STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
WINDMOOR HEALTHCARE OF )
CLEARWATER, INC., )
)
Petitioner, )
)
vs. )
)
AGENCY FOR HEALTHCARE ) ADMINISTRATION AND NEW PORT ) RICHEY HOSPITAL, INC., d/b/a ) COMMUNITY HOSPITAL OF NEW PORT ) RICHEY, )
)
Respondents. )
Case No. 10-5431CON
)
RECOMMENDED ORDER
A final hearing was held in this matter before Robert S. Cohen, Administrative Law Judge with the Division of Administrative Hearings, on November 16 through 18, 2010, in Tallahassee, Florida.
APPEARANCES
For Windmoor Healthcare of Clearwater, Inc. (Windmoor):
Timothy Bruce Elliott, Esquire Smith & Associates
2873 Remington Green Circle Tallahassee, Florida 32308
For the Agency for Healthcare Administration (AHCA): Richard Joseph Saliba, Esquire
Agency for Health Care Administration
2727 Mahan Drive, Building 3, Mail Station 3
Tallahassee, Florida 32308
For New Port Richey Hospital, Inc., d/b/a Community Hospital of New Port Richey (Community):
Stephen A. Ecenia, Esquire Rutledge, Ecenia & Purnell, P.A.
119 South Monroe Street, Suite 202 Tallahassee, Florida 32301
STATEMENT OF THE ISSUE
The issue is whether Windmoor has standing to challenge AHCA's award of Certificate of Need No. 10074 to Community to establish a Class III Specialty Psychiatric Hospital in New Port
Richey, Florida.
PRELIMINARY STATEMENT
On March 10, 2010, Community filed Certificate of Need (CON) Application No. 10074 seeking to establish a Class III specialty psychiatric hospital consisting of 46 adult psychiatric beds in New Port Richey, Pasco County, Florida, within AHCA Health Planning District 5.
Community filed its Omissions Response on April 14, 2010.
AHCA issued a State Agency Action Report on June 11, 2010, preliminarily approving CON No. 10074.
Windmoor and Morton Plant Hospital (Morton Plant) timely filed petitions for formal administrative hearing, challenging the proposed award of CON No. 10074 to Community.
On July 26, 2010, Community filed a Motion to Relinquish Jurisdiction to AHCA for Entry of a Final Order dismissing the
two petitions for lack of standing. Windmoor and Morton Plant filed responses to the motion. Oral argument was held on the motion on August 12, 2010, and by Order dated August 13, 2010, the proceeding was bifurcated to allow for an evidentiary hearing on the disputed factual issues concerning Windmoor's standing. Morton Plant filed a voluntary dismissal of its petition on October 11, 2010, and an order was entered severing that petition from this proceeding.
On November 12, 2010, the parties filed a Joint Pre-hearing Stipulation. The hearing on the issue of standing commenced on November 16 and concluded on November 18, 2010.
At hearing, Windmoor presented the testimony of two witnesses: Wendy Merson and Patricia Greenberg, an expert in health care planning and finance. Windmoor offered Exhibits 1-
22 and 29-30, which included the depositions of Judy Ginnis and Martha Lenderman.
AHCA and Community jointly presented the testimony of four witnesses: Jeffrey N. Gregg, an expert in health care planning and CON review; Glenn Romig, an expert in health care administration and hospital finance; Susan Stack, Ph.D., an expert in behavioral health services management, nursing, quality assurance, and risk management; and Eugene Nelson, an expert in health care planning. AHCA and Community jointly
offered Exhibits 1-13, including the deposition testimony of William Hardin.
The three-volume Transcript was filed on November 29, 2010. After the hearing, the parties filed their proposed findings of fact and conclusions of law on December 13, 2010.
References to statutes are to Florida Statutes (2010) unless otherwise noted.
FINDINGS OF FACT
AHCA is the state agency responsible for administering the CON program, and is authorized to evaluate and make final determinations on CON applications pursuant to the Health Facilities and Services Development Act, sections 408.031-.045,
Florida Statutes.
