Case Name: BAYONET POINT REGIONAL MEDICAL CENTER, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1987-11-24
Citations: 516 So. 2d 995
Docket Number: No. BP-272
Parties: BAYONET POINT REGIONAL MEDICAL CENTER, Appellant, v. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, Appellee.
Judges: SMITH, C.J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 516
Pages: 995–1008

Head Matter:
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.

Opinion:
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 catheteri-zation 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)(l)3.o., Florida Administrative Code. However, HRS stated "[bjecause 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), 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." 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 Pas-co 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 con sistent herewith. 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.
SMITH, C.J., concurs.
ERVIN, J., concurs in part and dissents in part with written opinion.
. Currently numbered 10-5.01 l(l)(e)6, Florida Administrative Code, the rule provides that applications for CCL services will "not normally" be approved unless numerical requirements are met. A similar rule, 10-5.11(16)(b), provides a "not normal" exception for open-heart surgery facilities.
. Currently that rule is 10-5.01 l(15)(l)(e)9.e., Florida Administrative Code:
e. Coordination of Services.
(I) Cardiac catheterization laboratories proposed in a facility not performing open heart surgery must submit, at the time of certificate of need application, a written referral agreement with a facility providing open heart surgery services which is within 30 minutes' travel time by emergency vehicle under average travel conditions.
(II) Cardiac catheterization laboratories where coronary angioplasty is performed must be located in health care facilities which also provide open heart surgery.
.HRS based its conclusion that no need exists for an open-heart surgery facility on utilization rates in District V. However, since most of appellant's patient referrals are sent to Tampa, which is in a different district, actual need is unrelated to the rule's formula. The hearing officer found that 1,200 Pasco County (District V) residents per year were being sent for cardiac catheterization to a hospital in Tampa (District VI), and some 300 of these would also undergo open-heart surgery.
. Section 120.68, Florida Statutes, provides that the court may "order agency exercise of discretion when required by law." Compare 5 U.S.C. S. § 706. See 4 K. Davis, Administrative Law § 23:9 at 160-63 (2d ed. 1983).
. Due to our disposition of Issue I, it is unnecessary to address Issue II concerning application of Rule 10-5.11(15), as it existed at the time of the final hearing.