STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
UNIVERSITY OF MIAMI, d/b/a UNIVERSITY OF MIAMI HOSPITAL AND CLINICS,
Petitioner,
vs.
AGENCY FOR HEALTH CARE ADMINISTRATION AND BAPTIST HOSPITAL OF MIAMI, INC.,
Respondents.
/
Case No. 16-1698CON
RECOMMENDED ORDER
An administrative hearing was held in this case on September 13 through 16 and 19 through 23, 2016, in Tallahassee, Florida, before James H. Peterson, III, Administrative Law Judge with the Division of Administrative Hearings.
APPEARANCES
For the University of Miami, d/b/a University of Miami Hospital and Clinics:
M. Stephen Turner, Esquire Frank P. Rainer, Esquire Leonard M. Collins, Esquire Broad and Cassel
215 South Monroe Street, Suite 400 Tallahassee, Florida 32301
For Baptist Hospital of Miami, Inc.:
Karen A. Putnal, Esquire Robert A. Weiss, Esquire Moyle Law Firm, P.A.
118 North Gadsden Street, Second Floor Tallahassee, Florida 32301
For the Agency for Health Care Administration:
Kevin M. Marker, Esquire Richard J. Saliba, Esquire
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 STATEMENT OF THE ISSUE
Whether the Certificate of Need (CON) Application No. 10420 submitted by Baptist Hospital of Miami, Inc. (Baptist Hospital or Baptist), to establish a new adult autologous and allogeneic bone marrow transplant (BMT) program in Florida’s Organ Transplant Service Area 4 (TSA 4) should be approved.
PRELIMINARY STATEMENT
Baptist Hospital timely filed CON Application No. 10420 (the Application) to establish a new adult inpatient autologous and allogeneic BMT program in TSA 4, Miami-Dade County, Florida, in the October 2015 Other Beds and Programs CON Batching Cycle. On February 19, 2016, the Agency for Health Care Administration (AHCA or Agency) issued its State Agency Action Report (SAAR) stating AHCA’s intent to preliminarily approve the Application. AHCA published notice of its preliminary approval of the
Application on February 22, 2016, in the Florida Administrative Register, Volume 42, No. 35. On March 11, 2016, the University of Miami, d/b/a University of Miami Hospital and Clinics (UM), which has an existing BMT program in TSA 4, timely filed a petition for formal administrative hearing to challenge AHCA’s preliminary decision. The Agency forwarded the petition to the Division of Administrative Hearings (DOAH) on March 25, 2016.
With agreement of the parties, the final hearing was scheduled for September 13 through 16 and 19 through 23, 2016.
At the final hearing, Baptist presented the testimony of Wayne Brackin, chief operating officer of Baptist Health South Florida, accepted as an expert in health care administration; Michael Zinner, M.D., CEO and executive medical director of the Miami Cancer Institute (MCI); Lyle Feinstein, M.D., accepted as an expert in hematological malignancies and BMT procedure; Peter Citron, M.D., accepted as an expert in hematologic malignancies; Miguel Villalona-Calero, M.D., chief scientific officer and deputy director for MCI, accepted as an expert in clinical research and translational oncology research; Jeffrey Allen Boyd, Ph.D., director of translational research and director of the Center for Genomic Medicine at MCI, accepted as an expert in translational cancer research and genomic medicine; Lisa Reale, M.D., accepted as an expert in hematological malignancies; Maria Beatriz Currier, M.D., accepted as an expert in psychosomatic
medicine; Emily Ruwitch, assistant vice president at the Center for Performance Excellence at Baptist Health South Florida, accepted as an expert in health care quality and patient experience; Michele Ryder, R.N., BSN, OCN, BMTCN, chief operating officer and chief nursing officer at MCI, accepted as an expert in nursing and health care administration; Becky Montesino-King, DNP, RN, NEA-BC, CENP, vice president/chief nursing officer for Baptist, accepted as an expert in nursing administration; Maria Mercedes Rios, R.N., BSN, OCN, BMTCN, accepted as an expert in allogeneic and autologous BMT program management; Ann-Lori Perez, Pharm.D., BCOP, accepted as an expert in clinical oncology pharmacy and BMT pharmacy services; Mark Richardson, accepted as an expert in health care planning, and Edward Shashaty, through his deposition, accepted as an expert in hospital finance operations. Baptist Exhibits B1, B4, B5, B6, B8, B10, B11, B13 through B16, B18 through B22, B25, B26
through B31, B36 through B51, B54 through B65, and B74 through B78 were admitted into evidence.
UM presented the testimony of Michael Andrew Samuels, M.D., accepted as an expert in hospital-based medical research programs; Denise Pereira, M.D., accepted as an expert in BMT and medical administration of a BMT program; Deborah Goodman, accepted as an expert in hospital clinical research program administration; Cara Benjamin, Ph.D., accepted as an expert in
cellular therapy; Shyroll Morris, accepted as an expert in administration of BMT outpatient services, and quality assurance and financial aid services for BMTs; Blanca R. Rivera, accepted as an expert in administrative services over pharmaceutical services provided to BMT patients; Sharon Gordon-Girvin, accepted as an expert in health planning; Thomas Davidson, accepted as an expert in health care finance; Claudio Anasetti, M.D., accepted as an expert in health care planning for bone marrow programs and clinical expert in BMT programs; Stephen Nimer, M.D., accepted as an expert in cancer, cancer hospital and cancer center management and operations, BMT, and cancer research programs, development, and implementation. UM Exhibits UM-1a through UM-1j, UM-2, UM-3, UM-5 through UM-7, UM-9, UM-12
through UM-15, UM-17 through UM-20, UM-22, UM-23, UM-25 through UM-28, and UM-30 through UM-34 were admitted into evidence.
UM-36 was proffered.
AHCA presented the testimony of Marisol Fitch, supervisor of AHCA's CON and Commercial Managed Care Unit, who was accepted as an expert in CON and health care planning. AHCA Exhibit 1, consisting of the SAAR, was admitted into evidence.
The Transcript of the final hearing, consisting of 16 volumes, was filed at DOAH on October 17, 2016. After two unopposed requests for extensions of time, which were granted, the parties filed their proposed recommended orders on
December 16, 2016. The parties’ Proposed Recommended Orders were considered in the preparation of this Recommended Order.
FINDINGS OF FACT
OVERVIEW
Blood and Marrow Transplant
BMT is the infusion of blood progenitor cells, generally referred to as “blood stem cells,” into a patient after the patient has received high-dose chemotherapy to treat a blood cancer or disorder.1/ Blood stem cells are hematopoietic, or blood-producing progenitor cells that manufacture the cellular components of blood, i.e., white blood cells, red blood cells, and platelets. While high-dose chemotherapy may cure a patient’s blood cancer or disease, it also eliminates the body’s ability to produce normal blood cells. The ability to produce normal blood cells may be restored by the infusion of blood progenitor stem cells after the patient has completed high-dose chemotherapy treatment.
Standard of Care
Once considered experimental, over the past 20 to 30 years, BMT has become the standard of care for an increasing number of blood cancers and disorders, including leukemia, lymphoma, multiple myeloma, myelodysplastic syndrome, myelofibrosis, myeloproliferative neoplasm, paroxysmal nocturnal hemoglobinuria, primary amyloidosis, severe aplastic anemia,
testicular cancer, Waldenstrom’s macroglobulinemia, essential thrombocytosis, and Ewing’s sarcoma. In most instances, the goal of BMT therapy is cure.
Autologous Transplant
“Autologous” transplant involves the extraction or collection of a patient’s own stem cells through a process known as “apheresis” prior to treating the patient with high-dose chemotherapy. Once collected, the patient’s stem cells must be frozen and stored while the patient is undergoing high-dose chemotherapy, after which the cells are reinfused. After reinfusion, the stem cells migrate to the bone marrow, where they produce normal blood.
All autologous transplants require freezing (cryopreservation) and storage of the patient’s stem cells for preservation while the patient is receiving high-dose chemotherapy. In most cases, the time from collection and preservation of the patient’s stem cells to the time of complete recovery is approximately six weeks.
Allogeneic Transplant
“Allogeneic” transplant is a blood stem cell transplant using stem cells from either a related or unrelated donor, which may be necessary for certain cancers and disorders in which the patient's own stem cells cannot be used. Allogeneic transplant is the standard of care for acute myeloid leukemia. Potential
candidates for allogeneic transplant are often identified very early on in their disease. The first and most important goal of therapy in such cases is to put the patient’s cancer into complete remission. Once a patient is verified as in complete remission, the transplant process must proceed as rapidly as possible, including the identification of a donor.
The process of finding a donor may take two to three months, and does not begin until the patient is seen by a transplant center. Thus, the sooner the patient has access to a transplant center, the greater the chance of a successful allogeneic transplant. Most patients requiring allogeneic transplants will not have a donor within their family. Siblings are the most likely donors, but have only a 25-percent chance of being an appropriate “match.” The search for a donor is worldwide. Donors are initially identified through national and international BMT donor registries, and confirmed through human leukocyte antigen tissue-typing performed on a DNA sample collected by buccal swab or a blood sample.
In allogeneic transplants, the blood stem cells are not usually frozen. Rather, the stem cells remain in the donor while the patient is undergoing high-dose chemotherapy. Donors frequently are found as far as halfway across the world from the patient's location, and it is standard practice to have the donor’s stem cells collected in a transplant facility local to
the donor when the patient is ready to accept them and to transport the cells by specialized overnight air service for infusion “fresh” into the patient.
Medical Advances in Blood and Marrow Transplant
Remarkable progress has been made in the field of hematologic malignancies in the past five years. A major advancement is the ability to induce remission in cases in which remission previously was not possible. A number of new technologies have emerged in the past few years that are making it easier for doctors to move forward with transplants, and it is known that transplant is a treatment modality that time and again, in appropriately selected patients, offers the only hope for cure.
Whether the transplant is autologous or allogeneic, timeliness of access is important. Outcomes are best when transplants are done when the patient is in a state of complete remission, or when their disease is optimally controlled. For many patients with aggressive diseases, for which transplant is the only potentially curative therapy, it may be a relatively short window of time between achievement of remission or control of the disease and the opportunity for transplant. Patients who are put into remission in anticipation of transplant, who then must wait a prolonged period of time, may relapse. After
relapse, most often the disease becomes more aggressive and more difficult to get back into remission.
The CON Application
The Application proposes to establish a six-bed inpatient BMT unit within Baptist Hospital in Miami, Florida, TSA 4, to serve autologous and allogeneic BMT patients. Under the Application, the proposed inpatient unit will be integrated with outpatient BMT services facilities to be located in the MCI on the campus of Baptist Hospital.
