Findings Of Fact On August 7, 1984, the Petitioner, Abraham W. Chames, executed an application for examination for licensure as a medical doctor which was filed with the Florida Department of Professional Regulation on behalf of the Board of Medical Examiners, (now Board of Medicine), on August 9, 1984. Among other information required on the application was a section requesting information regarding the applicant's medical education. That question reads as follows: Be specific. Account for each year. List all universities or colleges where you attended classes and received training as a medical student. In response and on each of four lines which required the name of the medical school and location and the dates of attendance, the applicant listed the names of the appropriate universities. These were: Universidad Del Noreste/Tampico, Mexico, from August, 1978 to June 1979. Universidad Del Noreste/Tampico, Mexico, from August 1978 to June, 1979 [sic] CETEC University/Santo Domingo, Dominican Republic, from June, 1980 to June, 1981. CETEC University/ Santo Domingo, Dominican Republic, from June, 1981 to December 1981. The question immediately preceding the one just described requires the applicant to list all places of residence since initiation of medical training. In response, the applicant listed, Tampico, Tamps, Mexico, from August, 1978 to June, 1980 and on the second line, Miami Beach, Florida from June, 1980 to June, 1982. For the question that requires the applicant to account for all time from date of graduation to present, the Petitioner stated: "Started my residency in family medicine at the University of Miami: June 83 until present." Dr. Chames also indicated on his application that his Doctor of Medicine degree was obtained from CETEC University, Santo Domingo, Dominican Republic from which he graduated on December 12, 1981. As a part of the narrative reports submitted with his application and relating to the period of time spent at CETEC University from June, 1980 through December, 1981, Dr. Chames stated: "During this time, I performed all of my required and elective clinical rotations under the auspices of CETEC University and its New York City based office of C.J. Institute. I lived at 1247 West Avenue, Apt No. 1, Miami Beach, Florida." By so doing, he explained the apparent ambiguity between his place of residence and his medical education during the period, June, 1980 through December, 1981. The rotations taken and the dates thereof were thereafter listed immediately below the above-cited statement. It should be noted that all the rotations were completed at hospitals in the Miami, Florida area. It is not at all unusual for situations like this to happen and it is not improper. Along with the application submitted by Dr. Chames was a certification that he had successfully passed the examination of the Educational Commission for Foreign Medical Graduates, (ECFMG), which he took on July 21, 1982. On August 20, 1984, Dr. Chames was notified by the Board that it had been advised by the ECFMG that as of March, 1984, that body was withholding verification of its certificates for individuals with medical credentials issued in the name of CETEC University because of alleged irregularities with regard to these medical credentials. The Board requested that Dr. Chames waive the 90 days that it had for approval or denial of his application for licensure, which he did. ECFMG subsequently verified Dr. Chames' certification and this information was sent directly to the Board. On September 18, 1984, the Board advised Dr. Chames that he would be required to appear personally before the Foreign medical Graduate Committee, (FMGC), of the Board when notified. Two days later, on September 20, 1984, the Board advised him that his application was considered incomplete because he had failed to submit a copy of his medical school diploma, (notarized and certified as a true and correct copy) and a certified translation thereof. He was further advised that he had failed to submit an accounting for all of the time between December, 1981 and May, 1983, and a FLEX application with Part A completed. On August 23, 1985, Dr. Chames submitted a notarized affidavit in which he attempts to account for all time from December, 1981 through May, 1983 as requested. On August 15, 1985, Ms. Dorothy Faircloth, Executive Director of the Board, notified Petitioner that his application was still considered incomplete because of the failure to submit certain documentation including his diploma and translation thereof, an examination fee, a standard ECFMG certificate, photographs, letters of recommendation, an accounting for all of the time since graduation, and a FLEX application. By letter dated August 23, 1985, Dr. Chames' counsel, Deborah J. Miller, forwarded a notarized copy of the medical school diploma certified by the U.S. Vice-Consul, a notarized copy of the original translation thereof, a notarized copy of the ECFMG clearance, a notarized copy of the original standard ECFMG certificate, an accounting of Dr. Chames' time since graduation, and a comment that the addition application fee requested had been forwarded previously. The two photographs requested were forwarded by counsel on September 3, 1985. In her September 3, 1985 letter, Ms. Miller indicated she understood the ECFMG would contact the Board directly in the event that written verification had not been received by the time Dr. Chames was to appear before the FMGC. On September 27, 1955, the Board, by letter, advised Dr. Chames, (the salutation refers to Dr. Eaton) that he was required to appear personally before the FMGC at Sarasota on October 4, 1985. Dr. Chames appeared as required and was examined verbally by committee members, primarily Dr. Robert Katims, Chairman, on his credentials as a graduate of CETEC. His answers apparently raised some further questions and an extract of the minutes of that committee meeting reflects that Dr. Chames, a candidate for licensure by examination and a graduate of CETEC University, received a... unanimous vote to recommend unfavorably for