A STS REA NCC ANN ee Be riers D STATE OF FLORIDA a AGENCY FOR HEALTH CARE ADMINISTRATION REG -< 9p Py ne, las LAWNWOOD MEDICAL CENTER, DEES see mt ene INC., d/b/a LAWNWOOD REGIONAL MEDICAL CENTER, et. al., oS , DOAH CASE NOS. 02-0428 Petitioners, wi Dd? cloee O2-04n0 vs. 02-0431 02-0432 AGENCY FOR HEALTH CARE 02-0884 ADMINISTRATION and BETHESDA 02-0885 HEALTHCARE SYSTEM, INC., 02-0886 02-0887 Respondents, AHCA CASE NO. 2002046530 and HEALTHSOUTH OF TREASURE COAST, INC., d/b/a HEALTHSOUTH TREASURE COAST REHABILITATION HOSPITAL, and TENET ST. MARY'S, INC. d/b/a ST. MARY'S MEDICAL CENTER, Intervenors. / FINAL ORDER The Respondent, Agency for Health Care Administration, having entered into a Stipulation and Settlement Agreement with Petitioners, Lawnwood Medical Center, Inc. d/b/a Lawnwood Regional Medical Center and Columbia/JFK Medical Center Limited Partnership, d/b/a JFK Medical Center and Interveners, HealthSouth of Treasure Coast, Inc. d/b/a HealthSouth Treasure Coast Rehabilitation Hospital, and Tenet St. Mary’s, Inc. d/b/a St. Mary’s Medical Center, and being otherwise well advised in the premises, decides as follows: The attached Stipulation and Settlement Agreement is approved and adopted as a part of this Final Order and the parties are directed to comply with the terms of the Stipulation and Settlement Agreement. THEREFORE, it is ORDERED and ADJUDGED that the parties hereto are directed to comply with the terms of the Stiputation and Settlement Agreement. DONE and ORDERED this FF day of October 2002, in Tallahassee, Leon County, Florida, Rhonda M. Medows, MD, Secretary Agency for Health Care Administration Copies furnished to: Robert A. Weiss, Esq. Karen Putnall, Esq. Parker, Hudson, Rainer & Dobbs LLP The Pecking House, Suite 200 118 North Gasden Street Tallahassee, Florida 32301 (U.S. Mail) Stephen A. Ecenia, Esq. Richard M. Ellis, Esq. Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Tallahassee, Florida 32301 (U.S. Mail) C. Gary Williams, Esq. Michael J, Glazer, Esq. Stephen C, Emmanual, Esq. Ausley & McMullen 227 South Calhoun Street Tallahassee, Florida 32301 (U.S. Mail) Thomas F, Panza, Esq. Jennifer Kujawa Graner, Esq. Panza, Maurer, Maynard & Neel, P.A. Bank of America, Third Floor 3600 N., Federal! Highway Ft. Lauderdale, Florida 33308 (U.S. Mail) Lori C. Desnick Assistant General Counsel Agency for Health Care Administration 2727 Mahan Drive, M.S. #3 Tallahassee, Florida 32308 (Interoffice Mail) Elizabeth Dudek Deputy Secretary Managed Care and Health Quality Assurance Agency for Health Care Administration 2727 Mahan Drive, M.S. #9 Tallahassee, Florida 32308 (Interoffice mail) Wendy Adams Intake Facilities Unit Agency for Health Care Administration 2727 Mahan Drive, M.S. #3 Tallahassee, Florida 32308 (Interoffice Mail) CERTIFICATE OF SERVICE T HEREBY CERTIFY that a true copy of the foregoing was mailed to the above-named addressees on this ( D day of CEM et. 2002. OLealand McCharen, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32303 STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS LAWNWOOD MEDICAL CENTER, INC,, d/b/a LAWNWOOD REGIONAL MEDICAL CENTER, et al., Petitioners, DOAH Case Nos. 02-0428 02-0429 02-0430 02-0431 AGENCY FOR HEALTH CARE 02-0432 ADMINISTRATION and BETHESDA 02-0884 HEALTHCARE SYSTEM, INC., 02-0885 02-0886 Respondents, 02-0887 and HEALTHSOUTH OF TREASURE COAST, INC., d/b/a HEALTHSOUTH TREASURE COAST REHABILITATION HOSPITAL, and TENET ST. MARYS INC. d/b/a ST. MARY’S MEDICAL CENTER, Intervenors, eT SETTLEMENT AGREEMENT This Settlement Agreement (“Settlement Agreement’) is entered into this 7" day of October 2002, by and among Lawnwood Medical Center, Inc., d/b/a Lawnwood Regional Medical Center (“Lawnwood”), Columbia/JFK Medical Center Limited Partnership, d/b/a JFK Medical Center (QUFK”), HealthSouth of Treasure Coast, Inc., d/b/a HealthSouth Treasure Coast Rehabilitation Hospital (“HealthSouth”), Tenet St. Mary’s Inc. d/b/a St. Mary’s Medical Center (“St. Mary’s”), the Florida Agency for Health Care Administration (the “Agency”), and Bethesda Healthcare