THE PARTIES
Baptist Hospital of Miami, Inc.
Baptist Hospital is a large not-for-profit secondary and tertiary acute care hospital with over 700 inpatient beds, located at 8900 North Kendall Drive in Miami, Florida, TSA 4, and is the Applicant for CON No. 10420. Baptist is part of Baptist Health South Florida (BHSF), the largest not-for-profit, community-based health care system in the region, comprised of six acute care hospitals, over 30 outpatient centers, and Baptist Health Medical Group. In addition to Baptist Hospital (which includes Baptist Children’s Hospital), the six BHSF hospitals include Mariner’s Hospital in Monroe County, Doctors Hospital in Broward County, and West Kendall Hospital, South Miami Hospital, and Homestead Hospital in Miami-Dade County.
Baptist originated as a faith-based community service organization and “principally exists to provide high quality, cost-effective, compassionate health services to all comers, irrespective of religion, creed, race or national origin, or ability to pay.” The Baptist mission and vision include the commitment “to serve as a lifeline for uninsured people,” to “be the preeminent health care provider in the communities, the organization that people instinctively turn to for their health care needs,” and to be a “national and international leader in health care innovation.”
The BHSF hospitals are recognized by national evidence-based survey and benchmarking organizations for high quality of care, with a focus on patient satisfaction. Baptist Hospital was named the “Best Full-Service Hospital in South Florida” by U.S. News & World Report, and was awarded service- specific awards in 12 specialties, including oncology.
BHSF is ranked fifth among the 18 top-performing hospitals and academic medical centers in the United States in patient satisfaction and is the only community health system in the nation to be ranked among the top 18.
Baptist has a reputation for physician and employee satisfaction. Among the 500 hospitals participating in the HealthStream national survey group, BHSF ranks No. 1 with respect to physician satisfaction. Among the more than 400
hospitals participating in a national survey of employee satisfaction, BHSF again ranked No. 1.
BHSF’s inpatient oncology programs, primarily located at Baptist Hospital, Baptist Children’s Hospital, and South Miami Hospital, recently were awarded the Outstanding Achievement Award by the American College of Surgeons Commission on Cancer, the highest accolade an inpatient cancer program can achieve.
Baptist Hospital has approximately 1,500 physicians on its medical staff, covering all specialties. Baptist Health Medical Group is a large specialty physician group practice comprised of approximately 200 employed specialist and subspecialists, including a large number of medical, surgical, and radiation oncologists, as well as orthopedic surgeons, cardiac surgeons, neurosurgeons, primary care physicians, and hospitalists. The specialized oncology services within Baptist Health Medical Group include hematologic malignancies (including two physicians experienced in BMT), lung cancer, gastrointestinal malignancies, breast cancer, head and neck cancer, genitourinary cancer, and gynecological malignancies.
MCI is a comprehensive outpatient oncology facility formed by the consolidation, expansion, and programmatic standardization of all of BHSF’s existing outpatient oncology services and oncology clinical research programs into a new
$430 million, 400,000-square foot oncology research and clinical care facility located on the campus of, and physically attached to, Baptist Hospital.
The new MCI facility is comprised of two physically connected buildings, one designated as the “research building” that is designed to house state-of-the-art technology and proposed clinical research facilities, and the other focused on clinical care. The first floor of the research building houses MCI’s proton and radiation therapy. The three-gantry proton therapy installation at MCI is one of only a handful in the nation, the only one in South Florida, and will be used for both clinical research and interventional therapy. The second floor of the research building is designed to house a BMT outpatient services facility, with all related equipment, including apheresis and infusion areas, for the collection and infusion of blood stem cells for outpatient BMT.
It is anticipated that the medical staff of MCI will be open to BHSF physicians and community physicians. Membership on the MCI medical staff, however, requires additional evidence- based physician credentialing standards and obligations that are set forth in the aspects of care.
At the time of the final hearing, Baptist anticipated that MCI would begin serving patients in the new facility in January 2017.
MCI has recruited Dr. Minesh Mehta, a nationally recognized radiation oncologist and clinical research scientist to head MCI’s radiation oncology program. Dr. Mehta’s expertise is in brain tumors and in proton therapy and research. Proton therapy is the latest, highest technology radiation therapy that exists. BHSF, however, does not expect that its oncology proton therapy and research program will be immediately financially viable and acknowledges that it may take 15 years before the program begins to break even.
MCI has also hired Dr. Michael Zinner, a preeminent surgical oncologist and clinical researcher who has published more than 230 academic papers in the field of surgical oncology, to serve as CEO and executive medical director of MCI.
Dr. Zinner has an expertise in an emerging model of cancer care known as the "hybrid academic-community cancer center." The hybrid academic-community model is a relatively new concept and is based on the concept of taking the best of the community hospital setting and affiliating with a teaching hospital or clinical research institution to form a hybrid academic- community cancer center that supports advanced translational research and offers patients local access to more and earlier- phase clinical trials. Baptist plans to establish the next hybrid academic-community cancer center in South Florida.
MCI also recruited Dr. Miguel Villalona-Calero, a nationally and internationally recognized medical oncologist and scientist known for his innovative work in the field of medical oncology and translational research, who has special expertise in integrating academic clinical research in a community hospital setting. Dr. Villalona will lead MCI’s planned Phase I Laboratory and direct translational research, as well as MCI’s Clinical Research Program. Dr. Villalona is in the process of developing an expanded clinical trials office at MCI designed to expand clinical research programs. The expansion of the MCI Clinical Trials Office is occurring in phases, and the office currently is budgeted for 50 non-physician positions, 20 of which have been filled.
So far, Dr. Villalona has successfully recruited a number of experienced personnel to staff MCI’s Clinical Trials Office. BHSF has provided Dr. Villalona with resources to support his work at MCI, and also has facilitated the relocation of Dr. Villalona’s personal basic research laboratory, including key personnel, from the James Cancer Research Institute in Ohio to Florida International University (FIU).
MCI hired Dr. Jeff Boyd to serve as director of Translational Research and director of the Center for Genomic Medicine at MCI. Dr. Boyd also serves as professor and chair of the Department of Human and Molecular Genetics and associate
dean for Basic Research and Graduate Programs at the Herbert Wertheim College of Medicine at FIU.
Dr. Boyd is nationally and internationally recognized for his work in molecular diagnostics, translational research, and gynecologic and breast cancer research. In the past,
Dr. Boyd established the gynecologic and breast cancer research lab at Memorial Sloan Kettering Cancer Center, and founded and directed the Cancer Genome Institute at Fox Chase Cancer Center in Philadelphia, an NCI-designated cancer center. He is also a founding member of the National Comprehensive Cancer Network.
MCI’s resources and successful recruitment of Dr. Boyd places BHSF at the forefront of this precision therapy endeavor. BHSF has provided all necessary resources, including highly specialized next-generation technology and equipment, and dedicated space and staffing for MCI’s Center for Genomic Medicine. BHSF also has relocated Dr. Boyd’s personal oncology basic research laboratory to FIU. It is planned that resources of MCI’s Center for Genomic Medicine will be made available to Baptist’s proposed BMT program and other institutions.
Approval of the Application is conditioned on the successful recruitment of a fully qualified adult allogeneic and autologous BMT medical director, meeting all allogeneic and autologous criteria requirements. While Baptist asserts that, through MCI, it has already identified a preeminent BMT
physician scientist currently serving in a leadership role at a national cancer center to assume leadership of the BMT program, contingent on issuance of a CON to Baptist for an autologous and allogeneic adult BMT program, the name of that person was not revealed in the Application or at the final hearing.
University of Miami, d/b/a University of Miami Hospital and Clinics.
UM is a prominent university established in Florida in 1925. It is a single corporate, not-for-profit organization whose mission focuses on education, including the awarding of scholarships, basic and applied research activities, and delivery of public health and medical services. UM has a school of medicine, i.e., the Miller School of Medicine, a national research institution. UM does not operate its various programs under subsidiaries, but rather organizes its operations under divisions within the UM corporate entity.
UM operates its health care services and facilities under various fictitious names, including "University of Miami Hospital and Clinics," "University of Miami Hospital," and "Sylvester Comprehensive Cancer Center."
The University of Miami Hospital and Clinics is a comprehensive cancer treatment service and program that UM operates in TSA 4. The facilities used by UM to deliver those services include Sylvester Comprehensive Cancer Center
(Sylvester), a specialty-licensed hospital, and a group of five satellite outpatient clinics. The northernmost clinic is on the southern border of Palm Beach County, and the southernmost clinic is located in the southern portion of Miami Dade County, in the Kendall Area.
Sylvester is a 40-bed, Class III specialty cancer hospital that, by virtue of its limited size and its separation from the UM academic medical center, is exempt from the acute care Prospective Payment System (PPS). Under PPS, hospitals are paid a flat rate for services regardless of the actual cost of care. Sylvester, exempt from PPS, receives substantially higher, “cost-based” reimbursement for providing the same services.
Sylvester has 12 beds dedicated to BMT services and an additional six intensive care beds at Sylvester available for BMT patients.
Sylvester does a significant amount of clinical research, and has extensive laboratory space, clinical research space, and academic offices. At one time Sylvester was a National Cancer Institute (NCI)-designated comprehensive cancer center, but lost its NCI designation. Regaining that NCI designation is currently a focus for Sylvester.
All of the approximately 300 researchers and physicians at Sylvester are employed directly by UM and are
faculty members of various UM schools or the UM Miller School of Medicine, which are all part of the UM university system.
The University of Miami Hospital is UM's in-house, statutorily-designated teaching hospital. The facility is a 560-bed general acute care hospital across the street from Sylvester.
UM's medical facilities (the Miller School of Medicine, University of Miami Hospital, Sylvester and Anne Bates Leach Eye Center) are located on a medical campus that is co-located adjacent to Jackson Memorial Hospital (Jackson Memorial or Jackson), Miami-Dade County's “safety net” hospital. Jackson Memorial is a significant provider of transplant services in South Florida. Sylvester works in collaboration with Jackson, providing the entire physician staffing for cancer care to Jackson. UM also provides the staffing and outpatient pre- transplant and post-transplant services to the pediatric BMT program at Jackson. There are many other academic, clinical and research initiatives and services in which the two programs collaborate.
The medical campus includes a 13-story medical research building called the Don Soffer Clinical Research Center, with laboratories and staffed by various cancer center researchers. UM also has an interdisciplinary Stem Cell
Institute doing basic research on stem cells, which works in collaboration with Sylvester.
