STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION
EAST FLORIDA-DMC , INC.,
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Ar/CA
AGENCY CLERK
2019 JUL 22 p 3: SJ
vs.
Petitioner ,
DOAH CASE NO. 16-3819CON AHCA NO. 2016007170
RENDITION NO.: AHCA - i '1 - o l..>o l- -FOF-CON
ST ATE OF FLORIDA, AGENCY FOR HEALTHCARE ADMINIST RATION,
Respondent,
and
CGH HOSPITAL, LTD d/b/a CORAL GABLES HOSPITAL ; TENET HIALEAH HEALTHSYSTEM, INC. d/b/a
HIALEAH HOSPITAL; LIFEMARK HOSPITALS, INC. d/b/a PALMETTO GENERAL HOSPITAL; and THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST,
Intervenors.
I
Filed July 22, 2019 4:23 PM Division of Administrative Hearings
THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST,
Petitioner, DOAH CASE NO. 16-3820CON AHCA NO. 2016007146
vs.
STATE OF FLORIDA, AGENCY FOR HEALTHCARE ADMINISTRATION,
Respondent,
and
KENDALL HEALTHCARE GROUP, LTD d/b/a KENDALL REGIONAL MEDICAL CENTER; CGH HOSPITAL, LTD d/b/a CORAL GABLES HOSPITAL;
TENET HIALEAH HEALTHSYSTEM, INC. d/b/a HIALEAH HOSPITAL; and LIFEMARK HOSPITALS, INC. d/b/a PALMETTO GENERAL HOSPITAL,
Intervenors.
I
FINAL ORDER
These cases were referred to the Division of Administrative Hearings (DOAH) where they were consolidated and the assigned Administrative Law Judge (ALJ), W. David Watkins, conducted a formal administrative hearing. At issue in this matter is whether, on balance, Certificate of Need ("CON") application number 10432 by East Florida-DMC, Inc. ("DMC") to build an 80-bed acute care hospital in Miami-Dade County, Florida, AHCA District 11, and/or CON application number 10433 by the Public Health Trust of Miami-Dade County, Florida d/b/a Jackson West Hospital ("JW") to build a 100-bed acute care hospital in Miami-Dade County, Florida, AHCA District 11, satisfy the applicable criteria and should be approved.
On April 30, 2019, the ALJ entered a Recommended Order (Exhibit A) wherein he recommended the Agency deny both CON applications.
On May 8, 2019, and June 10, 2019, the parties filed joint motions for extension of time to file exceptions, which were granted by the Agency Clerk.
On June 25, 2019, Governor Ron Desantis signed CS/HB 21 into law. The bill
eliminates the requirement of CONs for new general hospitals as of July 1, 2019. See Ch. 2019- 136, Laws of Fla.
On July 9, 2019, Respondent filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction Due to Mootness ("Motion to Dismiss"), which is hereby attached to this Final Order as Exhibit B. In the Motion to Dismiss, Respondent asserts this matter should be dismissed as moot because the enactment of CS/HB 21 has divested the Agency of subject matter jurisdiction over this matter because it can no longer grant Petitioners the relief they requested in their petitions for fonnal administrative hearing, i.e. the issuance of a CON.
On July 12, 2019, Intervenors filed a Response to AHCA's Motion to Dismiss (Exhibit C), in which they agreed with Respondent's assertions in its Motion to Dismiss.
On July 16, 2019, Both DMC and JW filed responses to Respondent's Motion to Dismiss, which are hereby attached to this Final Order as Exhibits D and E, respectively. DMC disagreed with Respondent's assertion in its response but did not oppose dismissal of this matter. JW agreed with Respondent's assertion in its response and stated that the Agency should dismiss the matter as moot
Upon review of the Motion to Dismiss, the responses thereto, and in accordance with the
holding in Lavernia v. Dep't of Profl Reg., Bd. of Med., 616 So. 2d. 53, 54 (Fla. 1st DCA 1993),
IT IS THEREFORE ORDERED AND ADJUDGED THAT:
The Agency declines to adopt the ALJ's findings of fact, conclusions of law, and recommendation in the April 30, 2019 Recommended Order. Instead, the Agency hereby dismisses this matter as moot because the Agency no longer has the authority to review CON applications for new general hospitals and grant or deny such applications as of July I, 2019, due to the enactment of Chapter 2019-136, Laws of Florida. The parties shall govern themselves
accordingly.
DONE and ORDERED thisiL.day of J3 ,2019, in Tallahassee, Florida.
M .
AGENCY INISTRATION
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 # of
,.J.-0,---/'/ ,2019.
,l
OOP, Agency 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 Chief Administrative Law Judge
Division of Administrative Hearings (via electronic filing)
Geoffrey D. Smith, Esquire Susan C. Smith, Esquire Corinne T. Porcher, Esquire Smith & Associates
3301 Thomasville Road, Suite 201
Tallahassee, Florida 32303
(via electronic mail to geoff@smithlawtlh.com, susan@smithlawtlh.com and corinne@smithlawtlh.com)
Christopher C. Kokoruda, Esquire Laura E. Wade, Esquire
Eugene Shy, Jr., Esquire Assistant County Attorneys Miami-Dade County Attorney 1611 Northwest 12 th Avenue West Wing, Suite 109
Miami, Florida 33136
(via electronic mail to kokorud@miamidade.gov, wade@miamidade.gov, and eshy@miamidade.gov)
Stephen A. Ecenia, Esquire
R. David Prescott, Esquire Craig D. Miller, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202
Tallahassee, Florida 32301
(via electronic mail to Steve@rutledge-ecenia.com, David@rutledge-ecenia.com, and CMiller@rutledge-ecenia.com)
Thomas F. Panza, Esquire Paul C. Buckley, Esquire Elizabeth L. Pedersen, Esquire Angelina Gonzalez, Esquire
Panza, Maurer & Maynard, P.A. Coastal Tower
2400 East Commercial Boulevard, Suite 905 Fort Lauderdale, Florida 33308
(via electronic mail to tpanza@panzamaurer.com, pbuckley@panzamaurer.com, epederson@panzamaurer.com, and agonzalez@panzamaurer.com)
Michael J. Glazer, Esquire Steven M. Hogan, Esquire
E. Dylan Rivers, Esquire Ausley McMullen
Post Office Box 391
123 South Calhoun Street Tallahassee, Florida 32302
(via electronic mail to mglazer@ausley.com,
drivers@ausley.com, shogan@ausley.com, and jmcvaney@ausley.com)
Julia E. Smith, Esquire Assistant General Counsel
(via electronic mail to Julia.Smith@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)
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
EAST FLORIDA-DMC, INC.,
Petitioner,
vs. Case No. 16-3819CON
AGENCY FOR HEALTHCARE ADMINISTRATION,
Respondent,
and
CGH HOSPITAL, LTD, d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC., d/b/a HIALEAH HOSPITAL; LIFEMARK HOSPITALS, INC., d/b/a PALMETTO GENERAL HOSPITAL; AND THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA, d/b/a JACKSON HOSPITAL WEST,
Intervenors.
I
THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA, d/b/a JACKSON HOSPITAL WEST,
Petitioner,
vs. Case No. 16-3820CON
AGENCY FOR HEALTHCARE ADMINISTRATION,
Respondent,
and
KENDALL HEALTHCARE GROUP, LTD, d/b/a KENDALL REGIONAL MEDICAL CENTER; CGH HOSPITAL, LTD, d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC., d/b/a HIALEAH HOSPITAL; AND LIFEMARK HOSPITALS, INC., d/b/a PALMETTO GENERAL HOSPITAL,
Intervenors.
I
RECOMMENDED ORDER
Pursuant to notice, a final hearing was held in this case on September 10 through 14, 17 through 21, and 24 through 26, 2018, in Tallahassee, Florida, before W. David Watkins, the designated Administrative Law Judge of the Division of Administrative Hearings.
APPEARANCES
For The Public Health Trust of Miami-Dade County, Florida; d/b/a Jackson Hospital West:
Thomas Francis Panza, Esquire Elizabeth L. Pederson, Esquire Paul C. Buckley, Esquire Angelina Gonzalez, Esquire Alec J. Zavell, Esquire
Panza Maurer & Maynard, P.A.
2400 East Commercial Boulevard, Suite 905 Ft. Lauderdale, Florida 33308
For East Florida-DMC, Inc.; and Kendall Healthcare Group, Ltd, d/b/a Kendall Regional Medical Center:
Stephen A. Ecenia, Esquire Craig D. Miller, Esquire Gabriel F.V. Warren, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202 Tallahassee, Florida 32301
For Agency for Healthcare Administration: Richard Joseph Saliba, Esquire
Kevin Michael Marker, Esquire
Agency for Healthcare Administration Fort Knox Building III, Mail Stop 7 2727 Mahan Drive
Tallahassee, Florida 32308
For CGH Hospital, Ltd, d/b/a Coral Gables Hospital; Tenet Hialeah HealthSystem, Inc., d/b/a Hialeah Hospital; and Lifemark Hospitals, Inc., d/b/a Palmetto General Hospital:
Michael J. Glazer, Esquire Eugene Dylan Rivers, Esquire Stephen C. Emmanuel, Esquire Ausley & McMullen
123 South Calhoun Street Tallahassee, Florida 32301
STATEMENT OF THE ISSUES
The issues in these cases are whether Certificate of Need (CON) Application No. 10432 filed by East Florida-DMC, Inc. (DMC), to build an 80-bed acute care hospital in Miami-Dade County, Florida, AHCA District 11, or CON Application No. 10433 filed by The Public Health Trust of Miami-Dade County, Florida d/b/a Jackson Hospital West (JW), to build a 100-bed acute care hospital in Miami-Dade County, Florida, AHCA District 11, on balance, satisfy the applicable criteria; and, if so, whether either or both should be approved.
PRELIMINARY STATEMENT
The proceeding involves two CON applications filed in the first batching cycle of 2016. Each applicant sought approval to build and operate an acute care hospital in the City of Doral within Miami-Dade County, Florida, AHCA District 11. CON Application No. 10432, filed by DMC, is for an 80-bed hospital, and CON Application No. 10433, filed by JW, is for a 100-bed hospital.
Following its review of the two applications, the Agency
for Healthcare Administration (Agency or AHCA) issued a State Agency Action Report (SAAR) recommending that both CON applications be denied. The SAAR was signed by Marisol Fitch, AHCA's health administration services manager.
DMC and JW timely filed challenges to the preliminary denials of their applications, and AHCA referred their respective petitions to the Division of Administrative Hearings (DOAH) to conduct formal administrative hearings pursuant to sections 120.569, 120.57(1), and 408.039, Florida Statutes. At DOAH, DMC and JW's petitions were assigned Case Nos. 16-3819CON and 16-3820CON, respectively, and the undersigned was designated as the Administrative Law Judge (ALJ) to conduct the proceedings. Variety Children's Hospital, d/b/a Nicklaus Children's Hospital (NCH), filed a Petition for Leave to Intervene in each of the two proceedings, and three hospitals: CGH Hospital, Ltd., d/b/a Coral Gables Hospital (CGH); Tenet Hialeah Healthsystem, Inc., d/b/a Hialeah Hospital (Hialeah); and Lifemark Hospitals, Inc., d/b/a Palmetto General Hospital (PGH) (collectively the Tenet Hospitals or Tenet), filed a Joint Motion to Intervene in each of the two proceedings. JW filed a Motion to Intervene in DOAH Case No. 16-3819CON, and Kendall Healthcare Group, Ltd, d/b/a Kendall Regional Medical Center (KRMC), filed a Motion to Intervene in DOAH Case No. 16-3820CON.
On July 19, 2016, the undersigned entered an Order of Consolidation that consolidated DOAH Case Nos. 16-3819CON and 16-3820CON (the consolidated cases). By July 20, 2016, the undersigned had entered Orders in the consolidated cases that
granted each of the outstanding petitions and motions to intervene.
On July 20, 2016, NCH, CGH, Hialeah, and PGH filed an Amended Joint Unopposed Motion for Abeyance in Case No. 16- 3819CON. The motion represented that the parties were then involved in four consolidated cases, DOAH Case Nos. 16-0112CON, 16-0113CON, 16-0114CON, and 16-0llSCON (the Batch One
Proceedings or the Batch One Case). The Batch One Proceedings involved the same party applicants, virtually the same CON applications (albeit in an earlier batching cycle, the second cycle in 2015) for the same proposed projects, and the same parties in opposition to the CON applications as these consolidated cases. The unopposed motion requested that the consolidated cases be placed in abeyance until 30 days after the issuance of the final order in the Batch One Proceedings. The motion also referred to JW's Motion to Intervene in Case No. 16- 3819CON, and JW's slightly different request for relief that the matter be set for a 30-day hearing beginning on or after July 1, 2017, in order to allow for the issuance of a final order in the Batch One Proceedings. A similar but separate Joint Unopposed Motion for Abeyance was filed on July 19, 2016, by NCH, the Tenet Hospitals, and JW in Case No. 16-3820CON. The parties' requests for relief were identical to the parties' requests in the Amended Joint Unopposed Motion filed in Case No. 16-3819CON.
On July 20, 2016, the undersigned entered an Order Placing Cases in Abeyance that granted the motions for abeyance filed in each of the consolidated cases and ordered the parties to confer and advise in writing no later than a certain date, as to the status of the matter and the length of time required for the final hearing, and several mutually-agreeable dates for scheduling the final hearing, should one be necessary. During the abeyance, NCH filed a notice of voluntary dismissal of its petitions in the consolidated cases on November 20, 2017, and NCH did not participate in the proceedings thereafter.
Following a number of joint status reports and Orders continuing the cases in abeyance, the parties filed a joint status report on May 10, 2018. They reported that AHCA had issued a Final Order in the Batch One Cases that denied the CON applications of both DMC and JW.11 A scheduling conference was held with all parties and the consolidated cases were set for
hearing for 15 days the following September. cases proceeded to hearing as scheduled.
The consolidated
At the hearing, JW presented the testimony of the following
witnesses: Carlos Migoya, accepted as an expert in healthcare administration; Peter Glen Paige, M.D., accepted as an expert in hospital and healthcare administration and emergency medicine; Geralyn Lunsford, accepted as an expert in hospital administration; Girish Bobby Kapur, M.D., accepted as an expert
in emergency medicine; Wilfredo Alvarez, accepted as an expert in fire rescue and emergency medical services (EMS); Richard Garcia, P.E., accepted as an expert in transportation engineering; Mark Knight, accepted as an expert in healthcare finance and healthcare innovation; Michael Goldberg, M.D., accepted as an expert in anesthesiology and perioperative services; Henry Iler, accepted as an expert in urban planning and land use; Armand Edward Balsano, accepted as an expert in healthcare planning; David S. Levitt, accepted as an expert in healthcare planning; Laura Hunter, accepted as an expert in healthcare strategic planning and development; Juan Pablo Zambrano, M.D., accepted as an expert in cardiology, interventional cardiology, vascular medicine, and endovascular medicine; and, Rick Knapp, accepted as an expert in healthcare finance. JW offered the following exhibits which were received into evidence: Exhibits 1, 2, 5, 6, 8, 11, 13, 17-22, 39-43,
45, 50-59, 62-64, 67-75, 77-146, 149-151, 156, 162, 163, 167,
172, 209, 211, and 229.
DMC and KRMC presented the testimony of the following witnesses: Brandon Lee Haushalter, chief executive officer at KRMC, accepted as an expert in healthcare and hospital administration; Michael Joseph, president of Hospital Corporation of America's Florida division, accepted as an expert in hospital and healthcare administration; Carlos Santiago,
M.D., accepted as an expert in general surgery and robotic surgery; Eduardo Franca, M.D., accepted as an expert in interventional radiology; Mark McKenney, M.D., accepted as an expert in surgery, surgical critical care and trauma; Christopher Heggen, accepted as an expert in transportation engineering; Braulio Sabates, M.D., accepted as an expert in general surgery and laparoscopic surgery; Darryl Weiner, accepted as an expert in healthcare finance; Katherine Platt, accepted as an expert in health planning and health finance; and Daniel J. Sullivan, accepted as an expert in healthcare planning and finance. DMC and KRMC offered the following exhibits which were received as evidence: Exhibits 1-3, 13, 17, 18, 20-22,
25-28, 33-36, 39, 42, 43, 46, 47, 85, 112, 114, 118, 130, 131,
and 143.