examination based upon a total lack of credibility, deliberately failed to tell the truth in the application process. It cannot be determined in whose handwriting this notation was made. Dr. Katims, who was Chairman of the FMGC since its founding until just prior to the hearing, examined Dr. Chames from the file maintained by the Committee on foreign medical graduates. The Petitioner's testimony was not of a nature to inspire confidence in his credibility. He was hesitant in his answers and those which he gave were, if not evasive, at least not definitive. While acknowledging he made several mis-statements of fact on his application, Petitioner contended these were made through honest error rather than through design. He was obviously not believed by any committee member. No doubt this antipathy toward the applicant, manifested by the blatant hostility and outrage evidenced by Dr. Katims during his questioning and his threats to carry the matter further, even to the pressing of criminal charges if available, indicates that no matter what Dr. Chames would have said, the likelihood of his being voted upon favorably was remote. The file examined by Dr. Katims and the committee consisted of the application, letters of reference, test scores and other matters relevant to the candidate's suitability for licensure. This file documentation is knows as the Agenda Book. The Agenda Book maintained on Dr. Chames was reviewed by Dr. Katims prior to Petitioner's appearance. In his evaluation of this file, Dr. Katims looked primarily at Petitioner's application to take the ECFMG exam and his attention was drawn to the sites of medical education listed thereon. The file contained several different applications which, when reviewed, reflected that on two, Dr. Chames listed his medical schools as Del Noreste and Dominica and on a third he listed CETEC and Del Noreste. Dr. Katims also noted a different listing for undergraduate education. He did not look so much at the dates listed, though dates are important. At that time, his policy as Chairman and that of the committee, was to look closely at CETEC graduates because of that institution's reputation for fraud in the issuance of diplomas. It was his understanding that several people associated with CETEC, including some applicants, had been jailed in the United States and as a result, CETEC graduates got a lot of scrutiny. In fact, Dr. Katims threatened to "...pursue this beyond the actions of this Board, if it seems appropriate, along the lines indicated by Board Counsel...." The Board's counsel had just previously noted a change in the Florida law to make it a criminal offense to obtain or attempt to obtain a license by knowing misrepresentation. Dr. Katims categorically denies that he felt all CETEC students were trained by this "stink of corruption". In fact, he recalls many CETEC graduates have been voted upon favorably after they had been afforded an opportunity to prove their credentials and discuss their applications before the committee. As a result, Dr. Katims felt he did not prejudge the Petitioner. Dr. Katims has interviewed many applicants during his term in office and this includes many CETEC graduates. Consequently, he looked closely at Dr. Chames' application but it was the discrepancy in the applications and the applicant's failure to clarify it satisfactorily that was the problem here, not the fact that he was a CETEC graduate. Dr. Chames was called before the FMGC because it was felt necessary to have him amplify his file and give greater information on his actual scholastic residence. This was because several applicants had told Dr. Katims their only visit to the CETEC campus was to get their diploma. This is exactly what Dr. Chames stated in his interview. Though enrolled at both (Dominica) Ross and CETEC at the same time, he says he did not attend any classes at either campus, did not ever visit the (Dominica) Ross campus, and in fact visited the CETEC campus only once, in December, 1981, to get his diploma. In short, it appears that neither school required regular on-site educational activities. In substance, the Board considered that Dr. Chames' attendance at CETEC raised a question that required a more detailed examination. However, Dr. Katims, on behalf of the committee, clearly contends that CETEC graduates were held to no more strict standards of qualifications than other graduates of foreign medical schools. With regard to this Petitioner, the Board only looked at the educational discrepancies. Nothing else was looked into by the committee before it's report the next day to the full Board. Dr. Katims felt that Petitioner's story was "incredible." He could not accept Petitioner's story that he simultaneously applied to and attended both CETEC and Dominica (Ross) and concluded that Dr. Chames deliberately falsified his application. The discrepancies regarding the schools attended were not consistent with his explanation, and to this date, Dr. Katims feels the same way. He concludes that Petitioner lied in his applications and may have conspired with unknown others to do so but he has no proof of a conspiracy. The important issue to Dr. Katims was initially the caliber of education available at both (Dominica) Ross and CETEC. It was only when Petitioner testified and his testimony was felt to be "incredible" that the issue became his credibility. Dr. Chames graduated from Miami-Dade Community College with an AA degree; then from Yeshive University in New York with a BA degree and thereafter from Florida International University with a BS degree. He then entered Universidad Del Noreste medical school in Tampico, Mexico where he actually attended classes for two years. At his hearing before the FMGC, he stated that during his fourth semester there, he decided to transfer and looked into two medical schools both located in the Caribbean. They were the University of Dominica (Ross) and CETEC. He contends that he applied to both, took some entrance exams for Dominica which he passed and paid some initial fees to that school. He states, however, that it was CETEC that he