Bayonet Point Regional Medical Center v. Department of Health and Rehabilitative Services

• Decision Date: 24 November 1987
• Docket Number: No. BP-272,BP-272
• Citation: 516 So.2d 995,12 Fla. L. Weekly 2667
• Parties: 12 Fla. L. Weekly 2667 BAYONET POINT REGIONAL MEDICAL CENTER, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee.
• Court: Florida District Court of Appeals

Page 995

516 So.2d 995

12 Fla. L. Weekly 2667

BAYONET POINT REGIONAL MEDICAL CENTER, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee.

No. BP-272.

District Court of Appeal of Florida,

First District.

Nov. 24, 1987.

Donna H. Stinson of Moyle, Flanigan, Katz, Fitzgerald & Sheehan, Tallahassee, for appellant.

Theodore E. Mack, Asst. Gen. Counsel, Dept. of Health and Rehabilitative Services, Tallahassee, for appellee.

BOOTH, Judge.

This cause is before us on appeal from a final order of the Department of Health and Rehabilitative Services (HRS) denying the application of Bayonet Point Regional Medical Center (Bayonet Point) for a certificate of need (CON) for a cardiac catheterization laboratory (CCL) and an open-heart surgery service.

Appellant contends HRS erred in rejecting the hearing officer's conclusion that need existed. We find merit in that contention.

In the final order, HRS appears to accept the hearing officer's conclusion that need for a CCL service was demonstrated under the "not normal" exception to the methodology referred to in Rule 10-5.11(15)(1)3.o., Florida Administrative Code. ¹ However, HRS stated "[b]ecause there is no existing [or] approved open heart surgery service within 30 minutes travel time as required by Rule 10-5.11(15)(i)(5), ² Petitioner's [appellant's] application to provide cardiac catheterization laboratory services cannot be approved."

The hearing officer found, and HRS agreed, that "[a]bsent Bayonet Point's application for a certificate of need for a cardiac catheterization laboratory, there would be no showing of a need for additional open heart surgery services in District V under Rule 10-5.11(16), Florida Administrative Code." ³ The hearing officer held:

In this case, although the conditions of Rule 10-5.11(16)(h) and (k), Florida Administrative Code, are not met, Bayonet Point's application for open heart surgery should be granted so that its application for a needed cardiac catheterization laboratory will be approvable under rule 10-5.11(15)(i)5., Florida Administrative Code. Meanwhile, due to the large number of open heart surgeries for Pasco County patients which have been and are now performed outside District V, the addition of open heart surgery at Bayonet Point would not be anticipated to significantly reduce the number of open heart surgery cases that will be performed at the existing District V facilities.

However, HRS rejected the hearing officer's recommendation and denied the application.

This court has held that HRS determination of need is a conclusion of law within the exercise of the agency's discretion. Federal Property Management v. Department of Health and Rehabilitative Services, 482 So.2d 475, 477 (Fla. 1st DCA 1986). The agency's interpretation of its own rule is entitled to great weight and persuasive force. Humana, Inc. v. Department of Health and Rehabilitative Services, 492 So.2d 388 (Fla. 4th DCA 1986). Section 381.494(8)(e), Florida Statutes, provides the reviewing court must affirm the agency's decision unless it is found to be arbitrary, capricious, or not in compliance with controlling statutes. Applying the foregoing standards of review, and on consideration of the record and orders below, as well as the argument and briefs of counsel, we find HRS's decision is arbitrary, capricious, and inconsistent with the governing statutes and rules.

The hearing officer recommended granting the CCL, based either on the 1985 use rate which would satisfy rule methodology, or on the "not normal" exception to the rule. He recommended granting the open-heart surgery facilities under the "not normal" exception, based on the need for the CCL and the interdependence of the two services under Rule 10-5.11(15)(i)5. Bayonet Point's application included both services, and the hearing officer appropriately considered them together in making his recommendation. HRS, however, applied strict rule methodology based on numerical data (1981) use rate for the CCL and 1985 use rate for open-heart surgery) to each service and found the numbers wanting. The agency did not allow the interdependency of the services to be a factor affecting its determination and rejected the hearing officer's consideration of the interdependency of the services as "bootstrap" reasoning.