System, Inc. (“Bethesda”) (Lawnwood, JFK, HealthSouth, St. Mary’s and the Agency shall sometimes be referred to herein individually as party and collectively as parties), WHEREAS, on or about September 12, 2001, Bethesda filed Certificate of Need (“CON”) Application No. 9507 in the second Hospitals and Other Projects batching cycle of 2001 to establish a 28-bed comprehensive medical rehabilitation (“CMR”) program at Bethesda Memorial Hospital in Health Service Planning District 9; and WHEREAS, on or about September 12, 2001, Lawnwood filed CON Application No. 9509 in the second Hospitals and Other Projects batching cycle of 2001 to add eight CMR beds to Lawnwood’s existing 26-bed CMR program; and WHEREAS, on or about September 12, 2001, JFK filed CON Application No. 9508 in the second Hospitals and Other Projects batching cycle of 2001 to establish a 20-bed CMR program at JFK. Medical Center; and WHEREAS, on or about March 13, 2002, HealthSouth filed CON Application No. 9554 in the first Hospitals and Other Projects batching cycle of 2002 to add CMR beds to HeaithSouth’s existing 90-bed CMR program; and WHEREAS, the Agency published notice in the Florida Administrative Weekly, Vol. 28, No. 6, of the Agency’s preliminary decision to approve Bethesda’s CON Application No. 9507 and to deny both Lawnwood’s CON Application No. 9509 and JFK's Certificate of Need Application No. 9508; and WHEREAS, both Lawnwood and JFK timely filed petitions for formal administrative hearing challenging the Agency’s preliminary decision as published in the Florida Administrative Weekly, Vol. 28, No. 6; and WHEREAS, Lawnwood’s petition was transferred to the Division of Administrative Hearings (“DOAH”) and assigned DOAH Case No. 02-0428, and JFK’s petition was transferred to DOAH and assigned DOAH Case No. 02-0429; and 2 WHEREAS, Bethesda timely filed a petition for formal administrative proceeding in support of the Agency’s preliminary denial of the Lawnwood and JFK CON applications, which petitions were transferred to DOAH and respectively assigned DOAH Case Nos. 02-0887 and 02-0886; and WHEREAS, DOAH Case Nos. 02-0428, 02-0429, 02-0886, and 02-0887 were consolidated under Consolidated DOAH Case No. 02-0428; and WHEREAS, HealthSouth timely filed a petition to intervene in DOAH Case Nos. 02- 0887 and 02-0886, in opposition to the Lawnwood and JFK CON applications, which petition was granted; and WHEREAS, St. Mary’s timely filed a petition to intervene in DOAH Case No. 02-0886 in opposition to JFK’s CON application, which petition was granted; and WHEREAS, the Agency published notice in the Florida Administrative Weekly, Vol. 28, No. 26 of the Agency's preliminary decision to approve HealthSouth’s CON Application No. 9554; and WHEREAS, Lawnwood timely filed a petition for formal administrative proceeding challenging the Agency's preliminary approval of HealthSouth'’s CON application, which petition was transferred to DOAH and assigned DOAH Case No. 02-3217; and WHEREAS, Lawnwood, JFK, HealthSouth, St. Mary’s, the Agency and Bethesda wish to resolve this litigation amicably, and in a manner that will foster, facilitate, and further competition, as well as the goats and objectives of the Florida Certificate of Need Law set forth in Sections 408.035 through 408.045, Fla. Stat, (2001); and & NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties jointly stipulate and agree that Bethesda’s CON Application No. 9507; Lawnwood’s CON Application No. 9509, and HealthSouth’s CON Application No. 9554 satisfy, on balance, the pertinent statutory and regulatory criteria for approval of a Certificate of Need in Florida. The parties further agree as follows: 1. All Recitals above are true and correct and are expressly incorporated herein by reference as if fully set forth below. 2. All parties agree that the above Recitals incorporated herein are binding on the parties. 3, Lawnwood agrees that immediately upon execution of this Settlement Agreement that Lawnwood will file a Notice of Voluntary Dismissal of that portion of its petition for formal administrative proceeding in Consolidated DOAH Case No. 02-0428 by which Lawnwood challenged the Agency's preliminary approval of Bethesda's Certificate of Need Application No. 9507. 