Community
Community Hospital owns and operates a 389-bed Class I general acute care hospital, comprised of 343 acute care beds and 46 adult psychiatric beds, currently located at 5637 Marine Parkway, New Port Richey, Pasco County, Florida, AHCA Health Planning District 5.
AHCA previously awarded CON No. 9539 to Community authorizing construction of a replacement facility in an area known as Trinity, approximately 5.5 miles southeast of Community's current location. The Trinity replacement hospital
facility is currently under construction and scheduled for occupancy in November 2011.
The route between the Trinity and Community campuses is a drive of approximately one mile on a two-lane road leading into State Road 54, a six-lane divided highway. Trinity Medical Center campus is located on State Road 54.
Windmoor
Windmoor is a licensed Class III Specialty Hospital with 78 adult psychiatric beds and 22 adult substance abuse beds, located in Clearwater, Pinellas County, Florida. Windmoor is an existing provider of adult psychiatric services located within the same Health Planning District 5 as Community.
Windmoor's facility has remained in its current location since its inception in 1987. That year, Windmoor had
200 adult psychiatric beds, which were reduced in 1996 to 163.
In 2001, the number of adult psychiatric beds was reduced to its current 100. Windmoor has the capability of adding 40 to 60 additional beds.
Windmoor's parent corporation is Psychiatric Solutions, Inc. (PSI), a publicly traded company based in Franklin, Tennessee, that also owns psychiatric hospitals in other states. PSI also owns at least seven other psychiatric hospitals in Florida, as well as other treatment facilities. PSI acquired
all of its Florida facilities within the past five years, including Windmoor in 2006.
On November 15, 2010, PSI was acquired by Universal Health Systems, which owns and operates psychiatric hospitals and general acute care hospitals throughout the United States, including Florida.
This is the first CON proceeding in which Windmoor has participated.
District 5 Providers
District 5 consists of Pasco and Pinellas Counties.
At the time the CON application was filed, Pasco County had two adult inpatient psychiatric providers: Community and Florida Hospital Zephyrhills with 15 beds. The Pinellas County providers were Morton Plant Hospital (Clearwater), St. Anthony's Hospital, Sun Coast Hospital (now known as Largo Medical Center- Indian Rocks) (Largo), and Windmoor. Windmoor was the only Class III specialty psychiatric hospital in District 5.
Additionally, new CON-approved adult psychiatric beds included 17 at Largo, and approval for Ten Broeck Tampa, Inc., to construct a new 35-bed Class III adult psychiatric hospital in Pasco County.
Also, Morton Plant North Bay Recovery Center (NB Recovery Center) had received CON exemptions to establish 56 adult psychiatric beds at its new Class III facility in Pasco
County which had already been approved for 10 child/adolescent psychiatric beds.
NB Recovery Center is a new entrant into the market, having opened its Class III psychiatric hospital in August 2010. This Class III psychiatric hospital is on the same license as North Bay Hospitals' Class I general acute care hospital (North Bay). North Bay is located about one mile north of Community.
The approximate distances of the District 5 providers from Community are: NB Recovery Center, 19 miles; Florida Hospital Zephyrhills, 40 miles; Morton Plant Hospital, 24 miles; and Windmoor, 26 miles.
Also, Largo, like Community, is an HCA affiliated hospital located approximately nine miles north-northwest of Windmoor, and two to four miles south of Morton Plant. St. Anthony's Hospital is located in downtown St. Petersburg.
CON approvals and exemptions are no longer reliable predictors of bed inventory since existing psychiatric facilities can add beds through CON exemptions at will.
Service Areas
No overlap exists between Community and Windmoor's service areas. Community's primary service area (PSA) is a nine zip code area located in western Pasco County. Community's secondary service area (SSA) consists of four zip codes in Hernando County to the north, a few zip codes in eastern Pasco
County, and a single zip code in the far northwestern corner of Pinellas County - 34689.
