Jackson Health System, UF Health Shands challenge new neonatal intensive care unit rule

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Hospitals continue to wrangle with the Ron DeSantis administration over proposed new NICU rules.

A proposed rule that changes how the state’s sickest newborns are cared for is being challenged by two of the state’s largest teaching hospitals which claim, among other things, the new staffing requirements are costly and unnecessary.

Attorneys for the Jackson Health System and University of Florida Health Shands Hospital filed a challenge in the state Division of Administrative Hearings earlier this week arguing the new staffing requirements for nurses at Level II and Level III neonatal intensive care units (NICUs) do not reflect industry standards and are vague.

Moreover, the attorneys argued the Agency for Health Care Administration (AHCA) did not analyze the fiscal impact the proposed rule would have on the hospital industry, as required by Florida law.

State law requires agencies and boards to prepare a statement of estimated regulatory costs, commonly called a SERC, for any rule that within one year of taking effect is likely to increase regulatory costs directly or indirectly in the aggregate by more than $200,000.

The hospitals are asking a state administrative judge to quash the rule and, additionally, to award them their attorneys’ fees. The case has been assigned to Judge E. Gary Early.

As of now, Florida has three types of neonatal intensive care units: Level I, Level II and Level III. The rules being challenged would create a fourth unit, Level IV.

The hospitals are the largest and oldest teaching facilities in the state. Jackson North Medical Center has a Level II NICU and Holtz Children’s Hospital at Jackson Memorial has a Level III NICU, according to its webpage. UF Health Shands, meanwhile, advertises that it has a Level IV NICU.

According to the challenge, the hospitals are concerned about the increased nursing staffing requirements the rule requires and the potential costs of those nurses.

Currently, Level II NICU units are required to maintain one nurse for every four newborns in the unit. The proposed rule ups that requirement to one nurse for every three newborns.

“In order to maintain Level II and Level III NICU licensure, petitioners will be required to retain, train and employ additional nursing staff without any rational connection to operations, quality of care or patient acuity levels,” the challenge notes. “This is not only dangerous to the program from a financial standpoint, but due to existing and increasingly difficult national nursing staff shortages, it creates an unnecessary burden on petitioners they may not be able to meet.”

Attorneys also argue the proposed rule language for Level III and Level IV NICUs, requiring one nurse for each newborn in the “immediate preoperative, intraoperative and immediate postoperative periods,” is vague.

“The lack of clarity in these terms will create uncertainty in the staffing required for these patients,” attorneys wrote.

AHCA needs to develop new NICU rules after Florida lawmakers passed legislation in 2018 requiring the state to adopt rules for hospital tertiary services, such as NICU beds. Hospital tertiary services in Florida had long been governed by the certificate of need program. But the following year, lawmakers eliminated that mandate for hospitals.

This is not the first time the state has tried to forge ahead with new rules for neonatal intensive care only to face legal challenges.

The agency released a proposed NICU rule last year that was challenged by Tampa General Hospital and Broward Health, which worried the changes in the proposed rules would lock them out of the market.

AHCA announced in June 2021 that it would rely on what is called “negotiated rulemaking” to help craft the rules. It assembled a 17-member panel of hospital representatives from across the state, including Jackson Health System and UF Shands. AHCA Secretary Simone Marstiller hired retired Judge Gregory P. Holder to mediate discussions.

The panel met for two days tackling some of the thornier issues that have caused industry infighting, with Holder negotiating discussions. AHCA took the agreements made during the two-day meeting and developed a new rule that it released Dec. 28.

In addition to filing a legal challenge, the hospitals have also requested the state to hold a public meeting on the proposal. That meeting is scheduled for Jan. 31. Baptist Health South Florida has also requested a formal hearing on the rule.

Christine Jordan Sexton

Tallahassee-based health care reporter who focuses on health care policy and the politics behind it. Medicaid, health insurance, workers’ compensation, and business and professional regulation are just a few of the things that keep me busy.



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