The Tenet Hospitals presented the testimony of the following witnesses: Anna Mederos, an expert in nursing and hospital administration; Christina Jimenez, accepted as an expert in hospital administration; Jorge Perez, M.D., accepted as an expert in pathology; and Patricia Greenberg, accepted as an expert in healthcare planning and finance. Tenet offered the following exhibits which were received as evidence: Exhibits 1, 2, 5, 6, 9-11, 14, 15, 17-54, 56-72, 91, 99, 107, and 124.
Official recognition was taken of Tenet Exhibits 108-111 and 115.
Consistent with the announcement made at the outset of the hearing that, "AHCA is not taking a position at this hearing on the applications and does not intend to present evidence in the proceeding," the Agency did not present the testimony of any witnesses and offered no exhibits.
The 24-volume Transcript of the final hearing was filed with DOAH on November 2, 2018. Thereafter the parties timely filed their respective Proposed Recommended Orders, each of which has been carefully considered in the preparation of this Recommended Order.
All references to Florida Statutes are to the 2018 version unless indicated otherwise.
PREFACE TO FINDINGS OF FACT
As stipulated by the parties, at issue in this proceeding are the CON applications filed in the first batching cycle of 2016. The parties stipulated that the Batch One Proceedings involved the same party applicants, virtually the same CON applications (albeit in an earlier batching cycle, the second cycle in 2015), for the same proposed projects, and the same parties in opposition to the CON applications as these consolidated cases. Given the similarity of the two applications, the issues to be determined in both cases, and the evidence presented (often by witnesses that also testified in the Batch One hearing), the undersigned notes that many of the
Findings of Fact in the instant proceeding are similar to the Findings of Fact made in the Batch One Recommended Order.
However, pursuant to section 120.57(1) (k), the hearing conducted by the undersigned was de novo, and the Findings of Fact set forth below are based upon the evidence adduced at hearing, as
well as the entire record of this proceeding as defined by section 120.57(1)(f).2 1
FINDINGS OF FACT
Based upon the parties' stipulations, the demeanor and credibility of the witnesses, other evidence presented at the final hearing, and on the entire record of this proceeding, the following Findings of Fact are made:
The Parties
The Public Health Trust of Miami-Dade County d/b/a Jackson Hospital West and Jackson Health System (JHS)
JHS is a taxpayer-funded health system located in and
owned by Miami-Dade County. It is governed by The Public Health
Trust of Miami Dade-County, Florida (PHT), a seven-member board. JHS owns and operates three acute care hospitals in Miami-Dade County--Jackson Memorial Hospital (JMH); Jackson North Medical Center (JN); and Jackson South Medical Center (JS)--as well as
three specialty hospitals: Holtz Children's Hospital (Holtz);
Jackson Rehabilitation Hospital; and Jackson Behavioral Health Hospital. JHS also owns and operates numerous other non-
hospital healthcare facilities within Miami-Dade County. JHS's applicant in this proceeding is JW which, if approved, will be another acute care hospital in JHS.
JHS is an academic teaching institution, and the University of Miami (UM) is JHS's affiliated medical school. Over 1,000 UM residents staff JMH pursuant to an operating agreement with JHS. JN and JS are not academic medical centers.
JHS annually receives sales tax and ad valorem tax revenues from Miami-Dade County in order to help fund its operations.
JS and JN are community hospitals operated as part of JHS. JS was acquired in 2001. JS is licensed for 226 beds and is also home to a verified Level II trauma center.
The JN facility was acquired by JHS in 2006. The facility is licensed for 382 beds.
East Florida (DMC)
DMC is an affiliate of HCA Healthcare, Inc. (HCA), the largest provider of acute care hospital services in the world. DMC will operate within HCA's East Florida Division (EFD), which is comprised of 15 hospitals, 12 surgery centers, two diagnostic imaging centers, four freestanding emergency departments, nine behavioral health facilities, and one regional laboratory, along with other related services. There are three HCA-affiliated hospitals in Miami-Dade County: KRMC; Aventura Hospital and
Medical Center (Aventura); and Mercy Hospital, a campus of Plantation General Hospital (Mercy).
Kendall Regional (KRMC)
KRMC, which is located at the intersection of the Florida Turnpike and Southwest 40th Street in Miami-Dade County, is a 417-bed tertiary provider comprised of 380 acute care beds,
23 inpatient adult psychiatric beds, eight Level II neonatal intensive care unit (NICU) beds, and five Level III NICU beds. It is a Baker Act receiving facility. KRMC is a verified Level I trauma center. It also has a burn program.
KRMC is also an academic teaching facility, receiving freestanding institutional accreditation from the Accrediting Council for Graduate Medical Education (ACGME) in 2013. KRMC currently has six residency programs including, among others, surgery, internal medicine, podiatry, anesthesia, and surgical critical care. Its teaching programs are affiliated with the University of South Florida, Nova Southeastern University, and
Florida International University. scholarly and clinical research.
KRMC also participates in
9.
visits.
In 2017, KRMC had over 82,000 Emergency Department (ED)
It treated over 115,000 total inpatients and
outpatients that year. There are 850 physicians on KRMC's
medical staff. It offers a full range of medical surgery
services, interventional procedures, obstetrics (OB), pediatric, and neonatal care, among many other service lines.
KRMC primarily serves southern and western portions of Miami-Dade County but also receives referrals from the Florida Keys up through Broward County, Palm Beach County, and the Treasure Coast. Its main competitors include, but are not limited to: Baptist Hospital; Baptist West; South Miami Hospital; PGH; Hialeah; CGH; JS, and Palm Springs General Hospital.
The Tenet Hospitals
PGH, Hialeah, and CGH are wholly-owned subsidiaries of Tenet South Florida. These are all for-profit hospitals.
PGH is a 368-bed tertiary facility that opened in the early 1970s. It has 297 licensed acute care beds, 48 adult psychiatric beds, 52 ICU beds, and 15 Level II NICU beds. It is located at the Palmetto Expressway and Northwest 122nd Street in Hialeah, Florida. The hospital employs about 1,700 people and has over 600 physicians on its medical staff.
PGH is a tertiary-level facility offering a variety of specialty services, including adult open heart surgery, a comprehensive stroke center, and robotic surgery. It has inpatient mental health beds and serves the community as a Baker Act receiving facility. It also offers OB and Level II NICU services with approximately 1,500 births a year. It has
approximately 70,000 ED visits and between 17,000 and 18,000 inpatient admissions per year. In addition to its licensed inpatient beds, PGH operates 31 observation beds.
PGH is ACGME accredited and serves a significant teaching function in the community. It has approximately
89 residents and fellows. The hospital provides fellowships in cardiology, critical care and interventional cardiology, and
also has rotations in neurology and gastroenterology. from Larkin General Hospital also rotate through PGH.
Residents
PGH generally serves the communities of Opa Locka,
Hialeah, Miami Lakes, Hialeah Gardens, Doral, and Miami Springs. In reality, all of the hospitals in the county are competitors, but more direct competition comes from Palm Springs Hospital, Memorial in Miramar, Mount Sinai, Kendall, and even its sister hospital, Hialeah.
Hialeah first opened in 1951 and is a 378-bed acute care facility. It has 356 acute care beds, 12 adult psychiatric beds, and 10 Level II NICU beds. The ED has 25 beds and about 40,000 visits per year. It has approximately 14,000 inpatient admissions and 1,400 babies delivered annually. It offers services including cardiac, stroke, robotic surgery, colorectal surgery, and OB services. The hospital has a Level II NICU with
12 beds.
CGH is located in the City of Coral Gables and is near the border between Coral Gables and the City of Miami on Douglas Road. It first opened in 1926. Portions of the original structure are still in use.
CGH has 245 licensed beds, over 725 employees,
367 physicians, and over 100 additional allied providers on its medical staff. The hospital has a full-service ED. Its service lines include general surgery, geriatrics, urology, treatment of cardiovascular and pulmonary disease, and others. The hospital has eight operating rooms and offers robotic surgery. The ED has 28 beds divided into the main area and a geriatric emergency room. It had about 25,000 ED visits last year, which is lower than prior years, due in part to the presence of over a dozen nearby urgent care centers.
CGH has over 8,500 inpatient admissions per year and is not at capacity. While patient days have grown slightly, the average occupancy is still just a little over 40%, meaning, on average, it has over 140 empty inpatient beds on any given day. The hospital is licensed for 245 beds, but typically there are only 180 beds immediately available for use.
Agency for Healthcare Administration (AHCA)
AHCA is the state health-planning agency charged with administration of the CON program as set forth in sections 408.31-408.0455, Florida Statutes.
The Proposals
Doral Medical Center (DMC)
DMC proposes to build an 80-bed community hospital situated within the residential district of Doral. The hospital will be located in southwestern Doral in zip code 33126 and will serve the growing population of Doral, along with residential areas to the north and south of Doral.
The hospital will be located in the City of Doral's residential district on Northwest 41st Street between Northwest 109th Avenue to the east, and Northwest 112th Avenue to the west. Doral has seen significant growth in the past 15 years and has been consistently included on the list of the fastest growing cities in Florida.
The new facility will have a bed complement of
80 licensed acute care beds, including 72 medical/surgical and eight OB beds. The proposed acute care hospital will be fully accredited by the Joint Commission for the Accreditation of Healthcare Facilities and licensed by the State of Florida. No public funds will be utilized in construction of the hospital and it will contribute to the state, county, and municipal tax base as a proprietary corporation.
DMC will offer a full range of non-tertiary services, including emergency services, imaging, surgery, intensive care, cardiac catheterization, and women's services, including an OB
unit, and pediatric care. DMC will be a general medical facility that will include a general medical component and a surgery component. Although DMC will operate an OB unit, NICU services will not be offered at DMC. If DMC's patients need more advanced services, including NICU, the EFD hopes they will receive them from KRMC. The open medical staff will be largely community-based, but University of Miami physicians would be welcome at DMC.
Before the hospital is built, KRMC will construct and operate a freestanding emergency department (FSED) at the location that will eventually become the ED of DMC. Construction of the FSED is now underway, and Brandon Haushalter, chief executive officer (CEO) of KRMC, estimated that it will open in March or April of 2019.
Jackson West
JHS proposes to build a community hospital to be known as "Jackson Westu near the eastern edge of Doral. The proposed 100-bed general acute care hospital would have medical surgical and obstetrical beds and offer basic acute care services.
JHS is a public health system owned by Miami-Dade County. All of JHS's assets, as well as its debts, belong to the county. JHS is a not-for-profit entity, and therefore does not pay taxes, though it receives hundreds of millions of
dollars from property taxes and sales taxes in Miami-Dade County.
JHS's main campus is a large health campus located near the Midtown Miami area in between Allapattah (to the north) and Little Havana (to the south). In addition to JMH, the campus includes Holtz Children's Hospital, a behavioral health hospital, an inpatient rehabilitation hospital, and several specialty clinics. Bascom-Palmer Eye Institute, a Veterans Administration hospital, and University of Miami Hospital are also located adjacent to Jackson West's main campus.
JMH is a 1,500-bed hospital with a wide array of programs and services, including tertiary and quaternary care, and a Level I trauma program, the Ryder Trauma Center. JMH receives patients from throughout Miami-Dade County, elsewhere in Florida, and internationally.
JMH is a teaching hospital and has a large number of residents, as well as professors from the University of Miami, on staff. UM and JMH have had a relationship for many years, and in addition to research and teaching, UM provides physician staffing to JMH.
JN is a 342-bed community hospital located in between Miami Gardens and North Miami Beach, just off of I-95 and the Turnpike.
JS is a 252-bed community hospital located in the Palmetto Bay area just south of Kendall. It has stroke certification and interventional cardiology, and was recently approved for a trauma program, which began in May 2016.
Both JN and JS were existing hospitals that were
acquired by JHS. up.
JHS has never built a hospital from the ground
In 2014, JHS leadership directed its internal planning team to review the healthcare needs of county residents. JHS's analysis identified a need for outpatient services in western Miami-Dade, the only remaining quadrant of the county in which JHS did not have a hospital or healthcare program at the time. As part of its due diligence, JHS then consulted healthcare firm Kurt Salmon & Associates (KSA) to independently evaluate the data. KSA's investigation validated a need in the west county for adult and pediatric outpatient services, including need for an FSED. This prompted JHS to explore opportunities for expansion of outpatient services where needed: in the western corridor of Miami-Dade. This was also the genesis of JHS's
long-range plan to first build an FSED in the Doral area, to be followed ultimately by the addition of a general acute care hospital at the site.
The JW site is a 27-acre parcel of land located just west of the Palmetto Expressway and north of 25th Street. The
site is in an industrial area only a short distance from the western end of the runways at Miami International Airport. The site is located in zip code 33122, which is very sparsely populated.
JW proposed a primary service area (PSA) consisting of zip codes 33126, 33144, 33166, 33172/33122, 33174, 33178,
and 33182, and a secondary service area (SSA) of zip codes 33155, 33165, 33175, and 33184. JW intends to serve general, acute care non-tertiary patients and OB patients.
Detailed below, trends in the JW service area do not demonstrate need for its proposed hospital.
The location of the JW site will not contribute to the viability of the proposed hospital. According to 2010 census data, only 328 people live within a one-mile radius of the JW site. Since 2000, only 32 total people have moved into that same area around the JW site--an average of three per year. There are virtually no residences within a one-mile radius of the JW site. From 2000 to 2010, the population within a two- mile radius of the JW site decreased by a rate of 9.4%.
The JW health planner projects JW's home zip code of 33122 will have a total population of only eight (8) people in 2022.
From 2012 to 2014, the use rate in the JW service area for non-tertiary patients decreased by 3.9%. That decline
continued at a steeper pace of 4.2% from 2014 to 2017. This was largely due to the 65+ age cohort, the demographic of patients that utilize inpatient services the most. The 65+ age cohort is growing at a slower pace in the JW service area than in Miami Dade or Florida as a whole. Non-tertiary discharges in the JW service area are declining at a greater pace than that of Miami Dade County--negative 4.2% compared to negative 1.9%.
The rate of projected population growth in the JW PSA is decreasing. The projected rate of growth for the JW service area is lower than that of Miami-Dade County and Florida as a whole. The OB patient base JW intends to rely on is projected to remain flat.
The inpatient discharges for all ages in the JW service area have declined from 2014 to 2017. For ages 0-17, discharges in the JW service area declined 21.4% during that time period. The discharges for ages 18-44 declined by 4.8%, and the discharges for ages 45-64 declined by 8.9%. The discharges for the important 65+ age cohort declined by 0.1%. Specifically, the discharges for ages 65-74 declined by 6.5%, and the discharges for ages 75-84 declined by 3.3%. The discharges for ages 85+ are the only age cohort that has not declined from 2012 to 2017. Overall, the non-tertiary discharges per 1,000 population (i.e., use rate) for all ages in
the JW service area declined from 2012 to 2014 by 6%, and from 2014 to 2017 by 7.8%.
Despite these declines in discharges in the JW service area, the health planners who crafted the JW projections used a constant use rate for the 0-17, 18-44, and 45-64 age cohorts. The JW health planners used a declining use rate for the 65+ age cohort. These use rates were applied uniformly across all zip codes, despite wide variance in actual use rates in each zip code.
Applying the zip code specific use rates in conjunction with the other assumptions used by the JW health planner demonstrates that the JW projections are unreasonable. For instance, JW's reliance on a uniform use rate over-projects the number of discharges in JW PSA zip code 33178 by nearly 1,000 patients. This occurs because the population is only growing at a 2% rate in the zip code, but JW's reliance on service area-wide projections cause the discharges to grow at an extraordinary rate of 8.9% per year. Applying actual use rates across all zip codes causes a drastic change in the JW PSA and SSA definition.
Section 408.037(2) requires a CON applicant to identify its PSA and SSA by listing zip codes in which it will receive discharges in descending order, beginning with the zip code with the highest amount of discharges, then proceeding in
diminishing order to the zip code with the lowest amount of discharges. The zip codes, which comprise 75% of discharges, constitute the PSA; and the remaining zip codes, which consist of the remaining 25% of discharges, makes up the SSA. However, JW did not project its utilization in this manner.
In its application, JW did not define its service area, PSA, and SSA zip codes in descending order by number or percentage of discharges. When this correct adjustment is made, its PSA consists of zip codes 33126, 33172, 33178, 33174, 33144, and 33165; and its SSA consists of zip codes 33175, 33166, 33155, 33182, and 33184. Zip codes 33166 and 33182 were in the original JW PSA, and zip code 33165 was in the original JW SSA. As such, JW's home zip code should actually be in its SSA. JW health planners call this illogical, but it demonstrates that the JW site is located within a zip code that has almost no population of potential patients.