Community's PSA accounts for 79.4% of its psychiatric discharges. An additional 9.1% of its discharges are from its SSA, defined as any non-PSA zip code from which it receives at least 1% of its discharges. The remaining 11% of Community's discharges are scattered among other areas.
All of Community's PSA zip codes are within Pasco County. The only SSA zip code in Pinellas County is in the northwestern corner of the county – 34689, from which Community received only 2% of its discharges.
Community derives 84.4% of its discharges from Pasco County, while only 6.9% of discharges originate from Pinellas County residents. Another 5.6% of Community's discharges originate in Hernando County which is outside District 5.
Community's psychiatric service area is not expected to change with the implementation of the CON.
While Community received 1367 discharges from its PSA, Windmoor received only 97 of its discharges from that PSA. On a percentage basis this is 79.4% versus 4.7% of discharges, respectively. Windmoor did not derive even 1% of its discharges from any single zip code within Community's PSA.
When a provider receives less than 1% of its discharges from a particular zip code, that zip code is not appropriately considered part of the provider's PSA or SSA.
Further, Windmoor has no significant market share in Community's SSA.
On a county basis, while Community derived 84.4% of its psychiatric discharges from Pasco County residents, Windmoor received only 5.9% of its discharges from Pasco County. Conversely, Community derived only 6.9% of its discharges from Pinellas County compared with 73.6% for Windmoor.
During the year ending June 2009, among all providers of inpatient psychiatric services to Community's PSA, Community had a 70% market share compared with Windmoor's 4% market share. For Pasco County as a whole, Community had a 52% market share compared with Windmoor's 4% market share. Like Windmoor, Morton Plant had only a 4% market share for both Pasco County and Community's PSA.
The conclusion from this analysis is that Community is predominantly a Pasco County provider while Windmoor is predominantly a Pinellas County provider. Windmoor is not a significant provider in either Community's PSA or in Pasco County.
Further, there is no physician overlap between the psychiatrists on the respective medical staffs of Community and Windmoor.
Community's CON Proposal
In its State Agency Action Report concerning Community's CON application, AHCA summarized the proposal: "[t]his project is to keep 46 existing adult inpatient psychiatric beds at their present location following completion of the replacement facility authorized by CON #9539."
The proposal is to allow Community's psychiatric facility to remain in the same location with the same bed complement, which will remain unchanged in terms of its historical operations.
The psychiatric unit at Community has been located at its current site since at least 1981.
A CON is required only because, upon occupancy of the Trinity replacement facility, the continued use of the existing site for its inpatient psychiatric activity would fall within the statutory criteria for projects subject to CON review as an "establishment of additional healthcare facilities."
With respect to both hospital campuses, Community will own, operate, and be the licensee of both facilities. All components of patient care will be controlled by a single
governing body, and will have a single medical staff, chief medical officer, and CEO.
Florida is home to other similarly situated hospitals that own and operate a Class I general acute care hospital and an affiliated Class III licensed specialty hospital on separate campuses. In each case, the Class I and Class III facilities share the same license and license number, owner, and CEO. These facilities include Westchester General Hospital and its affiliated Class III Southern Winds Hospital; Halifax Health Medical Center and its affiliated Halifax Psychiatric Center North; Shands Hospital at the University of Florida and Shands at Vista; and Morton Plant North Bay Hospital and NB Recovery Center. AHCA issues an actual license certificate for each facility for general display at each campus.
The approximate distances between the two campuses of these Class I and Class III single license facilities are: Westchester General Hospital and Southern Winds Hospital – nine miles; Halifax Health Medical Center and Halifax Psychiatric Center – 1.5 miles; Shands at the University of Florida and Shands at Vista – 10 miles; and Morton Plant North Bay and NB Recovery Center – 20 miles.
The scenario of a Class I hospital with an affiliated Class III hospital with a single license number is considered one licensee with two premises.