stayed with and from which he got his degree. According to Dr. Chames, this was a tumultuous time for foreign medical schools. Many students of these institutions wanted to come back to do their obligatory rotations in the United States. As a result, he enrolled in both schools, though he felt affiliated with Dominica (Ross) and paid it only. CETEC indicated he could pay later. In the fall of 1981, he switched to CETEC because a number of states were determining that students of proprietary foreign medical schools could not do U.S. residencies. CETEC was considered to be a higher quality school and had a greater legitimacy in the Dominican Republic. It was a viable school in disciplines other than medicine and was not categorized as an "offshore" medical school. Dr. Chames was expelled from Dominica (Ross) on July 12, 1982, because he failed to pay for the fourth year of medical school. He had, by this time, transferred his credits to CETEC and had graduated from there in December, 1981. Neither school had a requirement for on-campus participation. Students paid their money and turned in the paperwork, and the rotations--the learning periods spent in active hospitals--which constitute the greatest part of the last two years of medical school, were done in the United States. In reality, Dr. Chames arranged his clerkships and rotations by himself. When asked by the various hospitals to which he applied where he was in school, he would say either Del Noreste, Dominica (Ross), or CETEC depending on the time in question. He claims he considered himself to be a student at both Dominica (Ross) and CETEC at the same time. He gave his clerkship evaluations, however, only to Dominica (Ross) until the end of the fourth year of training, when he also gave one to CETEC. He first started paying fees to CETEC and provided a clerkship evaluation there in the fall of 1981, even though he says he considered himself a student there from the beginning. He intended to graduate in December, 1981. This date was established in the fall of 1981 when he started sending CETEC the evaluations of clerkships he had completed almost two years previously which had already been sent to Dominica (Ross). Dominica (Ross) required the taking of a basic second examination upon starting and a final examination prior to graduation unless one took and passed the ECFMG examination. Petitioner admittedly failed the final at Dominica (Ross). CETEC required no examinations. He took and passed the ECFMG exam long after he graduated from CETEC. Petitioner applied to CJ Institute, CETEC's U.S. affiliate, in November, 1981. He contends that he had applied to CETEC previous to that time, but paid no money to CETEC until approximately two weeks prior to graduation, and he got credit from CETEC for rotations/clerkships performed while enrolled at Dominica (Ross). In reality, what appears to be the fact, and it is so found, is that Dr. Chames was enrolled for by far the greatest majority of the last two years of his medical training at Dominica (Ross). Having failed the final examination and being concerned over the ECFMG examination, he looked around and found another medical school that would grant him a diploma based on work done at his former institution, Dominica (Ross). This he found in CETEC which had no requirements and was willing to give him full credit for all work performed at or under the auspices of Dominica (Ross). It would graduate him, awarding him a medical degree upon payment of the required fees, even though no work was done either in the classroom or in rotations while enrolled at that university. When the applicant subsequently filled out the forms for admission to licensure in Florida, he unfortunately listed only CETEC and not Dominica (Ross) as his medical school, even though the application form instructed him to list all schools and omit nothing. He admits that since he did his rotations, and since CETEC granted him credit for them even though he did them while enrolled at another school, he didn't feel it necessary to list Dominica (Ross) as one of his schools. Notwithstanding the apparent lapse as defined above, Respondent's reputation for honesty is generally good. His wife for almost nine years, who has known him since he was fifteen, considers him a most honorable man who makes no distinction between his personal and business ethics which are high in both categories. Though she is an attorney and notarized at least one of the applications he filled out, she did not discuss them with him. She has no reason to believe that they were not accurate and knows no reason that Petitioner would falsify them as she knows he dearly wants to be a doctor. When he filled out his applications, he did them based on his recollection and not on files or documents. She knows he has a terrible memory for dates and numbers and this may have contributed to his mistake. Mrs. Chames' testimony is not credited highly as to her failure to discuss the applications with her husband, however. Dr. Lynn Carmichael, Chairman of the Department of Family Medicine at the University of Miami Medical School, supervised the Petitioner in the Family Practice service at Jackson Memorial Hospital when Petitioner was a resident there. Petitioner's employment file contains all materials received regarding him including evaluations, letters, applications, etc., and a review of this file reveals that all evaluations rendered on Petitioner over the three years of his residency were above average. At the time Petitioner applied for the residency program in October, 1982, he listed his medical school as CETEC University. While he was in the residency program, Petitioner consistently performed in an outstanding manner in all six criteria considered and his reputation for truth and veracity, a highly important factor in evaluation, is good. Dr. Carmichael became aware of the denial of Petitioner's application for licensure after the fact and is aware now of the reasons therefor. Based on his knowledge of the Petitioner, he does not feel that Dr. Chames is a perjurer, or a liar, or would