Stamm, Ivor Groves, Lucy Conditt, Larry Dougher, John Davis, Sharon

Gordon-Girvin, Lanny J. Morrison, and Daniel J. Sullivan. Received into

evidence were NME/PIA exhibits as follows: (1) Excerpt from FAW, Volume 16, No.

3, 1-19-90, pages 197-204; (2) Excerpt from FAW, Volume 16, No. 4, 1-26-90,

pages 304-313; (3) Rules 10-5.011(1) (o) (p) and (q) ; (4) Minutes of HRS work

group, August, 1988; (5) DSM-III Manual; (6) Two length of stay charts; (7)

Analysis of insurance policies; (8) Excerpt from ICD-9, pages 55-66; (9)

Memorandum from Ivor Groves to Bob Sharpe; (10) Psychiatric hospital discharge

data reporting requirements; (11) Psychiatric case mix data; (12) Curriculum

vitae of Lanny J. Morrison; (13) Curriculum vita of Daniel J. Sullivan; (14)

Medicaid chart prepared by Daniel J. Sullivan; and (15) ALOS chart prepared by

Daniel J. Sullivan.

During the hearing, Baptist presented the testimony of Nancy Ramos and

Andrew Terry. Received in evidence were Baptist's exhibits as follows: (1)

Curriculum vitae of Nancy Ramos; (2) Graph prepared by Nancy Ramos; (3)

Curriculum vitae of Leonard Andrew Terry; (4) Analysis of recordkeeping costs,

prepared by Leonard Andrew Terry; and (5) Psychiatric Rule Analysis Composites

A, B, C, and D.

Florida Medical Center presented the testimony of Nancy Sutton-Bell, Thomas

J. Konrad, Anthony Krayer, and James Whitaker. Received into evidence were

Florida Medical Center exhibits as follows: (1) IRTF average length of stay

reference sheet; (2) Long-term psychiatric occupancy Second Quarter, 1989; (3)

EIS for psychiatric bed rule; (4) Curriculum vitae of Nancy Sutton-Bell (5)

Chart-max.4 day coverage; and (6) District X bed survey.

Humana presented the testimony of Sharon Gordon-Girvin, John Davis, Robert

Pannell, and Niels Vernegaard. Received into evidence were Humana exhibits as

follows: (1) Preliminary inventory of psychiatric beds, as of 3-9-90; (2)

Preliminary inventory of substance abuse beds; (3) Summary by Daniel J.

Sullivan; (4) Information underlying NME Exhibit 15 and Humana Exhibit 13; (5)

Preliminary estimate of need for adult psychiatric beds; (6) Long-term/short-

term rule, FAW, 12-10-82; (7) Excerpt from FAW, 4-13-90; (8) Excerpt from FAW,

3-15-85; (9) Excerpt from FAW, 9-13-85; (10) HRS fixed pool publication,

September 1989; (11) HRS fixed pool publication, March 1990; and (12) Current

Glenbeigh Hospital License.

Adventist/Florida Hospital and Adventist/Medical Center Hospital presented

the testimony of Barbara Lang, Ted Hirsch, Richard C. W. Hall and Wendy Thomas.

Received into evidence were Florida Hospital exhibits as follows: (1) Curriculum

vitae of Ted Hirsch; (2) License-2586; (3) Curriculum vitae of Richard C. W.

Hall; and (4) Portion of Glenbeigh Application. Received into evidence were

Medical Center Hospital exhibits as follows: (1) License, (2) Front page of CON.

Received into evidence was Health Management Associates Exhibit No. 1 --

Florida Medical Center's CON application.

South Broward Hospital District presented the testimony of Jon Bandes.

Received into evidence was South Broward Exhibit No. 1 -- Curriculum vitae of

Jon Bandes.

Indian River Memorial Hospital presented the testimony of Phillip Charles

Brauening, Michael O'Grady, and Jim Tyler. Received into evidence were Indian

River exhibits as follows: (1) 1-19-90 correspondence from HRS [taken under

advisement and now admitted as a joint exhibit of Indian River/Glenbeigh] and

(1) [sic] resume of Michael O'Grady.

JFK Medical Center, Inc. and Sarasota County Public Hospital Board

presented the testimony of Michael Carroll. Received into evidence were JFK

Medical Center/Sarasota exhibits as follows: (1) Curriculum vitae of Michael

Carroll; (2-6) Bed need calculations. Charter Medical presented the testimony

of Dr. Ronald Luke. Received into evidence was Charter Medical's exhibit No.-

Curriculum vitae of Dr. Ronald Luke.

University Pavilion presented the testimony of Robert Patrick Archer and

Eugene Nelson. Received into evidence were University Pavilion exhibits as

follows: (1) Curriculum vitae for Dr. Archer; (2) Series of tables.

Glenbeigh presented the testimony of Richard Weedman. Received into

evidence was Glenbeigh's exhibit No.-- Curriculum vitae of Richard Weedman.

HRS presented the testimony of Elfie Stamm. Received into evidence were

HRS exhibits as follows: (1) Curriculum vitae of Elfie Stamm; (2) Work group

minutes, composite; (3) Literature, composite; (4) Comments on psychiatric rule;

(5) Comments on substance abuse rule; (6) Transcript of substance abuse rule

public hearing; and (7) Transcript of psychiatric rule public hearing.

Three stipulations entered by the parties during the course of the

proceeding are included in the record as "Hearing Officer exhibits": Hearing

Officer exhibit #1 is the Joint Prehearing Stipulation filed by the parties on

March 16, 1990. Hearing Officer exhibit #2 is an agreement and amendment to

prehearing stipulation entered on May 1, 1990, wherein the parties withdrew all

challenges to HRS' proposed rule amendments categorizing eating disorders as

psychiatric diseases. In return HRS agreed to "grandfather" certain eating

disorder programs in acute care hospitals. Hearing Officer exhibit #3 is a

second agreement, entitled Amendment to Prehearing Stipulation, executed by all

parties and effecting a number of changes in the text of the proposed rules.

The parties have agreed that the amendments reflected in the second agreement

are technical in nature, do not affect the substance of the rules, are supported

by the record of the public hearing held in this matter, or are in response to

written material received by HRS within 21 days after the notice required by

Section 120.54(1), F.S. To the extent this material is found in the petitions

which are the subject of this proceeding, those petitions shall (if not already

included) be made a part of the record of the rule making proceeding. See

Section 120.54(13)(b), F.S. and Florida Medical Center, etc. v. Department of

Health and Rehabilitative Services, 11 FALR 3904 (Final order dated 6/29/89).

On August 16, 1990, the parties filed a correction to the second agreement

(Hearing Officer exhibit #3) correcting a scrivener's error in attachment B to

the exhibit.

This Final Order is based on the proposed rules as amended by the second

agreement, except for the following provisions which, by agreement of the

parties, are based on the text as originally published:

Rule 10-5.011(1) (o)

4.e. (III), 4.h. (III),11.b.

Rule 10-5.011(1) (q)

4.e.(III),11.b.

After the formal hearing adjourned, and a 19-volume transcript was filed, the

parties were given a deadline extension of August 27, 1990, for filing proposed

orders, briefs, and similar documents.