The HRS order concludes that "proficient and cost effective delivery" of services is insured by compliance with rule methodology. However, neither cost nor proficiency was actually contested below. HRS stipulated that Bayonet Point satisfied the necessary criteria relating to financial feasibility and ability to provide services necessary for the issuance of a CON relating to CCL and open-heart surgery programs. As to the existing facilities, there was no finding that the granting of the application would adversely affect the cost or proficiency of present providers of the services. On the contrary, the hearing officer concluded:

[D]ue to the large numbers of open heart surgeries for Pasco County patients which have been and are now performed outside District V, the addition of open heart surgery at Bayonet Point would not be anticipated to significantly reduce the number of open heart surgery cases that will be performed at the existing District V facilities. (The impact on Tampa General Hospital and District VI utilization has not been made relevant to this proceeding by the stipulation of the parties.) (emphasis added)

There is no existing CCL in Pasco County. The hearing officer found that the adjoining county of Hernando (District III) is within Bayonet Point's primary service area and is without a needed CCL. The hearing officer did not find any adverse affect on the two existing CCLs in District V, which are located in Pinellas County.

Review of the record shows that the hearing officer's findings are supported by the evidence. HRS adopts all these findings other than paragraph six, containing the hearing officer's finding of need. Further, the conclusions of the hearing officer are consistent with the intent of Sections 381.493(2) and 381.494(6), Florida Statutes, and with HRS rules adopted pursuant to those statutes. The HRS rationale for denial of the application--to reject "bootstrapping" of heart surgery facilities based on need for CCL services--is contrary to HRS rule, which does, in fact, tie these services together. Moreover, the order fails to address the actual need.

The other issue raised and considered on appeal is whether HRS violated Section 120.66, Florida Statutes, prohibiting ex parte communications, and violated due process requirements. There was no opportunity for the lower tribunal to address this issue; therefore we remand for an evidentiary hearing.

In light of the findings below and in the absence of any other issue related to fitness or entitlement to the CON, we reverse and remand for entry of an order in accord with the hearing officer's order and consistent herewith. ⁴ HRS is further instructed to appoint a hearing officer to conduct an evidentiary hearing regarding the allegation of ex parte communications and to make appropriate disposition thereof. ⁵

SMITH, C.J., concurs.

ERVIN, J., concurs in part and dissents in part with written opinion.

ERVIN, Judge, concurring and dissenting.

I concur with the majority's decision to remand the cause to HRS with instructions that a hearing officer be appointed to conduct an evidentiary hearing regarding the allegation of ex parte communications, and to make appropriate disposition of the same.

As to HRS's argument that the doctrine of waiver should be applied to preclude appellant from raising the ex parte communication issue for the first time on appeal, on the ground that the agency was never given the opportunity to rule on the question, I consider the argument to be without merit. Appellant moved for rehearing eleven days following the entry of the final order; yet during the pendency of the motion, and before HRS had yet ruled on the merits of the motion, appellant filed a notice of appeal from the entry of the order. HRS relies upon case law, not involving administrative appeals, holding that if an appeal is taken during a pending motion for rehearing, the appeal is in effect an abandonment of the previously filed motion, and jurisdiction is vested immediately in the appellate court. State ex rel. Owens v. Pearson, 156 So.2d 4 (Fla.1963). Nevertheless, HRS concedes that there is no provision by statute or rule for an agency to retain jurisdiction over its final order, once filed, so as to permit the agency to withdraw the order and modify it. See Taylor v. Department of Professional Regulation, 493 So.2d 498 (Fla. 1st DCA 1986); Systems Management Associates, Inc. v. State, Department of Health and Rehabilitative Services, 391 So.2d 688 (Fla. 1st DCA 1980). HRS nonetheless argues that because Bayonet Point was aware of the existence of the alleged ex parte communications nearly a month before the entry of the final order, it could have properly filed a motion for rehearing, or reopened the record that was filed prior to the entry of the final order.

I do not see how waiver can be applied to the instant case, in view of the lack of any authority allowing the filing of motions following the entry of final administrative orders. I therefore agree with the majority that appellant should be given an opportunity to develop fully its claim regarding the asserted violation of the statutory provision barring ex parte communications.

I cannot, however, concur with the opinion to reverse and remand with directions that HRS issue an order granting the certificate of need (CON) to appellant for both a cardiac catheterization laboratory (CCL) and an open-heart surgery service (OHSS), consistent with the hearing officer's recommendation. In the instant case, as the applicant is unable to establish need for the OHSS, pursuant to the formula contained in RULE 10-5.11(16), FLORIDA...