STATE OF FLORIDA

AGENCY FOR HEALTH CARE ADMINISTRATION

PUNTA GORDA HMA, INC., licensee for CHARLOTTE REGIONAL MEDICAL

CENTER; SARASOTA COUNTY PUBLIC HOSPITAL BOARD d/b/a SARASOTA

MEMORIAL HOSPITAL; and SARASOTA CASE NO. 98-1134 DOCTORS HOSPITAL, INC. d/b/a 98-1142

COLUMBIA DOCTOR'S HOSPITAL OF 98-1145

SARASOTA, 98-1497

CON NO. 8913

Petitioners, 8914

vs.

STATE OF FLORIDA, AGENCY FOR RENDITION NO.: AHCA- HEALTH CARE ADMINISTRATION and 00-021-FOF-CON BON SECOURS-VENICE HEALTH CARE

CORPORATION,

Respondents,

and

NAPLES COMMUNITY HOSPITAL, INC.,

Intervenor.

/

FINAL ORDER

This cause was referred to the Division of Administrative Hearings for a formal administrative hearing. The assigned Administrative Law Judge ("ALJ") has submitted a Recommended Order to the Agency for Health Care Administration ("AGENCY"). The Recommended Order of September 16, 1999 is incorporated by reference.

RULING ON EXCEPTIONS

Bon Secours - Venice Healthcare Corporation ("VENICE") excepts to paragraph 38. Each finding and conclusion of the challenged paragraph is supported by the record and applicable law. Venice's assertion that paragraph 38 does not comply with the essential requirements of law is without foundation. The challenged findings are supported by competent, substantial evidence; therefore the exception is denied. Lawnwood Medical

Center vs. Agency for Health Care Administration, 678 So. 2d 421,

425 (Fla. 1st DCA 1996).

Venice excepts to the finding in paragraphs 105 and 116 that approval and operation of an open heart surgery program at Venice would drive the annual number of open heart surgeries at Charlotte Regional Medical Center (hereinafter "CRMC") below 350. Venice argues at length the weight of the evidence, but the finding is supported by competent, substantial evidence; therefore, the exception is denied.

Venice excepts to paragraphs 155, 157, and 158 asserting that the AW has created a conclusive presumption that a CON cannot be approved for a new open heart surgery program if it is credibly projected that approval and operation of the new program would drive the annual number of open heart surgeries below 350 at an existing program within the district. Elsewhere in the Recommended Order the AW found as a fact that approval of Venice's proposal would likely drive the annual number of open- heart surgeries at CRMC below 350. The AW did not make any findings regarding the amount by which the number of open-heart surgeries at CRMC would be reduced below 350. The AW's conclusion of law in paragraphs 157 and 158 of the Recommended Order-- that approval of Venice's application would reduce the annual volume of CRMC's open-heart surgeries to a number below 350, and this fact, therefore requires denial of the application-

-is rejected. To the extent these conclusions of law rely on, or

create, a conclusive presumption that a CON for a new program cannot be approved if it will likely reduce the volume of procedures of an existing provider below 350 annually, they are rejected. Accordingly, Venice's exception IV (B), to paragraphs

157 and 158, is accepted.

Rule 59C-1.033(7), Fla. Admin. Code, governs the Adult Open Heart Surgery Program Need Determination. The provisions of that rule dictate the considerations and calculations for publication of the semiannual fixed need pool. They are not the gauge, or measure of, or the way to determine, the statutory criteria of adverse impact that requires the Agency to consider the potential for adverse impact on existing providers if a new program were approved. See Fla. Admin. Code Rule 59C-1.008(2); Balsam v. HRS 486 So. 2d 1341, 1349 (Fla. 1st DCA 1986); and Section 408.035,

Fla. Stat. The likelihood that approval of any CON application would substantially adversely impact an existing provider is a statutory review criterion to be weighed and balanced, along with the other review criteria, in determining whether an application should be approved. The bases of the AW's recommendation that neither CON proposal at issue be approved reflect the weighing and balancing of the review criteria and include:

no geographic or economic access problems were shown, existing programs provide high quality care,

a new program would duplicate unused capacity at existing programs, and would be an inefficient use of health care resources,

there is serious potential for jeopardizing the financial viability of Sarasota Memorial, the primary provider for charitable and Medicaid care in Sarasota County and a leading regional cardiac center, and

approval of a new program would exacerbate problems in recruiting critical care nursing personnel in District 8.