The findings of fact proposed by the parties are addressed in the attached

appendix.

FINDINGS OF FACT

Metamorphosis of the Rules

1. Prior to 1983, hospitals were not separately licensed, and certificates

of need (CON) were not required for the designation of beds for psychiatric and

substance abuse services. In 1983, statutory amendments to Chapter 381, F.S.

addressed psychiatric beds as reviewable projects in the CON program.

2. In 1983, HRS adopted rules establishing four new categories of beds,

now found in Rules 10-5.011(1)(o), (p), and (q), F.A.C.: Short-term psychiatric,

long-term psychiatric, and short and long-term substance abuse.

At the time that the categories were created, HRS conducted an inventory of

the hospitals, asking how many beds were designated in each category. Based on

the responses, published in the Florida Administrative Weekly, future

projections of need were made and applications were considered for CONs.

3. Another category of psychiatric beds was not included in the 1983

rules. Intensive residential treatment programs for children and adolescents

were created by statute in 1982, and are defined in Section 395.002(8), F.S. as:

a specialty hospital accredited by the

Joint Commission on Accreditation of

Hospitals which provides 24-hour care and

which has the primary functions of diagnosis

and treatment of patients under the age of IS

having psychiatric disorders in order to

restore such patients to an optimal level of

functioning.

These facilities, called IRTFs, may become licensed as hospitals pursuant to

Section 395.003(2)(f), F.S., but as hospitals they must obtain CON approval

pursuant to Sections 381.702(7) and (12), F.S. and Section 381.706(1) (b), F.S.

4. IRTFs have no statutory or regulatory restrictions on length of stay

and were approved by HRS at one time under an unwritten policy that there be one

such facility available in each HRS planning district, without regard to the

availability of other long or short term psychiatric programs.

5. In 1985, HRS proposed a rule amendment which would have eliminated the

short and long term distinction, as well as the distinction between psychiatric

services and substance abuse services.

Six months later, the proposed rule amendment was withdrawn. It was highly

controversial; several challenges were filed; objections were made by various

local health councils; and a new administrator took over. The agency decided to

rework its proposed change~;.

6. The agency next began the process of revision in 1987, and in 1988

convened a workshop group to review an issue paper prepared by agency staff.

Another work group met in 1989 to consider the consolidation of psychiatric and

substance abuse rules. HRS staff reviewed literature on the subjects of

substance abuse and psychiatric services, including literature relating to

access by indigent patients and the provision of services to children and

adolescents.

Staff prepared rule drafts which were circulated in- house, including the

alcohol, drug abuse and mental health program office; and to such outside groups

as the Association of Voluntary Hospitals of Florida, the Florida Hospital

Association and the League of Hospitals.

7. The proposed rule amendments which are the subject of this proceeding

were filed on January 19, 1990 (substance abuse), and on January 26, 1990

(inpatient psychiatric services) in the Florida Administrative Weekly.

The Parties

8. HRS administers the CON program pursuant to Section 381.701, et seq.,

F.S. (1989). The CON program regulates entry into the Florida health care

market by providers through review and approval of certain capital expenditures,

services and beds.

9. The petitioner, Florida League of Hospitals, Inc. is a nonprofit

corporation which is organized and maintained for the benefit of investor-owned

hospitals which comprise its membership. The remaining petitioners and

intervenors are current providers of hospital inpatient psychiatric services,

long and short term, and of inpatient substance abuse services, long and short

term.

10. The petitioners and intervenors are all substantially affected by the

proposed rules and have stipulated to the standing of all parties in this

proceeding.

Abolishing Distinctions Between Long-Term & Short-Term

Psychiatric Beds

11. "Short term hospital inpatient psychiatric services" is defined in

existing rule 10-5.011(1)(o)1, FAC, as follows:

1. Short term hospital inpatient psychiatric

services means a category of services which

provides a 24-hour a day therapeutic milieu

for persons suffering from mental health

problems which are so severe and acute that

they need intensive, full-time care. Acute

psychiatric inpatient care is defined as a

service not exceeding three months and

averaging length of stay of 30 days or less

for adults and a stay of 60 days or less for

children and adolescents under 18 years.

"Long term psychiatric services" is defined in existing rule 10-

5.011(1)(p)1., FAC as

a category of services which provides

hospital based inpatient services averaging a

length of stay of 90 days.

12. Neither rule addresses services to adults with an average length of

stay (ALOS) of 30-90 days, or services to children and adolescents with a 60-90

day ALOS.

Because of this, and the "averaging" process, long term hospitals

legitimately serve "short term" patients and short term hospitals may serve

"long term" patients. One party has calculated than a long term facility could

legally provide short term services for 80% of its patients, and long term

services for only 20% of its patients and still have an ALOS of 90 days.

13. Under the existing rules a facility must file a CON application to

convert from long term to short term beds, or vice versa, and is subject to

sanctions for failure to comply with the designation on its CON.

The proposed changes would repeal rule 10-5.011(1) (p), FAC regarding long

term services, and would amend rule 10- 5.011(1) (o), FAC to delete the

definition of short term services, thereby permitting facilities to serve

patients without regard to length of stay.

14. The proposed changes are supported by several factors upon which a

reasonable person could rely.

Substantial changes have occurred in the last decade in clinical practices

and in third party reimbursement to reduce the ALOS for hospital inpatient

psychiatric care.

Prior to the 1960s, there was no distinction between long and short term

care, as all hospital based care was long term with an emphasis on

psychoanalytic therapy.

Beginning in the 1960s, the concept of community mental health programs

evolved with an emphasis on deinstitutionalization of patients in large public

"asylums" and with a goal of treatment in the least restrictive environment. In

more recent years the trend has spread to the private sector.

Improvements in the availability and use of psychiatric drugs, the use of

outpatient care or partial hospitalization, and improved follow up care have led

to a dramatic decrease in ALOS.

15. Long term care is costly, and whether third party payors have been a

driving force, or are merely responding to the trends described above, long term

inpatient reimbursement is virtually nonexistent. During the 19805, most

insurance companies imposed a 30-day limit on psychiatric inpatient care or

imposed monetary limits which would have effectively paid for less than a 90-day

term. CHAMPUS, the program providing insurance to military dependents, was

providing long term coverage in 1982, but by 1986 its coverage was rarely

available for more than 30-60 days, and today, under CHAMPUS' case management

system, 30 days is a "luxurious amount".

Other large third-party payors such as Blue Cross/Blue Shield have similar

limits or aggressively use case management (the close scrutiny of need on a case

by case basis) to limit reimbursement for inpatient care.

16. Of the two or three long term facilities in existence at the time that

HRS' rules were originally adopted, only one, Anclote Manor still reported an

ALOS of over 90 days by 1989, dropping from an ALOS of 477.9 days in 1986 to

145.4 days in 1989. At the same time its occupancy rate dropped below 50%.