Sylvester is part of the Comprehensive Cancer Center Consortium for Quality Improvement, which is a network of
19 preeminent national cancer centers, including notable institutions such as Dana-Farber, Memorial Sloan-Kettering, MD Anderson, and Duke University that review various clinical best practices and regularly share data and outcomes. UM has
been operating an adult allogeneic and autologous BMT program at Sylvester since 2008, when it was awarded a CON to transfer the existing adult BMT program at Jackson (who had the program since 1994). The first census of BMT patients at Sylvester began in 2010.
Agency for Health Care Administration.
AHCA is the state agency responsible for administering the state CON program. Following review and analysis of Baptist’s Application, and independent analysis of state BMT utilization data, AHCA preliminarily determined that there is a need for an additional adult autologous and allogeneic BMT program in TSA 4 and that, considering the applicable statutory and rule criteria on balance, Baptist’s Application should be approved.
STATUTORY AND RULE REVIEW CRITERIA
Pursuant to section 408.036(1)(f), Florida Statutes,2/ AHCA has designated BMT programs as a tertiary health care service subject to the requirements of CON application and review. Section 408.032(17) defines a tertiary health care service as a health care service which, "due to its high level of intensity, complexity, specialized applicability, and cost, should be limited to, and concentrated in a limited number of hospitals to ensure the quality, availability, and cost- effectiveness of such service."
Florida Administrative Code Rule 59C-1.044, entitled “Organ Transplantation,” requires AHCA to review the establishment of organ transplantation programs under the CON program pursuant to the review criteria in section 408.035, including need determination criteria.
Need for BMT services is not determined by health service planning districts as defined by section 408.032(5). Rather, rule 59C-1.044(2)(f) aggregates health planning service on a regionalized basis. TSA 4 consists of District 10 (Broward County), District 11 (Miami-Dade County), a portion of District
8 (Collier County), and a portion of District 9 (Palm Beach County).
The current inventory of approved BMT programs by service areas is as follows: TSA 1, Mayo Clinic (Jacksonville)
and Shands Hospital (Gainesville); TSA 2, H. Lee Moffitt Cancer Center (Tampa); TSA 3, Florida Hospital (Orlando); TSA 4, Good Samaritan (West Palm Beach), Memorial West (Pembroke Pines) and UM (Miami). TSA 4, with three programs, has more adult BMT programs than any other service area in Florida.
Section 408.035(1)(a), Florida Statutes: The Need for the Health Care Facilities and Health Services Being Proposed
AHCA does not publish a fixed-need pool projection for BMT programs. Rule 59C-1.008(2)(e) provides that if no need methodology exists for a proposed project, the applicant is responsible for demonstrating need through a needs assessment methodology, which must include consideration of (1) population demographics and dynamics; (2) availability, utilization and quality of like services in the district; (3) medical treatment trends; and (4) market conditions. These criteria are largely subsumed within section 408.035(1)(a), (b), and (f) and were addressed under those provisions in the Application.
Rule 59C-1.044(9) requires applicants for BMT programs to be able to project at least 10 allogeneic and 10 autologous transplants for the third year of operation.
Utilization of BMT Services in Florida and in TSA 4
The provision of BMT services typically involves both inpatient and outpatient care. In general, autologous BMT
involves a shorter inpatient stay, while allogeneic services require an extended inpatient stay. AHCA maintains two distinct databases of information reflecting utilization of BMT services in Florida. The first is “local health council” data, which combines, but does not distinguish between inpatient and outpatient, or autologous and allogeneic utilization. The second data set, known as “AHCA discharge data,” differentiates between autologous and allogeneic BMT procedures and, by definition, reflects only inpatient utilization. Neither database captures the number of Florida residents who leave the state to obtain BMT services.
Both AHCA datasets show growth in overall utilization of BMT services statewide and in TSA 4. The compound average growth rate (which is an average annual growth rate over a
multi-year time frame) for BMT services in Florida for the 5-year period from January 2010 to December 2015 was +8.5 percent per year, and the corresponding average yearly growth in actual BMT case volume was +73 cases per year.
In addition to the growth in the number of BMT cases, the rate of utilization of BMT services increased statewide, with the greatest percentage of growth occurring in TSA 4, which saw a +27 percent overall growth in utilization of BMT services from June 2012 to June 2015, with a compound average annual growth rate of +29.8 percent per year over the 5-year period
ending December 2015. The AHCA data is consistent with the independent data collected by the Center for International Blood and Marrow Transplant Research.
Even though there has been an increase in utilization of BMT services in TSA 4, the overall volume of BMT cases in TSA 4 is below the case volume that would be expected by applying the statewide average use rate to TSA 4.
Sylvester performed 170 BMTs in 2015, all of which were inpatient cases. Moffitt Cancer Center in Tampa is also experiencing increases in BMT case volume.
2. Population Dynamics
The population age 15+ in South Florida is increasing at a rate of one to two percent per year, which reflects growth, but not substantially greater than the growth in population age 15+ statewide. Accordingly, the rate of growth in utilization of BMT services in TSA 4, which is greater than the rate of growth in utilization of BMT services statewide, is attributable to an increase in the actual use rate of BMT services in TSA 4, rather than straight population growth.
3. Market Trends for BMT Services in TSA 4
Baptist assessed the overall market, or volume of BMT cases arising within TSA 4 using AHCA utilization data, and verified the analysis using BMT use rates. The AHCA data shows that 284 adult BMTs, both inpatient and outpatient, were
performed by facilities in TSA 4 in calendar year 2015. In addition to the 284 inpatient and outpatient procedures performed in TSA 4, an additional 51 residents of TSA 4 out- migrated from TSA 4 to receive inpatient BMT services at Moffitt Cancer Center (Moffitt), located approximately 300 miles away in Tampa, Florida.
In addition, it is known that a number of patients out-migrated from TSA 4 for outpatient BMT services at facilities in other TSAs in Florida in 2015. There is no publicly available database showing the precise number of residents of TSA 4 who received outpatient BMT services in other TSAs. Baptist’s health planning expert estimated the volume of outpatient out-migration to other TSAs in Florida at 16 to 20 outpatients in 2015, by multiplying the 51 TSA residents known to have out-migrated to Moffitt for inpatient BMT services by approximately 30 percent.
While it is reasonable to conclude that an additional number of residents of TSA 4 out-migrated from TSA 4 to receive BMT services at transplant centers outside the state of Florida, because this data is not reported to any publicly available database, Baptist did not include these patient volumes in its utilization projections.
Based on the AHCA data, Baptist estimated the 2015 BMT case volume (net market size), for both inpatient and outpatient
BMT services in TSA 4, at 343 to 347 BMT cases (i.e., 284 cases performed in TSA 4, minus 8 cases of in-migration, plus 51 inpatient cases that out-migrated to Moffitt, plus 16 to 20 outpatient cases that out-migrated from TSA 4 to receive outpatient BMT services).
Baptist verified its assessment of the 2015 TSA 4 market size for BMT services by applying the 2015 average statewide use rate for BMT services for the population age 15+ (66.5 cases per million population) to the 2015 age 15+ population in TSA 4, resulting in a calculation of approximately
344 BMT cases in TSA 4 for calendar year 2015, which is consistent with its analysis of AHCA utilization data showing
343 to 347 cases for the same time period.
4. Forecast of 2020 BMT Case Volume in TSA 4
Using its calculated 2015 net market size for BMT in TSA 4, Baptist projected a net market size in BMT case volume for TSA 4 for the year 2020, using both the national compound average annual growth rate of +5 percent per year and the higher Florida growth rate of +8.5 percent per year, resulting in a projection of 439 to 517 BMT cases in TSA 4 in 2020. This estimate does not use the higher TSA 4 compound average growth rate observed in BMT utilization in TSA 4.
Although Baptist projects growth rate for both inpatient and outpatient BMT procedures, the two AHCA databases
utilized by Baptist do not specifically identify outpatient procedures. Therefore, Baptist’s health planner devised a method for estimating the number of outpatient procedures. For purposes of the projection, Baptist’s health planner assumed that the vast majority of the gap between the “local health council” data and the “AHCA discharge data” constitutes outpatient utilization. To approximate that gap, he doubled the reported inpatient autologous cases and used that number as the estimate for outpatient cases used in Baptist’s projections.
However, as explained by the credible testimony of Dr. Claudio Anasetti, chair of Moffitt Cancer Center and Research Institute’s Department of Blood and Marrow Transplantation, Baptist’s methodology of estimating outpatient procedures by arbitrarily doubling autologous cases is inaccurate. The actual ratio of outpatient procedures observed at Moffitt is only between 10 to 20 percent of all transplant activity. While Baptist’s method may reflect current numbers, utilization of that methodology, in light of actual outpatient experience at Moffitt, is questionable as a method of projecting future utilization.
Baptist’s projections directed no analysis exclusively to adult inpatient procedures, which is the focus of Baptist’s Application. In fact, outpatient procedures are not material to the Application. Because Baptist’s projection methodology
doubles the number of autologous procedures to estimate the number of outpatients in the total procedures calculation, less than half of the projected total procedures are pertinent to inpatient procedures for BMT residents.
Under Baptist’s projection methodology,3/ less than half of the 439 to 517 BMT patients projected for TSA 4 in 2020 will be inpatient procedures, yielding about 220 to 259 total inpatient cases. After subtracting 51 inpatient cases out- migrating to Moffitt used in calculating the baseline number for year 2015, Baptist’s projected volume for inpatient BMT cases in TSA 4 for 2020 is approximately 169 to 208. This number of inpatient cases is within the current capacity of UM and the other two adult BMT service providers in TSA 4.
Under Baptist’s projections, while it appears that Baptist’s proposed program could serve at least 10 allogeneic and 10 autologous transplants for the third year of operation as required by rule 59C-1.044(9), that service would be at the expense of existing TSA 4 providers.
Section 408.035(1)(b): The Availability, Quality of Care, Accessibility, and Extent of Utilization of Existing Health Care Facilities and Health Services in TSA 4
Availability, Utilization, and Quality of Existing BMT Programs in TSA 4
Sylvester is the dominant provider of BMT services in TSA 4. Baptist does not take issue with the quality of care
Sylvester provides to BMT patients once the patient is admitted to Sylvester, but argues that the rate of out-migration of TSA 4 residents to obtain BMT services is evidence of problems in the availability and accessibility of existing BMT services within TSA 4.
Out-migration of 51 BMT inpatient TSA 4 residents to Moffit in 2015 does not establish need for Baptist's adult BMT program. The 2015 inpatient out-migration is slightly less than the number in 2008. The percentage of out-migration from TSA 4 over the years has been decreasing, to about 22 percent of total inpatient procedures in 2015. In fact, the number of TSA 4 adult inpatient cases going to Moffitt is actually declining, from 67 in 2013, 62 in 2014, to 51 in 2015. Current out- migration is not excessive in relation to other TSAs.
