Baptist Hosp., Inc. v. State, Dept. of Health and Rehabilitative Services, BK-459

• Decision Date: 23 December 1986
• Docket Number: No. BK-459,BK-459
• Parties: 12 Fla. L. Weekly 29 BAPTIST HOSPITAL, INC., Appellant, v. STATE of Florida, DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee, and West Florida Hospital, Intervenor.
• Court: Florida District Court of Appeals

Page 620

500 So.2d 620

12 Fla. L. Weekly 29

BAPTIST HOSPITAL, INC., Appellant, v. STATE of Florida, DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee, and West Florida Hospital, Intervenor.

No. BK-459.

District Court of Appeal of Florida,

First District.

Dec. 23, 1986.

Rehearing Denied Feb. 5, 1987.

F. Philip Blank, P.A., Tallahassee, for appellant.

John F. Gilroy, Asst. Gen. Counsel, Dept. of Health and Rehabilitative Services, Tallahassee, for appellee.

Donna H. Stinson, of Moyle, Flanigan, Katz, Fitzgerald & Sheehan, P.A., Tallahassee, for intervenor.

JOANOS, Judge.

Baptist Hospital, Inc. (Baptist) appeals from a final order of the Department of Health and Rehabilitative Services (HRS) denying its request to have its designated rehabilitation unit exempt from certificate of need (CON) review. HRS denied the request on the ground that Baptist's proposal constituted a substantial change in health services provided within the meaning of Section 381.494(1)(g), Florida Statutes (1983), so that CON review is required. Baptist raises three issues for our review: (1) HRS's rejection of the hearing officer's findings of fact, (2) HRS's conclusion that Baptist's proposal constituted a substantial change in health services provided, and (3) the hearing officer's conclusion that West Florida Hospital had standing to intervene. We affirm.

In January 1983 Baptist notified HRS that it proposed to establish a 50-bed designated rehabilitation unit within the existing licensed acute care beds in its Specialty Care Center. Baptist further advised that no new services were proposed. The unit was estimated to cost $550,000, which was below the threshold for review of capital expenditure. Baptist requested HRS determination regarding whether the proposed project was subject to CON review.

In February 1983 HRS advised Baptist that its proposal was not subject to review, since it involved no increase in existing bed capacity, was below the capital expenditure threshold of $600,000, and a substantial change in service was not at issue. On March 15, 1983, Baptist submitted its formal application for establishment of a 40-bed inpatient rehabilitation unit.

Following receipt of Baptist's formal proposal, HRS reconsidered its initial decision, and so notified Baptist--first through oral communications, and then through correspondence dated March 29, 1983. HRS advised that its February 1983 correspondence stating that CON review was not appropriate had been premature. Upon further consideration, HRS had determined that the various forms of rehabilitative care offered in the Baptist facility over the previous 12-month period had not been comprehensive in nature. Consequently, the application proposed a new service which required CON review.

In July 1983 Baptist petitioned for a formal administrative hearing. Over Baptist's objection, West Florida Hospital (West Florida) was granted leave to intervene. The primary issue for the hearing officer's determination was whether Baptist's proposed rehabilitation unit was subject to CON review.

Baptist Hospital is a 520-bed acute care facility. Since the 1950's, Baptist has offered some form of rehabilitative services to its patients. Since 1980, those services have included (1) physical therapy, (2) speech therapy, (3) prosthetic and orthopedic devices and services, (4) psychological services, and (5) dietary services. In addition, since 1980 Baptist has made the following variable services available through contractual arrangement: (1) physician services, (2) nursing services, (3) physical therapy, (4) speech therapy, (5) prosthetic and stroke devices, (6) inhalation therapy, (7) psychological services, (8) occupational therapy, (9) dietary services, and (10) social work. Also since 1980, Baptist has had a director of physical medicine under contract.

West Florida, which, since the institution of the proceedings, changed its name to West Florida Regional Medical Center, is a 547-bed general acute care hospital in Pensacola. It is a tertiary care facility, and includes separate buildings which contain an 84-bed psychiatric pavilion and a 58-bed rehabilitation program. It is a subsidiary of Hospital Corporation of America (HCA). The rehabilitation program became part of West Florida in 1983 when HCA purchased the Rehabilitation Institute of West Florida. A new facility was built on the grounds of West Florida, and the Rehabilitation Institute moved to the campus in October 1984. It is one of five designated rehabilitation centers in Florida for the Spinal Cord Injury (SCI) program of HRS. Baptist and West Florida are both designated as acute care centers of the SCI program.