17. There is an interesting dialogue among experts as to whether there

still exists a clinical distinction between long term and short term inpatient

psychiatric care. Studies at the Florida Mental Health Institute found no

difference in rate of rehospitalization over a 12 month period between patients

who were in a nine week program and patients from Florida State Hospital with a

500 day length of stay. Some mental health practitioners are looking now at

treating the chronic psychiatric patient with repeated short term hospital stays

and less intensive care between episodes, rather than a single long term

inpatient stay. Other practitioners maintain that a long term psychiatric

problem is behavioral in nature and requires a total life readjustment and

longer length of stay.

Whichever practice may be preferable, the facts remain that fewer and fewer

mental patients are being treated with long term hospitalization.

18. The proposed rules would not foreclose any facility from providing

long term care, if it finds the need.

To the extent that a clinical distinction exists between short and long

term care, the existing rules do not address that distinction, except from a

wholly arbitrary length of stay perspective. The existing rules no longer serve

valid health care objectives.

19. Existing providers with short term CONs are concerned that the

allowing long term facilities to convert will further glut an underutilized

market and will result in an increase in vacant beds and a rise in the cost of

health services, contrary to the intent of the CON program.

Intensive residential treatment facilities (IRTFs), which will be folded

into the need methodology for children and adolescent beds, have no current

restrictions on length of stay and may already compete with impunity with the

short term providers.

Moreover, long term facilities are also providing substantial short term

care as a result of the trends discussed above. HRS has not consistently

enforced the length of stay restrictions of long term providers' CONs. Whether

those CONs were improvidently granted is beside the point. The capital costs

have already been incurred; the beds are available; and the beds are being used,

in part, for short term services.

Abolishing the distinction is a rational approach to current conditions.

And in determining that all existing providers would be placed in the same

position regarding length of stay, HRS avoids the regulatory nightmare of trying

to enforce limitations on existing providers and approving new beds without

limitations.

Creating a Distinction Between Adult and Children/Adolescent Beds

20. Rule 10-5.011(1)(o)3.c. creates a CON distinction between general

psychiatric services for adults, and those services for children and

adolescents. Rule 10-5.011(1)(o)4., as proposed, would create separate need

criteria for hospital inpatient general psychiatric services for adults and for

children/adolescents. Adolescents are defined in Rule 10- 5.011(1)(o)2.a., as

persons age 14 through 17 years. Persons over 17 years are adults, and under 14

years are children.

21. There are valid clinical reasons to distinguish between programs fob

the separate age groups. Although there is some overlap, differing therapies

are appropriate with different ages. The types of services offered to adults

are not the same as those which are offered to children. Children, for example,

often receive academic educational services while being hospitalized. Adults

receive career or vocational counseling and marriage counseling.

22. The required separation by age categories would remove some

flexibility from providers. However, this is offset by the Department's valid

need to track for planning purposes inpatient services to children and

adolescents separately from those provided to adults. Based on anecdotal

evidence, HRS' Office of Alcohol, Drug Abuse and Mental Health Program Office is

concerned about the possible overutilization of hospital inpatient services for

children and adolescents and the potential that when insurance reimbursement

expires they are discharged without clinical bases.

Taking Inventory

23. Under the proposed rule, in order to separately regulate adult and

children/adolescent beds, HRS will fix an inventory of uses as of the time that

the rule takes effect.

24. For facilities with CONs which already allocate beds between the two

groups, the proposed rule will have no effect. For facilities without a

designation, as long as adults and children/adolescents are kept in separate

programs, the allocation can now be mixed and changed at will. The rule

amendment will freeze that use in place.

25. HRS has conducted a preliminary survey to determine the existing uses

of psychiatric, substance abuse and residential treatment program beds. The

survey of approximately 120 facilities is complete, but is not intended to limit

those facilities unless their CON already provides a limit. A final inventory

will be taken after the proposed rules become effective. The inventory will be

published, and providers will be given an opportunity to contest its findings.

The ultimate outcome will be amended CONs and licenses which reflect each

facility's mix of adult and children/adolescent beds.

The process is a fair and reasonable means of commencing separate

regulation of services to these age groups.

The Definitions

26. Proposed rules 10-5.011(1)(o)2.1., 2.p., and 2.t.) define "hospital

inpatient general psychiatric services", "psychiatric disorder" and "substance

abuse", respectively. Each of these provisions defines the terms by reference to

classifications contained in the Diagnostic and Statistical Manual of Mental

Diseases (DSM-III-R Manual) and equivalent classifications contained- in the

International Classification of Diseases (ICD-9 Codes). The rule as originally

proposed included the phrase "or its subsequent revisions", after incorporating

the manuals by reference. In testimony, and in the parties second agreement

(Hearing Office exhibit 3) the phrase is deleted. However, it still appears in

proposed rule 10-5.011(1) (o)2.1., perhaps inadvertently.

The DSM-III-R is a generally recognized manual for the classification of

mental disorders and is widely used by clinicians and medical records

professionals to categorize the conditions of patients. The ICD-9 codes are

broader than just mental disorders, but they have a section on mental disorders

with numbers that are identical to those in the DSM-III-R.

27. Although the manuals are complex and subject to interpretation,

clinicians are accustomed to their use and they provide a reasonable guide as to

the services which may be provided in an inpatient substance abuse program, as

distinguished from an inpatient psychiatric program.

Advertising Limited

28. Proposed rule 10-5.011(1)(o)3.d. (as amended in the parties second

agreement, Hearing Officer exhibit #3), provides:

D. Advertising of services. The number of

beds for adult or for children and adolescent

hospital inpatient general psychiatric

services shall be indicated on the face of

the hospital's license. Beds in intensive

residential treatment programs for children

and adolescents which are licensed as

specialty hospital beds will be indicated as

intensive residential treatment program beds

on the face of the hospital's license. Only

hospitals with separately-licensed hospital

inpatient general psychiatric services,

including facilities with intensive

residential treatment programs for children

and adolescents which are licensed as

specialty hospitals, can advertise to the

public the availability of hospital inpatient

general psychiatric services. A hospital

with separately licensed hospital inpatient

general psychiatric services that does not

have a certificate of need for hospital

inpatient substance abuse services may

advertise that they [sic] provide services

for patients with a principal psychiatric

diagnosis excluding substance abuse and a

secondary substance abuse disorder.

29. The Department does not currently have CON, licensure, or other rules

which limit the ability of a health care provider to advertise its services, and

has never used advertising as a factor in conducting CON review for any proposed

services.

30. HRS included provisions regarding advertising in its proposed rules

because it had evidence that existing facilities have used misleading

advertisements. The evidence came from other providers, rather than consumers.

However, it is the consumer whom the agency feels may be confused by advertising

which implies that services are available when such services cannot be legally

provided under the facility's license.

31. The advertising provision is prospective in nature, seeking to prevent

licensed providers from advertising services for which they are not licensed.

The provisions do not relate to CON review, and the staff is unclear as to how

the rule would be implemented. Licensing and CON review are two separate

functions within the agency.

32. Although the term is not defined in the proposed rule, advertising

broadly includes word of mouth referrals and public presentations by

professionals in the community, as well as traditional media and written

advertisements. Properly utilized, advertising helps consumers exercise choice

and gain access to needed services. Improper advertising is subject to the

regulation of federal and state agencies other than the department.