JHS is developing an FSED and outpatient/ambulatory facilities on the JW site regardless of whether its CON
application for a hospital is approved. Construction has begun
on the JW site, and JHS is actually building a "shelled in" structure intended to house a future hospital, notwithstanding
lack of CON approval for the hospital. There is no contingency
plan for use of the shelled-in hospital space if CON approval is not obtained. JHS executives unequivocally stated that they
intend to continue pursuing CON approval for the JW hospital, even if the proposed DMC hospital is approved. Indeed, JHS has filed third and fourth CON applications for its proposed JW hospital.
The budget for the JW campus is $252 million. Sixty to $70 million is being funded from a bond issuance approved by voters in Miami-Dade County. Notably, the bond referendum approved by voters made no mention of a new hospital. The remaining $180 to $190 million is being funded by JHS, which has chosen to only keep 50 days cash-on-hand, and put any surplus toward capital projects. This is well below the number of days cash-on-hand ws advisable for a system like JHS.
The specific programs and services to be offered at JW have not been finalized, but it is clear that JW will be a small community hospital that will not offer anything unique or different from any of the existing hospitals in the area, nor will it operate NICU beds. Patients presenting to JW in need of specialized or tertiary services will need to be transferred to another hospital with the capability of serving them, most likely JMH.
The Applicants' Arguments
Doral Medical Center (DMC)
DMC's arguments in support of its proposed hospital may be summarized as follows:
Geographic features surrounding Doral create transportation access barriers for the residents of the area;
Doral is a densely-populated community that is growing quickly and lacks a readily accessible hospital;
KRMC, which is the provider of choice for Doral residents, is a growing tertiary facility that cannot sufficiently expand to meet its future demands. DMC will serve much of the same patient population currently served by KRMC and help decompress KRMC's acute care load so KRMC can focus on its tertiary service lines;
From a geographic standpoint, the Doral community and its patients are isolated from much of Miami-Dade County to the north, west, and east, and the nearest hospitals.
East Florida-DMC is a subsidiary of HCA and would be a part of the HCA EFD. Michael Joseph is the president of the EFD, which includes 15 hospitals and other facilities from Miami north through the Treasure Coast.
Mr. Joseph authorized the filing of the DMC CON application, which proposes an 80-bed basic acute care hospital that includes 72 medical surgical and eight OB beds. As noted, there will be neither unique services at DMC nor any tertiary services, such as a NICU. HCA anticipates that DMC patients needing tertiary services would be referred and treated at KRMC.
The proposed hospital would be built on 41st Street, between Northwest 109th Avenue and Northwest 112th Avenue. This
site is located on the western edge of Doral, just east of the Everglades.
When the consultants were retained to write the first DMC CON application, HCA had already made the decision to go forward with the project.
Mr. Joseph described Miami-Dade County as one of the most competitive markets in the country for hospital services. There is robust competition in the Miami-Dade market from the standpoints of payors, physicians, and the many hospitals located in the county, including Jackson, HCA, Tenet, Baptist and others.
HCA is not proposing this project because any of the existing hospitals in the area do not provide good quality care.
HCA is currently building an FSED on the DMC site that will open regardless of whether the DMC hospital is approved.
Mr. Joseph acknowledged that there is a trend toward outpatient rather than inpatient care. Inpatient occupancy of acute care hospitals in Miami-Dade County has been declining in recent years. Managed care has added further pressure on reducing inpatient admissions.
Surgical advances have also resulted in fewer inpatient admissions. Surgeries that formerly required an inpatient stay are now often done on an outpatient basis.
Mr. Joseph agreed that 30 minutes is a reasonable travel time to access an acute care hospital.
The home zip code for the proposed DMC hospital is 33178. KRMC's market share for that zip code is 20%. Individuals in that zip code are currently accessing a wide variety of hospitals. PGH is only 6.7 miles away and has the fourth highest market share in that zip code.
HCA's healthcare planning expert, Dan Sullivan, acknowledged that, if approved, DMC would likely have an adverse financial impact on KRMC and other area hospitals.
Several witnesses testified that the travel time from the DMC site to KRMC is about 10 minutes, and that an ambulance could do it in as little as five minutes.
As to the argument that the residents of Doral face geographic access barriers, the evidence did not indicate that there is anything unique about Doral from a traffic standpoint compared to other parts of Miami-Dade County. People come in and out of Doral on a daily basis in significant numbers for work and other reasons via various access points.
Witnesses agreed that 25 to 30 minutes is a reasonable drive time for non-tertiary acute care services, and the evidence showed that residents of Doral, and the DMC service area, are well within 30 minutes of multiple hospitals providing more intensive services than are proposed by DMC. Indeed, many
residents of DMC's service area are closer to other hospitals than to the DMC site.
None of the DMC witnesses were able to identify any patient in Doral who had been unable to access acute care services, or had suffered a bad outcome because of travel from Doral to an area hospital. The evidence did not establish that there currently exists either geographic or financial access barriers within the service area proposed to be served by DMC.
Jackson West
As in its Batch One application, JW advances six arguments as to why its proposed hospital should be approved. They are:
It will serve a significant amount of indigent and Medicaid patients.
JHS already serves residents of the proposed service area, which JW characterizes as "fragmented," in that residents go to a number of different hospitals to receive services.
Development of the freestanding ED and ambulatory center is under way.
JW would provide an additional opportunity to partner with UM and FIU.
There is physician and community support for the project.
JW will add to the financial viability of JHS and its ability to continue its mission.
JW presented very little analysis of the types of factors typically considered in evaluating need for a new hospital. JW did not discuss existing providers and their programs and services, the utilization of existing hospitals, and whether they have excess capacity, or other important considerations. Instead, JW advanced the six arguments noted above, for approval of its proposed hospital, none of which truly relate to the issue of need.
First, JW states that its proposed hospital will serve a significant level of Medicaid and indigent patients. While it is true that JHS serves a significant amount of Medicaid and indigent patients, there are a number of reasons why this is not a basis to approve its proposed hospital.
As an initial matter, JW treads a fine line in touting its service to Medicaid and indigent patients, while also targeting Doral for its better payer mix and financial benefit to JHS. JHS also receives an enormous amount of tax dollars to provide care to indigent and underserved patients. While other hospitals in Miami-Dade County provide care to such patients, they do not receive taxpayer dollars, as does JHS, although they pay taxes, unlike JHS. Also, Medicaid is a good payer for JHS. With its substantial supplement, JHS actually makes money from Medicaid patients, and it costs the system more for a Medicaid patient to be treated at a JHS hospital than elsewhere. More
significantly, there is not a large Medicaid or indigent population in Doral, nor evidence of financial access issues in Doral.
Second, JW argues that its CON application should be approved because JHS already serves patients from the Doral area, which JW characterizes as "fragmented" because area residents go to several different hospitals for care. This so- called "fragmentation" is not unique to Doral, and is not unusual in a densely-populated urban market with several existing hospitals. The same phenomenon occurs in other areas of Miami-Dade County, some of which actually have a hospital in the localized area. The fact that Doral residents are accessing several different hospitals demonstrates that there are a number of existing providers that are accessible to them. As discussed in greater detail below, residents of the Doral area have choices in every direction (other than to the west, which is the Everglades). JHS itself already serves patients from the Doral area. If anything, this tells us that patients from Doral currently have access to the JHS hospitals.
Third, JW argues that its CON application should be approved because development of the JW campus is under way.
This is irrelevant to the determination of need, and is simply a statement of JHS's intent to build an FSED and outpatient
facilities on a piece of land that was acquired for that purpose, regardless of CON approval.
Fourth, JW argues for approval of its proposed hospital because it would provide an additional opportunity to partner with UM and Florida International University (FIU). However, the statutory criteria no longer addresses research and teaching concerns, and JHS's relationship with UM or FIU has no bearing on whether there is a need for a new hospital in the Doral area. Moreover, JW did not present any evidence of how it would partner with UM or FIU at JW, and there does not seem to be any set plans in this regard.
Fifth, JW claims that there is physician and community support for its proposed hospital, but it is very common for CON applicants to obtain letters in support for applications. Indeed, the DMC application was also accompanied by letters of support.
Sixth and finally, JW argues that its proposed hospital will add to the financial viability of HSA and allow it to continue its mission. However, JW provided no analysis of the projected financial performance of its proposed hospital to substantiate this. The only financial analysis in the record is from KSA, a consulting firm that JHS hired to analyze the programs and services to be developed at JW. The KSA analysis posits that the JW FSED project will lose millions of dollars
and not achieve break-even unless there is an inpatient hospital co-located there so that JW can take advantage of the more lucrative hospital-based billing and reimbursement.
The sixth "need" argument relates to the issue of JHS's historical financial struggles, which bear discussion. Only a handful of years ago, the entire JHS was in dire financial trouble, so much so that selling all or parts of it was considered. Days cash-on-hand was in the single digits, and JHS fell out of compliance with bond covenants.
JHS's financial difficulties prompted the appointment of an outside monitor to oversee JHS's finances. Price Waterhouse served in that role, and made several recommendations for JHS to improve its revenue cycle, make accounting adjustments, and improve its staffing and efficiency. As a result of these recommendations, JHS went through a large reduction in force, and began to more closely screen the income and residency of its patients. As a result of these measures, overall financial performance has since improved.
Despite its improved financial position, JHS still
consistently loses money on operations, including a
$362,000,915 loss as of June 30, 2018. JHS clearly depends upon the hundreds of millions of non-operating tax-based revenues it receives annually.
JHS's CEO expressed concerns over decreases in the system's non-operating revenue sources, and claimed that JHS needs to find ways to increase its operating revenue to offset this. JW is being proposed as part of this strategy. However, JHS's chief financial officer testified that "the non-operating revenues are a fairly stable source of income." In fact, JHS's tax revenues have gone up in the last few years.
JHS sees the more affluent Doral area as a source of better paying patients that will enhance the profitability of its new hospital. Beyond this aspiration however, there is no meaningful analysis of the anticipated financial performance of its proposed hospital. This is a glaring omission given that a significant impetus for spending millions of public dollars on a new hospital is to improve JHS's overall financial position.
The KSA analysis referenced above determined that changes to the Hospital Outpatient Prospective Payment System rule would result in the JW campus losing hundreds of millions of dollars and never reaching "break even," absent an inpatient hospital on the campus for "hospital based" billing and reimbursement.
Though a financial benefit to the system, the increased reimbursement JHS would receive by having an inpatient hospital on the JW campus would be a financial burden on the healthcare delivery system since it would cost more for the same
patient to receive the same outpatient services in a hospital based facility.
Reports by KSA also state that a strategic purpose of JW is to attract patients that would otherwise go to nearby facilities like PGH and Hialeah, and to capture tertiary or higher complexity cases which would then be sent to JMH. JW's witnesses and healthcare planning experts fully expect this to happen.
In 2015, and again in 2017, JHS conducted a "Community Health Needs Assessment," which is required by law to be performed by public safety net hospitals. The assessments were conducted by gathering responses to various questions from a wide array of community leaders and stakeholders, including the CEOs of JHS's hospitals, about the healthcare needs of the community.
The final Community Health Needs Assessment documents are lengthy and cover a variety of health-related topics, but most notable for this case is that: (1) nowhere in either the 2015 or 2017 assessment is the development of a new hospital recommended; and (2) expansion into western Miami-Dade County scored by far the lowest on a list of priorities for JHS.
In its application and at hearing, JW took the position that JW can enter the Doral area market without impacting existing providers to any meaningful extent. While JW
acknowledges that its proposed hospital would impact the Tenet Hospitals, it argues that the impact is not significant.
The evidence established that the financial impact to the Tenet Hospitals (calculated based upon lost contribution margin) would total roughly $3 million for lost inpatients, and
$5.2 million including lost outpatients. While these losses will not put the Tenet Hospitals in financial peril, they are nonetheless significant and material.
The Existing Healthcare Delivery System
Miami-Dade County is home to 18 freestanding acute care hospitals, comprising a total of 7,585 licensed and approved acute care beds. With an average annual occupancy of 53.8% in calendar year 2017, there were, on average, approximately 3,500 unoccupied acute care beds in the county on any given day. While the countywide occupancy rate fluctuates from year to year, it has been on a downward trend in the past several years.
As pointed out by several witnesses, the lack of a hospital in Doral is not itself an indication of need. In addition, population growth, and the demands of the population for inpatient hospital beds, cannot be considered in a vacuum. Sound healthcare planning requires an analysis of existing area hospitals, including the services they offer and their respective locations; how area residents travel to existing
hospitals and any barriers to access; the utilization of existing hospitals and amount of capacity they have; and other factors which may be relevant in a given case.
The population of Doral currently is only about 59,000 people. It is not as densely populated as many areas of Miami-Dade County, has a number of golf course communities, and is generally a more affluent area with a higher average household income than much of Miami-Dade County. As set forth in JW's CON application, the better payer mix in Doral was a significant factor behind its decision to file its CON application.
Although there is not a hospital within the Doral city limits, there are a number of healthcare providers in Doral and several hospitals nearby. PGH and Palm Springs Hospital are
just north of Doral. northeast of Doral. southeast of Doral.
KRMC is just south of Doral. Hialeah is CGH, Westchester General, and NCH are
JMH and all of its facilities are east of
Doral. And there are others within reasonable distance. KRMC is only six miles due south of the proposed DMC site, and PGH is just eight miles north of the DMC site. As to the JW site, PGH is 6.9 miles distant, CGH is 8.6 miles distant, and Hialeah is
7.4 miles distant.
Residents of the Doral area have many choices in hospitals with a wide array of services, and they are accessing
them. The parties to this case, as well as other existing hospitals, all have a share of the Doral area market. JW calls this "fragmentation" of the market and casts it in a negative light, but the evidence showed this to be a normal phenomenon in an urban area like Miami, with several hospitals in healthy competition with each other.
Among the experts testifying at the hearing, it was undisputed that inpatient acute care hospital use rates are on the decline. There are different reasons for this, but it was uniformly recognized that decreasing use rates for inpatient services, and a shift toward outpatient services, are ongoing trends in the market. Recognizing the need for outpatient services in the Doral area, both JW and DMC (or, more accurately, their related entities) have proposed outpatient facilities and services to be located in Doral.
Kendall Regional Medical Center
KRMC is currently the dominant hospital provider in the Doral area. Regarding his motivation for filing the DMC application, Mr. Joseph readily admitted "it's as much about protecting what I already currently provide, number one."
KRMC treats Medicaid and indigent patients. KRMC has never turned away a patient because it did not have a contract with a Medicaid-managed care company. The CEO agreed that there
is no access problem for Medicaid or charity patients justifying a new hospital.
It was argued that KRMC is crowded, and the DMC hospital would help "decompress" KRMC, but the evidence showed that KRMC has a number of licensed beds that are not being used for inpatients. In addition, its ED has never gone on diversion, and no patient has ever been turned away due to the lack of a bed. Moreover, the census at KRMC has been declining. It had 25,324 inpatient admissions in 2015, 24,649 admissions in 2016, and 23,301 in 2017.
The most recent data available at the time of hearing reflected that KRMC has been running at a little less than
75% occupancy, before its planned bed additions. KRMC is between an eight to 10 minute drive from Doral, and currently has the largest market share within the applicants' defined service areas. KRMC is readily available and accessible to the residents of Doral.
KRMC currently has a $90 million dollar expansion project under way. It involves adding beds and two new floors to the West Tower--a new fifth floor which will add 24 ICU beds and 24 step-down beds, and a new sixth floor which will house the relocated pediatric unit and 12 new medical-surgical beds. KRMC is also adding a new nine-story, 765 parking space garage and other ancillary space. This expansion will reduce the
occupancy rate of KRMC's inpatient units, and in particular its ICUs. These bed additions, in conjunction with increasing emphasis on outpatient services and the resultant declining inpatient admissions, will alleviate any historical capacity constraints KRMC may have had.
There are also a number of ways KRMC could be further expanded in the future if needed. The West Tower is designed so it could accommodate a seventh floor, and the East Tower is also designed so that an additional floor could also be added to it. In addition, KRMC recently completed construction of a new OR area that is built on pillars. The new construction includes a third floor of shelled-in space that could house an additional
12 acute care beds. Moreover, this new OR tower was designed to go up an additional two to three floors beyond the existing shelled-in third floor.