4. Lawnwood agrees that immediately upon execution of this Settlement Agreement that Lawnwood will file a Notice of Voluntary Dismissal of its petition for formal administrative proceeding in DOAH Case No. 02-3217, thereby dismissing its challenge to the Agency’s preliminary approval of CON No. 9554, 5. JFK agrees that immediately upon execution of this Settlement Agreement that JFK will file a Notice of Voluntary Dismissal of its petition for formal administrative proceeding in DOAH Case No. 02-0429 (Consolidated DOAH Case No. 02-0428). , é 6. HealthSouth agrees that immediately upon execution of this Settlement Agreement that HealthSouth will file a Notice of Voluntary Dismissal of its petition to intervene in DOAH Case Nos. 02-0886 and 02-0887, 7. St. Mary’s joinder in this Agreement is contingent upon voluntary dismissal of the application submitted by JFK. St. Mary’s agrees that simultaneously with the filing of a Notice of Voluntary Dismissal by JFK, St. Mary's will file a Notice of Voluntary Dismissal of its petition to intervene in DOAH Case No. 02-0429. 8. Bethesda agrees that immediately upon the execution of this Settlement Agreement that Bethesda will file a Notice of Voluntary Dismissal of its petitions filed in DOAH Case Nos. 02-0886 and 02-0887 (Consolidated DOAH Case No. 02-0428). 9. The parties agree that immediately upon filing of the Notices of Voluntary Dismissal referenced above, the parties will jointly file a Motion to Relinquish Jurisdiction in Consolidated DOAH Case No. 02-0428 for the purpose of enabling the Agency to enter a Final Order approving Bethesda’s CON Application No. 9507 and Lawnwood’s CON Application No. 9509. 10. The Agency agrees that, as soon as practicable following relinquishment of jurisdiction in Consolidated DOAH Case No. 02-0428, the Agency will enter a Final Order approving: (a) Bethesda’s Certificate of Need Application No. 9507 to establish a 28-bed CMR unit, with the conditions that “(1) a minimum of three percent (3%) of the 28-bed CMR unit’s total annual patient days should be provided to Medicaid patients and (2) a minimum of three percent (3%) of the 28-bed CMR unit’s total annual ce rr en RL patient days should be provided to charity patients” appearing on the face of the CON; and (b) Lawnwood’s Certificate of Need Application No. 9509 to add eight CMR beds to Lawnwood’s existing 26-bed CMR unit, with the condition that “a minimum of 4.5 percent of the 34-bed CMR unit’s total annual patient admissions shall be to Medicaid and charity patients on a combined basis” appearing on the face of CON No. 9509. The prior CON condition imposed by the Agency on Lawnwood’s existing 26-bed CMR unit in CON No. 7448 shall be superceded by the condition placed upon the facility in this Settlement Agreement. 11. The Agency agrees that, as soon as practicable following the close of the DOAH file in DOAH Case No.02-3217, the Agency will enter a Final Order approving HealthSouth’s Certificate of Need Application No. 9554 to add 13 CMR beds to the existing 90-bed CMR hospital, with the condition that “(1) three of the facility’s beds shall be used for pediatric patients; and (2) a minimum of 3.68 percent of the total annual patient days in the 103-bed facility shall be provided to Medicaid and charity patients on a combined basis” appearing on the face of CON No. 9554. The prior CON condition imposed by the Agency on HealthSouth’s existing 90-bed CMR unit in CON No. 7871 shall be superceded by the condition placed upon the facility in this Settlement Agreement. 