Baptist's primary argument as to out-migration is that it is an imposition on patients from South Florida to have to travel to Moffitt given the length of time that one has to be
on-site during the primary course of treatment. Nothing in Baptist's proposal, however, significantly alleviates this concern and no real harm to patients in South Florida was demonstrated.
Some out-migration can be explained by the complexity of patient cases, and possibly by referral preference of Baptist’s physicians. Out-migration to Moffitt can also be
explained by the fact that Moffitt is a preeminent cancer center. It is currently the only NCI-designated cancer center in Florida, with the third highest volume of cancer patients in the country. Moffitt is ranked sixth in the country in overall performance as a cancer center.
AHCA's health care planner, Marisol Fitch, recognized that out-migration is not proof of need and acknowledged the preference of some residents to receive BMT services outside the TSA 4. Out-migration of TSA 4 residents to nationally prominent centers is unavoidable, and some out-migration is expected to continue even as the use rate for TSA 4 residents increases.
2. Alleged Underutilization
The Application includes an analysis of the use rate of BMT services in TSA 4 reflecting that the observed BMT case volume in TSA 4 is lower than would be expected by applying the statewide average-use rate for BMT services to the TSA 4 population. According to Baptist, the lower-use rate suggests that BMT services in TSA 4 are not equally accessible or available when compared to accessibility of services elsewhere in the state.
Instead of indicating accessibility or availability problems in TSA 4, however, the evidence established that BMT use rate is somewhat skewed in favor of TSA 2, where Moffitt is the only provider. There is no question that Moffitt, because
of its prominence, has an extraordinary draw of patients to its facility. Moffitt draws two-thirds of its BMT patient volume from outside of the Tampa Bay area. Under the circumstances, comparing use rates is not indicative of lack of accessibility or availability, and is not a good predictor of need. To the contrary, the evidence indicates that the vast majority of Florida residents who need BMT services are currently being served by existing Florida BMT programs. In addition, there is credible evidence that inpatient BMT use rates are likely to decrease because of an increase in outpatient care and a new, alternative technology known as “CAR-T cell therapy.”
3. Accessibility--Alleged Capacity Constraints
According to Baptist, AHCA’s inpatient utilization data shows that Sylvester, a 40-bed hospital, is currently operating at capacity. Indeed, at present, UM is using the equivalent of 10 beds annually out of the 12 beds designated to accommodate BMT patients. There are an additional six intensive care beds at Sylvester that are presently considered available for BMT patients.
UM also has available another entire floor (the second floor) with 22 beds at Sylvester, which is already hepa-filtered and otherwise meets all of the physical plant requirements for delivering BMT services. UM has capacity without any changes to its current facilities, to accommodate 250 transplants a year.
UM is already repurposing beds in University of Miami Hospital across the street to accommodate commercial pay cancer patients, in order to allow Sylvester's beds to be used for BMT patients. In sum, UM's BMT physical facilities have room to accommodate new growth in BMT program services for the next five years of the growth forecast by Baptist health planners.
Ample capacity at Sylvester and the fact that TSA 4 has the largest number of BMT providers in the state support the SAAR’s finding that Baptist had not shown lack of availability or accessibility in TSA 4 for the proposed BMT services.
4. Accessibility--Alleged Delays and Problems with Intake in TSA 4
At the final hearing, Baptist physicians testified that they are generally satisfied with the quality of care provided by Sylvester’s BMT program once their patients were admitted to Sylvester, but expressed frustration with delays in getting patients seen or admitted at Sylvester. They attributed the delay to lack of adequate communication after patient referral. Baptist’s Application did not advance the theory that poor referral communications resulted in lack of accessibility to BMT services in TSA 4. Therefore, that theory is not properly considered.
Even with consideration of that theory, the evidence does not support a finding that communication errors caused lack
of access. While there was evidence of occasional communication issues in referring BMT patients to UM, the evidence was not sufficient to reasonably infer lack of quality of care or accessibility for BMT inpatient services in TSA 4. Handoff communication issues among health care personnel are globally true. However, at the final hearing, UM demonstrated that personnel involved in its BMT program proactively engage in marketing, program monitoring, auditing, and prospective patient counseling efforts to reduce barriers to admission and reduce the time between patient referral and initial consult. As for physician communications, the evidence indicated that BMT physicians at UM regularly consult with their referring physicians at Baptist.
Consistent with these findings is the fact that surveys of patient experience for the last two years have ranked UM in the 91st percentile and the 97th percentile ranking against other hospitals of similar size for BMT services.
Section 408.035(1)(c), Fla. Stat.: The Ability of the Applicant to Provide Quality of Care and the Applicant’s Record of Providing Quality of Care
Baptist is a well-regarded community hospital in Miami, with over 700 beds and over 1,800 nurses. Baptist's ability to provide quality health care in the areas where it is already providing care was not questioned. However, at the final
hearing, Dr. Claudio Anasetti expressed concern about quality of care during the start-up period of Baptist’s proposed BMT program. Those start-up concerns, as well as questionable future program volume estimates, are issues that would confront any applicant for a new BMT program in TSA 4.
Nevertheless, consideration of Baptist’s patient- focused care initiatives, “House ARNP” staffing model, oncology navigation program, and nursing program, supports a finding that Baptist has the ability to establish a new program with a focus on quality of care. Whether Baptist’s acumen for quality of care translates into the ability to establish a new adult autologous and allogeneic BMT program in TSA 4, however, depends on its ability to fulfill all of the statutory and rule criteria.
Section 408.035(1)(d): The Availability of Resources, Including Health Personnel, Management Personnel, and Funds for Capital and Operating Expenditures, for Project Accomplishment and Operation
Baptist did not demonstrate that it has the requisite resources and health or management personnel to implement the service. The specifics of the deficiencies are discussed under heading III, J, entitled “Florida Administrative Code Rule
59C-1.044, ,” infra.
Section 408.035(1)(e), Fla. Stat.: The Extent to Which the Proposed Services Will Enhance Access to Health Care for Residents of the Service District
As previously discussed under headings III. A. and
B., above, lack of access or availability that would support the need for a new adult BMT program in TSA 4 has not been shown. Access to BMT clinical services is currently met by existing programs. TSA 4 has more BMT programs and facilities than any other TSA in Florida. The proposed services will not enhance clinical access to health care for residents of TSA 4.
Further, it was not shown that the proposed program will enhance transportation or geographic access. Baptist plans to consolidate all of its cancer services currently provided at its hospital chain's facilities disbursed throughout southern Miami-Dade County into MCI. Although there is a bus line, it is anticipated that most transportation to MCI will be by automobile.
Lack of financial access to current BMT programs in TSA 4 was not demonstrated. A facility's reimbursement is "driven by a patient's health insurance." Dr. Feinstein
acknowledged that the low-volume numbers achieved during his nine years as program director at the Broward County Memorial West BMT program was because delay in obtaining Foundation for Accreditation of Cellular Therapy (FACT) accreditation. FACT
accreditation assures that reimbursement can be obtained from all payers, including Medicare, Medicaid, and commercial. Unless the proposed new program obtains FACT accreditation, the proposal will actually provide less financial access. Baptist acknowledged that there would be a delay in obtaining FACT accreditation for its proposed program.
Although Baptist suggested that it had access to some managed health care providers that were not accessible to UM, Baptist did not demonstrate any gaps in managed care coverage that would be filled by Baptist’s proposal, or that UM was not effective in assisting its patients in obtaining coverage. Rather, the evidence indicated that personnel at Sylvester have developed expertise over the years to resolve financial coverage issues for its BMT patients.
Section 408.035(f), Fla. Stat.: The Immediate and Long-Term Financial Feasibility of the Proposal
UM’s financial expert, Tom Davidson, testified that the Baptist’s proposed BMT program is not financially feasible because the Application leaves out costs for several leadership and clinical positions that must be filled. Salary costs for a program director and staff omitted from the Application exceed one million dollars.
A comparison of Baptist’s cost estimates for its proposal against UM’s actual costs for Sylvester’s BMT operations
reveals significant discrepancies. For example, Baptist projects
$178 a day in laboratory costs per patient, while UM expends
$1,000 a day. For pharmacy costs, Baptist projects $450 per day while UM’s pharmacy costs are $2,000 a day. While UM’s costs include expenditures for outpatient services and Baptist’s estimates do not, the discrepancies are still significant, especially considering the fact that BMT services are paid on a global, flat fee basis that takes into account all services, including post-procedure outpatient care.
Baptist acknowledges that it does not currently have requisite skilled and experienced staff for much of the program, but proposes that nursing and other professionals will be given extensive training. Baptist’s projected costs do not include many of the costs for training staff and other startup costs which will have to be incurred to have a functioning BMT program.
Further, delay in FACT accreditation, which Baptist acknowledged may take up to two years to achieve, will interfere with Baptist’s ability to achieve reimbursement.
Considering these factors, Mr. Davidson’s analysis projected a 1.6 million dollar deficit instead of a $500,000 surplus projected by Baptist for year 2 of its proposed BMT program. Mr. Davidson’s analysis is credited.
Even considering Mr. Davidson’s analysis with projected deficits, Baptist’s proposed BMT program is financially feasible
in the short-term. Baptist is a large hospital system that could take on the costs associated with the proposed BMT program. The Application included a complete listing of all capital projects approved, underway, pending approval, or planned by Baptist Hospital at the time of submission of the Application. Baptist Hospital’s audited financial statements included in the Application demonstrate that Baptist Hospital has the financial wherewithal to implement the project. Whether short-term ability will translate into long-term feasibility is less certain, especially considering the capacity of existing programs to meet future BMT needs in TSA 4.
Section 408.035(1)(g), Fla. Stat.: The Extent to Which the Proposal Will Foster Competition that Promotes Quality and Cost- Effectiveness
As concluded by AHCA in the SAAR, the proposed project “will not likely foster the type of competition generally expected to promote quality and cost effectiveness.” In explaining the rationale for this conclusion, the SAAR listed a number of barriers to competition in the health care industry, including the fact that: 1) price-based competition is limited due to Medicare and Medicaid’s impact on pricing, accounting for over 41 percent of hospital charges in Florida; 2) most users do not shop around for pricing because 87.1 percent are covered by Medicaid, Medicare, or managed-care plans; and 3) lack of
information available to consumers regarding quality measures that could affect choice.
Contrary to AHCA’s conclusion, Baptist contends that approval of the Application will introduce both additional capacity and patient choice for BMT services within TSA 4, which will promote quality and cost-effectiveness. However, considering the fact that TSA 4 has more BMT programs than any other TSA in Florida, as well as the capacity of existing TSA 4 BMT programs to serve projected need, Baptist’s contention must fail.