Psychiatric Services at Community Will Remain Unchanged
Implementation of the CON will result in no changes in the current level of health care services provided to patients for both psychiatric and non-psychiatric medical conditions.
Those patients who might currently be transported internally to the psychiatric unit behavioral health unit or (BHU) upon discharge from non-psychiatric medical units of the hospital will now be transported by vehicle to the BHU campus if the patient requires transport assistance. The transport of psychiatric patients is not material to the discussion of whether the two campuses are, in fact, one hospital. Patients cannot be admitted to the BHU until they have been medically cleared of any non-psychiatric medical conditions that would require inpatient medical care.
"Medically cleared" means the patient no longer requires medical/surgical inpatient care. Those processes and requirements will not change as a result of implementation of the CON.
Community currently provides transport services for all types of patients. Those services will continue for patients between the two campuses, including any psychiatric patients who may need transport assistance.
AHCA has never had a regulatory issue involving the movement of patients among different facilities that are
operated by one licensee. AHCA has no concern about the ability of hospitals to transport patients among their various facilities, including any hospital provider-based services.
Under federal regulations such services may be provided at locations up to 35 miles from the main hospital campus.
A psychiatric patient presenting to a hospital's emergency department (ED) is handled the same initially as any patient. The patient undergoes triage and is seen by an ED physician. If the patient exhibits both psychiatric and non- psychiatric medical conditions, the ED physician calls a psychiatrist and together they will determine the primary diagnosis.
If an ED patient has achieved medical stability, and is ready to be medically discharged from the ED, yet still suffers from a psychiatric condition, the ED physician will call in a psychiatrist to participate in the disposition of the patient.
If the primary diagnosis for a patient is medical or emergent, but with a secondary or co-morbid psychiatric condition, the patient receives medical/surgical care with a psychiatrist serving as a consulting physician. If deemed appropriate, the patient would be admitted to the medical/surgical unit for care until reaching medical stability.
While on the medical/surgical unit, the patient needing psychiatric care would receive it from a psychiatrist while on the medical/surgical unit. Once medically cleared for discharge, the patient requiring further inpatient psychiatric care would be transferred to the BHU. Once in the BHU, the patient would still receive any necessary care for any non- psychiatric conditions from the appropriate physicians. This system will not change with the implementation of the CON.
Coverage of the BHU by hospitalists and other members of the medical staff who do rounds will not change as a result of implementation of the CON.
Some patients will achieve medical stability for both the psychiatric and non-psychiatric conditions from which they suffer, and will therefore not be admitted to the BHU upon discharge from the ED or medical/surgical unit.
As reflected in Community's policies and procedures, all BHU patients must be admitted under the care of a psychiatrist, and can only be discharged by a psychiatrist. Every BHU patient also receives a general medical history and physical examination performed by a consulting medical physician.
Non-psychiatrist medical staff physicians are always available for consultation to the psychiatrist and other clinical staff while the patient stays in the BHU.
Community's current practices with respect to psychiatric patient services and physician coverage will not change due to implementation of the CON.
AHCA's Review of Community's CON Application
AHCA gave notice of its intent to approve CON No.
10074 in the June 25, 2010, Florida Administrative Weekly.
In AHCA's view, the status quo will be maintained by the issuance of the CON. Nothing will be different in the way Community delivers its health care services in District 5.
This is a case where the applicant has to go through the CON process to arrive at the same place it already was. AHCA expects no change at all.
AHCA concluded that "this project is not likely to change the current competitive structure of the existing market." By that conclusion, AHCA intended to convey a lack of adverse impact on existing providers based upon CON approval.
Particularly due to deregulation, AHCA believes there have already been significant changes to the competitive structure of the District 5 market, such as psychiatric bed additions through CON exemption, CON approval of a new Ten Broeck psychiatric hospital, and upcoming shifts toward greater Medicaid HMO reimbursement and associated federal health care reform legislation. Conversely, the Agency projects no impact from Community's CON.
Lack of Adverse Impact
Adverse impact analyses typically arise from a new entrant to the market. Community's proposal does not present a new entrant to the market for inpatient psychiatric services.