12. For purposes of this Settlement Agreement, the term “charity care" shall mean that portion of hospital charges reported to the Agency for which there is no compensation, other than restricted or unrestricted revenues provided to a hospital by local governments or tax districts regardless of the method of payment, for care provided to a patient whose family income for the twelve (12) months preceding the determination is less than or equal to two 6 & re ee See ERE hundred percent (200%) of the federal poverty level, unless the amount of hospital charges due from the patient exceeds twenty-five percent (25%) of the annual family income. However, in no case shall the hospital charges for a patient whose family income exceeds four times the federal poverty level for a family of four be considered charity. 13. The CMR beds awarded to Bethesda, Lawnwood, and HealthSouth, respectively, by the Agency in this Settlement Agreement shall not be transferred, assigned or otherwise conveyed. 14. Upon full execution of this Settlement Agreement, each party: (a) agrees to a withdrawal of its request for a formal administrative proceeding as stated above; (b) agrees to waive any and all appeals and proceedings; and (c) agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which it may be entitled including, but not limited to, an informal proceeding under Subsection 120.57(2), Florida Statutes, a formal proceeding under Subsection 120.57(1), Florida Statutes, appeals under Section 120.68, Florida Statutes, and declaratory and all writs of relief in any court or quasi-court (e.g., Division of Administrative Hearings) of competent jurisdiction. 15. Each party for itself and for its related or resulting organizations, its successors or transferees, attorneys, and executors or administrators, does hereby discharge the other parties and their respective employees, agents, representatives, and attorneys of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum by or on behalf of such party or any of its related facilities. 16. Each party shall bear its own costs and attorneys’ fees. 7 17. This Agreement shall become effective on the date upon which it is fully executed by ail parties hereto. 18. The parties each hereby represent and warrant that their undersigned Tepresentative is authorized to execute this Settlement Agreement on behalf of the party, and to bind the party to the terms and conditions herein. 19. The terms, conditions, covenants, provisions, promises, and agreements contained herein shall be binding upon and shall inure to the benefit of the parties hereto, and their successors and permitted assigns. 20. This Settlement Agreement contains the entire agreement between the parties hereto, and no representations or agreements, oral or otherwise, between the parties not embodied herein or attached hereto shall be of any force or effect. Any additions or amendments to this Settlement Agreement subsequent hereto shall be of no force or effect unless in writing and signed by all parties hereto. 21. This Settlement Agreement has been made and delivered in Leon County, Florida, and shall be construed and interpreted in accordance with the laws of the State of Florida. Should a legal action be instituted by any party hereto to enforce the terms and conditions of this Settlement Agreement, the venue for such legal action shall be Leon County, Florida. 2213PM 4.2002 From=PARKER HUDSON RATNER & BOBBS oct. _ SotD4e2002 12:3 pm BETHESDA HEALTHCARE SYSTEM, INC., d/b/a BETHESDA MEMORIAL, HOSPITAL . | , "4, i | Jt ‘ u LAWNWOOD MEDICAL CENTER, INC., d/b/a LAWNWOOQD REGION MEDICAL CENTER BMH EXECUTIVE OFFICE NO. 415 P.18/19 506819403 7-664 P.O10/01D F868 Sutternent Agyremunct AGENCY FOR HEALTH CARE ADMINISTRATION COLUMIBAJFK MEDICAL CENTER (.IMITED PARTNERSHIP, d/b/a JFK MEDICAL CENTER TENET ST, MARY'S INC. d/b/a, ST. MARY'S MEDICAL CENTER, NEALTHSOUTHA OF TREASURE COAST, INC, d/b/a HEALTHSOUTH TREASURECOAST REHABILITATION AOSPITAL 20/07/2002 14:09 FAX 9543907991 BETHESDA HEALTHCARE SYSTEM, INC., d/b/a BETHESDA MEMORIAL HOSPITAL By: Its: Date: LAWNWOOD MEDICAL CENTER, INC,, d/b/a LAWNWOOD REGIONAL MEDICAL CENTER TENET ST. MARY’S INC, d/b/a ST. MARY’S MEDICAL CENTER PANZA MAURER MAYNARD 002 AGENCY FOR HEALTH CARE ADMINISTRATION COLUMIBA/JFK MEDICAL CENTER LIMITED PARTNERSHIP, d/b/a JFK MEDICAL CENTER HEALTHSOUTH OF TREASURE COAST, INC., d/b/a HEALTHSOUTH

Docket for Case No: 02-000885CON