STATE OF FLORIDA

AGENCY FOR HEALTH CARE ADMINISTRATION

THE NEMOURS FOUNDATION d/b/a NEMOURS CHILDREN' S HOSPITAL,

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2016 CCT 31 A II: 35

Petitioner,

V.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

CASE NOS. 17-1913CON

l 7-1914CON AHCA NOS. 2017002774

2017002775

RENDITION NO.: AHCA- IS • c''al \ -FOF-OLC

Respondent.

                                                                    I

FINAL ORDER

This case was referred to the Division of Administrative Hearings (DOAH) where the assigned Administrative Law Judge (ALJ), W. David Watkins, conducted a formal administrative hearing. At issue in this proceeding is whether the Agency for Health Care Administration ("AHCA " or " Agency") should approve the Certificate of Need (" CON") applications filed by Petitioner to establish a new pediatric heart transplant ("PHT") program and pediatric heart and lung transplant ("PHLT") program in AHCA Organ Transplant Service Area ("OTSA") 3. The Recommended Order entered on July 31, 2018 is attached to this final order

and incorporated herein by reference, except where noted infra.

RULINGS ON EXCEPTIONS

Petitioner filed exceptions to the Recommended Order, and Respondent filed a response to Petitioner's exceptions.

In determining how to rule upon Petitioner's exceptions and whether to adopt the ALJ's Recommended Order in whole or in part, the Agency must follow Section 120.57(1)(/), Florida Statutes, which provides in pertinent part:

Filed November 1, 2018 2:29 PM Division of Administrative Hearings

The agency may adopt the recommended order as the final order of the agency. The agency in its final order may reject or modify the conclusions of law over which it has substantive jurisdiction and interpretation of administrative rules over which it has substantive jurisdiction. When rejecting or modifying such conclusion of law or interpretation of administrative rule, the agency must state with particularity its reasons for rejecting or modifying such conclusion of law or interpretation of administrative rule and must make a finding that its substituted conclusion of law or interpretation of administrative rule is as or more reasonable than that which was rejected or modified. Rejection or modification of conclusions of law may not form the basis for rejection or modification of findings of fact. The agency may not reject or modify the findings of fact unless the agency first determines from a review of the entire record, and states with particularity in the order, that the findings of fact were not based upon competent substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements oflaw....

§120.57(1)(1), Fla. Stat. Additionally, "[t]he final order shall include an explicit ruling on each exception, but an agency need not rule on an exception that does not clearly identify the disputed portion of the recommended order by page number or paragraph, that does not identify the legal basis for the exception, or that does not include appropriate and specific citations to the record."

§ 120.57(l)(k), Fla. Stat. In accordance with these legal standards, the Agency makes the following rulings on Petitioner's exceptions:

In General Exception No. 1, Petitioner takes exception to the Recommended Order in

general, arguing it cannot be squared with the case of Variety Children's Hospital d/b/a Nicklaus

Children's Hospital v. Agency for Health Care Administration, et. al, DOAH Case No. 16-1695 (AHCA 2017). General Exception No. 1 is not a valid exception under section 120.57(1 ), Florida Statutes, because Petitioner does not clearly identify the disputed portion of the Recommended Order by page number or paragraph. See § 120.57(l)(k), Florida Statutes. Therefore, the Agency need not rule on it.

In Specific Exception No. 1, Petitioner takes exception to Paragraph 61 of the Recommended Order, arguing there is no competent, substantial record evidence to support the

ALJ's use of the terms "aggressive" and "unreasonable" in that paragraph. The findings of fact in Paragraph 61 of the Recommended Order are based on competent, substantial record evidence. See Transcript, Volume 5, Pages 762-763; and Petitioner's Exhibit 49. Thus, the Agency is not at liberty to reject or modify them. See § 120.57(1 )([), Fla. Stat.; Heifetz v.

Department of Business Regulation, 475 So. 2d 1277, 1281 (Fla. 1st DCA 1985) (holding that an agency "may not reject the hearing officer's finding [of fact] unless there is no competent, substantial evidence from which the finding could reasonably be inferred"). Therefore, the Agency denies Specific Exception No. I.

In Specific Exception No. 2, Petitioner takes exception to Paragraph 63 of the Recommended Order, arguing the paragraph contains opinions, not findings of fact. Contrary to Petitioner's argument, Paragraph 63 of the Recommended Order contains findings of fact that are based on competent, substantial record evidence. See Transcript, Volume 5 at Pages 757-759

and 762-763; and Petitioner's Exhibit 49. Thus, the Agency cannot reject or modify them. See§

120.57(1)([), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 2.

In Specific Exception No. 3, Petitioner takes exception to Paragraph 64 of the Recommended Order, arguing that it contains opinion, not facts. Contrary to Petitioner's argument, Paragraph 64 of the Recommended Order contains findings of fact that are based on competent, substantial record evidence. See Transcript, Volume 5 at Pages 645-646 and 763; and Petitioner's Exhibit 49. Thus, the Agency is prohibited from rejecting or modifying them.