Adverse impact will occur when a new provider enters a service area or an existing provider increases its capacity to offer services. Neither of those will occur as a result of Community's CON. None of the conditions that could lead to an adverse impact is present.
Implementation of the Community CON will have no adverse impact or effect on existing providers because Community will continue to have the same historic PSA and its market shares will remain the same, except for potential market changes unrelated to the CON, such as entrance of new providers.
This case is unique. For example, Ms. Patricia Greenberg, Windmoor's highly qualified and experienced expert in health care planning, has never been involved in a case such as this where the applicant sought approval to remain at its current location.
The typical CON application seeks permission for a new provider, facility, for beds, or services to enter a particular market for the first time. In the typical case, health care planners will agree that some shift in market share will occur
among existing providers as the result of the new entrant to the market.
Ms. Greenberg's adverse impact analysis did not take into account the new market entrants such as Ten Broeck and NB Recovery Center, even though she expects them to have a greater impact on Community, due in part to geography.
Health care planners develop adverse impact analyses that attempt to estimate the future shift in market shares.
From there, the planner will attempt to project a number of lost patients per provider, and then apply a financial impact.
Regarding Community's proposal, since there will be no new entrant into the market, the typical adverse analysis cannot be performed.
Windmoor, through Ms. Greenberg, creatively developed four theories of adverse impact that could result from the status quo. Each of Windmoor's theories is premised on assumptions that Community will cease providing certain clinical services that will result in Community losing the capability to serve some of its psychiatric patients.
However, Windmoor provided no clinical evidence to support its alleged changes to Community's clinical services. Indeed, all clinical evidence in the record confirms that Community can and will continue its current clinical services to all patients, including its BHU patients.
The four impact theories offered by Windmoor are each based upon the unproven assumption that CON implementation will transform Community into two separate unaffiliated hospitals as opposed to a single hospital with two campuses. From that assumption, Ms. Greenberg contended there are two, and only two, categories of psychiatric facilities, which she labeled as either a "hospital based unit" or a "freestanding" facility.
Ms. Greenberg defined "hospital based unit" (HBU) as either located inside a hospital or on the campus of a general hospital. She defined "freestanding" as any facility that is not co-located with a general hospital on the same campus.
Ms. Greenberg did not consider or address a category of commonly owned and operated Class I general acute care hospitals affiliated with Class III psychiatric hospitals.
Ms. Greenberg did not recognize the existence in Florida of several general hospital affiliated Class III psychiatric hospitals.
The fact that two hospital campuses of Class I and Class III facilities exist is irrelevant, so long as in reasonable proximity to one another. The relevant factors are whether the two campuses share the same: 1) license number,
2) ownership, 3) hospital administration, and 4) medical staff.
If these factors are present, it is incorrect to characterize one of the two facilities or campuses as "freestanding" because
that implies no connection to a general acute care hospital. Community is a general acute care hospital with an affiliated psychiatric facility which is in no sense "freestanding."
Ms. Greenberg's attempt to compare statewide data for various patient characteristics between facilities that she defines as "freestanding" versus HBUs is not persuasive, primarily because it is built upon the incorrect assumption that Community and other Florida hospitals cannot operate a Class I general acute care hospital and a Class III specialty psychiatric hospital under the same license.
Characteristics such as payor source or patient mix are influenced by a number of factors other than simply whether an inpatient program is "freestanding" or "hospital based," as defined by Ms. Greenberg, including influences such as age composition of the service area, income distribution, and whether the hospital is located in an urban or rural area, to cite but a few.
Attempts to draw generalizations from such data and then conclude that Community will be more like a HBU than a freestanding or vice versa, is without merit. Ms. Greenberg's data indicates that Community falls into her defined HBU categories in some respects while, in other respects, falls into her freestanding categories. This type of analysis is not
sound. Community will not transform into a "freestanding" facility as defined by Ms. Greenberg, as a result of this CON.