In addition, UM demonstrated that cases lost to Baptist’s new program would negatively affect UM’s program. UM’s expert reasonably estimated that the cases lost to Baptist would result in a loss between $6.2 million and $14 million in revenue over a three-year period.
Section 408.035(1)(h): The Costs and Methods of the Proposed Construction, Including the Costs and Methods of Energy Provision and the Availability of Alternative, Less Costly, or More Effective Methods of Construction
The parties stipulated that Baptist's BMT facility design, construction cost, and timeline are reasonable and appropriate for the autologous and allogeneic transplant program proposed by Baptist Hospital, in satisfaction of rule 59C- 1.044(9)(b)5. and (c)5. and rule 59C-1.044(3)(c).
I. Section 408.035(i), Fla. Stat.: The Applicant’s Past and Proposed Provision of Health Care Services to Medicaid Patients and the Medically Indigent
Baptist Hospital has a long-established commitment and history of providing care to Medicaid, medically indigent, and charity care patients. Approximately 19 percent of Baptist Hospital’s total acute care hospital activity consists of services provided to Medicaid patients, and an additional five to six percent consists of unreimbursed charity care. In 2013, BHSF contributed more than $292 million for total charity care, community clinics, and community benefit, serving more than 24,000 charity care patients.
The Application includes, as a condition of approval, Baptist Hospital’s commitment to provide at least 10 percent of its BMT case volume on an annual basis to Medicaid, charity, and self-pay patients.
J. Florida Administrative Code Rule 59C-1.044
Rule 59C-1.044, entitled “Organ Transplantation,” provides that, in addition to review under applicable criteria in section 408.035, organ transplant programs must meet the minimum requirements set forth in the rule. Subsections (3) and
of rule 59C-1.044 set forth minimum requirements for personnel, equipment, and support services for all transplantation programs. Subsections 9(b) and 9(c) provide
specific clinical and program requirements for adult allogeneic and autologous BMT program applicants, respectively.
Research Criteria
In the last sentence of its initial subsection, rule 59C-1.044(1) states in pertinent part:
The following organ transplantation programs shall be restricted to teaching or research hospitals: . . . adult allogeneic bone marrow . . . .
This restriction is reiterated in subsection (9)(b) of rule 59C-1.044, which states, in pertinent part:
(b) Adult Allogeneic Bone Marrow Transplantation Programs. Adult allogeneic bone marrow transplantation programs shall be limited to teaching and research hospitals.
Additional research requirements for adult allogeneic BMT programs are found in rule 59C-1.044(9)(b)9. and 10., which require applicants to have:
An ongoing research program that is integrated either within the hospital or by written agreement with a bone marrow transplantation center operated by a teaching hospital. The program must include outcome monitoring and long-term patient follow-up;
An established research-oriented oncology program; . . . .
At the final hearing, the parties stipulated that none of the hospitals under BHSF’s umbrella are teaching hospitals.
Subsection (2) of rule 59C-1.044 sets forth applicable definitions. Rule 59C-1.044(2)(d) defines research hospital as:
A hospital which devotes clearly defined space, staff, equipment, and other resources for research purposes, and has documented teaching affiliations with an accredited school of medicine in Florida or another state.
“Research Program” is defined in rule 59C-1.044(2)(e)
as:
An organized program that conducts clinical trial research, collects treatment data, assesses outcome data, and publishes statistical reports showing research activity and findings.
Neither Baptist nor other hospitals in the Baptist Health System are generally regarded as being a research hospital. None of Baptist’s promotional and marketing materials disseminated to the public and contained in the Application make any claim that any hospital in BHSF’s system is a research hospital.
While the Application points out BHSF’s many accolades and honors as a community hospital system, the evidence did not show its hospitals have received distinctions for research activities.
BHSF’s financial statements do not indicate expenditures for research and its mission statement does not
mention pursuit of a research hospital designation. Rather, Baptist’s mission statement and accompanying value statements are consistent with a religious-based community hospital and business model.
In support of its contention that it is a research hospital, Baptist asserts the following: (1) A teaching affiliation with FIU; (2) Baptist has more than 220 active clinical research studies; (3) Cancer research is a major portion of Baptist’s research activity with over 90 current cancer studies underway; (4) Baptist’s hospital system has a unit entitled "The Center for Research & Grants"; (5) MCI has a research building under construction to be completed in the summer of 2017; (6) BHSF has recently hired researchers--one to be the scientific officer of MCI (Dr. Miguel A. Villalona- Calero), one to be director of translational research and genomic medicine at MCI (Dr. Jeffery Boyd), Dr. Michael Zinner as the director of MCI, and Dr. Minesh Mehta as chief of radiation oncology; and (7) BHSF has a rigorous "nurse research" program. The evidence supports some of these assertions better than others.
There is, indeed, a teaching affiliation between BHSF and FIU. Graduate medical education is occurring at the West Kendall Baptist Hospital, with a family medicine residency program, and at Doctors Hospital, which has a sports medicine
fellowship program. The evidence did not indicate how many physicians with staff privileges at Baptist are FIU faculty members.
As to clinical studies, Baptist presented a listing of "220+ active clinical research studies" and made a claim that of those studies, "90+ current cancer studies are underway." The number of clinical trials, however, both in aggregate and specific to "cancer studies" did not match the government reporting data base entitled “clinicaltrials.gov” from the federal regulatory body that requires registration of clinical trials. Only seven trials in adult oncology were registered. There were also some trials in the data base designated as "not yet accruing,” without sufficient information regarding whether they were open or not.
MCI recently created a clinical trials office different from BHSF’s research and grants program. While it is reasonably expected that MCI’s new program will someday administer clinical trials to patients in a safe manner with new protocols, when Dr. Villalona-Calero arrived to set up the new program, he stopped accrual of clinical trials.
MCI is in the process of recruiting, but at the time of the final hearing had not yet hired, a medical director for its new clinical trials office. MCI’s first clinical scientific review committee meeting for the new clinical trials office was
September 14, 2016. MCI just finished screening their medical oncology patients for eligibility to participate in clinical trials and still had several other patient populations to screen.
Baptist’s evidence revealed some effort to acquire staff for research activities. While 50 persons were designated as support for anticipated research activities, at the time of hearing, only 20 persons were employed. The credible testimony of Dr. Michael Andrew Samuels cast doubt on the sufficiency of those designated by Baptist to support the claimed portfolio size of 220+ active hospital-based clinical trials.
Further, of the 220+ clinical trials listed in the Application, most were national trials that would be generally available to a community hospital, and were trials produced by other investigators at other institutions. Many of the listed clinical trials appear to be observational or quality improvement initiatives. In addition, many of the trials had very old dates and no information was provided as to whether the listed trials were active and registering patients.
The Application provides that support infrastructure for Baptist’s current research activities is provided by a group called "The Center for Research & Grants." At the hearing, however, Baptist provided information that support and administrative services for research are provided by a unit
called “Baptist Health South Florida Research Enterprise,” a federally recognized parent institution. That institution is not mentioned in the Application.
Further, no specific or detailed evidence was provided as to what space or equipment is currently being dedicated for research activities, at either Baptist’s facilities or anywhere in the Baptist health care system. As to future research facilities, it was acknowledged that no portion of any research activities would be housed at Baptist facilities. Rather, Baptist described MCI as the place where all the research capabilities will be housed. Those "research facilities" will not be opened until the summer of 2017.
The MCI facility designated as the "research building" will have, as its third floor, outpatient facilities to operate the Baptist’s BMT outpatient program described in the Application; and the fourth floor would be dedicated to conducting pharmaceutical company-sponsored phase 1 clinical drug trials, a molecular diagnostic lab, and the bio-specimen depository. Other than one laboratory for Dr. Boyd (on the fourth floor), no other laboratory space was identified for the research building.
Any research hospital or program is expected to have a significant amount of laboratory space. However, there is no laboratory space dedicated anywhere to the proposed BMT program
or any other oncology research activities. No laboratory space will be made available for the processing and handling of stem cell products, which the Application states will be commercially acquired from OneBlood.
Dr. Michael Zinner, Dr. Minesh Mehta, Dr. Miguel A. Villalona-Calero and Dr. Jeffery Boyd, all have significant research credentials. While they may be inclined to continue pursuit of their research interests, their new positions are now essentially administrative, with significant duties that would distract them from pursuing hospital-based clinical research.
There was testimony indicating that certain Baptist nurses engage in research activities that are assigned an Institutional Review Board number. The nature of that nursing “research” activity, however, can best be described as quality assurance and customer satisfaction research as opposed to the high-level oncology research that would benefit patient outcomes. Baptist’s nursing research does not show that Baptist is a research hospital or that it has a research program.
Baptist further asserts that combining with MCI would satisfy the research criteria by the creation of a “hybrid” cancer center that is both a community hospital and research center. The anticipated research to be undertaken at Baptist's concept of a hybrid cancer center will be primarily composed of reimbursed pharmaceutical trials. Expert testimony presented by
UM demonstrated that research takes a tremendous amount of time for physicians and for investigators, and raised doubt as to Baptist’s ability to follow through on claims that it will be able to change the current corporate culture of Baptist from a community hospital to a research hospital.
In reviewing the Application for AHCA, CON supervisor and health planning expert, Marisol Fitch, felt as though Baptist “had made a point that they were a research hospital, not a community hospital just having a research program.” In support of this contention, in addition to mentioning Baptist Health System’s teaching activity with FIU, the SAAR cites Baptist’s access to clinical trials and ongoing studies, as well as MCI’s announcement of its intention to affiliate with Memorial Sloan Kettering Cancer Center. Baptist, however, has not shown that it is presently a research hospital, nor can BHSF currently make that claim.
While it is apparent that MCI anticipates an affiliation with Memorial Sloan Kettering, Baptist failed to provide sufficient evidence of the nature of that relationship. Instead of providing a copy of an agreement between MCI and Memorial Sloan Kettering, at the final hearing, Baptist attempted to introduce a highly redacted version of an agreement between the two institutions. The proffer, even if accepted into evidence, is insufficient to prove the nature of the
purported relationship.4/ The redacted version omitted the operative terms of the arrangement. The only language available for review was the recital portion of the alleged agreement.
While there was some testimony by Baptist witnesses as to such affiliation, it was insufficient to explain the true nature or extent of the anticipated relationship. Therefore, the evidence does not support the SAAR's recognition of such affiliation as a factor qualifying Baptist as a research hospital.