Venice' remaining exception to paragraph 155, 157 and 158 is denied.

CRMC filed two exceptions.1 First, CRMC maintains that "[t]he Venice application must be denied due to its failure to introduce into evidence the hospital-wide pro-forma." While failure to prove the financial feasibility of a CON proposal requires denial, it does not follow that financial feasibility can only be proved by admission over hearsay objection of the applicant's hospital-wide pro-forma. The parties stipulated that both CON proposals at issue in this proceeding are financially feasible in the short term. As to the ALJ's finding that Venice's proposal is financially feasible in long term, the finding is supported by competent, substantial evidence; therefore, the exception is denied. See paragraphs 100 and 101 of the Recommended Order.

Next, CRMC maintains that "[t]he Venice application must be denied because it failed to include two years of annual audited financial statements." CRMC cites Section 408.037(1)(c), Florida Statutes, which requires the application package to include audited financial statements of the applicant-entity for the previous two years. Chapter 97-270, § 5, Laws of Florida added a harmless error provision as follows:

The applicant's failure to strictly comply with the requirements of Section 408.037(1) or paragraph (2)(c) is not cause for dismissal of the application, unless the failure to comply impairs the fairness of the proceeding or affects the correctness of the action taken by the agency.

To counsel's credit he does not allege prejudice to CRMC. The record demonstrates the exhaustive discovery, investigation, analysis, and evidentiary presentation by the parties opposing the approval of Venice's proposal. The exception is denied.

The conclusions of law rejected or modified by this final order concern statutes and rules over which the Agency has substantive jurisdiction. The Agency concludes its rejection and modification of the conclusions of law and interpretation of administrative rules, as outlined herein, is as reasonable, or more so, than the rejected and modified conclusions of law and interpretations of rule.

FINDINGS OF FACT

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

CONCLUSIONS OF LAW

Except as modified herein, the agency adopts the conclusions of law set forth in the Recommended Order.

Based on the foregoing, the application of Bon Secours - Venice Health Care Corporation for CON 8914 is DENIED and the application of Sarasota Doctors Hospital, Incorporated, for CON 8913 is DENIED.

DONE and ORDERED this 9th day of Feb, 2000, in Tallahassee, Florida.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION

RUBEN J. KING-SHAW, JR., DIRECTOR

ENDNOTE

1/ As acknowledged by CRMC, its exceptions do not address specific findings of fact or conclusions of law in the Recommended Order. However, in an abundance of caution, AHCA is ruling on the merits of CRMC's contentions.

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.

COPIES FURNISHED TO:

David M. Maloney Administrative Law Judge DOAH, The DeSoto Building 1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

James C. Hauser, Esquire Skelding, Labasky, Corry

Hauser, Jolly, Metz & Daws, P. A. Post Office Box 669

Tallahassee, Florida 32302-0669

Robert A. Weiss, Esquire Karen A. Putnal, Esquire

Parker, Hudson, Rainer & Dobbs LLP The Perkins House, Suite 200

118 North Gadsden Street Tallahassee, Florida 32301

John D. C. Newton, II, Esquire Berger Davis & Singerman, P. A.

215 South Monroe Street, Suite 705 Tallahassee, Florida 32301

Richard A. Patterson, Esquire Senior Attorney, Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308

Gerald B. Sternstein, Esquire Frank P. Rainer, Esquire Sternstein, Rainer & Clarke, P. A.

314 North Calhoun Street Tallahassee, Florida 32301-7606

W. David Watkins, Esquire Watkins & Caleen, P. A. Post Office Box 15828

Tallahassee, Florida 32317-5828

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a copy of the foregoing was served on the above-named people by U. S. Mail this 10th day of February, 2000.

R. S. POWER, Agency Clerk State of Florida, Agency for Health Care Administration 2727 Mahan Drive, Suite 3431 Fort Knox Building III Tallahassee, Florida 32308 850/922-5865

Docket for Case No: 98-001497CON

Orders for Case No: 98-001497CON