Moreover, many people with a primary diagnosis of psychosis are treated in hospitals that do not have inpatient psychiatric beds. In 2008, psychosis was the number one discharge diagnosis for all males in Florida hospitals, and was the number three diagnosis for all females behind conditions associated with pregnancy. Simply looking at discharge data by diagnosis between freestanding and HBUs as defined by
Ms. Greenberg is not a meaningful analysis.
Every adverse impact scenario presented by Windmoor is based upon the incorrect premise that implementation of Community's CON will result in Community becoming a "freestanding" facility as defined by Ms. Greenberg. For this reason alone, none of Ms. Greenberg's adverse impact theories is valid and each must be rejected.
Another common thread running through Windmoor's impact theories is the assertion that, based again upon the false "freestanding" presumption, Community's patient mix will change due to changes in clinical services available to patients, such as ED services, no medical environment for comprehensive treatment, and certain patients allegedly no longer clinically appropriate for Community's HBU. There is no
evidence in the record to support such claims, either operationally or clinically.
All of Ms. Greenberg's impact theories lead to the contention that CON implementation will result in Community being adversely affected by its own CON through the loss of psychiatric patients. Ms. Greenberg further speculates that because of her asserted loss of patients, Community would need to replace those patients ("backfill") with patients who might otherwise be admitted to a competing hospital.
As explained previously, however, there is virtually no overlap of service area or competition between Windmoor and Community as reflected by their respective service areas.
Community does not contact health care providers in Windmoor's service area regarding the availability of Community's psychiatric services. In fact, Largo, a sister facility of Community, is an inpatient provider located between Community and Windmoor. Community would not actively seek patients in those areas of Pinellas County.
It is neither reasonable to expect, nor was any credible evidence presented, that to make up for lost patients, Community would go outside its current PSA into the Windmoor area to seek patients when it has its sister Largo facility near Windmoor.
As stated above, Windmoor, through Ms. Greenberg, offered four adverse impact scenarios. All four scenarios are premised upon the assumption that CON implementation will transform Community's BHU into a "freestanding" facility. The premise is not correct for the reasons stated above, primarily that AHCA recognizes the ability of hospitals in Florida to have Class I general acute care facilities along with Class III specialty psychiatric hospitals under the same license, ownership, management, etc. Further, all four scenarios are based upon Ms. Greenberg's theory of "backfill" under which Community will have to make up lost patients by intruding into Windmoor's service area. The evidence supports the assertion that Community expects no lost admissions because its PSA and SSA will not change, nor will the type and extent of services it provides, including ED, medical/surgical, and a unified medical staff, change upon implementation of the CON.
Medicaid
Windmoor asserted that Community would lose its eligibility to receive reimbursement for services under the Medicaid program if the CON were implemented. This assertion was not supported by the evidence presented by Windmoor. Moreover, the evidence presented by Community and AHCA negated Windmoor's assertion.
Prior to the filing of the CON application omissions response, Community representatives met with AHCA personnel and confirmed its continued Medicaid reimbursement eligibility, which to Community was never an issue.
Community's CON application proposed a Medicaid CON condition, and contained numerous statements of expected continued ability to serve Medicaid fee-for-service patients. AHCA accepted the proposed CON condition when recommending approval of the application. Community expects to satisfy the Medicaid CON conditions.
AHCA's Deputy Secretary for Medicaid, Roberta Bradford, subsequently confirmed by letter to Community that, based upon Community's representations of satisfaction of certain applicable criteria, Community's proposed 46-bed inpatient psychiatric hospital would continue to be eligible for Medicaid participation.
The determination of a facility's Medicaid reimbursement is a state determination, rather than a federal CMS decision. In Florida, that determination is ultimately made by AHCA's Deputy Secretary for Medicaid, Ms. Bradford.