It is clear that KRMC has implemented reasonable
strategies for addressing any bed capacity issues it may have
experienced in the past. to approve DMC.
Decompression of KRMC is not a reason
Palmetto General Hospital
Evidence regarding PGH was provided by its CEO Ana Mederos. Ms. Mederos is a registered nurse and has lived in Miami-Dade County for many years. She has a master of business education from Nova University and has worked in several
different hospitals in the county. Specifically, she was the chief operating officer (COO) at Cedars Medical Center, the CEO at North Shore Medical Center, the CEO at Hialeah Hospital, and has been the CEO at PGH since August of 2006.
Ms. Mederos is one of the few witnesses that actually lives in Doral. She travels in and out of the area on a daily basis. Her average commute is only about 15 minutes, and she has multiple convenient options in and out of Doral.
PGH is located just off the Palmetto Expressway at
68th Street. It opened in the early 1970s and has 368 licensed
beds, including 52 ICU beds. The hospital employs about
1,800 people and has over 600 physicians on its medical staff.
PGH's occupancy has declined from 79.8% in 2015 to
64% in 2016, and even further to 56.7% in 2017. There are many reasons for this decline, including pressure from managed care organizations, the continued increase in the use of outpatient procedures, improvements in technology, and increased competition in the Miami-Dade County market. Ms. Mederos expects that inpatient demand will continue to decline into the foreseeable future.
PGH recently activated 31 observation beds to help improve throughput and better accommodate the increasing number of observation patients.
PGH offers high-quality care and uses various metrics
and indicators to measure and monitor what is going on in the
hospital. awards.
The hospital has also been recognized with numerous
Through its parent, Tenet, PGH has contracts with
just about every insurance and managed care company that serves the community. The hospital treats Medicaid and indigent patients. PGH's Medicaid rate of $3,580 per patient is significantly lower than the rate paid to JMH. PGH has an office dedicated to helping patients get qualified for Medicaid or other financial resources, which not only helps the hospital get paid for its services, it also assists patients and families to make sure that they have benefits on an ongoing basis.
Roughly 9-10% of PGH's patients annually are completely unfunded.
PGH only transfers patients if there is a need for a service not provided at the hospital, or upon the patient's request. PGH does not transfer patients just because they cannot pay. PGH pays physicians to take calls in the ED which also obligates those physicians to provide care to patients that are seen at the hospital.
PGH is a for-profit hospital that pays income taxes and property taxes, and does not receive any taxpayer subsidies like those received by JHS.
Ms. Mederos reviewed the applications of JW and DMC, and articulated a number of reasons why, in her opinion, neither application should be approved. She sees no delays in providing care to anyone in the area, as there are hospitals serving Doral in every direction. There are a multitude of FSEDs available and additional FSEDs are being built in Doral by both applicants. There is another FSED being built close to PGH by Mount Sinai Medical Center. NCH has also opened an FSED that has negatively affected the volume of pediatric patients seen at PGH. There are also multiple urgent care centers. It was
Ms. Mederos' firm belief that persons living in Doral have reasonable geographic access to both inpatient and outpatient medical services. Ms. Mederos' testimony in this regard is credited.
There are no programs or services being proposed by either applicant that are not already available in the area. Ms. Mederos also noted that there is currently no problem with access to OB services in the area. However, she has a particular concern in that both applicants propose to offer OB services, but neither is proposing to offer NICU services. The evidence showed that most all of the hospitals that provide OB services to the Doral area offer at least Level II and some Level III NICU services. Thus, in terms of OB care, both
proposed hospitals would be a step below what has developed as the standard of care for OB patients in the county.
Ms. Mederos acknowledged that PGH does not have a huge market share in the zip codes that the applicants are proposing to serve, but that does not mean that the impact from either would not be real and significant. If a hospital is built by either applicant, it will need physicians, with some specialists in short supply. There are tremendous shortages in certain medical fields, such as orthopedics and neurology. In addition, there will be additional competition for nurses and other staff, which will increase the cost of healthcare.
The loss of $1.3 to $2 million in contribution margin, as projected by Tenet's healthcare planner, is a negative impact on PGH as hospital margins become thinner, and those numbers do not include costs like those needed to recruit and retain staff. PGH is again experiencing a nursing shortage, and losing nurses, incurring the higher cost for contract labor, paying overtime, and essentially not having the staff to provide the required services is a serious potential adverse impact from either proposed new hospital. JHS also tends to provide more lucrative benefits than PGH, and a nearby JW hospital is a threat in that regard.
As a final note, Ms. Mederos stated that her conviction that there is no need for either proposed hospital in
Doral is even more resolute than when she testified in the Batch One Case. With continued declines in admissions, length of stay and patient days, the development of more services for the residents of Doral, the shortages of doctors and nurses, the ever increasing role of managed care that depresses the demand for inpatient hospital services and other factors, she persuasively explained why no new hospitals are needed in the Doral area.
Coral Gables Hospital (CGH)
Maria Cristina Jimenez testified on behalf of CGH, where she has worked in a variety of different capacities since 1985. She was promoted to CEO in March 2017. She has lived in Miami her entire life.
Ms. Jimenez has been involved in initiatives to make her hospital more efficient. She is supportive of efforts to reduce inpatient hospitalizations and length of stay, as this is what is best for patients. Overall, the hospital length of stay is dropping, which adds to the decreasing demand for inpatient services.
CGH is accredited by the Joint Commission, has
received multiple awards, and provides high-quality care to its patients. It also has contracts with a broad array of managed care companies as do the other Tenet hospitals.
CGH treats Medicaid patients, and its total Medicaid
rate is less than $3,500 per inpatient. The hospital has a
program similar to PGH to help patients get qualified for Medicaid and other resources.
CGH also provides services to indigent patients, and
self-pay/charity is about 6% of the hospital's total admissions. The hospital does not transfer patients just because they are indigent. Physicians are compensated to provide care in the emergency room and are expected to continue with that care if the patients are admitted to the hospital, even if they do not have financial resources. CGH also pays income and property taxes, but does not receive any taxpayer support.
CGH generally serves the Little Havana, Flagami, Miami, and Coral Gables communities, and its service area overlaps with those of the applicants.
In order to better serve its patients and to help it compete in the highly competitive Miami-Dade County marketplace, CGH is developing a freestanding ED at the corner of Bird Road and Southwest 87th Avenue, which is scheduled to open in January 2020. This will provide another resource for patients in the proposed service areas.
Ms. Jimenez had reviewed the CON applications at issue in this case. She does not believe that either hospital should be approved because it will drain resources from CGH, not
only from a financial standpoint, but also physician and nurse staffing. CGH experiences physician shortages. Urologists are in short supply, as are gastrointestinal physicians that perform certain procedures. Hematology, oncology, and endocrinology are also specialty areas with shortages. The addition of another hospital will exacerbate those shortages at CGH.
While CGH does not have a large market share in the proposed PSA of either applicant, anticipated impact from approval of either is real and substantial. A contribution margin loss of $1.2 to $2.2 million per year, as projected by Tenet's healthcare planner, would be significant. The drain on resources, including staff and physicians, is also of significant concern.
Hialeah Hospital
Dr. Jorge Perez testified on behalf of Hialeah.
Dr. Perez is a pathologist and medical director of laboratory at the hospital. More significantly, Dr. Perez has been on the hospital's staff since 2001 and has served in multiple leadership roles, including chair of the Performance Improvement Council, chief of staff; and since 2015, chair of the Hialeah Hospital Governing Board.
Hialeah offers obstetrics services and a Level II NICU with 12 beds. Approximately 1,400 babies a year are born there.
Hialeah's occupancy has been essentially flat for the
past three years, at below 40%, and it clearly has ample excess capacity. On an average day, over 200 of Hialeah's beds are unoccupied. Like other hospitals in the county, Hialeah has a
number of competitors. The growth of managed care has affected
the demand for inpatient beds and services at Hialeah.
Hialeah treats Medicaid and indigent patients.
Approximately 15% of Hialeah's admissions are unfunded.
As with its sister Tenet hospitals, Hialeah is a for profit hospital that pays taxes and does not receive tax dollars for providing care to the indigent.
Dr. Perez succinctly and persuasively identified a
variety of reasons why no new hospital is needed in Doral. First and foremost, there is plenty of capacity at the existing hospitals in the area, including Hialeah. Second, both inpatient admissions and length of stay continue trending downward. Care continues to shift toward outpatient services, thereby reducing the demand for inpatient care.
According to Dr. Perez, if a new hospital is approved in Doral it will bring with it adverse impacts on existing hospitals, including Hialeah. A new hospital in Doral will attract patients, some of which would have otherwise gone to Hialeah. Moreover, Doral has more insured patients, meaning the patients that would be lost would be good payors. There would
also be a significant risk of loss of staff to a new hospital. Dr. Perez's testimony in this regard is credible.
Statutory and Rule Review Criteria
In 2008, the Florida Legislature streamlined the review criteria applicable for evaluating new hospital applications. Mem'l Healthcare Grp. v. AHCA, Case No. 12- 0429CON, RO at 32 (Fla. DOAH Dec. 7, 2012). The criteria specifically eliminated included quality of care, availability of resources, financial feasibility, and the costs and methods of proposed construction. Lee Mem'l Health System v. AHCA, Case No. 13-2508CON, RO at 135 (Fla. DOAH Mar. 28, 2014). The remaining criteria applicable to new hospital projects are set forth at section 408.035(1), Florida Statutes.
Section 408.035(1)(a): The need for the healthcare facilities and health services being proposed.
Generally, CON applicants are responsible for demonstrating need for new acute care hospitals, typically in the context of a numeric need methodology adopted by AHCA. However, AHCA has not promulgated a numeric need methodology to calculate need for new hospital facilities. Florida Administrative Code Rule 59C-l.008(2) (e) provides that if no agency need methodology exists, the applicant is responsible for demonstrating need through a needs assessment methodology, which must include, at a minimum, consideration of the following
topics, except where they are inconsistent with the applicable statutory and rule criteria:
Population demographics and dynamics;
Availability, utilization and quality of like services in the district, subdistrict, or both;
Medical treatment trends; and
Market conditions.
Both applicants propose to build small community hospitals providing basic acute care and OB services in the Doral area of western Miami-Dade County. Both applicants point to the increasing population and the lack of an acute care hospital in Doral as evidence of need for a hospital. The DMC application focuses largely on geographic access concerns, while the JW application is premised upon six arguments as to why JHS contends its proposed JW hospital should be approved.
The lack of a hospital in Doral is not itself an indication of need.31 In addition, population growth, and the
demands of the population for inpatient hospital beds, cannot be considered in a vacuum. Sound healthcare planning requires an analysis of existing area hospitals, including the services they offer and their respective locations; how area residents travel to existing hospitals, and any barriers to access; the utilization of existing hospitals and amount of capacity they have; and other factors which may be relevant in a given case.
so
Doral is in the west/northwest part of Miami-Dade County, in between the Miami International Airport (to the east) and the Everglades (to the west). It is surrounded by major roadways, with US Highway 27/Okeechobee Road running diagonally to the north, US Highway 836/Dolphin Expressway running along its southern edge, US Highway 826/Palmetto Expressway running north-south to the east, and the Florida Turnpike running north- south along the western edge of Doral. To the west of the Turnpike is the Everglades, where there is minimal population and very limited development possible in the future.
The City of Doral itself has an area of about 15 square miles, and is only two or three times the size of the Miami International Airport, which sits just east of Doral. Much of Doral is commercial and industrial, with the largest concentration of residential areas being in the northwest part of the city.
While there is unquestionably residential growth in Doral, the population of Doral is currently only about
59,000 people. Doral is not as densely populated as many areas of Miami-Dade County, has a number of golf course communities, and is generally a more affluent area with a higher average household income than much of Miami-Dade County.
JW proposes to locate its hospital on the eastern side of Doral, just west of Miami International Airport, while
the DMC site is on the western side of Doral, just east of the Everglades. JW's site is located in an industrial area with few residents, while the DMC site is located in an area where future growth is likely to be limited. Both sites have downsides for development of a hospital, with both applicants spending considerable time at hearing pointing out the flaws of each other's chosen location.
Both applicants define their service areas to include the City of Doral, but also areas outside of Doral. Notably, the entire DMC service area is contained within KRMC's existing service area, with the exception of one small area. While the population of Doral itself is only 59,000 people, there are more concentrated populations in areas outside of Doral (except to the west). However, the people in these areas are closer to existing hospitals like PGH, Hialeah, KRMC, and others.
For the population inside Doral, there are several major roadways in and out of Doral, and area residents can access several existing hospitals with plenty of capacity within a 20-minute drive time, many closer than that.
It was undisputed that inpatient acute care hospital use rates continue to decline. There are different reasons for this, but it was uniformly recognized that decreasing inpatient use rates, and a shift toward outpatient services, are ongoing trends in the market. These trends existed at the time of the
Batch One Case. As observed by Tenet's healthcare planner at hearing: "The occupancy is lower today than it was two years ago, the use rates are lower, and the actual utilization is lower."
Both applicants failed to establish a compelling case of need. While there is growth in the Doral area, it remains a relatively small population, and there was no evidence of community needs being unmet. Sound healthcare planning, and the statutory criteria, require consideration of existing hospitals, their availability, accessibility, and extent of utilization. These considerations weigh heavily against approval of either CON application, even more so than in the prior case.
Section 408.035(1)(b): The availability, accessibility, and extent of utilization of existing healthcare facilities and health services in the service district of the applicant; and Section 408.035(1)(e): The extent to which the proposed services will enhance access to healthcare for residents of the service district.
As stated above, there are several existing hospitals in close proximity to Doral. Thus, the question is whether they are accessible and have capacity to serve the needs of patients from the Doral area. The evidence overwhelmingly answers these questions in the affirmative.
Geographic access was a focal point of the DMC application, which argued that there are various barriers to access in and around Doral, such as a canal that runs parallel
to US Highway 27/Okeechobee Road, train tracks and a rail yard, industrial plants, and the airport. While the presence of these things is undeniable, as is the fact that there is traffic in Miami, based upon the evidence presented, they do not present the barriers that DMC alleges. Rather, the evidence was undisputed that numerous hospitals are accessible within
20 minutes of the proposed hospital sites, and some within 10 to
15 minutes. All of Doral is within 30 minutes of multiple hospitals. These are reasonable travel times and are not indicative of a geographic access problem, regardless of any alleged "barriers."
In addition, existing hospitals clearly have the capacity to serve the Doral community, and they are doing so. Without question, there is excess capacity in the Miami-Dade County market. With approximately 7,500 hospital beds in the county running at an average occupancy just over 50%, there are around 3,500 beds available at any given time. Focusing on the hospitals closest to Doral (those accessible within 20 minutes), there are hundreds of beds that are available and accessible from the proposed service areas of the applicants. KRMC is particularly noteworthy because of its proximity to, and market share in, the Doral area. The most recent utilization and occupancy data for KRMC indicate that it has, on average, 100 vacant beds. This is more than the entire 80-bed hospital
proposed in the DMC application (for a service area that is already served and subsumed by KRMC). Moreover, KRMC is expanding, and will soon have even more capacity at its location less than a 10-minute drive from the DMC site.
From a programmatic standpoint, neither applicant is proposing any programs or services that are not already available at numerous existing hospitals, and, in fact, both would offer fewer programs and services than other area hospitals. As such, patients in need of tertiary or specialized services will still have to travel to other hospitals like PGH, KRMC, or JMH. Alternatively, if they present to a small hospital in Doral in need of specialized services, they will then have to be transferred to an appropriate hospital that can treat them. The same would be true for babies born at either DMC or JW in need of a NICU.
Similarly, there are bypass protocols for EMS to take cardiac, stroke, and trauma patients to the closest hospital equipped to treat them, even if it means bypassing other hospitals not so equipped, like JW and DMC. Less acute patients can be transported to the closest ED. And since both applicants are building FSEDs in Doral, there will be ample access to emergency services for residents of Doral.
This criterion does not weigh in favor of approval of either hospital. To the contrary, the evidence overwhelmingly
established that existing hospitals are available and accessible to Doral area residents.
Section 408.035(1)(e), (g) and (i): The extent to which the proposed services will enhance access to healthcare, the extent to which the proposal will foster competition that promotes quality and cost-effectiveness, and the applicant's past and proposed provision of healthcare services to Medicaid patients and the medically indigent.