New Need Methodology, with Preferences

33. Proposed Rule 10-5.011(1)(o)4., deletes the existing population ratio

methodology and creates a need formula based upon use rate, for adult and

children/adolescent inpatient psychiatric services. Certain preferences are

also described.

34. Rule 10-5.011(1) (o)4.e.(III) provides:

In order to insure access to hospital

inpatient general psychiatric services for

Medicaid-eligible and charity care adults,

forty percent of the gross bed need allocated

to each district for hospital inpatient

general psychiatric services for adults

should be allocated to general hospitals.

The same provision for children and adolescent services is found in rule

10-5.011(1)(o)4.h.(III).

Medicaid reimbursement is not available for inpatient services in a

specialty hospital.

35. Rule 10-5.011(1)(o)4.i. provides:

1. Preferences Among Competing Applicants

for Hospital Inpatient General Psychiatric

Services. In weighing and balancing

statutory and rule review criteria,

preference will be given to applicants who:

I. Provide Medicaid and charity care days

as a percentage of its total patient days

equal to or greater than the average

percentage of Medicaid and charity care

patient days of total patient days provided

by other hospitals in the district, as

determined for the most recent calendar year

prior to the year of the application for

which data are available from the Health Care

Cost Containment Board.

II. Propose to serve the most seriously

mentally ill patients (e.g. suicidal

patients; patients with acute schizophrenia;

patients with severe depression) to the

extent that these patients can benefit from a

hospital-based organized inpatient treatment

program.

III. Propose to service Medicaid-eligible

persons.

IV. Propose to service individuals without

regard to their ability to pay.

V. Provide a continuum of psychiatric

services for children and adolescents,

including services following discharge.

36. The preferences are similar to those in CON rules relating to other

types of health services and are intended to implement, in part, the legislative

mandate that the agency consider an applicant's ". . . past and proposed

provision of health care services to medicaid patients and the medically

indigent." Section 381.705(1) (n), F.S.

37. Under Medicaid reimbursement general hospitals are paid a set per diem

based on a variety of services provided to all Medicaid patients, regardless of

actual cost of the individual service. As psychiatric services are generally

less costly than other services on a per diem basis, hospitals may recoup a

greater percentage of their costs in serving Medicaid psychiatric patients.

38. This and the fact that public hospitals receive some governmental

subsidies do not obviate the need for incentives in the CON program. Not all of

the charity care provided by these hospitals is funded and a large amount is

written off. Although Petitioners argue that the preferences are not needed, or

are too generous, none provide competent evidence that the facilities who do not

enjoy the preferences are unduly prejudiced.

39. The 40% allocation of bed need to general hospitals is a guideline,

not a maximum, as applied by the agency, and presumes that there are general

hospitals competing in any batch in question. It is not intended to frustrate a

separate section of the rule which allows a hospital with at least an 85%

occupancy rate to expand regardless of need shown in the formula and the

occupancy rate district-wide. See 10- 5.011(1) (o)4.d. and g.

"Evaluation of Treatment Outcomes"

40. The proposed rules contain three provisions relating to a hospital's

evaluation of its patients' treatment outcomes. Rule 10-5.011(1) (o)3.i,

includes among "required services", ". . . an overall program evaluation of the

treatment outcomes for discharged patients to determine program effectiveness."

Rule 10-5.011(1)(o)8.j., requires in the application,

A description of the methods to be used to

evaluate the outcome of the treatments

provided and to determine the effectiveness

of the program, including any summary

evaluation outcome results for hospital

inpatient psychiatric services provided at

other facilities owned or operated by the

applicant in Florida and other states. The

data shall exclude patient specific

information.

Rule 10-5.011(1)(o)9.e., imposes a similar additional requirement in

applications from providers seeking more beds:

A summary description of any treatment

outcome evaluation of the hospital inpatient

general psychiatric services provided at the

facility for which additional beds are

requested, for children, adolescents or

adults as applicable to the facility for the

12-month period ending six months prior to

the beginning date of the quarter of the

publication of the fixed bed need pool.

41. The purpose of these requirements, according to HRS, is to insure that

hospitals will know whether its patients are better off when they leave than

when they were admitted to the program. Most hospitals have such knowledge.

42. The terms, "outcome determination", "summary evaluation outcome

results", "summary description of treatment outcome evaluation" and "overall

program evaluation of treatment outcomes", are nowhere defined in the proposed

rules, and the department intends to leave to each applicant or provider the

methodology for determining whether its patients are "better off" for having

been in its program.

43. Hospitals do not routinely evaluate their patients after discharge and

such follow up would be difficult and costly. Most hospitals do, however,

establish a treatment plan upon admission, continue to review and revise that

plan as needed throughout treatment, and determine the patients' readiness for

discharge based on the goals successfully attained. This is the process

described by Florida Hospital's Center of Psychiatry Administrative Director.

44. The rules require no more than a description similar to that provided

by Florida Hospital. The rules set no standards and do not dictate that follow-

up of discharged patients be accomplished, even though post discharge evaluation

may be of value and is generally accepted as the best tool for measuring

treatment effectiveness.

45. The measurement of treatment outcome is an inexact process and relies

on a series of subjective standards which need to be described. HRS does not

intend to set those standards and, other than have its applicants demonstrate

that a process is in place, the agency has no idea how the required information

will impact its CON review. Without definitions and standards, the agency will

have no way of comparing one applicant's information with another's.

46. Without specificity and more guidance the rules fail to apprise the

applicant of what is required and will provide no meaningful information to the

agency in its CON review function.

Miscellaneous Provisions

A. The Non-Physician Director.

47. The proposed definition of "Hospital Inpatient General Psychiatric

Services" in Rule 10-5.011(1) (o)2.1. includes

services provided under the direction

of a psychiatrist or clinical psychologist

48. In drafting this definition, agency staff relied on advice from

experts at their workshops and on advice from the agency's own Alcohol, Drug

Abuse and Mental Health Program Office, to the effect that professionals, other

than physicians, are qualified to direct the units.

B. Interpretation and Application.

49. It is not the intention of HRS that its rules be interpreted to

override good medical practice or the sound judgement of treating physicians.

Thus, the rules would not prohibit stabilization of a patient who is

presented to the emergency room of a hospital without a CON for substance abuse

or psychiatric services. Stabilized Alzheimers patients may be housed in

nursing homes. Nor do the rules prohibit or subject to sanctions the occasional

admission of a psychiatric or substance abuse patient to a non-substance abuse

or psychiatric bed so long as this occurs infrequently in a hospital without

psychiatric or substance abuse programs. "Scatter" beds are not eliminated.

Those beds would continue to be licensed as acute-care beds, as they would not

be considered part of an organized program, with staff and protocols, to provide

psychiatric or substance abuse services.

50. Proposed rule 10-5.011(1)(o)4.h.(v) provides that applicants for IRTPs

for children and adolescents seeking licensing as a specialty hospital must

provide documentation that the district's licensed non-hospital IRTPs do not

meet the need for the proposed service.

The department is not seeking specific utilization data in this regard, as

such is not available. General information on the availability of alternatives

to inpatient hospital services is obtainable from local health councils and

mental health professionals in the community.