Windmoor elicited testimony from Community to show that each of the following services would not be physically present on the campus of the Class III psychiatric hospital portion of Community following CON implementation: ED,
emergency cardiac catheterization and angioplasty services, surgical and operating suites, stroke center designation, CT equipment, and the full range of medical services currently available on site at Community. Community will, however, continue to operate all of these services in the Class I acute care hospital campus, which will be under the unified license with the psychiatric campus.
Satisfaction of the Medicaid letter criteria from AHCA was confirmed at hearing. The criteria include: Community will own and operate both locations and be the licensee of both facilities; all components of patient care at the facilities will be controlled by a single governing body; one Chief Medical Officer will be responsible for all medical staff activities at both facilities; one Chief Executive Officer will control both facilities' administrative activities; and the two facilities are situated closely enough geographically that it is feasible to operate them as a single entity.
Mr. Jeffrey N. Gregg, AHCA's head of CON review, is satisfied that the Class III licensed Community facility will maintain its Medicaid eligibility.
Southern Winds, Halifax Psychiatric Center, and Shands at Vista receive Medicaid fee-for-service reimbursement, and are similarly situated to Community. Mr. Gregg also expects NB
Recovery Center to receive this type of Medicaid reimbursement when it initiates its service.
Ms. Greenberg has been aware for at least 10 years that Class III psychiatric facilities affiliated with general hospitals in Florida receive fee-for-service reimbursement. She testified that if AHCA determines that Community is Medicaid eligible, her scenario related to Community losing its Medicaid eligibility "would go away."
Moreover, due to recent legislative changes that will expand the use of Medicaid HMOs, the majority of Medicaid reimbursement is soon going to be under Medicaid HMOs. Class III psychiatric hospitals that are not affiliated with or on the same campus as a general acute care hospital, such as Windmoor, are eligible for Medicaid HMO reimbursement versus Medicaid fee- for-service reimbursement.
Summary of Impact Analysis Conclusions
All of Windmoor's adverse impact claims are based on a series of false and erroneous assumptions, none of which is supported by the evidence of record. In fact, most of the claims in the form of four scenarios are based upon ignoring the fact that what Community proposes here is not so unique in Florida. Many Florida health care facilities currently operate both Class I general acute care hospitals and Class III specialty psychiatric hospitals under the same license,
management, and receive Medicaid fee-for-service reimbursement, while maintaining two physically separate campuses. This should have been common knowledge for an existing provider such as Windmoor, which based its entire case, adverse impact scenario, and decision to go forward with the hearing in this case on a series of erroneous assumptions. Windmoor offered several theories about how it would suffer a substantial and adverse impact in the event Community's CON application is approved, yet offered no competent evidence to support its claims.
Windmoor failed to demonstrate that Community would lose any psychiatric patient admissions and be forced to seek admissions from Windmoor's PSA or SSA to keep its beds full. Windmoor failed to provide competent evidence that it will be adversely affected by the approval of Community's CON. Community's CON will have no impact on Windmoor.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.
The requirements for establishing standing to participate in a CON proceeding are governed by section 408.039(5)(c), Florida Statutes, which provides, in pertinent part: "Existing health care facilities may initiate or intervene in an administrative hearing upon a showing that an established
program will be substantially affected by the issuance of any certificate of need, "
Before one can be considered to have a "substantial interest" in the outcome of the administrative proceeding and thus be entitled to appear as a party, one must show 1) that it will suffer injury in fact which is of sufficient immediacy to entitle them to a hearing under the APA, and 2) that its substantial injury is of the 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). See also North Ridge Gen. Hosp., Inc. v. NME Hosps., Inc., 478 So. 2d 1138, 1139 (Fla. 1st DCA 1985).
Under Agrico, the injury-in-fact test requires an injury that is real and substantial; it cannot be speculative. The second Agrico prong of whether the substantial injury is of the type or nature the proceeding is designed to protect involves the application of an identifiable regulatory framework, or "zone of interest."