It goes without saying that any new hospital is going to enhance access to the people closest to its location; but as explained above, there is no evidence of an access problem, or any pressing need for enhanced access to acute care hospital services. Rather, the evidence showed that Doral area residents are within very reasonable travel times to existing hospitals, most of which have far more extensive programs and services than either applicant is proposing to offer. Indeed, the proposed DMC service area is contained within KRMC's existing service area, and KRMC is only 10 minutes from the DMC site.
Neither applicant would enhance access to tertiary or specialized services, and patients in need of those services will still have to travel to other hospitals, or worse, be transferred after presenting to a Doral hospital with more limited programs and services.
Although it was not shown to be an issue, access to emergency services is going to be enhanced by the FSEDs being built by both applicants. Thus, to the extent that a new
hospital would enhance access, it would be only for non-emergent patients in need of basic, non-tertiary level care. Existing hospitals are available and easily accessible to these patients. In addition, healthy competition exists between several existing providers serving the Doral area market. That healthy competition would be substantially eroded by approval of the DMC application, as HCA would likely capture a dominant share of the market.
While approval of the JW application might not create a dominant market share for one provider, it would certainly not promote cost-effectiveness given the fact that it costs the system more for the same patient to receive services at a JHS hospital than other facilities. Indeed, approval of JW's application would mean that the JW campus will have the more expensive hospital-based billing rates.
Florida Medicaid diagnosis related group (DRG) payment comparisons among hospitals are relevant because both DMC and JW propose that at least 22% of their patients will be Medicaid patients. Data from the 2017-18 DRG calculator provided by the Medicaid program office was used to compare JHS to the three Tenet hospitals, KRMC, and Aventura Hospital, another EFD hospital in Miami-Dade County. The data shows that JHS receives the highest Medicaid rate enhancement per discharge for the same Medicaid patients ($2,820.06) among these six
hospitals in the county. KRMC receives a modest enhancement of $147.27.
Comparison of Medicaid Managed Care Reimbursement over the period of fiscal years 2014-2016 show that JHS receives substantially more Medicaid reimbursement per adjusted patient day than any of the hospitals in this proceeding, with the other hospitals receiving between one-third and one-half of JHS reimbursement. In contrast, among all of these hospitals, KRMC had the lowest rate for each of the three years covered by the data, which means KRMC (and by extension DMC) would cost the Medicaid program substantially less money for care of Medicaid patients.
Under the new prospective payment system instituted by the State of Florida for Medicaid reimbursement of acute care hospital providers, for service between July 1, 2018, and
March 31, 2019, JHS is the beneficiary of an automatic rate enhancement of more than $8 million. In contrast, KRMC's rate enhancement is only between $16,000 and $17,000. Thus, it will cost the Medicaid program substantially more to treat a patient using the same services at JW than at DMC. Furthermore, rather than enhance the financial viability of the JHS system, the evidence indicates that the JW proposal will be a financial drain on the JHS system.
Finally, JHS's past and proposed provision of care to Medicaid and indigent patients is noteworthy, but not a reason
to approve its proposed hospital. JW is proposing this hospital
to penetrate a more affluent market, not an indigent or underserved area, and it proposes to provide Medicaid and indigent care at a level that is consistent with the existing hospitals.
JHS also receives the highest Low Income Pool (LIP) payments per charity care of any system in the state, and is one of only a handful of hospital systems that made money after
receipt of the LIP payments. HCA-affiliated hospitals, by
comparison, incur the second greatest cost in the state for charity care taking LIP payments into consideration.
Analysis of standardized net revenues per adjusted admission (NRAA) among Miami-Dade County acute care hospitals, a group of 16 hospitals, shows JHS to be either the second or the third highest hospital in terms of NRAA. KRMC, in contrast, part of the EFD/HCA hospitals, is about 3% below the average of the 16 hospitals for NRAA.
DMC's analysis of standardized NRAA using data from 2014, 2015, and 2016, among acute care hospitals receiving local government tax revenues, shows JHS receives more net revenue than any of the other hospitals in this grouping.
Using data from FY 2014 to FY 2016, DMC compared hospital costs among the four existing providers that are parties to this proceeding and JMH as a representative of JHS. Standardizing for case mix, fiscal year end, and location, an analysis of costs per adjusted admission shows that the hospitals other than JMH have an average cost of between a half and a third of JMH's average cost. The same type of analysis of costs among a peer group of eight statutory teaching hospitals shows JHS's costs to be the highest.
It should also be noted that if JW were to fail or experience significant losses from operations, the taxpayers of Miami-Dade County will be at risk. In contrast, if DMC were to fail financially, EFD/HCA will shoulder the losses.
When the two applications are evaluated in the context of the above criteria, the greater weight of the evidence does not mitigate in favor of approval of either. However, should AHCA decide to approve one of the applicants in its final order, preference should be given to DMC because of its lower costs per admission for all categories of payors, and in particular, the lower cost to the Florida Medicaid Program. In addition, the risk of financial failure would fall upon EFD/HCA, rather than the taxpayers of Miami-Dade County.
Rule 59C-1.008(2) (e): Need considerations.
Many of the considerations enumerated in rule 59C- 1.008(2)(e) overlap with the statutory criteria, but there are certain notable trends and market conditions that warrant mention. Specifically, while the population of Doral is growing, it remains relatively small, and does not itself justify a new hospital. And while there are some more densely populated areas outside of the city of Doral, they are much closer to existing hospitals having robust services and excess capacity.
Doral is a more affluent area, and there was no
evidence of any financial or cultural access issues supporting approval of either CON application.
The availability, utilization, and quality of
existing hospitals are clearly not issues, as there are several existing hospitals with plenty of capacity accessible to Doral area residents.
In terms of medical treatment trends, it was
undisputed that use rates for inpatient hospital services continue trending downward, and that trend is expected to
continue. Concomitantly, there is a marked shift toward
outpatient services in Miami-Dade County and elsewhere.
Finally, both applicants are proposing to provide OB services without a NICU, which is below the standard in the
market. While not required for the provision of obstetrics, NICU backup is clearly the most desirable and best practice.
For the foregoing reasons, the considerations in
rule 59C-1.008(2) (e) do not weigh in favor of approval of either hospital.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. §§ 120.569, 120.57(1), and 408.039(5), Fla. Stat.
In order for an existing healthcare 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), Fla. Stat.
JW and DMC, as applicants, have party status and, therefore, appropriate standing in this matter. §§ 120.52(13) and 408.039(5), Fla. Stat. The others have standing to participate as existing providers who allege the addition of a new hospital in Miami-Dade County will have a substantial and adverse impact on their operations.
Specifically, the Tenet Hospitals proved by a preponderance of the evidence that they have standing to participate as a party in this proceeding. The three hospitals are in the same district, and are proximate to the proposed hospital sites. Direct annual contribution margin losses per
hospital were reasonably projected in the range of over
$1.1 million to almost $2.9 million. This does not include the loss of tertiary referrals, which is particularly an issue for PGH as a tertiary hospital.
There was also significant and persuasive evidence regarding the impact of a new hospital on staffing. A hospital requires physicians and nursing staff regardless of volume, and
this staff will likely be recruited from other providers. drives up the cost of healthcare.
This
While none of this adverse impact will imperil the
Tenet Hospitals, it is certainly substantial enough to establish standing for PGH, Hialeah, and CGH. It should be noted, however, that had the applicants established need for their proposed hospitals, which they did not, this adverse impact would not have been significant enough to warrant denial of the applications.
The parties stipulated that section 408.035(2) establishes the statutory review criteria applicable to general
hospital applications. section 408.035(1).
The review criteria are set forth in
The award of a CON must be based on a balanced
consideration of all applicable statutory and rule criteria.
Balsam v. Dep't of HRS, 486 So. 2d 1341 (Fla. 1st DCA 1986). The appropriate weight to be given to each criterion is not
fixed, but rather varies based upon the facts of the case. See,
, Morton F. Plant Hosp. Ass'n, Inc. v. Dep't of HRS, 491 So. 2d 586, 589 (Fla. 1st DCA 1986) (quoting North Ridge Gen. Hosp.,
Inc. v. NME Hosps., Inc., 478 So. 2d 1138, 1139 (Fla. 1st DCA 1985)); Collier Med. Ctr., Inc. v. Dep't of HRS, 462 So. 2d 83, 84 (Fla. 1st DCA 1986).
A CON applicant bears the burden to prove by a preponderance of the evidence that its CON application should be approved. See, e.g., Boca Raton Artificial Kidney Ctr., Inc. v.
Dep't of HRS, 475 So. 2d 260, 263 (Fla. 1st DCA 1985);
§ 120.57(1)(j), Fla. Stat.
An administrative hearing involving disputed issues of material fact is a de novo proceeding in which the ALJ independently evaluates the evidence presented. Fla. Dep't of
Transp. v. J.W.C. Co., 396 So. 2d 778, 787 (Fla. 1st DCA 1981);
§ 120.57(1) (k), Fla. Stat. AHCA's preliminary decision with regard to JW and DMC's CON applications and its findings in the SAARs are not entitled to a presumption of correctness. Id.
As stipulated to by the parties, the CON applications at issue in this case are "virtually the same applications" that were filed in the Batch One Case. It is a "core principle of our justice system" that like cases should be treated alike.
Gessler v. Dep't of Bus. and Prof'l Reg., 627 So. 2d 501 (Fla. 4th DCA 1993), superseded on other grounds, Caserta v. Dep't of
Bus. and Prof'l Reg., 686 So. 2d 651 (Fla. 5th DCA 1996). This core principle applies to decisions issued by state agencies.
Id. at 503.
Being mindful of the Court's holding in J.W.C. as to
the de novo nature of this proceeding, it is also true that inconsistent orders based on similar facts, without rational explanation, violates principles of fundamental fairness. Id. at 504. Accordingly, "[a]n agency generally must follow its own precedents." Flagship Manor, LLC v. Fla. Hous. Fin. Corp., 199 So. 3d 1090, 1094 (Fla. 1st DCA 2016) (citing Bethesda
Healthcare Sys., Inc. v. Ag. for Healthcare Admin., 945 So. 2d 574, 576 (Fla. 4th DCA 2006)); see also Nordheim v. Dep't of
Envtl. Prot., 719 So. 2d 1212, 1214 (Fla. 3d DCA 1998), aff'd
sub nom. Nordheim v. Fla. Fish & Wildlife Conser. Comm'n, 785 So. 2d 523 (Fla. 3d DCA 2000) (holding it was error for agency to fail to consider its own prior precedent).
In the context of successive CON applications, an application for a previously denied project is not subject to traditional notions of res judicata, but in order to reach a different result (approval), it is incumbent upon the applicant to come forward with "new facts, changed conditions, or additional submissions." Delray Med. Ctr., Inc. v. AHCA, 5 So. 3d 26, 30 (Fla. 4th DCA 2009) (quoting Thomson v. Dept. of
Envtl. Reg., 511 So. 2d 989, 991-92 (Fla. 1987)). A different
result on the same application must be based upon "substantial changes in material circumstances between the two applications."
Delray, 5 So. 3d at 30.
Balancing the Applicable Statutory and Rule Criteria
AHCA is tasked with utilizing the statutory review criteria in section 408.035 in evaluating each hospital's proposed project. The 2008 amendments to the CON law significantly modified the application and review process for CON applications for general hospitals, including the criteria considered. Certain previously applicable review criteria were eliminated, but significantly, "need" (as codified at section 408.035(1)(a) and (b)) was not altered, and remains the focus of the CON law.
Section 408.035(2) specifically outlines the CON review criteria set forth in section 408.035(1) that are applicable to general hospital applications, which include the following:
The need for the healthcare facilities and health services being proposed.
The availability, accessibility, and extent of utilization of existing healthcare facilities and health services in the service district of the applicant.
* * *
(e) The extent to which the proposed services will enhance access to healthcare for residents of the service district.
* * *
(g) The extent to which the proposal will foster competition that promotes quality and cost-effectiveness.
* * *
(i) The applicant's past and proposed provision of healthcare services to Medicaid patients and the medically indigent.
§ 408.035(1), Fla. Stat.
In addition, since AHCA no longer issues a fixed need pool for acute care beds, the applicants are bound to follow rule 59C-l.008(2) (e)2., which states that:
[T]he applicant will be responsible for demonstrating need through a needs assessment methodology which must include, at a minimum, consideration of the following topics .
Population demographics and dynamics;
Availability, utilization and quality of like services in the district, subdistrict or both;
Medical treatment trends; and,
Market conditions.
When considered in light of the above four factors, neither applicant demonstrated need for its proposed hospital. Specifically, neither applicant established the existence of typical indicators of "need," such as programmatic, financial, or geographic access barriers to the types of hospital services proposed.
The evidence clearly established that existing hospitals have available capacity, and on any given day have more than adequate available beds to serve the current population and the projected population growth.
AHCA does not have a travel-time standard rule with
respect to access to acute care services. See, Mem'l Healthcare
Group, Inc., d/b/a Mem'l Hosp. Jacksonville v. Ag. for
Healthcare Admin. and Shands Jacksonville Med. Ctr., Inc., DOAH Case No. 12-0429CON, FO at 141 (Fla. DOAH Dec. 7, 2012; Fla.
AHCA Apr. 10, 2013) (hereafter Memorial) (citing Wellington Reg.
Med. Ctr., Inc., d/b/a Wellington Reg'l Med. Ctr. v. Ag. for
Healthcare Admin., Case Nos. 05-2352CON, 05-2594CON, and 05- 2753CON, FO at 110 and 354-58 (Fla. DOAH Apr. 5, 2007; Fla. AHCA
Aug. 9, 2007, FO at 27, 34-35), aff'd, 5 So. 3d 26 (Fla. 4th DCA
2009).
It was concluded in the Memorial decision that "20 to
30 minutes is a reasonable travel time standard for accessing general acute care hospital services, with 30 minutes being the outside range." Memorial, FO at 142. Multiple health planning and hospital operational witnesses that testified in this case agreed.
Approval of either application would not materially
improve geographic access to hospital services for most Doral area residents. Rather, the evidence established that area
residents are within reasonable drive times to multiple existing hospitals.
The evidence also established that approval of the DMC hospital is not needed to decompress KRMC.
Competition for doctors, nurses, and other hospital personnel is already intense and problematic due to shortages of nurses and some physician specialties. Approval of either application would exacerbate this competition, potentially driving up costs of providing care.
As was stated in Memorial:
It has been stated that "[n]ot every city, town or hamlet can or should have its own hospital." Columbia Hosp. Corp. of South Broward v. Ag. for Healthcare Admin., Case Nos. 01-2891CON and 01-2892CON (Fla. DOAH July 3, 2002, at FOF 62; Fla. AHCA Sept. 30, 2002) (application to establish a new 100-bed hospital in Broward County), aff'd, 883 So. 2d 283 (Fla. 1st DCA 2004); see also Manatee Memorial Hosp., L.P. v. Ag. for Healthcare Admin., Case Nos. 04-2723CON, 04-3027CON, and 04-3147CON (Fla. DOAH Dec. 1, 2005, at FOF 104; Fla. AHCA Apr. 11,2006) (application to establish a new acute care hospital in Sarasota County) ("A community's desire for a new hospital does not mean there is a 'need' for a new hospital. Under the CON program, the determination of need for a new hospital must be based upon sound health planning principles, not the desires of a particular local government or its citizens.") (cited in Osceola, LLC, d/b/a St. Cloud Reg'l Med. Ctr. v. Ag. For Healthcare Admin. and Osceola Reg'l Hosp., Inc., d/b/a Osceola Reg'l Med. Ctr., Case No. 08-0612CON (Fla. DOAH Dec. 31, 2008, at COL 275; Fla. AHCA Mar. 3, 2009)).
Just as the desires of local government or citizens may not dictate the approval of a new hospital, neither should the motivations of a particular health system, no matter how noble, trump the statutory requirement that "need" for the proposal be demonstrated.
In its Final Order in the Batch One Case, the Agency
discussed the factual circumstances in three cases involving CON applications for new acute care hospitals that were submitted to the Agency after the 2008 changes to the review criteria in section 408.035. Those cases were Memorial; Columbia Hospital
(Palm Beaches) Limited Partnership, d/b/a West Palm Hospital and
Jupiter Medical Center, Inc., d/b/a Jupiter Medical Center v.
Florida Regional Medical Center and Agency for Healthcare
Admin., Case Nos. 12-0428CON and 12-0496CON (Fla. DOAH Apr. 30,
2013; Fla. AHCA June 6, 2013); and Lee Memorial Health System v.