C. Quarterly Reports.

51. Proposed rule 10-5.011(1)(o)10. requires:

Facilities providing licensed hospital

inpatient general psychiatric services shall

report to the department or its designee,

within 45 days after the end of each calendar

quarter, the number of hospital inpatient

general psychiatric services admissions and

patient days by age and primary diagnosis

ICD-9 code.

52. The Health Care Cost Containment Board (HCCCB) is already collecting

similar quarterly data from providers. The reporting system is being updated

and improved but in the meantime HRS is experiencing problems with the type and

accuracy of the data it receives from HCCCB.

One problem is that HCCCB collects its data with regard to all discharges

in a psychiatric or substance abuse diagnostic category, whereas HRS is

interested only in data from a psychiatric or substance abuse program. Until

the system improves, HRS needs the information it seeks from the providers in

order to plan and apply the need methodology.

53. The agency intends to designate local health councils to collect the

data and has already worked with them to set up a system. If reports provided

to the HCCCB comply with the proposed requirement, HRS has no problem in

receiving a duplicate of those reports.

The Economic Impact Statement

54. Pursuant to Section 120.54(2), F.S., HRS prepared an economic impact

statement for the proposed rule.

It was authored by Elfie Stamm, a Health Services and Facilities Consultant

Supervisor with HRS. Ms. Stamm has a Masters degree in psychology and has

completed course work for a Ph.D. in psychology. She has been employed by HRS

for 13 years, including the last ten years in the Office of Comprehensive Health

Planning. She is responsible for developing CON rules, portions of the state

health plan, and special health care studies.

55. It was impossible for Ms. Stamm to determine how the rule could impact

the public at large. The economic impact statement addresses generally the

effect of abolishing the distinction between long and short term services and

acknowledges that the rule will increase competition among short term service

providers. The impact statement also addresses a positive impact on current

long term providers.

CONCLUSIONS OF LAW

56. The Division of Administrative Hearings has jurisdiction over the

parties and subject matter in these consolidated proceedings pursuant to Section

120.54(4), F.S.

57.

Any substantially affected person may seek an

administrative determination of the

invalidity of any proposed rule on the

grounds that the proposed rule is an invalid

exercise of delegated legislative authority.

Subsection 120.54(4) (a), F.S.

As providers of the services regulated by the proposed rules, the hospital

petitioners are "substantially affected." As an association of providers,

Florida League of Hospitals, Inc., is similarly "substantially affected."

Florida Home Builders Assn. et al V. Department of Labor and Employment

Security, 412 So.2d 351 (Fla. 1982) The parties have stipulated to standing for

all petitioners and intervenors.

58. "Invalid exercise of delegated legislative authority" is defined in

Section 120.52(8)F.S. as:

action which goes beyond the powers,

functions- and duties delegated by the

Legislature. A proposed or existing rule is

an invalid exercise of delegated legislative

authority if any one or more of the following

apply;

(a) The agency has materially failed to

follow the applicable rulemaking procedures

set forth in S. 120.54;

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by S. 120.54(7);

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required by

S. 120.54(7);

(d) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency; or

(e) The rule is arbitrary or capricious.

59. Those who seek to invalidate the proposed rules have the burden of

showing that:

the agency, if it adopts the rule,

would exceed its authority; that the

requirements of the rule are not appropriate

to the ends specified in the legislative act;

that the requirements contained in the rule

are not reasonably related to the purpose of

the enabling legislation or that the proposed

rule or the requirements thereof are

arbitrary and capricious.

Agrico Chemical Co. V. State Dept.

of Environmental Regulation, 365

So.2d 760, 763 (Fla. 1st DCA 1979)

60. An agency has wide discretion in its rulemaking authority. Austin v.

Department of Health and Rehabilitative Services, 495 So.2d 777 (Fla. 1st DCA

1986). When an agency construes a statute in its charge in a permissible way,

that interpretation must be sustained even though another may be possible, or

even, in the view of some preferable. HRS v. Framat Realty, Inc., 407 So.2d

238, 241 (Fla. 1st DCA 1981).

61. With few exceptions, the challengers have failed to sustain their

burden of proof.

Deregulating length of stay and Regulating Services by Age

62. Section 381.704(3), F.S. requires the department to establish by rule,

uniform need methodologies for health services and health facilities. Health

services is defined in Section 381.702(9) F.S. to include ". . . alcohol

treatment, drug abuse treatment, and mental health services."

Section 38l.706(1)(l), F.S. requires CON review for "[a] change in the

number of psychiatric or rehabilitation beds."

Nothing in the enabling legislation requires that there be any subdivision

of substance abuse or psychiatric beds, and in retrospect the creation of

separate categories may have been injudicious. The facts exposed in this

proceeding amply establish the rationale for abolishing the distinction now.

63. In contrast, there is a rational basis to separately regulate adult

and children/adolescent programs to serve both clinical and health planning

objectives. The challengers failed to demonstrate that the inventory process

described in the rule is arbitrary or capricious or otherwise invalid. It is

necessarily based on the providers' actual use of beds as of the effective date

of the rule.

Incorporation by Reference

64. Within the definition of the phrase, "Hospital Inpatient General

Psychiatric Services," in proposed rule 10- 5.011(1)(o)2.1. is the reference to

the Diagnostic and Statistical Manual of Mental Disorders and the parenthetical,

"(DSM-III-R, or its subsequent revisions)". This appears to be an oversight, as

the "subsequent-revisions" reference has been deleted from other sections of the

rules. As it remains here, it is invalid.

Incorporation by reference of future revisions is plainly prohibited by

Section 120.54(8), F.S. and Department of State rule 15-1.005, F.A.C.

Advertising

65. Proposed rule 10-5.011(1)(o)3.d. addresses the hospital's advertising

activity as a "general provision" among criteria against which the CON

applications will be evaluated.

The rule on its face and the evidence at hearing demonstrate that there is

no connection between the advertising limits and the certificate of need

program. The agency has received some unspecified complaints from providers

about other providers' advertising and is trying to respond to those complaints.

Agency staff has no idea how the prohibition will be applied in the CON program.

66. The rulemaking authorities cited by the agency in its notice of the

proposed amendments relate generally to rules implementing the agency's CON

responsibilities. None of these authorities directly or by implication

authorize the regulation of advertising, nor does advertising activity fit

within any of the statutory CON review criteria in Section 381.705, F.S.

67. Proposed rule 10-5.011(1)(o)3.d. is invalid as it exceeds the agency's

authority and is not reasonably related to the purpose of the enabling

legislation. Agrico, Supra. This conclusion obviates the necessity of

addressing the parties' various constitutional challenges to this rule.

Outcome Determination

68. Rule 10-5.011(1) (o)3.i, 8.j, and 9.e, requiring treatment outcome

evaluations, are vague and fail to establish adequate standards for agency

decisions. Beyond a notion that hospitals should be determining whether their

patients are better off as a result of their treatment, the agency is unable to

articulate what implementation will be required of the providers or how the new

requirement will be applied in its CON review. Providers can only guess what

must be done and risk arbitrary enforcement. These rules are an invalid

exercise of delegated legislative authority.