In sum, the evidence did not demonstrate that Baptist qualifies as a research hospital, that it has an ongoing research program that is integrated either within the hospital or by written agreement with a BMT center operated by a teaching hospital, or that it has a an established research-oriented oncology program to satisfy the research hospital or research criteria set forth in rule 59C-1.044(1) or rule 59C- 1.044(9)(b)9. and 10.
Autologous BMT programs are not restricted to only teaching or research hospitals. Rule 59C-1.044(9)(c)7. and 8., applicable to applicants for autologous BMT programs, have somewhat redundant research requirements as required of autologous program applicants under subsection (9)(b). Rule 59C-1.044(9)(c)7. and 8. provide:
c) Adult Autologous Bone Marrow Transplantation Programs. Adult autologous bone marrow transplantation programs can be
established at teaching hospitals or research hospitals; or at community hospitals having a research program, or who are affiliated with a research program, as defined in this rule.
An ongoing research program that is integrated either within the hospital or by written agreement with a bone marrow transplantation center operated by a teaching hospital; or the applicant may enter into an agreement with an outpatient provider having a research program, as defined in this rule. Under the agreement, the outpatient research program may perform specified outpatient phases of adult autologous bone marrow transplantation, including blood screening tests, mobilization of stem cells, stem cell rescue, chemotherapy, and reinfusion of stem cells; and,
An established research-oriented oncology program
As previously discussed, rather than demonstrating an active research program, the evidence indicates that Baptist had suspended its clinical trials programs and activities. Further, the evidence did not show a written agreement between Baptist and a BMT center operated by a teaching hospital.
The evidence does not otherwise support a finding that there is an "established research-oriented oncology program" at Baptist. The productivity and output from Baptist’s past oncology research activities has been low, even by community hospital standards. While the physician staff identified as researchers in the Application had appropriate
training, evidence of their academic, research, and laboratory investigative productivity was lacking.
Rather than showing that Baptist has existing research program capabilities, the evidence demonstrated Baptist Health System’s intention of building a future research program at MCI by constructing facilities, pursuing administrative activities and hiring leadership. Much of the evidence was aspirational or conceptual as opposed to demonstrative of an existing research program.
2. Criteria Applicable to All Types of Transplant Programs
Not specific to BMT, subsections (3) and (4) of rule 59C-1.044 set forth general transplant requirements, regardless of the transplant program, and apply to both allogeneic and autologous BMT programs. Rule 59C-1.044(3)(a) requires that applicants for all types of transplant programs have:
Staff and other resources necessary to care for the patient’s chronic illness prior to transplantation, during transplantation, and in the post-operative period. Services and facilities for inpatient and outpatient care shall be available on a 24-hour basis.
As to these criteria, Baptist proposes to use current staff and hire additional staff. And, for all of the specialty blood product evaluation, processing, and storage capabilities unique to BMT programs, Baptist proposes to use a contract vendor named “OneBlood.”
Because Baptist has hired Memorial West’s BMT program director, head nurse, lead ARNP, and pharmacist, it demonstrated the capability to at least address those criteria as they apply to an autologous BMT program. However, as no other proposed physician, nursing, or ancillary staff were shown to have BMT experience or skills, additional training would be required to adequately meet these criteria for autologous BMTs. As for an allogeneic program, however, as further discussed below, many of these criteria were not met.
Rule 59C-1.044(3)(d), (e), and (f), requires all transplant program applicants to have:
(3)(d) A clinical review committee for evaluation and decision-making regarding the suitability of a transplant candidate.
(3)(e) Written protocols for patient care for each type of organ transplantation program including, at a minimum, patient selection criteria for patient management and evaluation during the pre-hospital, in- hospital, and immediate post-discharge phases of the program.
(3)(f) Detailed therapeutic and evaluative procedures for the acute and long term management of each transplant program patient, including the management of commonly encountered complications.
Clinical review committees require a critical mass of people actively engaged in patient decisions. Review committees for established BMT programs typically schedule weekly meetings of between 10 and 20 people, half of whom are physicians, to
discuss the feasibility of proposed BMT transplants. At the time of the Application and final hearing, Baptist only identified four to eight competent staff members available to serve on a clinical review committee for the proposed program.
With regard to the requirements for written protocols and evaluative procedures required by rule 59C-1.044(3)(e) and (f), while there are apparently some draft protocols, the evidence indicates that the actual written protocols have not yet been developed.
Subsections (h) and (i) of rule 59C-1.044(3) require all transplant program applicants to have:
(3)(h) An on-site tissue-typing laboratory or a contractual arrangement with an outside laboratory within the State of Florida, which meets the requirements of the American Society of Histocompatibility.
(3)(i) Pathology services with the capability of studying and promptly reporting the patient's response to the organ transplantation surgery, and analyzing appropriate biopsy material.
Baptist does not have an on-site tissue-typing laboratory. The rule allows an applicant without an on-site laboratory to contract with an outside laboratory located within the state of Florida. While the Application claims that Baptist would contract with OneBlood to provide tissue typing for histocompatibility, OneBlood is not certified, licensed, or
otherwise capable of performing histocompatibility lab services. Without the requisite certification, Baptist would not be able to bill Medicare for OneBlood to perform histocompatibility services. While it was suggested at the final hearing that Baptist could perhaps contract with LabCorp for the histocompatibility services, the evidence did not show that such services would be performed by a laboratory located within the state of Florida.
With regard to the requisite pathology services, the Application states: "This in house expertise and infrastructure, combined with OneBlood external resources, will ensure that all BMT patients will have the required laboratory support to optimally meet their needs." Baptist's nursing expert testified at hearing that pathology services would be involved in diagnosis of graft versus host disease. However, both the testimony and Application were lacking specifics as to how these complex services would be provided.
Rule 59C-1.044(3)(j) requires transplant program applicants to have “[b]lood banking facilities.” Baptist’s Application provides that this criterion will be met by existing blood banking facilities, and that OneBlood would provide a "centralized blood collection, storage and distribution hub." Baptist's blood banking capabilities were not explained. As to reliance on OneBlood, there was no evidence of an existing
contract or of OneBlood's capability to provide the required services.
Rule 59C-1.044(3)(k) and (l) require transplant program applicants to have:
(3)(k) A program for the education and training of staff regarding the special care of transplantation patients.
(3)(1) Education programs for patients, their families and the patient's primary care physician regarding aftercare for transplantation patients.
Baptist proved its ability to establish a program for staff training and education. BHSF has a clinical learning department. The Application states that BHSF’s resources will be used to establish a comprehensive training program for the proposed BMT program. BHSF, through MCI, has developed a BMT program education plan. Although the Application lists more than 30 clinicians who support the clinical learning department, none have experience in BMT. While BHSF's training program will undoubtedly be able to adjust to meet the requirements of rule 59C-1.044(3)(k), it stands to reason that lack of immediate experienced staff may cause some delay in implementation.
Likewise, regarding rule 59C-1.044(3)(1) requirements for educational programs for BMT patients, families, and patient's primary care physicians, while Baptist introduced an exhibit entitled “Transplant Basics” that addresses issues confronting transplant patients, families and caregivers, there
was no elaboration as to whether the training programs have been developed.
Rule 59C-1.044(4)(a), relating to staff requirements for all transplant program applicants, requires applicants to have:
(a) A staff of physicians with expertise in caring for patients with end-stage disease requiring transplantation. The staff shall have medical specialties or sub-specialties appropriate for the type of transplantation program to be established. The program shall employ a transplant physician, and a transplant surgeon, if applicable, as defined by the United Network for Organ Sharing (UNOS) June 1994. The UNOS definitions are incorporated herein by reference. A physician with one year experience in the management of infectious diseases in the transplant patient shall be a member of the transplant team.
The only physician staffing that Baptist identified for its proposed BMT program is Dr. Lyle Feinstein. He was hired in September 2015 by Baptist Health System. Dr. Feinstein is the former BMT program director and physician for the Memorial Health System program located in Broward County, also in TSA 4. Dr. Citron was the only other physician identified as having any experience in performing BMT procedures. However, his medical group stopped doing BMT, around 1999, when it was no longer indicated as the standard of care for breast cancer.
While the Application and SAAR note that there are
19 certified hematologists and oncologists on Baptist's staff, only four of the 19 are hematologists.
Further, as correctly noted in the SAAR, “the Application did not address the infectious disease criteria.” The evidence at the final hearing did not further expound on how Baptist would address the infectious disease criteria.
Rule 59C-1.044(4)(b) requires transplant program applicants to have:
A program director who shall have a minimum of 1 year of formal training and
1 year of experience at a transplantation program for the same type of organ transplantation program proposed. Provided, however, that an applicant for a bone marrow transplantation program shall meet the requirements in subsection (9).
While Baptist is in the process of recruiting, a program director with all the required experience and training was not identified either in the Application or at the final hearing. Baptist is recruiting outside the BHSF organization. As previously noted, the salary expense on the staffing schedule in the Application does not show this position funded or filled for the 2019 year of operation.
Rule 59C-1.044(4)(d) requires applicants to have:
(4)(d) A staff of nurses, and nurse practitioners with experience in the care
of chronically ill patients and their families.
Baptist met this criterion with evidence showing that it has sufficient nursing staff to treat patients with other forms of cancer and with experience in the care of chronically ill patients and their families.
Rule 59-C 1.044(4)(e) requires all transplant program applicants to have:
(4)(e) Contractual agreements with consultants who have expertise in blood banking and are capable of meeting the unique needs of transplant patients on a long term basis.
Again, Baptist identifies OneBlood as satisfying this criteria. The evidence, however, did not show that Baptist has a contract with OneBlood. No representative from OneBlood testified as to any of its capabilities or whether it could provide the services needed for either an allogeneic or autologous BMT program.
As further discussed below, OneBlood does not have the capabilities, facilities, or licensures to provide services for an allogeneic program.
Subsections (f), (g), and (h) of rule 59C-1.044(4), require transplantation program applicants to have:
Nutritionists with expertise in the nutritional needs of transplant patients;
Respiratory therapists with expertise in the needs of transplant patients; and,
Social workers, psychologists, psychiatrists, and other individuals skilled in performing comprehensive psychological assessments, counselling patients, and families of patients, providing assistance with financial arrangements, and making arrangements for use of community resources.
With regard to subsection (f), the Application lists a core group of three registered and licensed dietician/nutrition staff, plus three additional credentialed nutritional support team members. However, as noted in the SAAR, Baptist does not state whether the listed nutritionists have experience in meeting the needs of transplant patients.
The drug regimens required to be delivered by respiratory therapists to allogeneic transplant patients are unique and complex. Baptist states in the Application that it has 83 registered respiratory therapists in its respiratory department. As noted in the SAAR, however, the Application does not affirmatively state whether any of its respiratory therapists have expertise in the respiratory needs of transplant patients. While the Application states that the respiratory therapists who will provide services to BMT patients will receive additional education, Baptist did not adequately address
its ability to provide adequate respiratory therapist services for BMT procedures.