Agency for Healthcare Admin., Case Nos. 13-2508CON and 13- 2558CON (Fla. DOAH Mar. 28, 2014; Fla. AHCA Apr. 24, 2014).
Following its discussion of the three above-cited cases, AHCA concluded:
The case at hand is very similar to those of Memorial Hospital Jacksonville, Columbia Hospital and Lee Memorial. The city of Doral has a relatively small population (Recommended Order at Paragraph 96). The existing beds in District 11 are underutilized with an overall occupancy rate of roughly 53% (See Transcript, Volume 23, Page 3660; Tenet Exhibit 5). And, there was no competent, substantial record evidence that the "geographic barriers to access"
alleged by both JW and DMC prevented residents of the proposed service area from accessing existing providers (See, e.g.
Transcript, Volume 17, Pages 2753-2759). In sum, if the Agency were to grant either applicant a CON, it would be departing from prior Agency precedent without any rational explanation.
(FO at 25)
JW and DMC, individually and collectively, failed to demonstrate need for either proposed hospital. To the contrary, the evidence demonstrated that neither hospital is needed. Accordingly, based upon the evidence presented in this case, the CON applications at issue should be denied.
It is important to note that these second applications for the same previously denied projects were not supported by "new facts, changed conditions, or additional
submissions". The applicants are identical to the prior
applications, and the record in this case does not reflect any "substantial changes in material circumstances." Delray, 5 So.
3d at 30.
Indeed, a thorough comparison of the facts in the
prior case and this case demonstrates that the only things that have changed (further decline in use rates, more vacant beds, expansion of Kendall) make the case for need less compelling now than in the prior case. Thus, there is no basis to reach a different result in this case.
Should the Agency reject the above recommendation and determine to approve one, but not both, of the applications at issue, preference should be given to the DMC application for the reasons stated in Findings of Fact Nos. 152 through 161 above.
RECOMMENDATION
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Healthcare Administration enter a final order denying East Florida-DMC, Inc.'s CON Application No. 10432 and denying The Public Health Trust of Miami-Dade County, Florida, d/b/a Jackson Hospital West's CON Application No. 10433.
DONE AND ENTERED this 30th day of April, 2019, in Tallahassee, Leon County, Florida.
np(
W. DAVID WATKINS 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 30th day of April, 2019.
ENDNOTES
11 Kendall Healthcare Group, Ltd. v. The Public Health Trust
of Miami-Dade County, Florida, d/b/a Jackson Hospital West, Case No. 16-0112CON (Fla. DOAH Mar. 16, 2017; Fla. AHCA Apr. 26,
2018). The Batch One Case Final Order is on appeal at the First DCA. See Case No. 1018-1975.
21 The corollary of this statement, as announced at the outset of the hearing, is that none of the Findings of Fact made in the Batch One Proceeding are binding upon the undersigned in this proceeding. (Tr. p. 19).
31 Doral is one of 34 municipalities in Miami-Dade County, several of which do not have a hospital.
COPIES FURNISHED:
Stephen A. Ecenia, Esquire Rutledge Ecenia, P.A. Suite 202
119 South Monroe Street Tallahassee, Florida 32301 (eServed)
Kevin Michael Marker, Esquire
Agency for Healthcare Administration Mail Stop 7
2727 Mahan Drive
Tallahassee, Florida 32308 (eServed)
R. David Prescott, Esquire Rutledge, Ecenia, and Purnell, P.A.
119 South Monroe Street, Suite 202 Tallahassee, Florida 32302 (eServed)
Richard Joseph Saliba, Esquire Agency for Healthcare Administration Fort Knox Building III, Mail Stop 7 2727 Mahan Drive
Tallahassee, Florida 32308 (eServed)
Michael J. Glazer, Esquire Ausley & McMullen
123 South Calhoun Street Post Office Box 391 Tallahassee, Florida 32302 (eServed)
Eugene Dylan Rivers, Esquire Ausley & McMullen, P.A.
123 South Calhoun Street Tallahassee, Florida 32301 (eServed)
Thomas Francis Panza, Esquire Panza, Maurer & Maynard, P.A. Suite 905
2400 East Commercial Boulevard Fort Lauderdale, Florida 33308 (eServed)
Elizabeth L. Pedersen, Esquire Panza, Maurer, & Maynard, P.A. Suite 905
2400 East Commercial Boulevard Fort Lauderdale, Florida 33308 (eServed)
Alec J. Zavell, Esquire
Panza, Maurer, & Maynard, P.A. Suite 905
2400 East Commercial Boulevard Fort Lauderdale, Florida 33308 (eServed)
Abigail Price-Williams, Esquire Miami-Dade County
West Wing, Suite 109
1611 Northwest 12th Avenue Miami, Florida 33136
Christopher Charles Kokoruda, Esquire Miami-Dade County
West Wing, Suite 109
1611 Northwest 12th Avenue Miami, Florida 33136 (eServed)
Eugene Shy, Jr., Esquire Miami-Dade County
West Wing, Suite 109
1611 Northwest 12th Avenue Miami, Florida 33136 (eServed)
Laura E. Wade, Esquire Miami-Dade County
West Wing, Suite 109
1161 Northwest 12th Avenue Miami, Florida 33136 (eServed)
Craig D. Miller, Esquire Rutledge Ecenia, P.A. Suite 202
119 South Monroe Street Tallahassee, Florida 32301 (eServed)
Paul C. Buckley, Esquire Panza, Maurer, & Maynard, P.A. Suite 905
2400 East Commercial Boulevard Fort Lauderdale, Florida 33308 (eServed)
Angelina Gonzalez, Esquire Panza, Maurer, & Maynard, P.A. Suite 905
2400 East Commercial Boulevard Fort Lauderdale, Florida 33308 (eServed)
Stephen C. Emmanuel, Esquire Ausley & McMullen
123 South Calhoun Street Tallahassee, Florida 32301 (eServed)
Gabriel F.V. Warren, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202 Tallahassee, Florida 32301 (eServed)
Lindsey L. Miller-Hailey, Esquire Agency for Healthcare Administration Mail Stop 7
2727 Mahan Drive
Tallahassee, Florida 32308 (eServed)
Richard J. Shoop, Agency Clerk Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Mary C. Mayhew, Secretary
Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 1
Tallahassee, Florida 32308 (eServed)
Stefen Grow, General Counsel
Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Kim Kellum, Esquire
Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (eServed)
Thomas M. Hoeler, Esquire
Agency for Healthcare Administration 2727 Mahan Drive, Mail Stop 3
Tallahassee, Florida 32308 (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.
STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION
EAST FLORlDA-DMC, INC.,
Petitioner,
vs.
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent,
and
CGH HOSPITAL, LTD d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC. d/b/a HIALEAH HOSPITAL; AND LIFEMARK HOSPITA LS, INC., d/b/a PALMETTO GENERAL HOSPITAL,
Intervenors.
I
CASE NO. 16-3819CON
EXHIBIT.B
THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA, d/b/a JACKSON HOSPITAL WEST,
Petitioner,
vs.
STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent,
and
KENDALL HEALTHCARE GROUP, LTD, d/b/a KENDALL REGIONAL MEDICAL CENTER,
CASE NO. 16-3820CON
Intervenor.
I
THE AGENCY FOR HEALTH CARE ADMINISTRATION'S MOTION TO DISMISS FOR LACK OF
SUBJECT MATTER JURISDICTION DUE TO MOOTNESS AND MEMORANDUM OF LAW IN SUPPORT THEREOF
The State of Florida, Agency for Health Care Administration, by and through the undersigned counsel and pursuant to Sections 120.569 and 120.57(1), Florida Statutes, and Rule 28-106.204, Florida Administrative Code, files this motion to dismiss the underlying cause of action for lack of subject matter jurisdiction due to mootness and states:
MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION DUE TO MOOTNESS
This case concerns whether the Certificate of Need ("Certificate of Need" or "CON") applications of East-Florida DMC, Inc., CON Application No. 10432, and The Public Health Trust of Miami-Dade County, Florida, CON Application No. 10433, health planning
District 11, sub-district 1, Miami-Dade County, Florida meet the CON statutory and rule criteria and should be approved.
Since the petitions concerning the two applications were filed, the legislature enacted a bill which modifies the Certificate of Need statutes to provide that Certificate of Need review is no longer required for the construction or establishment of a general acute care hospital
such as those proposed in the two Certificate of Need Applications at issue here. See CS/CS/HB 21 at§§ 13, pg. 20,1 now Chapter 2019-136, Laws of Florida§ 13 (amending§ 408.036 (l)(b), Fla. Stat. (2018), projects subject to review, to not include a CON for a general hospital) and § 6, pg. 11 (definitions relating to Health Facility and Services Development Act, specifically sub section (8) which defines "Health care facility"),2 p.11. Nor will a certificate of need be required for either project to apply for its initial license. 2019-136, § 9, p. 16 (the Agency may issue a license to a general hospital that has not been granted a CON). Florida follows the general rule
that the law at the time the license is issued controls. Lavernia v. Dep't of Profl Rel!., 616 So. 2d
53, 53-54 (Fla. 1st DCA 1993). The Governor of Florida has signed the bill and the provisions concerning general hospital applications took effect on July 1, 2019. CS/CS/HB 21, §§ 22, pg. 38,
13, p.20.
Accordingly, the decisions to approve the applications by the Agency are moot and the Agency no longer has subject matter jurisdiction; therefore, the petitions must be dismissed.
1 Page references are to the CS/CS/IIB 21 (Engrossed and Enrolled, 04/29/2019), the bill that became Chapter 2019- 136, Laws of Florida, which will be published and numbered separately. Section numbers should be the same in both the bill and the chapter.
2 That section defines "Health care facility" as "a hospital, long term eare hospital, skilled nursing facility, hospice, or intennediate care facility for the developmentally disabled. A facility relying solely on spiritual means through prayer for healing is not included in health care facility. CSICS/HB 21, 6, p.11. Thus, there are categories of hospitals that will still be subject to Certificate of Need review, but not general hospitals without more.
3
MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS FOR LACK OF
SUBJECT MATTER JURISDICTION DUE TO MOOTNESS
In considering a motion to dismiss, a trial court generally need only look to the four corners of the complaint and, in the administrative context, whether within those four comers there exists a claim or issue within the power of the tribunal to grant for which a formal administrative
hearing is provided -- that is, whether the party has been given standing. See Grand Dunes, Ltd.
v. Walton Countv, 714 So. 2d 473, 475 (Fla. 1st DCA 1998) (standing has been equated with
jurisdiction of the subject matter which cannot be conferred by consent); Minor v. Brunetti, 43 So. 2d 178, 178 (Fla. 3d DCA 2010) (reversing an order because the trial court considered matters
outside the four corners of the complaint); Lewis v. Barnett Bank, 604 So. 2d 937, 938 (Fla. 3d 1992) (on a motion to dismiss, the trial court is confined to the four corners of the complaint). In some instances, including a motion based on lack of subject matter jurisdiction, affidavits or sworn testimony outside the four corners may be considered, but the motion is still reviewed as a motion
to dismiss. Seminole Tribe of Florida v. McCor, 903 So. 2d 353, 357 (Fla. 2d DCA 2005). As a creature of statute, administrative agencies only have jurisdiction as required or necessarily
implied by statute. Dep't of Envt'l Rel!. v. Falls Chase Special Taxin!.! Dist., 424 So. 2d 787, 793 (Fla. 1st DCA 1982).
Procedural History Alleged Within the "Four Corners" of the Petitions
This case is before the Division of Administrative Hearings to determine whether the Certificate of Need ("Certificate of Need" or "CON") applications of East-Florida DMC, Inc., CON Application No. 10432, and The Public Health Trust of Miami-Dade County, Florida, CON Application No. 10433, health planning District 11, sub-district 1 meet the CON statutory and rule criteria and should be approved or whether there are sufficient adverse consequences to one or
4
both of the applications such that the applications should he denied. East Florida-DMC. Inc. v.
Agency for Health Care Administration, Case Nos. 16-3819CON, 16-3820CON, Petitions 3, 2-3;
see generally Motion to Intervene.
East-Florida DMC, Inc., CON Application No. 10432, proposes an 80-bed general acute care hospital and The Public Health Trust of Miami-Dade County, Florida, CON Application No. 10551, proposes a 100-bed general acute care hospital for health planning District 11, sub district 1. East Florida-DMC. Inc. v. Agency for Health Care Administration, Case Nos. 16- 3819CON, 16-3820CON, Petitions 3, Intro. -3, Motion to Intervene 6-14.
Both applications were co-batched and comparatively reviewed in the first Hospital Beds and Facilities 2016 batching cycle. East Florida-DMC. Inc. v. Agency for Health Care
Administration, Case Nos. 16-3819CON, 16-3820CON, Petitions 3, 3, Motion to Intervene. Notice of the Decisions was published in the Florida Administrative Register in Volume 42, Number 109 on June 6, 2016. East Florida-DMC. Inc. v. Agenc\ for Health Care Administration, Case Nos. 16-3819CON, 16-3820CON, Petitions, 5, 5; Motion to Intervene, 12.
The issues to be resolved include whether either or both applications should be approved based on CON statutory and rule criteria or whether the adverse impacts of either or both projects are substantial enough to warrant the applications be denied and include allegations of the timeliness of the petitions, announcement regarding the Agency's decisions on the application in
the State Agency Action Report which recommended approval of both applications. East Florida
DMC. Inc. v. Agencv for Health Care Administrati.Qn, Case Nos. 16-3819CON, 16-3820CON, Petitions 6-8, 6-7; Motion to Intervene 6-14.
Since the petitions were filed, the Florida Legislature considered and passed a Committee Substitute for a Committee Substitute to House Bill 21 (Engrossed and Enrolled,
5
04/29/2019), now Chapter 2019-136, Laws of Florida, concerning the partial deregulation of Florida's Certificate of Need laws. The bill was approved and signed by the Governor of Florida on June 25, 2019 and is now Chapter 2019-136, Laws of Florida. 3 Unless otherwise specified, its provisions become effective on July 1, 2019. 2019-136 Laws of Florida, §22.
The Effect of HB 21 on this Case
Chapter 2019-136, Laws of Florida, is styled, in part, as an act "relating to hospital Iicensure" and "deleting provisions relating to certificate of need applications" that appear in Part I of Chapter 408, Florida Statutes.
Specifically, Section 13 amends Section 408.036, Florida Statutes, to provide, in relevant part,
408.036 Projects subject to review; exemptions. -
APPLICABILITY.-Unless exempt under subsection (3), all health-care related projects, as described in this subsec!i911 paragraphs (a) (f), are subject to review and must file an application for a certificate of need with the agency. The agency is exclusively responsible for determining whether a health-care related project is subject to review under ss. 408.031-408.045.
The addition of beds in community nursing homes or intermediate care facilities for the developmentally disabled by new construction or alteration.
The new construction or establishment of additional health care facilities,
:xccnt for the construction of or establishment of a general hospital or including a replacement health care facility when the proposed project site is oot located on the same site as or within 1 mile of the existing health care facility, if the number of beds in each Iicensed bed category will not mcrease.
The conversion from one type of health care facility to another, including the conversion from a general hospital or, a specialty hospital, except that the conversion of a specialtv hospital to a general hospital is not subject to review or a long term eare hospital.
3 Section 22 provides that, "Except as expressly provided in this act, this act shall take effect July 1, 2019." This motion and memorandum are based entirely on provisions effective July 1, 2019, not the Sections or provisions with other effective dates. Ch. 2019-136 Laws of Florida, 22.
6
The establishment of a hospice or hospice inpatient facility, except as provided ins. 408.043.
A,n inerease m the fHm1:ber of beds for comprehensi•;e rehabilitation.
The establishment of tertiary healta services, including inpatient eomprehensive rehabilitation services.
Chapter 2019136, Laws of Florida, at §13, p. 20. Thus, while a Certificate of Need ("Certificate of Need" or "CON") may remain a requirement for some hospital projects, the "new construction or establishment" of a "general hospital" will no longer require a Certificate of Need nor will "a replacement health care facility when the proposed project site is located on the same site or within a mile of the existing health care facility, if the number of licensed beds in each licensed bed category will not increase" nor will the conversion from a specialty hospital to a general hospital.
Compare§§ 408.036(l)(b) and (c), Fla. Stat. (2018) with CS/CS/HB §13, pg. 20 (setting forth amended§§ 408.036(l)(b) and (c), Fla. Stat. (Effective 07/01/2019)).