See§ 120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 3.

In Specific Exception No. 4, Petitioner takes exception to Paragraph 65 of the Recommended Order, arguing it should have been placed in the Conclusions of Law portion of the Recommended Order. However, Petitioner fails to state a legal basis for the exception.

Thus, the Agency need not address it. See§ 120.57(l)(k), Fla. Stat.

In Specific Exception No. 5, Petitioner takes exception to Paragraph 69 of the Recommended Order, arguing the paragraph is "riddled with opinion, mischaracterization of the evidence, and phrasing that shows the paragraph to be more appropriately labeled a conclusion of law." The Agency disagrees with Petitioner. Paragraph 69 of the Recommended Order contains findings of fact, and reasonable inferences therefrom, that are all based on competent,

substantial record evidence. See Transcript, Volume 5, at Pages 742-743; Transcript, Volume 6 at Pages 880 and 907; Transcript, Volume 7 at Pages 931-932; and Transcript, Volume 8, Pages 1118-1119. Thus, the Agency cannot reject or modify them. See § 120.57(1)(1), Fla. Stat.;

Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 5.

In Specific Exception No. 6, Petitioner takes exception to Paragraph 75 of the Recommended Order, arguing the second and last sentences of that paragraph are not based on competent, substantial evidence and should thus be stricken. The findings of fact in the second and last sentences of Paragraph 75 of the Recommended Order are based on competent, substantial record evidence. See Transcript, Volume 8 at Pages 1118-1120. Thus, the Agency cannot alter them. See § 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 6.

In Specific Exception No. 7, Petitioner takes exception to Paragraph 94 of the Recommended Order, arguing Petitioner set forth "not normal" circumstances that did not fall under either of the two categories delineated by the ALJ in that paragraph. The findings of fact

m Paragraph 94 of the Recommended Order are based on competent, substantial record

evidence. See Transcript, Volume 8, Pages 1107-1108; Transcript, Volume 9 at Pages 1297- 1299; and Petitioner's Exhibit 1. Thus, the Agency is not at liberty to reject or modify them.

See§ 120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 7.

In Specific Exception No. 8, Petitioner takes exception to Paragraph 100 of the Recommended Order, based upon the reasoning set forth in its Specific Exception Nos. 5, 6 and

7. Based on the rulings on Specific Exception Nos. 5, 6 and 7 supra, which are hereby incorporated by reference, the Agency denies Specific Exception No. 8.

In Specific Exception No. 9, Petitioner takes exception to Paragraph 103 of the Recommended Order based upon the reasoning set forth in its Specific Exception No. 7. Based on the ruling on Specific Exception No. 7, which is hereby incorporated by reference, the Agency denies Specific Exception No. 9.

In Specific Exception No. 10, Petitioner takes exception to Paragraph 104 of the Recommended Order based on the reasoning set forth in its Specific Exception Nos. 1-3 and 7. Based upon the rulings on Specific Exception Nos. 1-3 and 7 supra, which are hereby incorporated by reference, the Agency denies Specific Exception No. 10.

In Specific Exception No. 11, Petitioner takes exception to Paragraph 106 of the Recommended Order, arguing the ALJ's finding of fact in the first sentence of the paragraph contravenes the ALJ's ruling in a December 13, 2017 order entered in this matter, wherein the ALJ stated that evidence of adverse impact to providers located outside of OTSA 3 was not relevant to the proceeding. To the extent Petitioner is asking the Agency to address an evidentiary issue, such issue is clearly outside of the Agency's substantive jurisdiction. See

Barfield v. Department of Health, 805 So. 2d 1008 (Fla. 1st DCA 2002). Additionally, the findings of fact in Paragraph 106 of the Recommended Order are based on competent, substantial record evidence. See Transcript, Volume 2, at Page 230; Transcript, Volume 4 at Pages 513-516; Transcript, Volume 5 at Pages 763-764, 793-794; and Transcript, Volume 8 at Pages 1122-1123. Thus, the Agency is prohibited from rejecting or modifying them. See §

120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, for all these reasons, the Agency denies Specific Exception No. 11.

In Specific Exception No. 12, Petitioner takes exception to Paragraph 107 of the Recommended Order, arguing that portions of it are opinion, and not fact. Contrary to Petitioner's argument, Paragraph 107 of the Recommended Order contains findings of fact that

are all based on competent, substantial record evidence. See Transcript, Volume 5, at Pages 740- 741 and 757-759; and Transcript, Volume 8 at Pages 1120-1121 and 1190-1191. Thus, the

Agency cannot reject or modify them. See§ 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 12.

