Humana, Inc. v. Department of Health and Rehabilitative Services

• Decision Date: 16 May 1985
• Docket Number: Nos. AY-422,AY-423,s. AY-422
• Citation: 469 So.2d 889,10 Fla. L. Weekly 1222
• Parties: 10 Fla. L. Weekly 1222 HUMANA, INC., d/b/a Cypress Community Hospital and North Shore Medical Center, Appellants/Intervenors, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee. PLANTATION GENERAL HOSPITAL, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and North Broward Hospital District, d/b/a North Broward Hospital, Appellees.
• Court: Florida District Court of Appeals

Page 889

469 So.2d 889

10 Fla. L. Weekly 1222

HUMANA, INC., d/b/a Cypress Community Hospital and North Shore Medical Center, Appellants/Intervenors, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee.

PLANTATION GENERAL HOSPITAL, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and North Broward Hospital District, d/b/a North Broward Hospital, Appellees.

Nos. AY-422, AY-423.

District Court of Appeal of Florida,

First District.

May 16, 1985.

John H. French, Jr., and James C. Hauser of Messer, Rhodes & Vickers, Tallahassee, for appellant/intervenor Humana, Inc.

Thomas H. Sheehan, III of Moyle, Flanigan, Katz, Fitzgerald & Sheehan, P.A., West Palm Beach, for appellant Plantation General Hosp.

Jay Adams, Deputy General Counsel, Dept. of Health and Rehabilitative Service, Tallahassee, for appellee HRS.

SMITH, Judge.

Appellants challenge the validity of Rule 10-5.11(15), Florida Administrative Code, on the following grounds: (1) the rule's formula methodology ¹ for determining need for new cardiac catheterization laboratories in a service area focuses undue attention on a single statutory criterion to the exclusion of the remaining criteria in Section 381.494(6)(c), Florida Statutes (1983); (2) the use of the year 1981 as a base year and the use of the 600 figure have no rational basis in fact; (3) the rule does not prohibit the addition of a second lab by an existing provider, and thus results in an unfair advantage to existing providers; and (4) the economic impact statement fails to comply with Section 120.54(2)(a), Florida Statutes (1983), and is inadequate. We affirm the well-reasoned order of the hearing officer of the Division of Administrative Hearings upholding the validity of the rule.

One who attacks the validity of a rule on the grounds of arbitrariness or capriciousness carries the burden of demonstrating by a preponderance of the evidence that the rule is not supported by fact or logic, was adopted without thought or reason or is otherwise not based upon competent, substantial evidence. Agrico Chemical Company v. State, Department of Environmental Regulation, 365 So.2d 759, 763 (Fla. 1st DCA 1978). We have thoroughly examined the record and briefs filed by the parties and we find that appellants have failed to show that Rule 10-5.11(15) is irrational and without basis in fact. It does not preclude consideration of statutory factors other than numerical need. It is true, as appellants assert, that an existing provider may add a second lab so long as the cost of instituting the new lab does not exceed $600,000 without going through the certificate of need process, Section 381.494(1)(c), Florida Statutes (1983). This advantage is not the result of the challenged rule, but instead--as the hearing officer concluded--is a statutory matter which should be remedied, if at all, by the legislature. Finally, though the economic impact statement is not a model of financial forecasting, there was competent, substantial evidence in the record which demonstrated that the department had considered the economic effects of the rule upon existing providers, potential providers, consumers, patients and the health care system as a whole. Accordingly, the hearing officer correctly concluded that any deficiencies in the economic impact statement did not impair the fairness of the rule-making proceedings. Plantation Residents' Association, Inc. v. School Board of Broward County, 424 So.2d 879 (Fla. 1st DCA 1982), pet. for rev. den., 436 So.2d 100 (Fla.1983); and Division of Workers' Compensation, Department of Labor and Employment Security v. McKee, 413 So.2d 805 (Fla. 1st DCA 1982).

Appellants' reliance on this court's decision in Department of Health and Rehabilitative Services v. Johnson & Johnson Home Health Care, Inc., 447 So.2d 361 (Fla. 1st DCA 1984) (rule providing that existing home health care providers in a given area...