The hearing officer determined that during the relevant time period Baptist provided skilled rehabilitative nursing care. The record reflects that the present rehabilitation care provided at Baptist is delivered through its skilled nursing facility, which is comprised of sixty-two beds certified by Medicare. Rehabilitative services are also provided at Baptist's main facility. Prior to 1982, Baptist had established criteria which regulated patient admissions, orientations, and discharges into its rehabilitation program; comprehensive policies establishing individualized programs for its rehabilitation patients; and comprehensive individualized patient care plans. Patients at Baptist in need of rehabilitative care are housed in various areas of the hospital. The physical therapy and occupational therapy departments are separated, with one located in the main hospital and the other in the skilled nursing facility. Rehabilitative personnel, programs, and activities are also separated by location, which results in various rehabilitation teams operating in different parts of the hospital. Despite this physical separation of services, the rehabilitation teams operate in a coordinated manner. The teams, which are composed of nurses, physical therapists, occupational therapists, social workers, dietitians, respiratory therapists, and other professionals on an as need basis, meet and establish a care plan for the patient subject to the medical director's approval.

Baptist's proposal contemplated a consolidation of its present rehabilitative services into one location on the second floor of its skilled nursing facility. The consolidation would be accomplished by the reallocation of existing licensed beds currently not in use, the widening of doorways, other minor renovations, and the addition of a nurses' station for the rehabilitation unit. Implementation of Baptist's proposal would concentrate its various rehabilitation activities into one location.

When Baptist requested an exemption from CON review, the HRS policy in place exempted from CON review a consolidation of services so long as it involved no increase in the number of beds, change in the scope of services, or a capital expenditure in excess of the statutory threshold amount. The agency had not promulgated a rule defining rehabilitation services, although it was in the process of developing such a rule. The rule defining rehabilitation services became effective June 8, 1983. Prior to the rule's effective date, all rehabilitation beds were counted by HRS as acute care beds. It is HRS policy to construe the 12-month period referenced in Florida Administrative Code Rule 10-5.02(19), ¹ defining "substantial change in service," as the twelve months immediately preceding a request for exemption from CON review for a specific proposal.

In February 1983, West Florida did not offer comprehensive rehabilitation services for its patients. However, such services were provided by the Rehabilitation Institute, which was purchased in March or April 1983 by HCA. Prior to sale of the Rehabilitation Institute, Baptist was also affiliated with the Institute. This affiliation allowed Baptist to have access to Rehabilitation Institute services. After the Rehabilitation Institute was purchased by HCA, these services were no longer available to Baptist. Although West Florida as a separate entity would not be affected if HRS determined that Baptist's proposed rehabilitation unit was exempt from CON review, West Florida Regional Medical Center would be adversely affected if Baptist were permitted to open a comprehensive rehabilitation facility. West Florida Hospital is the name sometimes applied to the entire organization, although in actuality the entity is West Florida Regional Medical Center. The Rehabilitation Institute now operates as a division of West Florida Regional Medical Center.

In his recommended order, the hearing officer found that implementation of Baptist's proposal would not impact on the quality of care provided at the Rehabilitation Institute or at West Florida Regional Medical Center. Concluding that during the preceding 12-month period, Baptist had provided the scope of services contemplated at Florida Administrative Code Rule 10-5.11(24), ² the hearing officer recommended that Baptist's proposal to establish a consolidated rehabilitation unit should be exempt from CON review.

HRS adopted the hearing officer's findings of fact, but rejected his interpretation of Rule 10-5.11(24). Instead, HRS concluded that the services enumerated in the rule contemplated a distinct unit as opposed to services provided in different parts of a facility. Therefore, HRS denied Baptist's request for exemption from CON review.

The first issue raised in this appeal concerns HRS's rejection of the hearing officer's findings of fact. Specifically, Baptist maintains that HRS failed to state its reasons for rejecting the hearing officer's finding regarding Baptist's provision of comprehensive medical rehabilitation service with the requisite particularity. We agree, but decline to set aside the Department's final determination because we conclude that the Department's decision fell within its discretionary authority to interpret its own rules and statutes.

It is well...