In Specific Exception No. 13, Petitioner takes exception to Paragraph 110 of the Recommended Order, arguing there is no competent, substantial evidence to support the findings of fact in that paragraph. Contrary to Petitioner's argument, the findings of fact in Paragraph 110

of the Recommended Order are based on competent, substantial record evidence. See Transcript, Volume 4 at Pages 479-481 and 486; and Transcript, Volume 8 at Pages 1189-1191. Thus, the

Agency is prohibited from rejecting or modifying them. See § 120.57(1)(l), Fla. Stat.; Heifetz,

475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 13.

In Specific Exception No. 14, Petitioner takes exception to Paragraph 112 of the Recommended Order, arguing it contains opinions and not factual findings. Paragraph 112 of

the Recommended Order contains reasonable inferences based on competent, substantial record

evidence. See Transcript, Volume 8 at Pages 1118-1121. Thus, the Agency cannot reject or

modify them. See§ 120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 14.

In Specific Exception No. 15, Petitioner takes exception to Paragraphs 113 and 114 of the Recommended Order, arguing they contain mislabeled conclusions of law and ignore competent, substantial record evidence. Paragraphs 113 and 114 of the Recommended Order contain findings of fact that are all based on competent, substantial record evidence. See Transcript, Volume 8 at Pages 1104-1105, 1124 and 1138. Thus, the Agency is prohibited from rejecting or modifying them. See § 120.57(1)(/), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Specific Exception No. 15.

In Specific Exception No. 16, Petitioner takes exception to Paragraph 126 of the Recommended Order, based on the reasoning set forth in its previous 15 exceptions. Based on

the rulings on Specific Exception Nos. 1 through 15 supra, which are all hereby incorporated by reference, the Agency denies Specific Exception No. 16.

In Specific Exception No. 17, Petitioner takes exception to Paragraphs 128 through 131 of the Recommended Order, arguing the Agency should strike the last sentence of Paragraph 131 based on the reasoning set forth in Specific Exception Nos. 1 through 3, 5 and 6. The Agency finds that it has substantive jurisdiction over the conclusions of law in Paragraphs 128 through

131 of the Recommended Order because they involve the interpretation of an Agency rule.

However, the Agency finds that it cannot substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Specific Exception No. 17.

In Specific Exception No. 18, Petitioner takes exception to Paragraphs 139 and 140 of the Recommended Order, arguing rule 59C-1.044(6)(b)2. and 4., Florida Administrative Code, is not applicable to the CON applications at issue in this proceeding. The Agency disagrees. It finds that it has substantive jurisdiction over the conclusions of law in Paragraphs 139 and 140 of the Recommended Order because it is the state agency in charge of administering Florida's CON program. However, the Agency finds that it cannot substitute conclusions of law that are as or more reasonable than those of the ALJ. Therefore, the Agency denies Specific Exception No. 18.

In Specific Exception No. 19, Petitioner takes exception to Paragraph 141 of the Recommended Order, based on the reasoning set forth in all of its previous exceptions. Based

upon the rulings on Petitioner's Specific Exception Nos. 1-18 supra, which are all hereby incorporated by reference, the Agency denies Specific Exception No. 19.

FINDINGS OF FACT

The Agency hereby adopts the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

The Agency hereby adopts the conclusions oflaw set forth in the Recommended Order.

ORDER

Based upon the foregoing, Petitioner's CON application nos. 10471 and 10472 are hereby denied. The parties shall govern themselves accordingly.

DONE and ORDERED this ay of o<!l.ck,- ,2018, in Tallahassee, Florida.

JUS RY

AGENCY FOR HEALTH CARE ADMINISTRATION

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY ALONG WITH THE FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has been furnished by the method indicated to the persons named below on this 31h.; of

_Q/4...,..-......  ---------"_, 2018.

. SHOOP, g ncy Clerk Agency for Health Care Administration 2727 Mahan Drive, MS #3

Tallahassee, Florida 32308-5403

(850) 412-3630

COPIES FURNISHED TO:

Honorable W. David Watkins Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060 (via electronic filing)

Stephen A. Ecenia, Esquire Craig D. Miller, Esquire Jennifer F. Hinson, Esquire David Mark Maloney, Esquire Rutledge Ecenia, P.A.

119 South Monroe Street, Suite 202

Tallahassee, Florida 32301

(via electronic mail to Steve@rutledge-ecenia.com, CMiller@rutledge-ecenia.com, Jennifer@rutledge-ecenia.com and dmaloney@rutledge-ecenia.com)

Richard J. Saliba, Esquire Kevin M. Marker, Esquire Assistant General Counsels

(via electronic mail to Richard.Saliba@ahca.myflorida.com and Kevin.Marker@ahca.myflorida.com)

Marisol Fitch Certificate of Need Unit

(via electronic mail to Marisol.Fitch@ahca.myflorida.com) Jan Mills

Facilities Intake Unit

(via electronic mail to Janice.Mills@ahca.myflorida.com)

Docket for Case No: 17-001913CON

Orders for Case No: 17-001913CON