Effective July 1, 2019, the requirements for standing in Certificate of Need proceedings for existing hospitals on general hospital applications are removed from the review process portion of the Certificate of Need statute. The provisions providing standing for existing providers who have filed Detailed Written Statements of Opposition, are amended as follows:
408.039 Review process. The review process for certificates of need shall be as follows:
(3) APPLICATION PROCESSING. -
(e) Except for competing applicants, ia orcler to be eligible to ehallenge ilie ageney decision on a general hospital a-pplication 1:mder re,·ie>N pl:lfsuant to paragFaph (5)(c), existing hosf)itals must submit a detailed written statement of opposition to the agency ancl to the apfllicant. The aetailed written statemeftt must be received BY the agency ans ilie applieant within 21 days after the general hospital iiflplieation is deemed complete and made available to the public.
7
(d) In those eases where e vlfitten statement of opposition has aeen timely filed regarding a certificate of need application for a geneFal hospital, the applicant for the general hospital may sabmit a '+'lritten response to the agency. Such response must be received by the agenej' 1Nith in 10 days of the ·.yritten statement due date.
ADMINISTRATIVE HEARINGS. -
Hearings shall be held in Tallahassee unless the administrative law judge determines that changing the location will facilitate the proceedings. The agency shall assign proceedings requiring hearings to the Division of Administrative Hearings For an applieation for a geHeral hospital, aemieistffitive heariags shall
eommenee •Nithia e 1Honths after the atlm.inistffitive lav, judge has b1:1eH assigeed,
and a contineanee may aot be granted absent a fiHding of eKtffiofdinMy eircumstanees by the administrati•t<e law judge.....
In administrative proceedings challenging the issuance or denial of a certificate of need, only applicants considered by the agency in the same batching cycle are entitled to a comparative hearing 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, With
respect to an applieatioa fer a geaernl hospital, competing applicants and only those existing hospitals that submitted a detailed '.'lfltten statement of opposition to an apfllioation as pro¥ided in this paragraph may imtiate or intervene in an administrative hearing. Such challenges to a general hospital application shall be limitea in scope to the issues raised in the detailed '+vritten statem:eat of opposition that was pro•,rided to the agency. The administrati•1e lav,rjudge may, upon a motion showing good cause, expand the scope of the issues to be heafd at the hearing. Sueh motion shall include sabstantial and detailed facts and reasons for failme to include sueh issues in the original written statement of opposition.
JUDICIAL REVIEW.-
The party appealing a final order that grants a geneffil hospital eertifioate of need shall pay the appellee's attorney's fees and costs, in an amount UfJ to $1 million, from the beginning of the original admiaistrative aetion if the appealing party loses the appeal, subject to the following limitations and requirements:
l . The party appealing a final order must post a bead in the amount of $1 million in order to maintain the appeal.
2. Exeept as provided under s. 120.595(5), in no e•,•eet shall the agency be held liable for any other party's attorney's fees or costs.
8
Ch. 2019-136, §17, pg. 32-35. Thus, the eligibility of existing providers to participate in general hospital application proceedings has been struck from the statutc.4
Each of the petitions in the above-styled cases alleges either the appropriateness or inappropriateness of the Agency's approvals under Florida's Certificate of Need law at the time the applications were filed. However, as of July 1, 2019, Florida's Certificate of Need law no longer requires the review of applications for general hospitals, rather general hospitals will be reviewed by the Agency for Health Care Administration for the provision of health services upon
4 In addition. effective July 1. 2019. Section 16 of HB 21 amends Section 408.037, Florida Statutes, concerning application content to provide, in relevant part:
Eirnept as pro•;iaed ifl Sttbseotion (2) for a general hos13ital, An application for certificate of need must contain:
An applieation for a eertifieate ofneed for a general hospital Jll¼tst eontain a aetailed aeseriptioa of the proposed general host3ital projeet and a statement of its JltlFJl0Se aad the Heeds it will meet. The proposed project's lecatioo, as well as its primary and secondary serviee areas, m wt be ideHtified by zip eede. Primary service area is defined as the zip cedes from which the applieant projeets that it will dmw 75 pereent of its disohw-ges. Secondary serviee area is defined 01; the zip eedes from whieh the applieant prejeets that it will draw its remaiaing aiseharges. If, subseq1:tent to issuanee of a fiaal order appre•,iflg the eertifieate ofneea, the f1£0flOSea leeatioH of the geaeral host3ital ehanges or the f'lrimary ser>,·iee area materially ehaBges, the ageaey shall re•roke the eertifieate efHeed. IIe•,vever, if the ageBGy detennifles that sHeh ehaages are deemed to enhaflee aeeess to h.ospital serYiees iH the serviee distriet, the ageHe · may permit sueh eh.aages to oeem-. A party partieif;)etiflg ifl the administrati•,re hearing regardiag the issuanee of the eertifieate ofHeed for a geaeral host3ital has staaaing to J:)artieipate ifl any sl¼bseq1:tent J:)roeeeding regardiflg the revoeation of the eertifieate of need for a hospital for whieh the location h.as ehaflged er for v,rhish the prifJ10f1' ser>,·ise area has materially ehanged. IH aadition, the applieation fer the eertifieate of need fer a genef'lll hospital nmst inelude a statement of inteat that, if approved by fiHal order of the ageney, the applieant shall within 120 days after issuanoe of the filial order or, if there is an appeal of the final order, within 120 days after the issuanee of the eeurt's mandate on appeal, furnish satisfaetory proof of the applicant's financial ability to operate. The ageHey shall establish dee1:tmentatien requirements, to be completed by eaeh applieant, 1.vhieh shov,r antieipated pro,·iaer re,·eooes and eKpendimres, the basis for fmaaeing the antieipated eash flew requiremeats of the pro¥ider, aHd an a13plieant's aeeess to eenti0ge0ey finaneing. A party partieipating ifl the admiflistrative heariag regardiag the issuanee of the eertifieate of neea for a general hest3ital may pre¥ide writteR eommeRts eoHeerning the adequaey of the fiaaneial iRformatioR f!FOvidea, but sueh J:)arty aees not have standiflg to J:)artieif;)ate in an administrative J:lreeeediag regarding proof of the applicant's finaneial ability to operate. The ageney may reqttire a lieensee to provide proof of financial ability to operate at any time if there is e•,ridenee of financial instability, ineluding but net limited, to l:lllpaid expenses necessary fer the basie operations of the provider.
2019-136, §17, Laws of Florida; CS/CS/HB 21 § 17, p. 32. Thus, the process for evaluating a CON for a general hospital and requirements for participation by detailed written statements of opposition and responses - as well as post-hearing challenges to financial feasibility and plans for the proposed site selection have been eliminated from the statute.
9
application for initial licensure. Florida follows the general rule that the law at the time the license is issued controls. Lavernia v. Dep't of Profl Reu., 616 So. 2d 53, 53-54 (Fla. 1st DCA l 993)(upholding Florida's general rule).
There is no longer an authorization for a general hospital project to be reviewed
through the certificate of need application process. See, Ch. 2019-136, Laws of Florida §13, pgs. 20-21. Nor is there authorization for the other procedures pertaining to CON review of general hospitals, including detailed written statements of opposition, hearings, standing for changes in location, cha1lenges to changes in location once a CON is issued and the like. In addition, the "Duties and Responsibilities" of the Agency have been amended to provide, in part:
(2) In the exercise of its authority to issue licenses to health care facilities aed health serviee providers, as provided under chapters 393 and 395 and parts II, IV, and VIII of chapter 400, the agency may not issues a license to any health care facility or health ser,,rice pr01t•ider that fails to receive a certificate of need or an exemption for the licensed facility, except that the a\,.'.encv ma\' issue a license to a general hospital that has not been issued a cerj:ificJ1t ofn cl or serviee.
Ch. 2019-136, Laws of Florida,§ 9, pg. 16. See also§ 120.536(2)(a), Fla. Stat. (2018) (providing that the repeal of a provision of law implemented by a rule that on its face implements only the provision repealed and no other provision nullifies the rule). The Agency does not have authority to change the statute, only to follow and enforce the statutes with which it has been granted authority over. Continuing with the proceedings will not change whether either entity seeking a general hospital can, under the current law, build a hospital or obtain a license and will not add or take away anything from other steps to proceed with a general hospital project. See Coventry
First. LLC v. Office of Insurance Regulation, 30 So. 3d 552, 558 (Fla. 1st DCA 2010) (finding that a vested right must be "more than a mere expectation based on anticipation of the continuance of an existing law; it must have become a title, legal or equitable, to the present or future
10
enforcement of a demand" citing to Div. of Workers' Comp. v. Brevda, 420 So. 2d 887,891 (Fla. 1st 1982).
In addition, there is no application for licensure pending, rather the application that has been proceeding through challenge is a condition precedent to licensure which has previously been a statutory requirement. Each of the proposals will still need to progress through plans and construction review and other conditions precedent prior to actually filing an application for licensure; therefore, without an application for licensure pending, the law as it is now amended will apply to these projects once those licensure applications are submitted.
Further, to the extent that a certificate of need is similar to the granting of a license, there is no unfairness. Having a CON will neither grant a license to operate a hospital nor will it
provide any other right or entitlement under existing law. See Coventry, 30 So. 3d at 558. It was
not foreseeable to any of the parties how the legislature might change the Certificate of Need statute. The Agency must follow the law as must the parties. The type of planning contemplated by the CON application process is necessary prior to engaging in the business of running a hospital, but investment in a CON application in itself does not grant an enforceable right where it is still
subject to de novo review in fonnal administrative hearing. To put it simply, the Agency no longer has a statutory authorization to review "general hospital" certificate of need applications, none is required for licensure and, without an application for licensure presently pending the parties'
positions are not distinguishable from Lavemia and any exceptions noted therein do not apply.
For example, in Department of Health and Rehabilitative Se:i:yices v. Pettv-Eifert, 443 So. 2d 266, 267-268 (Fla. 1st DCA 1983), two applicants for licenses to practice midwifery were denied licenses. Between the time that each applied for a license and the decision on the license applications, the legislature enacted new laws "radically altering" the requirements for such
11
licenses. Pettv-Eifert, 443 So. 2d 267-268. For purposes of the appeal to the First District Court of Appeals, the applicants conceded they did not meet the new Iicensure standards. Id. at 267. However, for reasons not explained in the opinion, HRS did not apply the new statute and rules in
denying the applications, but applied the old statute and rules. Id. at 267-268. Then on appeal the Department argued the new statute and rules applied to the applications. Id. at 267. The First District Court of Appeal held that "under the facts and circumstances of the case" and probably due to fairness concerns, the applicants were entitled to have the statute and rules at the time the
applications were filed apply. Pettv-Eifert, 443 So. 2d 267-268; Lavemia, 616 So. 2d at 54.
The Court then proceeded to find that the rules upon which the denials were based
were an invalid use of delegated legislative authority. Id. at 267-268. First a requirement to attend 15 births prior to application was invalid because it did not require any relationship between applying to be a midwife and the time period during which the births were attended -- the births could happen 10, 15 or even 30 years prior to application and would not determine fitness or experience in the practice of midwifery. 443 So. 2d at 267-268. Nor was the rule explicit the 15 births be within a year or other specified period of time, but it had been construed to require the
births be attended all within a 1 year time frame without authorization by statute. Pettv-Eifert, 443 So. 2d 267-268 (emphasis added). The other rule imposed a requirement to secure a letter of recommendation from the county medical director and there was no such requirement in the
statute. Peth-Eifert, 443 So. 2d 268 (emphasis added). Thus, even though the law at the time of application was applied, there was no authorization by statute for such requirements and the order
finding the rules invalid exercises of delegated legislative authority was affirmed. Id.
Similarly, in Attwood v. State, 53 So. 2d 101, 101 (1951), an applicant for a reciprocal certificate to practice as a pharmacist was denied a license. While the license application
]2
was pending, the law allowing for reciprocal licenses was repealed. Nonetheless, once the repealed reciprocity rule seems to have been applied but, even then, the applicant did not score high enough
on the exam to be granted a reciprocal license in Florida. Id.
Based on the amended language in 2019-136, Laws of Florida, the certificate of need law has changed, a project for a general hospital will no longer require a Certificate of Need and this proceeding cannot be maintained by the applicants as the issues to be determined are moot. In addition, the provisions providing standing to existing facilities in a certificate of need hearing have been struck and standing is no longer granted them in the present proceeding.
Because the Division of Administrative Hearings no longer has subject matter jurisdiction over the issues presented in the petitions due to mootness, the petitions must be dismissed.
Respectfully submitted this 9th day of July, 2019.
AGENCY FOR HEALTH CARE ADMINISTRATION
By: Isl Julia E. Smith
Julia E. Smith
Assistant General Counsel Florida Bar No. 117366
2727 Mahan Drive, Mail Stop #7
Tallahassee, Florida 32308 Julia.Smith@ahca.myflorida.com 850.412.3696 (Direct)
850.922.9634 (Facsimile)
13
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing has been furnished this 9th day of July, 2019, by Electronic Mail to:
Thomas Panza, Esquire Elizabeth Pedersen, Esquire Paul Buckley, Esquire Angelina Gonzalez, Esquire Alec Zavel1, Esquire
Suite 905, 2400 East Commercial Boulevard Fort Lauderdale, Florida 33308 tpanza@panzamaurer.com pbuckley@panzamaurer.com epedersen@panzamaurer.com azavell@panzamaurer.com cdubon@panzamaurer.com shackshaw@panzamaurer.com tkatlcr@panzamaurer.com
R. Davis Prescott, Esquire Stephen Ecenia, Esquire Craig Miller, Esquire Gabriel Warren, Esquire
119 South Monroe Street, Suite 202 Post Office Box 551
Tallahassee, Florida 32301 david@rutledge-ecenia.com steve@reuphlaw.com cmiller@rutledge-ecenia.com gwarren@rutledge-ecenia.com vicki@rutledge-ecenia.com lauren@rutledge-ecenia.com
Stephen Emmanuel, Esquire Michael Glazer, Esquire Eugene Rivers, Esquire
123 South Calhoun Street Tallahassee, Florida 32301 mglazer@ausley.com semmanuel@ausley.com drivers@ausley.com; jmcvaney@ausley.com mwallace@ausley.com
14
Abigail Price-Williams, Esquire Christopher Kokoruda, Esquire Laura Wade, Esquire
Eugene Shy, Jr., Esquire West Wing, Suite 109
1611 Northwest 12th Avenue Miami, Florida kokorud@miamidade.gov wade@miamidade.gov eshy@miamidade.gov sns@miamidade.gov
AGENCY FOR HEALTH CARE ADMINISTRATION
By: Isl Julia E. Smith
Julia E. Smith
Assistant General Counsel Florida Bar No. 117366
2727 Mahan Drive, Mail Stop #7
Tallahassee, Florida 32308 Julia.Smith@ahca.myflorida.com 850.412.3696 (Direct)
850.922.9634 (Facsimile)
15
STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION
EAST FLORIDA-DMC, INC.,
Petitioner,
vs. DOAH CASE NO.: 16-3819CON
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent,
and
CGH HOSPITAL, LTD d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC. d/b/a HIALEAH HOSPITAL; LIFEMARK HOSPITALS, INC. d/b/a PALMETTO GENERAL HOSPITAL; and THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, d/b/a JACKSON HOSPITAL WEST,
Intervenors.
I
EXHIBITC
THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST,
Petitioner,
VS. DOAH CASE NO.: 16-3820CON
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondents,
and
KENDALL HEALTHCARE GROUP, LTD d/b/a KENDALL REGIONAL MEDICAL CENTER; CGH HOSPITAL, LTD, d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC.,
d/b/a HIALEAH HOSPITAL; AND LIFEMARK HOSPITALS, INC., d/b/a PALMETTO GENERAL HOSPITAL,
lntervenors.
I
TENET'S RESPONSE TO AHCA'S MOTION TO DISMISS
CGH Hospital, Ltd d/b/a Coral Gables Hospital, Tenet Hialeah HealthSystem, Inc. d/b/a Hialeah Hospital and Lifemark Hospitals, Inc. d/b/a Palmetto General Hospital (hereinafter collectively referred to as "'Tenet") by and through its undersigned attorneys, hereby responds to the Agency for Health Care Administration's Motion to Dismiss for Lack of Subject Matter Jurisdiction. It is the position of Tenet that with the implementation of Chapter 2019-136, Laws of Florida, the Agency no longer has legal authority to issue the certificates of need at issue in this case. As such, a Final Order should be entered dismissing the above-styled cause.