Preference and Miscellaneous Provisions

69. The need methodology preferences and the reporting requirements, as

well as the provision regarding who may direct the program are supported by

facts and logic and are reasonable related to several purposes of the act, such

as access to services, quality of care, and planning for future needs.

The challengers have failed to prove that these remaining provisions are

invalid.

Economic Impact Statement

70. The failure to provide an adequate statement of economic impact is a

ground for holding a rule invalid. Subsection 120.54(3)(d), F.S.

What constitutes an "adequate" statement has been liberally construed by

the courts:

A rule will not be declared invalid merely

because the economic impact statement may not

be as complete as possible; any deficiency in

the statement must be so grave as to have

impaired the fairness of the proceedings.

Health Care and Retirement

Corporation of America v.

Department of Health and

Rehabilitative Services, 463 So.2d

1175, 1178 (Fla. 1st DCA 1985)

71. While hardly a "model of economic forecasting", the agency's impact

statement addresses the considerations mandated in subsection 120.54(2)(b), F.S.

The agency acknowledges an impact on existing providers without computing a

specific numeric impact. Such specificity is neither required nor possible.

Department of Natural Resources v. Sailfish Club, 473 So.2d 261 (Fla. 1st DCA

1985).

The challengers have failed to prove that any deficiencies in the economic

impact statement impaired the fairness of the proceeding.

ORDER

Based on the foregoing, it is hereby

ORDERED:

Proposed amendments to Rule 10-5.011(1)(o), and (p) FAC are not an invalid

exercise of delegated legislative authority, with the following exceptions,

which are found to be invalid:

a. 10-5.011(1)(o)2.1., to the extent that it incorporates "subsequent

revisions" to DSM-III-R.

b. 10-s.5.011(1)(o)3.d.; and

c. 10-5.011(1)(o)3.i. as to the requirement for evaluation of treatment

outcomes, 8.j., and 9.e.

DONE and ORDERED this 28th day of September, 1990, in Tallahassee, Florida.

___________________________________

MARY CLARK

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of September, 1990.

APPENDIX TO FINAL ORDER

The following constitute rulings on the findings of fact proposed by the

parties. Unless otherwise designated, the paragraph reference is to the order

related to Rule 10-5.011(1)(q), Hospital Inpatient Substance Abuse Services.

Paragraph references to the psychiatric rule order are designated *. Proposed

Final Order 10-5.011(1)(q)i. by NME, etc/PIA, etc. [Paragraphs 1, and 3-11 are

included in the Preliminary Statement.] 2. Adopted in paragraph 10. 12.

Adopted in paragraph 11. 13.-l7. Adopted in substance in paragraphs 11-19. 18.-

19. Adopted in paragraph 26. 20. Adopted in part in paragraph 27, otherwise

rejected as unsubstantiated by the evidence. 21. Rejected as unsubstantiated by

the record. 22. Rejected as unnecessary. 23. Adopted in paragraph 28. 24.-25.

Rejected as unnecessary or unsupported by the evidence.

The amendments in Hearing Officer Exhibit #3 appear to permit advertising

of services which the facility is allowed to provide. 26.-29. Rejected as

unnecessary. 30.-37. Adopted in part in paragraphs 33.-39.; otherwise rejected

as contrary to the weight of evidence. 38.-40. Adopted in substance in

paragraphs 40.-46. 41.-43. Adopted in part in paragraphs 5l.-53., otherwise

rejected as unnecessary. 44.-45. Adopted in part in paragraph 50, otherwise

rejected as contrary to the weight of evidence. 46.-48. Adopted in part in

paragraphs 23.-25., otherwise rejected as contrary to the weight of evidence.

49.-50. Adopted in paragraphs 54. and 55.

Proposed Final Order 10-5.011(1)(o) & (p)1 by NME, etc./PIA, etc.

[paragraphs 1, and 3-10 are adopted in the Preliminary Statement] 2.

Adopted in *paragraph 10. 11. Adopted in *paragraphs 11 and 13. 12.-17.

Adopted in substance in *paragraphs 12-19. l8.-23. Adopted in *paragraphs 26

and 27, otherwise rejected as unnecessary. 24.-26. Adopted in *paragraphs 28-

32. 27.-30. Rejected as unnecessary. 31.-38. Adopted in part in *paragraphs

33-39; otherwise rejected as contrary to the weight of evidence. 39.-41.

Adopted in substance in *paragraphs 40-46. 42.-44. Adopted in part in

*paragraphs 51-53; otherwise rejected as unsupported by the evidence. 45.-46.

Adopted in part in paragraph 50; otherwise rejected as contrary to the weight of

evidence. 47.-49. Adopted in part in *paragraphs 23-25; otherwise rejected as

contrary to the weight of evidence. 50.-5I. Adopted in *paragraphs 54 & 55.

Proposed Final Order by Florida League of Hospitals.

1. Adopted in paragraph 1. 2.-3. Adopted in Preliminary Statement. 4.-5.

Adopted in paragraph 10. 6.-32. Adopted in substance in paragraphs 28-32. 33.-

60. Adopted in substance in paragraphs 40-46. 6l.-105. Adopted in part,

otherwise rejected as unnecessary or immaterial. The "preferences" in the rule

are a clear example of agency discretion. While there may be other and better

ways of accomplishing the goals, the method selected by the agency is not

arbitrary or an excess of authority or otherwise invalid.

Proposed Final Order by Adventist Health System, Inc.

1.-2. Included in summary in paragraph 9.

3.-17. Adopted in part in paragraphs 11-19 and *paragraphs 11-19, as to a

summary discussion of the clinical distinctions and background of the rules;

otherwise rejected as unnecessary or contrary to the weight of evidence.

18.-24. Rejected as immaterial or contrary to the weight of evidence.

25.-26. Rejected as contrary to the weight of evidence.

27.-28. Rejected as unsubstantiated by competent evidence.

29.-31. Rejected as contrary to the weight of evidence.

32. and 37. Adopted in part (as to the preference) in paragraphs 33-35

and *paragraphs 33-35; otherwise rejected (as to the conclusion that the

criteria are "irrational".)

33.-35. Rejected as unnecessary (these provisions have been removed-see

parties' 2nd agreement).

36. Partially adopted in paragraphs 51-53, otherwise rejected as

immaterial.

38.-39. Adopted in paragraphs 28-32.

40.-41. Adopted in part in paragraphs 20-22, otherwise rejected as

immaterial.

42.-44. Adopted in substance in paragraphs 40-46.

45. Rejected as contrary to the weight of evidence (as to the conclusion

that the proposal is arbitrary and violates health planning principles.)

Proposed Final Order of Horizon Hospital.

1. Adopted in summary in paragraphs 9 and 10.

2. Rejected as an improper conclusion.

3.-22. Adopted in part in paragraphs 11-19 and *paragraphs 11-19 (as to

distinction between the two programs and some impact on existing providers),

otherwise rejected as immaterial or unsubstantiated by competent evidence (as to

the ultimate increase in health care costs, and the conclusion that the proposal

is illogical or otherwise invalid.)