As to the requirements of rule 59C-1.044(4)(h), Baptist does not currently have social workers to assist families concerning the impacts of a BMT. However, UM does not contest Baptist’s ability to meet that requirement and the Application and evidence otherwise demonstrated Baptist’s capability of fulfilling those requirements in the future.
3. Additional Criteria for Allogeneic BMT Program Applicants
In addition to the minimum projections of 10 allogeneic transplants each year required by rule 59C- 1.044(9)(b)1., and the research requirements set forth in rule 59C-1.044(9)(b)9. and 10., addressed above, rule 59C- 1.044(9)(b)1. through 8. and 10. through 12. have additional requirements that applicants for adult allogeneic BMT programs must meet.
Rule 59C-1.044(9)(b)2. requires allogeneic BMT program applicants to have:
A program director who is a board certified hematologist or oncologist with experience in the treatment and management of adult acute oncological cases involving high dose chemotherapy or high dose radiation therapy. The program director must have formal training in bone marrow transplantation.
These criteria for a program director are essentially the same as set forth in rule 59C-1.044(4)(b) and rule 59C- 1.044(9)(c)2. As previously discussed, Baptist has not hired a program director.
Rule 59C-1.044(9)(b)3. requires applicants for allogeneic BMT programs to have:
Clinical nurses with experience in the care of critically ill immuno-suppressed patients. Nursing staff shall be dedicated full time to the program;
Baptist identified two nurses with experience in treating BMT patients. Baptist did not specify the number of nurses with the requisite experience to be transferred from other areas or the number who will be new hires for the proposed BMT program.
161. Rule 59C-1.044(9)(b)4. requires:
An interdisciplinary transplantation team with expertise in hematology, oncology, immunologic diseases, neoplastic diseases, including hematopoietic and lymphopoietic malignancies, and non- neoplastic disorders. The team shall direct permanent follow-up care of the bone marrow transplantation patients, including the maintenance of immunosuppressive therapy and treatment of complications.
While Baptist identified the physicians and nurses who came from Memorial West with experience in BMT procedures, it did not provide evidence of who would comprise an
"interdisciplinary transplantation team." Further, Baptist did not identify staff that would provide services for "maintenance of immunosuppressive therapy and treatment of complications" for allogeneic patients.
While Baptist has 1,800 nurses on staff, only two have BMT experience, both of whom were recruited away from the Memorial West BMT program. Baptist has not identified any other staff ready to perform allogeneic BMT services. Rather, Baptist proposes to train staff to comprise the interdisciplinary team. Nurse Rios, who will be doing the training for Baptist, testified that, at Memorial West, it took one year before they performed their first outpatient autologous transplant, and three years before Memorial West applied for a CON for an inpatient and allogeneic transplant program. This evidence calls into question Baptist's proposed ability to implement an allogeneic program in 18 months.
Under rule 59C-1.044(9)(b)6., applicants must have:
A radiation therapy division on-site which is capable of sub-lethal x- irradiation and total lymphoid irradiation. The division shall be under the direction of a board certified radiation oncologist.
Radiation therapy is a highly skilled and complex service for BMT patients. Baptist failed to demonstrate, either
in the Application or at the final hearing, that it has the requisite staff to handle this service for BMT patients.
166. Rule 59C-1.044(9)(b)7. requires:
A laboratory equipped to handle studies including the use of monoclonal antibodies, if this procedure is employed by the hospital, or T-cell depletion, separation of lymphocyte and hematological cell subpopulations and their removal for prevention of graft versus host disease. This requirement may be met through contractual arrangements.
The Application addresses the requirement of 59C- 1.044(9)(b)7. by explaining that, "Cellular processing services will be provided by OneBlood or other external specialty providers with applicable accreditation and certification." The Application also cites a letter from OneBlood to support a claim that it can perform T-Cell depletion. Review of the letter, which was introduced as an exhibit during the final hearing and is otherwise hearsay, indicates that OneBlood can perform T-Cell subsets, not T-Cell depletion. There was no evidence demonstrating OneBlood's ability to perform T-Cell depletion.
T-Cell depletion is a preventative measure against Graft versus Host disease, a serious and anticipated complication of an allogeneic BMT. And yet, it is not anticipated that T-Cell depletion will initially be available for Baptist's proposed program.
At the final hearing, when Baptist's nursing witness, Ms. Rios, was asked how Baptist will comply with 59C- 1.044(9)(b)7., she replied, "I don't know at this point." When Baptist's counsel followed up and asked how Memorial West complied with this criterion, Ms. Rios replied, "We did not do
T-Cell depletion at Memorial."
Further, the evidence did not demonstrate that OneBlood is FACT-accredited to do the blood processing services, like T-Cell depletion, which are required for allogeneic BMT programs. Baptist's reliance on OneBlood to perform services is contrary to objective evidence as to what OneBlood can actually perform. Baptist failed to demonstrate that it has a feasible proposal to provide for T-Cell depletion.
Rule 59C-1.044(9)(b)8. requires allogeneic BMT program applicants to have:
An on-site laboratory equipped for the evaluation and cryopreservation of bone marrow.
The Application does not provide for and Baptist does not plan to have an on-site laboratory equipped for the evaluation and cryopreservation of bone marrow. Rather, the Application states that "[b]one marrow evaluation and cryopreservation will be provided by the OneBlood organization." Baptist’s intent in this regard was confirmed by testimony. The requirement is that the laboratory be on-site. Instead, Baptist
proposes to ship blood product to a OneBlood facility more than
40 miles from Baptist.
When blood product is cryopreserved, its temperature is extremely low and very susceptible to fractures. Serious complications could occur if there are any issues with the transport of a donor's blood.
Baptist’s proposed contractual arrangement with OneBlood is not in compliance with the rule requirement for an on-site laboratory for allogeneic BMT transplants. The SAAR does not address Baptist’s failure to meet this requirement for an on-site lab.
When confronted with the issue at the final hearing, AHCA’s expert, Ms. Fitch, took the position that language under the recitation on page 26 of the SAAR, that an “on-site tissue- typing laboratory or a contractual arraignment with an outside laboratory within the State of Florida, which meets the requirements of the American Society of Histocompatibility,” was an acknowledgment that Baptist met the requirement in rule 59C- 1.044(9)(b)8. Ms. Fitch testified that the above quote from the SAAR was borrowed from language used for evaluations of past applications, and that contractual arrangements should be sufficient. A comparison of that language from the SAAR, however, with the general requirement under rule 59C-1.044(3)(h) applicable to all types of transplantation programs, makes it
clear that Ms. Fitch confused the two laboratory requirements. The general requirement for all transplant programs under 59C- 1.044(3)(h) is for an “on-site tissue-typing laboratory or a contractual arrangement with an outside laboratory within the State of Florida, which meets the requirements of the American Society of Histocompatibility.” The requirement for an on-site laboratory for allogeneic BMT programs under 59C-1.044(9)(b)8., however, does not allow for contracting with an outside laboratory, but simply provides that an applicant shall have “[a]n on site laboratory equipped for the evaluation and cryopreservation of bone marrow.”
While Ms. Fitch testified that none of the rule requirements were “100 percent mandatory,” allowing Baptist to meet the requirement for an on-site laboratory through contractual arrangement with an outside laboratory would violate the express terms of rule 59C-1.044(9)(b)8.
Rule 59C-1.044(9)(b)11. requires allogeneic BMT program applicants to have:
A patient convalescent facility to provide a temporary residence setting for transplant patients during the prolonged convalescence.
Baptist meets this requirement with a new facility adjacent to Baptist Hospital and MCI, charging standard rates for the facility as would be paid in comparable area hotels.
Rule 59C-1.044(9)(b)12. requires allogeneic program applicants to have:
An outpatient unit for close supervision of discharged patients.
Baptist proposes to provide those outpatient services at MCI, and is closing its outpatient cancer facilities at its other hospitals, except for its chemotherapy unit at Mariner Hospital in Monroe County, so that they will all be housed under MCI. Specific information as to how the outpatient unit at MCI will be staffed is lacking. In particular, there are no specifics as to the staffing and qualifications for those at MCI who will be providing the "collection and reinfusion of stem cells." Collection and reinfusion of stem cell is accomplished with the use of an apheresis machine. While the evidence indicates this activity will be undertaken on the third floor of MCI’s “research building,” Schedule 6 of the Application does not identify nursing or other staff or personnel.
4. Allogeneic BMT Program Applicant Criteria
Rule 59C-1.044(9)(c) contains requirements specific to autologous BMT program applicants. Subsections (c)2., (c)3., and (c)6. of that rule are the same requirements for allogeneic programs provided in rule 59C-1.044(9)(b)2., (b)3., and (b)6., addressed above.
The requirements under 59C-1.044(9)(c)4., are the same as for allogeneic programs under 59C-1.044(9)(b)4., except (c)4. does not require “the maintenance of immunosuppressive therapy and treatment complications” as required for allogeneic programs. While additional staff training will be required, Baptist has demonstrated the capability to commence autologous BMT transplants in the not-so-distant future. This capability was largely acquired by hiring away the primary BMT medical professionals who conducted that program at Memorial West.
Many of Baptist’s other clinical requirements for an autologous program will have to be acquired. While Baptist will depend on contractual agreements with OneBlood, corroborating evidence from OneBlood regarding its capabilities in that regard was not provided, nor was there evidence of an existing contractual agreement with OneBlood.
As for the clinical proposal to deliver autologous BMT transplants, while attainable, Baptist’s proposed program does not add any new clinical capabilities or experience that are not already being provided in the service area.
As far as an allogeneic program, rather than demonstrating current capability, the evidence indicates that Baptist would start with autologous transplants, and begin allogeneic transplants only after sufficient institutional
skills and staff training are obtained. A specific timetable as to when such skills would be acquired was not supplied.
ADVERSE IMPACT
UM demonstrated that it will lose $111,019 of revenue per transplant episode for each procedure not served by UM. There was credible, expert opinion that projected a range of total financial adverse impact to UM in the form of income loss between $6.2 million and $14 million over a three-year period.
As demonstrated by the fact that Baptist has hired away Memorial West's program director, head nurse, one of its most skilled ARNPs, and its main pharmacist, approval of Baptist’s program could also adversely impact UM by drawing staff and personnel away from UM. Baptist has already undermined the services available in TSA 4 by depleting the staffing at the BMT program of Memorial West at the expense of Memorial West’s BMT program.