Every Windmoor adverse impact scenario is premised on the argument that implementation of the CON will transform Community's psychiatric facility campus into a "freestanding" psychiatric hospital as defined by Windmoor. Windmoor's definition of "freestanding" does not take into account the continued unification of Community's licensure, medical staff,
management, and operations of the resulting two campuses. Windmoor's characterization of Community's proposal as resulting in a "freestanding" facility is neither credible nor supported by the evidence it offered at hearing. The evidence demonstrated that implementation of the CON, while resulting in two campuses, will not result in any meaningful changes in any patient care services available to Community's psychiatric patients. Because this Windmoor premise is both factually and legally untrue, all of Windmoor's impact theories are without merit.
Windmoor also argues that as a result of the CON implementation, Community would cease to operate its emergency department and all of the medical/surgical services due to the relocation of those services to the Trinity hospital replacement facility site. However, the evidence demonstrated that the physical relocation of those services would not deny access to those services by any psychiatric unit patients. The evidence demonstrated that psychiatrists and non-psychiatrist physicians would continue to appropriately care for psychiatric patients at both Community campuses. Windmoor failed to prove that Community would eliminate any services deemed appropriate for its patients.
Windmoor attempted to make a major issue of its contention that, after CON implementation, Community would no
longer be eligible to receive fee-for-service reimbursement.
The only competent evidence in this case is that AHCA's Medicaid program has determined, in writing, that Community will continue to be eligible for such reimbursement. Such a determination by the state is not subject to challenge by a third party such as Windmoor, and particularly not in a CON proceeding. Further, whether Community might lose such Medicaid eligibility in the future is speculative, and cannot be the basis for any finding of fact or conclusion of law in this case.
Windmoor did not prove the validity of any of its underlying factual premises of its impact scenarios or theories about what might happen should Community implement the CON at issue here. Windmoor did not prove that Community would lose any patients as a direct result of CON implementation. In fact, the true adverse impact on Windmoor, if any, might come from new entrants into the health care delivery system in District 5, Ten Broeck and NB Recovery Center, but that is not a relevant issue to be determined in this proceeding. Accordingly, Windmoor failed to prove that it could suffer an adverse impact in any manner as a direct result of CON implementation.
The totality of the evidence overwhelmingly supports Community's proposed implementation of CON No. 10074 to continue its Class I general acute care hospital and implement a Class III specialty psychiatric hospital under the same license.
Further, the evidence is clear that Windmoor will not suffer an injury in fact that is real or substantial, or of any immediacy. Windmoor, therefore, lacks standing to challenge the award of CON No. 10074. Accordingly, no further proceedings will be held in this case to weigh and balance the CON criteria as requested by Windmoor.
Based upon the Findings of Fact and Conclusions of Law, it
is
RECOMMENDED that the Agency for Health Care Administration
issue a final order dismissing Windmoor's Petition for Formal Administrative Hearing due to lack of standing to challenge the award of CON No. 10074.
DONE AND ENTERED this 6th day of July, 2011, in Tallahassee, Leon County, Florida.
S
ROBERT S. COHEN
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 6th day of July, 2011.
COPIES FURNISHED:
Timothy Bruce Elliott, Esquire Smith & Associates
2873 Remington Green Circle Tallahassee, Florida 32308
Richard Joseph Saliba, Esquire
Agency for Health Care Administration
2727 Mahan Drive, Building 3, Mail Station 3
Tallahassee, Florida 32308
Stephen A. Ecenia, Esquire Rutledge, Ecenia & Purnell, P.A.
119 South Monroe Street, Suite 202 Tallahassee, Florida 32301
Richard J. Shoop, Agency Clerk Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308
Justin Senior, General Counsel Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308
Elizabeth Dudek, Secretary
Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308-5403
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 |
|---|---|---|
| Aug. 17, 2011 | Agency Final Order | |
| Jul. 06, 2011 | Recommended Order | In this bifurcated proceeding, Windmoor failed to demonstrate standing to challenge the award of CON Application No. 10074 to Community. Windmoor's petition is dismissed, and it is not entitled to a full CON hearing to contest Community's approval. |