DATED this 12th day of July, 2019.
AZ
Florida Bar No. 6508
E. DYLAN RIVERS Florida Bar No. 0669555
STEPHEN C. EMMANUEL
Florida Bar No. 0379646 Ausley McMullen
Post Office Box 391
123 South Calhoun Street Tallahassee, Florida 32302
(850) 224-9115
Email: mglazer(al,ausley.com drivers(w,ausley.com semmanuel(a),ausley.com
Add') email: jmcvaney(a),ausley.com
Attorneys for Coral Gables Hospital, Hialeah Hospital and Palmetto General Hospital
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that the original of the foregoing has been furnished by AHCA EFile this 12th day of July, 2019 to Richard Shoop, Agency Clerk, Agency for Health Care Administration, 2727 Mahan Drive, Room 3431, Building 3, Tallahassee, Florida 32308 and a copy has been provided by electronic delivery to:
Julia E. Smith
Agency for Health Care Administration 2727 Mahan Drive, Suite 3431
Fort Knox Building 3, MS #3
Tallahassee, Florida 32308 Julia.smith(cv,ahca.myflorida.com Add'/ email:
Victoriarobbins(a1ahca.myflorida.com
Eugene Shy, Jr. Christopher C. Kokoruda
Miami-Dade County Attorney 1611 N.W. 12th Avenue
West Wing, Suite 109 Miami, Florida 33136 eshy(cv,miamidade.gov kokorud(a),miamidade.gov
Add'! email: sns(cv,miamidade.gov
Stephen A. Ecenia Craig D. Miller Gabe Warren
Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202
Tallahassee, Florida 32301 steve(a),rutledge-ecenia.com cmiller(a1rutledge-ecenia.com
Add'! email: lauren(dlrutledge-ecenia.com
vicki((v,rutl edge-ecenia. com
Thomas F. Panza Elizabeth Pedersen Paul C. Buckley
Panza, Maurer & Maynard, P.A.
Bank of America Building, Third Floor 3600 North Federal Highway
Ft. Lauderdale, Florida 33308 tpanza(aJ,panzamaurer.com epedersen(c4panzamaurer.com pbuckley(cv,panzamaurer.com
Add'! email: shackshaw(cv,panzamaurer.com
cdubon(a),panzamaurer.com
STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION EAST FLORIDA-DMC, INC.,
Petitioner,
vs. Case No. 16-3819CON
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent,
and
CGH HOSPITAL, LTD, d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC., d/b/a HIALEAH HOSPITAL; LIFEMARK HOSPITALS, INC., d/b/a PALMETTO
GENERAL HOSPITAL; AND THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA, d/b/a JACKSON HOSPITAL WEST,
Intervenors.
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THE PUBLIC HEALTH TRUST OF
MIAMI-DADE COUNTY, FLORIDA, d/b/a JACKSON HOSPITAL WEST,
Petitioner,
vs. Case No. 16-3820CON
AGENCY FOR HEALTH CARE ADMINISTRATION,
Respondent,
and
KENDALL HEALTHCARE GROUP, LTD, d/b/a KENDALL REGIONAL MEDICAL CENTER,
Intervenor.
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EAST FLORIDA-DMC, INC. AND KENDALL REGIONAL MEDICAL CENTER'S RESPONSE TO THE AGENCY FOR HEALTH CARE ADMINISTRATION'S MOTION TO DISMISS
East Florida - DMC, Inc. ("'DMC") and Kendall Healthcare Group, Ltd. d/b/a Kendall Regional Medical Center ("Kendall" or ·'KRMC"), pursuant to Fla. Admin. Code R. 28-106.204, hereby responds to the Agency for Health Care Administration's ("Agency'' or "AHCA'') motion to dismiss for lack of subject matter jurisdiction due to mootness and memorandum of law in support thereof (the "Motion''):
Background
In the February 2016 Hospital Beds and Facilities batching cycle, DMC filed a certificate of need ("CON") application number 10432 to establish an 80-bed general acute care hospital in Miami-Dade County, District 11, Subdistrict 11-1 (the "DMC CON Application''). During the same batching cycle, The Public Health Trust of Miami-Dade County, Florida ("PHT' or "Jackson") filed CON application number 10433 to establish a 100-bed general acute care hospital in Miami-Dade County, District 11, Subdistrict 11-1 (the "PHT CON Application").
On June 3, 2016, the Agency issued a State Agency Action Report ("SAAR") recommending that both CON applications be denied.
DMC and PHT each filed petitions challenging the denial of their CON applications. These petitions were referred to the Division of Administrative Hearings (''DOAH") on or about July 5, 2016, and were assigned case numbers as follows: DOAH Case Nos. 16- 3819CON and l 6-3820CON. These cases were consolidated by an Order of Consolidation on July 19,2016
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CGH Hospital, Ltd. d/b/a Coral Gables Hospital, Tenet Hialeah Healthsystem, Inc. d/b/a Hialeah Hospital, Likemark Hospitals of Florida, Inc. d/b/a Palmetto General Hospital (collectively, "Tenet'"), and Variety Children's Hospital d/b/a Nicklaus Children's Hospital each intervened in the consolidated cases.
The instant case was the second such iteration of CON applications that were originally filed in 2016 (the "Batch 2" cases).
The ·'Batch I'' case was the first iteration of the PHT CON Application and DMC
CON Application. See Kendall Healthcare Group, Ltd. d/b/a Kendall Regional Medical Center v.
The Public Health Trust of Miami-Dade County, Florida d/b/a Jackson Hospital West, and Agency
for Health Care Admin., No. 16-0112CON, et al. (Fla. DOAH Mar. 16, 2017) (Recommended
Order), rejected ALJ recommendation (Fla. AHCA Apr. 26, 2018) (Final Order No. AHCA-18- 0235-FOF-CON). The Batch 1 case was decided by Recommended Order on March 16, 2017, and by Agency Final Order on April 26, 2018. The Recommended Order recommended approval of the DMC CON Application and denial of the PHT CON Application. AHCA's Final Order denied both applications. The Batch 1 case was appealed to the First District Court of Appeals by PHT and DMC.
The Batch 2 case was placed in abeyance on July 20, 2016, pursuant to an Amended Joint Unopposed Motion for Abeyance. The Amended Joint Unopposed Motion for Abeyance noted that the parties were in final hearing for the Batch 1 case, and requested that the Batch 2 case be placed in abeyance until 30 days after a final order in the Batch 1 case was issued.
The Batch 2 case was subsequently ordered continued in abeyance 12 separate times from October 2016 through April 2018 while waiting for AHCA to issue a final order in the Batch 1 case. A recommended order was issued in the Batch 2 case on April 30, 2019.
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On April 29, 2019, the Florida Legislature passed House Bill 21, related to Hospital Licensure ("HB 21"). The bill repeals CON regulations pertaining general hospitals like those at issue in this case, allowing general hospitals to be constructed and operated without the need to
apply for a CON, effective July 1, 2019. The Governor signed HB 21 on June 26, 2019. See Ch. 20I 9-136, Laws of Fla.
Argument
HB 21 repeals the requirement of obtaining a CON in order to license a general hospital.
Florida recognizes the broad principle that when a statute is repealed, any right or
remedy conferred or created by that statute falls with it. Yaffee v. International Company, Inc., 80
So. 2d 910, 911-12 (Fla. 1955); Bureau of Crimes Compensation, Department of Labor and
Employment Security v. Williams, 405 So. 2d 747, 748 (Fla. 2d DCA 1981). If, however, a right has somehow vested under a statute, repeal of the statute does not divest the holder of the right.
Mitchell v. Doggett, 1 Fla. 356 (1847). A substantive, vested right is ·'an immediate right of present
enjoyment, or a present, fixed right of future enjoyment." City of Sanford v. McClelland, 163 So. 513, 514-515 (Fla. 1935).
Courts differ on when rights vest under which statutes, and no Court has interpreted whether or when the right to a certificate of need vests.
Florida Courts have, however, applied the general rule that a change in a licensure statute that occurs during the pendency of an application for licensure is operative as to the application, so that the law as changed, rather than as it existed at the time the application was
filed, determines whether the license should be granted. Lavernia v. Dep't of Prof] Reg., Bd. of
Med., 616 So. 2d 53, 54 (Fla. 1st DCA 1993).
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Courts generally have not analyzed whether an applicant's right to a license has vested when a change in law or repeal oflaw has occurred. They have, however, applied exceptions to the general rule when agencies purposefully delay processing a license application or otherwise
act in bad faith and obtain a benefit from a change in licensure law. Attwood v. State ex rel.
Buchert, 53 So. 2d IO I (Fla. 1951); Goldstein v. Sweeny, 42 So. 2d 367 (Fla. 1949); Department
of Health and Rehabilitative Services v. Petty-Eifert, 443 So. 2d 266 (Fla. I st DCA 1983). In these instances, the law that existed at the time the application was filed is applied.
HB 21 repeals certain provisions of Chapter 408, Florida Statutes, pertaining to CON's for general hospitals, such that general hospitals may be constructed and operated without a CON.
Although a CON is not a license, but rather a prerequisite to obtain a license, the CON application process has many procedural similarities to a licensure application process.
Courts are likely to analogize a CON to a license and apply a Lavemia analysis to the instant case.
There is ample evidence that an exception to Lavernia applies in this case, such that the law that existing when the DMC CON Application was filed applies, rather than the law created by HB 21.
However, DMC and Kendall do not wish to litigate this case any further, and do not oppose dismissal of the case.
Respectfully submitted this 16th day pf July, 2019.
/s/ Craig D. Miller Stephen A. Ecenia, Esq. steve(al,rutledge-ecenia.com Craig D. Miller, Esq.
cmiller(cv,rutledge-ecenia.com Rutledge Ecenia, P.A.
119 South Monroe St., Suite 202 Post Office Box 551 Tallahassee, FL 32302-0551
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(850) 681-6788 (Telephone)
(850) 681-6515 (Facsimile)
Attorneys for East Florida-DMC, Inc. and Kendall Regional Medical Center
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that foregoing has been filed by electronic filing and served by electronic mail this 16th day of July, 2019, to:
Thomas F. Panza, Esq. Elizabeth L. Pedersen, Esq. Paul C. Buckley, Esq.
Angelina M. Gonzalez, Esq. Panza, Maurer & Maynard, P.A. 2400 E. Commercial Boulevard Suite 905
Fort Lauderdale, Florida 33308 tpanza(a),panzamaurer.com epedersen(a)panzamaurer.com pbuckley(ll{panzamaurer.com agonzalez(ll{panzamaurer.com
Christopher C. Kokoruda, Esq. Laura E. Wade, Esq.
Eugene Shy, Jr., Esq.
Miami-Dade County Attorney's Office West Wing, Suite 109
1611 Northwest 12th Avenue Miami, FL 33136 kokorud(a),miamidade.gov wade(a),miamidade.gov eshy(ll{miamidade.gov
Julia Smith, Esq.
Agency for Health Care Administration Mail Stop 3
2727 Mahan Drive
Tallahassee, Florida 32308 Richard.saliba(cilahca.myflorida.com julia.smith(cilahca.myflorida.com
Michael J. Glazer, Esq.
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Eugene D. Rivers, Esq. Ausley and McMullen 123 S. Calhoun Street Tallahassee, FL 32302 mglazer@ausley.com drivers@ausley.com
/s/ Craig D. Miller Attorney
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STATE OF FLORIDA
AGENCY FOR HEALTH CARE ADMINISTRATION
EAST FLORIDA-DMC, INC.,
PETITIONER,
Case No.: 16-3819CON
vs.
AGENCY FOR HEALTH CARE ADMINISTRATION,
RESPONDENT,
and
CGH HOSPITAL, LTD d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC., d/b/a HIALEAH HOSPITAL; and LIFEMARK HOSPITALS, INC., d/b/a PALMETTO GENERAL
HOSPITAL; AND THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST,
INTERYENORS.
I
THE PUBLIC HEALTH TRUST OF Case No.: 16-3820CON MIAMI-DADE COUNTY, FLORIDA d/b/a
JACKSON HOSPITAL WEST,
PETITIONER,
vs.
AGENCY FOR HEALTH CARE ADMINISTRATION,
RESPONDENT, EXHIBIT£
and
KENDALL HEALTHCARE GROUP, LTD.
{00729363.DOCX. 1 }
d/b/a KENDALL REGIONAL MEDICAL CENTER,
INTERYENORS.
I
JACKSON'S RESPONSE TO AHCA'S MOTION TO DISMISS
COMES NOW, the Petitioner, THE PUBLIC HEALTH TRUST OF MIAMI-DADE
COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST (hereinafter "Jackson West"), by and through its undersigned counsel, and files its Response to The Agency for Health Care Administration·s Motion to Dismiss for Lack of Subject Matter Jurisdiction. It is the position of Jackson West that:
The enactment of Chapter 2019-136, Laws of Florida, has eliminated the CON Program for general acute care hospitals in the State of Florida effective July I, 2019; The new law permits AHCA to grant a license to a general hospital that has not obtained a CON, effective July 1, 2019; and exempts new general hospitals from CON review effective July 1, 2019.
The new law further eliminates the procedures by which existing general hospitals and competing applicants may dispute the award or denial of a CON application for a new general hospital effective July I, 2019.
As a result of the foregoing, Jackson West believes this matter to be moot, and as such, the matter should be remanded to AHCA for further proceedings. If the Motion is denied as to any party to this proceeding, Jackson West desires to remain a party in the pending administrative proceeding.
Respectfully submitted,
CHRISTOPHER C. KOKORUDA
Assistant County Attorney
{00729363.DOCX. 1} 2
Miami Dade County Attorney 1611 N. W. 12th Avenue West Wing, Suite 109
Miami, Florida 33136 Florida Bar No. 86501 EUGENE SHY, JR.
Assistant County Attorney Florida Bar No. 278653 Telephone: (305) 585-1313
Facsimile: (305) 326-8239
Email: eugene.shy@miamidade.gov chris.kokoruda@miamidade.gov
Secondary: sns@miamide.gov and
PANZA, MAURER& MAYNARD, P.A.
Coastal Tower
2400 E. Commercial Boulevard, Suite 905 Fort Lauderdale, FL 33308
Phone: (954) 390-0100
Fax: (954) 390-7991
By: ls/Thomas F. Panza
THOMAS F. PANZA, ESQUIRE
tpanza(a<panzamaurer.com Fla. Bar No. 138551
ELIZABETH L. PEDERSEN, ESQUIRE
epedersen(a),panzamaurer.com Fla. Bar No. 676969
PAUL C. BUCKLEY, ESQUIRE
pbuckley l)panzamaurer.com Fla. Bar No.906697
Counsel for The Public Health Trust of Miami Dade County, Florida dlb/a Jackson Hospital West
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was filed and served
via electronic filing this 16th day of July, 2019 with:
Julia E. Smith, Esq.
Agency for Health Care Administration 2727 Mahan Drive, Suite 3431
{00729363.DOCX. 1}
Michael J. Glazer, Esq. Eugene D. Rivers, Esq. Stephen Emmanuel, Esq.
3
Fort Knox Building 3, MS #3
Tallahassee, FL 32308 Julia.Smith(m,ahca.myflorida.com YictoriaRobbins(m,ahca.myfl01ida.com
Ausley and McMullen 123 S. Calhoun Street Tallahassee, FL 32302 mglazer(a)ausley.com drivers(m,ausley.com semmanuel( ausley.com
imcvaney(a)ausley.com
mwallace( ausley.com
Stephen A. Ecenia, Esq. Craig D. Miller, Esq.
Babe Warren, Esq.
Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202
Tallahassee, FL 32302-0551 steve(m,rutledge-ecenia.com cmiller(m,rutledge-ecenia.com gwarren@rutledge-ecenia.com lauren(m,rutledge-ecenia.com vicki(a)rutledge-ecenia.com
By: ls/Thomas F. Panza
{00729363.DOCX. 1} 4
| Issue Date | Document | Summary |
|---|---|---|
| Jul. 22, 2019 | Agency Final Order | |
| Apr. 30, 2019 | Recommended Order | When evaluated in the context of the applicable statutory and rule criteria, neither applicant for a new hospital in the Doral area of Dade County established need for its proposal. |
