91-001591 Hca Health Services Of Florida, Inc., D/B/A Columbia Blake Medical Center vs. Department Of Health And Rehabilitative Services Status: Closed Recommended Order on Thursday, November 7, 1991.

Summary: Certificate Of Need granted when occupancy level met rule criteria despite no need under bed need methodology

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HCA HEALTH SERVICES OF )

FLORIDA, INC., d/b/a HCA )

OAK HILL HOSPITAL, )

)

Petitioner, )

)

vs. ) CASE NO. 91-1591

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent, )

)

and )

)

HERNANDO HEALTHCARE, INC., )

d/b/a BROOKSVILLE REGIONAL )

HOSPITAL, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was commenced in the above-styled case

on October 31, 1991, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert S. Cohen, Esquire

306 North Monroe Street

Tallahassee, Florida 32301

For Respondent: Leslie Mendelson, Esquire

2727 Mahan Drive

Tallahassee, Florida 32308

For Intervenor: Stephen Ecenia, Esquire

Post Office Box 1877

Tallahassee, Florida 32302

STATEMENT OF THE ISSUES

Whether Oak Hill Hospital should be awarded certificate of need 6383 to add

54 additional acute care beds in Hernando County, HRS District III.

PRELIMINARY STATEMENT

This cause was initiated by Petition for Formal Administrative Hearing

filed by Oak Hill Hospital challenging HRS' preliminary decision to deny its

application for CON 6383 filed on February 7, 1991 with the HRS department clerk

and referred to the Division of Administrative Hearings for assignment of a

hearing officer. By Order of April 19, 1991, Hernando Healthcare Inc., d/b/a

Brooksville Regional Hospital was granted intervention in the cause. At the

commencement of the hearing, the parties stated that a stipulated settlement had

been reached, but a short additional period of time was needed to reduce the

stipulated facts to writing and present same to the Hearing Officer.

Accordingly, the hearing was adjourned, and the parties subsequently submitted a

proposed recommended order signed by all parties. Based upon the stipulated

facts the following is submitted.

FINDINGS OF FACT

1. On August 10, 1990, HRS published in Volume 16, Number 32 edition, of

the Florida Administrative Weekly, a fixed need pool of zero needed acute care

hospital beds for HRS District III, Subdistrict VI, Hernando County.

Thereafter, Oak Hill Hospital timely and properly filed a letter of intent

requesting the addition of 56 acute care beds in Hernando County District III.

2. The letter of intent was followed by a timely filed application to add

54 acute care beds at Oak Hill Hospital at a project cost of $4,498,690. The

addition of 54 acute care beds will be accomplished by the addition of a fifth

floor of 19,800 gross square feet to the existing hospital.

3. The application was properly deemed complete effective November 13,

1990, and the application was preliminarily denied on January 11, 1991.

4. Oak Hill Hospital is a 150 bed acute care hospital located in Hernando

County, Florida, HRS District III.

5. There are three existing acute care facilities in Hernando County. In

addition to Oak Hill Hospital, Hernando Healthcare, Inc., operates Brooksville

Regional Hospital and its Satellite facility, Springhill Hospital, with 166

combined licensed beds.

6. Pursuant to the bed need formula in the Acute Care Rule, the projected

need for acute care beds in the relevant horizon is 4,785 beds in District III.

Because the base period occupancy rate for the district was less than 75

percent, the net need for acute care beds defaulted to zero in accordance with

the terms of the rule.

7. During the base period, calendar year 1989, Oak Hill Hospital

experienced a 93.87 percent occupancy rate. This occupancy level would allow

the facility to seek beds pursuant to the provisions of Rule 10-5.038(7)(e),

Florida Administrative Code. Oak Hill Hospital has demonstrated a need for an

additional 54 acute care beds.

8. Oak Hill Hospital is JCAHO accredited. It provides quality care at its

facility. Likewise, Brooksville Regional Medical Center and its satellite

facility provide quality of care in those facilities.

9. The proposed costs and methods of construction contained in the

application are reasonable.

10. Oak Hill Hospital can properly equip its proposal for the amount

contained in the application.

11. Oak Hill Hospital's proposal is financially feasible in both the short

and the long term.

12. Oak Hill Hospital can achieve the utilization level it projects in its

application, which is reasonable.

13. Oak Hill Hospital has committed to provide a minimum of 1.5 percent of

total annual patient days to Medicaid patients and a minimum of 1.0 percent of

total annual patient days to indigent patients.

CONCLUSIONS OF LAW

14. The Division of Administrative Hearings has jurisdiction over the

parties to and the subject matter of these proceedings.

15. According to the prehearing stipulation filed by the parties, Sections

381.705(1)(b), as to quality of care, (e), (g), (j), (m) and (2)(e), Florida

Statutes, are met or not in dispute.

16. The award of a CON for acute care beds is governed by Rule 10-5.038,

Florida Administrative Code. Under the provisions of this rule, even when there

is no need for beds pursuant to the methodology contained in the rule, as in

this case, beds may be awarded to an existing hospital pursuant to the

provisions of subparagraph (7)(e) when there is a bed need and the average

twelve month occupancy at the facility is at or exceeded 75 percent.

17. In this case, the occupancy at Oak Hill Hospital for the relevant

period was greater than 75 percent and, therefore, it is possible to award the

beds requested by the applicant. Oak Hill Hospital has demonstrated that it can

achieve the utilization it projects, which is a reasonable occupancy level, and

that the beds are needed. The hospital will provide quality care and be

financially feasible.

18. Based on a balanced consideration of all statutory review criteria,

the Oak Hill Hospital application will benefit the health care delivery system

in Hernando County.

RECOMMENDATION

It is recommended that CON 6383 be issued to Oak Hill Hospital to construct

and operate an additional 54 acute care beds at a cost of $4,498,690 by the

addition of a fifth floor of 19,800 gross square feet to the existing hospital

in Hernando County, Florida. It is further recommended that the CON be

conditioned upon the requirement of a minimum of 1.5 percent total annual

Medicaid patient days and a minimum of 1 percent total annual charity patient

days, as reported to the Health Care Cost Containment Board.

RECOMMENDED this 7th day of November, 1991, in Tallahassee, Florida.

__________________________________

K. N. AYERS

Hearing Officer

Division of Administrative Hearings

The Desoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 7th day of November, 1991.

COPIES FURNISHED:

Robert S. Cohen, Esquire

306 North Monroe Street

Tallahassee, FL 32301

Leslie Mendelson, Esquire

2727 Mahan Drive

Tallahassee, FL 32308

Stephen Ecenia, Esquire

Post Office Box 1877

Tallahassee, FL 32302

Sam Power

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