A new program in TSA 4 will also adversely affect the capability for effective research efforts in existing programs. The relatively small population of BMT patients makes program volume critical for clinical research. The small patient population is also characterized by having significant subgroups with individual uniqueness by patient. By disbursing this small population among yet another provider, advancements in research are hampered by reducing the critical and varied mass of patients
who present to a given set of physicians and staff, thereby diluting those researchers’ ability to learn by experience, experimentation, and observation. This same phenomenon occurs with the dilution of BMT candidates for clinical trials.
The de-concentration of research, experimentation, and clinical effort for this specialized transplant service is contrary to the statutory and public policy contained in section 408.032(17), which recognizes that tertiary health services, (which include BMT programs), “due to [their] high level of intensity, complexity, specialized or limited applicability, and cost, should be limited to, and concentrated in, a limited number of hospitals to ensure the quality, availability, and cost- effectiveness of such service.”
In sum, considering the Application and the facts submitted at the final hearing as outlined above, it is found that Baptist’s Application to establish a new adult autologous and allogeneic BMT program in TSA 4 does not satisfy, on balance, the applicable statutory and rule review criteria required for
approval.
CONCLUSIONS OF LAW
Jurisdiction
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of,
these proceedings. §§ 120.569, 120.57(1), and 408.039(5), Fla. Stat.
Standing
In order for an existing health care facility to have standing to intervene in a CON proceeding, it must show that it will be “substantially affected” by approval of the CON application at issue. § 408.039(5)(c), Fla. Stat. In order to be substantially affected by the outcome of a proceeding, a party must show: (1) injury in fact of sufficient immediacy, and (2) that the person’s substantial injury is of a type or nature which the proceeding is designed to protect. Agrico Chem. Co. v. Dep’t of Envtl. Reg., 406 So. 2d 478 (Fla. 2d DCA
1981).
UM proved by a preponderance of the evidence that it has standing to participate as a party in this proceeding. UM demonstrated that approval of Baptist’s Application would have an adverse impact upon UM’s existing adult BMT program in the form of income loss between $6.2 million and $14 million over a three-year period. In addition, UM demonstrated that approval of a new adult BMT program in TSA 4 would have a deleterious effect on UM’s research efforts, and could impact UM’s ability to retain and attract staff necessary for continuation of its existing BMT program.
The adverse impact on UM, as more fully discussed in the Findings of Fact, above, is of the type or nature of injury against which this proceeding is designed to protect, and is substantial enough to establish UM’s standing.
No Partial Approval
The Application seeks approval for an inpatient autologous and allogeneic BMT program. The question of whether AHCA may issue a partial approval of Baptist’s Application, i.e., an “autologous only” BMT program, arose during the final hearing. AHCA rules prohibit the partial approval of a project unless the Applicant specifies, at the time it submits its application, that it wishes to be considered for a partial award and, in support of such request, includes in its application all required schedules and analysis addressed to the partial approval.
Rule 59C-1.008(5) provides:
If an applicant would like to be considered for an award of an identifiable portion of the project, the application, at the time of submission, must include responses to the applicable questions on the identifiable portion. The Agency may make a partial award only if the applicant included responses to the applicable questions in the application.
In this case, Baptist is not requesting a partial approval and the Application does not contain schedules or analyses of an “autologous-only” BMT program. Moreover, a
partial approval would arguably constitute an impermissible amendment to the Application, because it would substantially and impermissibly change the nature and scope of Baptist’s Application. See Cmty. Hospice of N.E. Fla. v. AHCA, et al., Case No. 10-1865CON, FO at 148-149 (Fla. DOAH Mar. 22, 2011;
Fla. AHCA May 2, 2011)(when a CON application addressed need for one program, the applicant could not argue for approval of two at final hearing; Broward Health’s attempt to establish a need for two adult kidney transplant programs is a departure from its applications and would require a very different review by the Agency than was conducted. The dual-approvals theory is so material a change from Broward Health’s applications that it constitutes an impermissible amendment.).
Burden of Proof
The petition in this case commenced a de novo proceeding intended to formulate final agency action, “not to review action taken earlier and preliminarily.” Fla. Dep't of
Transp. v. J.W.C. Co., 396 So. 2d 778, 786-87 (Fla. 1st DCA
1981)(citing McDonald v. Dep’t of Banking & Fin., 346 So. 2d 569
(Fla. 1st DCA 1977)); § 120.57(1), Fla. Stat. Therefore, the Agency's preliminary decision on a CON application, including findings in a SAAR, is not entitled to a presumption of correctness. Id.
Baptist, as an applicant for a CON, has the burden of demonstrating that its Application should be granted. Boca Raton Artificial Kidney Ctr. v. Dep’t of HRS, 475 So. 2d 250 (Fla. 1st
DCA 1985). The award of a CON must be based on a balanced consideration of applicable statutory and rule criteria. Dep’t
of HRS v. Johnson and Johnson Home Healthcare Inc., 447 So. 2d
361 (Fla. 1st DCA 1984); Balsam v. Dep’t of HRS, 486 So. 2d 1314 (Fla. 1st DCA 1988). The weight to be given each criterion is not fixed but varies depending on the facts of each case. Collier Med. Ctr., Inc. v. Dep’t of HRS, 462 So. 2d 83 (Fla. 1st
DCA 1985).
Although weight-accorded criteria may vary with the facts, an agency is required to follow its own rules. See
Vantage Healthcare Corp. v. Ag. for Health Care Admin., 687 So. 2d 306, 308 (Fla. 1st DCA 1997); Collier Cnty. Bd. of Cnty.
Comm'rs v. Fish & Wildlife Conser. Comm'n, 993 So. 2d 69, 74
(Fla. 2d DCA 2008). In Cleveland Clinic Florida Hospital, Inc. v. Agency for Health Care Administration, 679 So. 2d 1279 (Fla.
1st DCA 1997), the First District Court of Appeal held:
Without question, an agency must follow its own rules, Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 493 So. 2d 1055 (Fla. 1st DCA 1986), but if the rule, as it plainly reads, should prove impractical in operation, the rule can be amended pursuant to established rulemaking procedures.
However, “[a]bsent such amendment,
expedience cannot be permitted to dictate its terms.” Id. at 1057. That is, while an administrative agency “is not necessarily bound by its initial construction of a statute evidenced by the adoption of a rule,” the agency may implement its changed interpretation only by “validly adopting subsequent rule changes.” Department of Administration, Division of Retirement v.
Albanese, 445 So. 2d 639, 642 (Fla. 1st DCA
1984). Id. 679 So. 2d at 1242.
So, while the weight accorded to, for instance, the criterion derived from section 408.035(1)(c) pertaining to an applicant’s ability and record of providing quality of care, may vary depending on the facts, application of programmatic requirements found in agency rules, such as rule 59C-1.044, which sets minimum standards for applicants applying for transplant programs, cannot be varied according to the facts.5/
Baptist failed to demonstrate that it is either a teaching or research hospital as required by rule 59C- 1.044(9)(b)9., did not show that it has an on-site laboratory equipped for evaluation and cryopreservation of bone marrow required by rule 59C-1.044(9)(b)8., and did not provide sufficient proof of an ongoing research program or an established research-oriented oncology program to meet the requirements of rule 59C-1.044(9)(c)7. and 8. Because of these failures and other deficiencies noted in the above analysis of applicant requirements under rule 59C-1.044, AHCA’s own rules dictate denial of the Application.
Moreover, in view of the evidence, a balanced consideration of all applicable statutory and rule criteria compels the conclusion that the CON Application should be
denied.
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that the Agency for Health Care Administration enter a final order denying CON Application No. 10420.
DONE AND ENTERED this 30th day of March, 2017, in Tallahassee, Leon County, Florida.
S
JAMES H. PETERSON, III
Administrative Law Judge
Division of Administrative Hearings The Desoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 2017.
ENDNOTES
1/ Florida Administrative Code Rule 59C-1.044(2) provides the following definition:
Bone Marrow Transplantation. Human blood precursor cells, stem cells, administered to a patient to restore normal hematological and immunological functions
following ablative or nonablative therapy with curative or life-prolonging intent. Human blood precursor cells may be obtained from the patient in an autologous transplant or from a medically acceptable related or unrelated donor, and may be derived from bone marrow, circulating blood, or a combination of bone marrow and circulating blood. If chemotherapy is an integral part of the treatment involving bone marrow transplantation, the term “bone marrow transplantation” includes both the transplantation and the chemotherapy. (Section 627.4236(1), F.S.)
2/ Unless otherwise noted, all citations to the Florida Statutes and Florida Administrative Code are to current versions.
3/ While Baptist explored different growth rates and data sets in its forecasts, the methodology and range of the results were basically the same.
4/ Recitals are not considered part of a contract unless specifically incorporated by reference. Whetstone Candy Co., Inc. v. Kraft Foods, Inc., 351 F.3d 1067, 1074 (11th Cir. 2003);
Johnson v. Johnson, 725 So. 2d 1209, 1213 (Fla. 3d DCA 1999). Moreover, an adverse party is not bound by such writing if the proponent of the document refuses to introduce the other parts.
§ 90.108, Fla. Stat.
5/ While section 120.542, Florida Statutes, provides a procedure for variances and waivers of rule requirements, there is no evidence that Baptist sought to procure a variance or waiver.
COPIES FURNISHED:
Kevin M. Marker, Esquire
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Richard J. Saliba, Esquire
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Richard J. Shoop, Agency Clerk
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Justin Senior, Secretary
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 1
Tallahassee, Florida 32308 (eServed)
Stuart Williams, General Counsel Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Shena L. Grantham, Esquire
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Thomas M. Hoeler, Esquire
Agency for Health Care Administration Fort Knox Building
2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
M. Stephen Turner, Esquire Broad and Cassel
215 South Monroe Street, Suite 400 Tallahassee, Florida 32301 (eServed)
Frank P. Rainer, Esquire Broad and Cassel
215 South Monroe Street, Suite 400 Tallahassee, Florida 32301 (eServed)
Leonard M. Collins, Esquire Broad and Cassel
215 South Monroe Street, Suite 400 Tallahassee, Florida 32301 (eServed)
Karen A. Putnal, Esquire Moyle Law Firm, P.A.
118 North Gadsden Street, Second Floor Tallahassee, Florida 32301
(eServed)
Robert A. Weiss, Esquire Moyle Law Firm, P.A.
118 North Gadsden Street, Second Floor Tallahassee, Florida 32301
(eServed)
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Jun. 13, 2017 | Agency Final Order | |
| Mar. 30, 2017 | Recommended Order | Consideration of applicable statutory and rule criteria compels a recommendation that an application for a new adult bone marrow transplant program in TSA 4 be denied. |