Proposed Final Order by Baptist Hospital.

1. Rejected as an improper conclusion.

2.-4. Rejected as immaterial.

5.-9. Adopted in general in *paragraphs 11-19.

10.-12. Rejected as immaterial.

13.-15. Adopted in general in *paragraphs 11-19.

16.-21. Rejected as unnecessary.

23.-25. Adopted in general in *paragraphs 40-46.

Proposed Final Order by Humana.

1.-4. Adopted in summary in paragraphs 1-7, otherwise rejected as

unnecessary or immaterial.

5. Rejected as an improper conclusion.

6.-36. Adopted in part in *paragraphs 11-19 and 11-19, rejected for the

most part as immaterial or improper conclusions.

37.-41. Rejected as unsupported by the evidence or improper conclusions,

except for the summary of the rule provisions, which is addressed in paragraphs

20-25.

42.-44. Adopted in paragraphs 28-32, except that the changes seem to allow

advertising of services which may legally be provided.

45.-47. Rejected as unnecessary.

48.-50. Adopted in paragraphs 40-46.

51.-53. Rejected as contrary to the evidence and improper conclusions.

54. Rejected as an improper conclusion.

Proposed Final Order by JFK Medical Center and Sarasota Co. Public Hospital.

1. Rejected as unnecessary.

2. Adopted in paragraph 23.

3.-17. Rejected as unnecessary.

18.-19. Adopted in Preliminary Statement.

20.-30. Rejected as unnecessary or immaterial.

Proposed Final Order by So. Broward Hospital District.

1.-2. Adopted in Preliminary Statement and paragraph 1.

3. Adopted in part in Preliminary Statement, otherwise rejected as

immaterial.

4.-5. Rejected as immaterial.

6. Adopted in *paragraph 17.

7.-17. Rejected as unnecessary or immaterial.

18.-19. Adopted in *paragraph 19.

20.-25. Rejected as unsupported by competent evidence or an improper

conclusion.

26.-29. Rejected as unnecessary or unsupported by competent evidence.

Proposed Final Order by Morton Plant Hospital.

1. Adopted in preliminary statement and in *paragraph 15.

2. Rejected as unnecessary.

3. Rejected as contrary to the evidence.

4. Rejected as an improper conclusion. 5.-6. Rejected as unnecessary.

7. Adopted in *paragraph 4.

8. Adopted in substance in *paragraph 17.

9. Adopted in *paragraph 14.

10. and 11. Rejected as unsupported by the weight of evidence.

Proposed Final Order by Charter Medical.

1.-5. Addressed in Preliminary Statement, except that standing is

addressed in paragraph 10.

6.-63. Adopted, in substantially abbreviated form in paragraphs 40-46, and

*paragraphs 40-46.

64.-1l6. Adopted, in substantially abbreviated form in paragraphs 11-19

and *paragraphs 11-19.

Proposed Final Order by University Pavilion.

1.-3. Adopted in Preliminary Statement and conclusions of law.

4. Rejected as unnecessary.

5. Adopted in *paragraph 18.

6. Adopted in *paragraph 19.

7. Adopted in Preliminary Statement.

8. Adopted in paragraph 5.

9.-11. Rejected as unnecessary.

12.-14. Adopted in *paragraph 14.

15. Adopted in *paragraph 17.

16. Rejected as unnecessary.

17. Adopted in *paragraph 14.

18.-19. Addressed in *paragraph 17.

20.-21. Adopted in *paragraph 14.

22. Adopted in paint in *paragraph 16.

23. Rejected as unnecessary.

24. Adopted in *paragraph 12.

25.-26. Rejected as unnecessary.

27. Adopted in *paragraph 15.

28.-30. Rejected as unnecessary.

31. Adopted in *paragraph 19.

32.-38. Rejected as cumulative and unnecessary.

39. Adopted in conclusions of law.

40.-41. Addressed in paragraphs 1-6.

Final Order Proposed by Glenbeigh/Indian River Memorial.

1.-146. Adopted in substance, in substantially abbreviated form in

paragraphs 11-19 and *paragraphs 11-19, otherwise rejected as immaterial,

cumulative or argumentative.

Final Order Proposed by HMA.

1.-3. Adopted in paragraphs 1-7.

4. Adopted in *paragraph 12.

5. Adopted in *paragraph 18.

6.-8. Rejected as unnecessary.

9. Adopted in *paragraph 14.

10. Adopted in *paragraph 17.

11. Addressed in *paragraph 17.

12. Adopted in *paragraph 15.

13.-14. Addressed in *paragraph 17.

15. Rejected as unnecessary.

16. Adopted in *paragraph 16.

17.-26. Rejected as unnecessary.

27. Adopted in *paragraph 18.

28.-54. Rejected a- cumulative or unnecessary.

Proposed Final Order by HRS.

1.-13. Adopted in summary in paragraph 1-7.

14. Rejected as unnecessary.

15.-16. Adopted in Preliminary Statement.

17.-19. Rejected as unnecessary.

20.-23. Adopted in paragraphs 26-27.

24. Rejected as unnecessary.

25. Adopted in paragraph 48.

26.-29. Adopted in substance in paragraph 49.

30. Rejected as unnecessary.

3l.-32. Adopted in substance in paragraph 49.

33. Adopted in paragraph 22.

34. Adopted in paragraph 30.

35.-38. Rejected as immaterial.

39.-44. Adopted in substance in paragraphs 33-39.

45.-46. Adopted in paragraph 50. 47. Adopted in paragraph 38.

48.-57. Rejected as unnecessary.

58.-67. Addressed in paragraphs 40-46. However, adoption of the findings

does not result in a conclusion that the requirements are valid. 68. Rejected

as unnecessary.

69.-71. Adopted in paragraphs 51-53.

72.-78. Adopted in paragraphs 23-25.

79.-123. Adopted in substance in paragraphs 11-19 and *paragraphs 11-19,

although in substantially abbreviated form.

124.-127. Adopted in substance in paragraphs 3, 4 and 19.

128. Adopted in paragraphs 54 and 55.

COPIES FURNISHED:

Steve Mindlin, Esquire

John F. Gilroy, III, Esquire

Haben & Culpepper, P.A.

P.O. Box 10095

Tallahassee, FL 32302

(Florida League of Hospitals)

Paul H. Amundsen, Esquire

Blank, Hauser & Amundsen

204-B South Monroe Street

Tallahassee, FL 32301

(South Broward Hospital District)

Edgar Lee Elzie, Jr., Esquire

215 S. Monroe St.

Tallahassee, FL 32301

(HRS)

Darrell White, Esquire

McFarlain, Sternstein, Wiley

and Cassedy, P.A.

600 First Florida Bank Bldg.

P.O. Box 2174

Tallahassee, FL 32316-2174

(Horizon Hospital)

Steven Boone, Attorney at Law

Boone, Boone, Klingbeil, Boone

& Roberts, P.A.

1001 Avenida del Circo

Post Office Box 1596

Venice, Florida 34284

(Adventist Health System)

Michael J. Glazer

Steven P. Seymoe

Attorneys at Law

Ausley, McMullen, McGehee,

Carothers & Proctor

Post Office Box 391

Tallahassee, Florida 32302

(NME Hospitals and PIA Psychiatric Hospitals)

James C. Hauser, Attorney at Law

Blank, Hauser & Amundsen

204-B South Monroe Street

Tallahassee, Florida 32301

(Humana)

Theodore C. Eastmoore, Attorney at Law

Williams, Parker, Harrison,

Deitz & Getzen

1550 Ringling Boulevard

Post Office Box 3258

Sarasota, Florida 34230

(Sarasota County Public Hospital Board)

Robert A. Weiss

John M. Knight

Attorneys at Law

Parker, Hudson, Rainer & Dobbs

The Perkins House, Suite 101

118 North Gadsden Street

Tallahassee, Florida 32301

(Sarasota County Public Hospital Board)

Ivan Wood, Attorney at Law

Wood, Lucksinger & Epstein

Four Houston Center

1221 Lamar, Suite 1400

Houston, Texas 77010-3015

(Baptist Hospital)

Clarke Walden, Attorney at Law

Memorial Hospital of Hollywood

3501 Johnson Street

Hollywood, Florida 33021

(South Broward Hospital District)

Cynthia S. Tunnicliff

Martha Harrell Hall

Attorneys at Law

Carlton, Fields, Ward, Emmanuel,

Smith & Cutler, P.A.

Post Office Drawer 190

Tallahassee, Florida 32302

(Morton F. Plant Hospital)

Kenneth F. Hoffman, Attorney at Law

Oertel, Hoffman, Fernandez & Cole, P.A.

2700 Blair Stone Road

Post Office Box 6507

Tallahassee, Florida 32314-6507

(Indian River Memorial Hospital)

Michael Cherniga

Steve Ecenia

Attorneys at Law

101 East College Avenue

P.O. Drawer 1838

Tallahassee, FL 32301

(Charter Medical)

Eric B. Tilton, Attorney at Law

241-B East Virginia Street

Tallahassee, Florida 32301

(Florida Medical Center)

Charles Stampelos, Attorney at Law

McFarlain, Sternstein, Wiley and

Cassedy, P.A.

600 First Florida Bank Building

P.O. Box 2174

Tallahassee, FL 32301

(Tampa Bay Academy)

Robert S. Cohen, Attorney at Law

Haben & Culpepper, P.A.

Post Office Box 10095

Tallahassee, Florida 32302

(Health Management Associates)

Donna H. Stinson, Attorney at Law

Moyle, Flanigan, Katz,

Fitzgerald & Sheehan, P.A.

The Perkins House, Suite 100

118 North Gadsden Street

Tallahassee, Florida 32301

(University Pavilion Hospital)

Sam Power, Agency Clerk

Department of Health and

Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, FL 32399-0700

Linda Harris, General Counsel

Department of Health and

Rehabilitative Services

1323 Winewood Boulevard

Tallahassee, FL 32399-0700

Liz Cloud, Chief

Bureau of Administrative Code

The Capitol, Room 1802

Tallahassee, FL 32399-0250

Carroll Webb, Executive Director

Administrative Procedures Committee

Holland Bldg., Room 120

Tallahassee, FL 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO

JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW

PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH

PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE

AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY,

ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL,

FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT

WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF

RENDITION OF THE ORDER TO BE REVIEWED.

=================================================================

DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL

FIRST DISTRICT, STATE OF FLORIDA

SARASOTA COUNTY PUBLIC HOSPITAL NOT FINAL UNTIL TIME EXPIRES

BOARD, d/b/a MEMORIAL HOSPITAL, TO FILE MOTION FOR REHEARING AND

SARASOTA, and PSYCHIATRIC DISPOSITION THEREOF IF FILED,

HOSPITALS of AMERICA, INC., d/b/a

HORIZON HOSPITAL,

CASE NO. 90-3140/3195

Appellants, DOAH CASE NO. 90-1036RP

v.

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES, PIA

PSYCHIATRIC HOSPITALS, INC., and

PIA SARASOTA PALMS, INC., d/b/a

SARASOTA PALMS HOSPITAL, UNIVERSITY

PAVILION, GLENBEIGH, INC., INDIAN

RIVER MEMORIAL HOSPITAL, CHARTER

MEDICAL-OCALA, INC., HEALTH

MANAGEMENT ASSOCIATES, INC.,

Appellees.

_____________________________________/

Opinion filed September 24, 1991.

An appeal from the Division of Administrative Hearings, Mary

Clark, Hearing Officer., Judge.

For appellants:

Eric B. Tilton, Tallahassee for Florida Medical Center, Ltd.

Robert A. Weiss and John M. Knight, Tallahassee for Memorial

Hospital.

Gerald B. Sternstein, Charles A. Stampelos and Darrell White

of McFarlane, Bobo, Sterstein, Cassedy and Wiley, P.A.,

Tallahassee for Horizon Hospital.

For appellees:

No appearance for the Department of Health and

Rehabilitative Services.

C. Gary Williams, Michael J. Glazer and R. Stan Peeler of

Ausley, McMullen, McGehee, Carothers & Proctor, Tallahassee

for Sarasota Palms Hospital.

Donna H. Stinson, Moyle, Flanigan, Katz, Fitzgerald &

Sheehan, Tallahassee for University Pavilion.

Kenneth F. Hoffman and W. David Watkins of Oertel, Hoffman,

Fernandez & Cole, P.A., Tallahassee for Glenbeich, Inc. and

Indian River Memorial Hospital.

Michael J. Cherniga of Roberts, Bagett, LaFace & Richard,

Tallahassee for Charter Medical-Ocala, Inc.

Robert S. Cohen of Haben, Culpepper, Dunar & French, P.A.,

Tallahassee for Health Management Associates.

PER CURIAM.

AFFIRMED.

BOOTH, MINER and ALLEN, JJ., CONCUR.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA

FIRST DISTRICT

To the Honorable Mary Clark, Hearing Officer

WHEREAS, in that certain cause filed in this Court styled:

FLORIDA LEAGUE OF HOSPITALS, INC., et al

and

HORIZON HOSPITAL, and CHARTER

MEDICAL CENTER

v. Case No. 90-3140

DEPARTMENT OF HEALTH AND

REHABILITATIVE SERVICES Your Case Nos. 90-1036RP,

and 90-1037RP, 90-1038RP, 901045RP,

HEALTH MANAGEMENT ASSOCIATES, 90-1046RP, 90-1047RP, 90-1048RP,

INC., UNIVERSITY PAVILLION 90-1049RP, 90-1050RP, 90-1051RP,

HOSTIPAL, and GLENBEIGH, INC. 90-1052RP, 90-1053RP, 90-1054RP,

90-1055RP, 90-1056RP, 90-1057RP,

90-1058RP, 90-1059RP, 90-1060RP,

90-1061RP

The attached opinion was rendered on September 24, 1991.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said

opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable James D. Joanos

Chief Judge of the District Court of Appeal of Florida, First District and

the Seal of said court at Tallahassee, the Capitol, on this 25th day of October,

1991.

___________________________________________

Clerk, District Court of Appeal of Florida,

First District