deliberately falsify an application. He was very surprised at the result of the committee hearing because the facts discussed there did not fit in with his evaluation of Petitioner. In fact, his peers at the University Hospital thought so highly of Dr. Chames, that if he had been licensed, the hospital was going to ask him to stay on for a fellowship, for which a license is required. Dr. Carmichael does not consider the listing of the medical school on the application for as a particularly important factor in evaluating foreign medical graduates for the simple reason that these graduates are required to show ECFMG certification which, in fact, the Petitioner was able to do. Ms. Deborah Miller, an attorney specializing in administrative and governmental law, represented Petitioner in his efforts to apply for licensure in Florida. He was concerned that foreign medical graduates were being unduly scrutinized and discriminated against in the licensing process. In this case, the Board of Medicine had asked Petitioner to waive the 90 days they had to rule one way or another on his application and she looked into this for him. In doing so, she procured the Petitioner's application file and went over it item by item with a representative of the Board. It was after this that Dr. Chames was notified of his requirement to appear before the FMGC, as were most foreign medical graduates and all CETEC graduates. Ms. Miller wrote to the Board just before the meeting to see if there was anything else in Petitioner's file than that of what she had been notified and was told that there was not. However, an AMA profile on Petitioner was in the file which listed both CETEC and Dominica (Ross) medical schools and this document may not have come to her. In the past, it has been Ms. Miller's experience that the Board does not always give a "full" file upon request, at times holding matters back. Based on what she knew, Ms. Miller had no reason to believe Dr. Chames had concealed anything regarding his application. Had Petitioner told her that he had applied to both CETEC and Dominica (Ross), she would have advised him to amend his application to correctly reflect the situation which could have been done at that time. On cross examination, Ms. Miller indicated that Petitioner told her that he applied to CETEC and Dominica (Ross) because he had heard of CETEC and was impressed by its good reputation. When he was accepted at CETEC, he dropped all further dealings with Dominica (Ross). He felt the board was concerned more with the courses and rotations not with which school was listed on the application form. This third story regarding Dr. Chames' reasons for switching from Dominica (Ross) to CETEC, clearly establishes that his application forms were consciously filled out; that he knew what he was doing; that his omission was more-than mere oversight; and that he was not particularly concerned with the accuracy of his application and the requirements for forthrightness contained on the face of it. On all of the reports of rotations and clerkships submitted to Dominica (Ross) during the time he was enrolled there and performing them, Dr. Chames was always highly rated and no adverse comments about his ability, his sensitivity, his patient relationships or his integrity was ever raised. There is no doubt that Dr. Chames possesses the clinical and technical skills necessary to be an excellent physician. He also apparently possesses the sensitivity to patients which separates a healer from a technician. In substance, then, it is found that Dr. Chames was enrolled for the last two years of his medical education at Dominica (Ross) and completed the course work/rotation/clerkships satisfactorily. Unfortunately for him, Dominica (Ross) required the passing of an examination prior to the award of the medical diploma, which Dr. Chames failed once and chose not to taken again. He found another school, CETEC, that would award him his medical degree upon payment of the required fees on the basis of the work done while a student at Dominica and without any work being done under the auspices or supervision of CETEC at all. Thereafter, when he applied for licensure in Florida, notwithstanding the fact that the application form clearly required a listing of all medical schools attended, Dr. Chames neglected to list his enrollment at Dominica (Ross), choosing instead, to list only his graduation from CETEC. It is this failure to list Dominica, coupled with the apparently false listing of the true term of the CETEC enrollment which constitutes the discrepancy of such grave concern to the Board and, the ultimate basis for its denial of Petitioner's application. Notwithstanding the apparent hostility of the Chairman of the FMGC and his predisposition to vote unfavorably on this Petitioner's application, it would appear that the unfavorable vote was justified and appropriate.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is, therefore, RECOMMENDED that Petitioner's current application for examination as a physician in Florida be denied. RECOMMENDED this 14th day of April, 1987, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1438 The following constitutes my specific rulings pursuant to Section 120.57(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. By Petitioner Petitioner failed to number his proposed Findings of Fact. To facilitate identifying them for ruling, I have numbered them consecutively as they appear in the Proposed Recommended Order. Accepted. Accepted. Accepted. Accepted except for the reason for changing schools which is contrary to the better evidence. Accepted. Accepted. Accepted. Accepted. Accepted as to date of filing and schools listed. Rejected as to his reason for failing to list Dominica, Petitioner's different stories as to the point make it impossible to determine why he failed to list Dominica. Accepted. Accepted. Accepted. Accepted except for words "sting of corruption" which should be "stink of corruption." Accepted. Accepted. Accepted. Accepted. Sentence 1 rejected as comment and not a Finding of Fact. Sentence 2 accepted. Sentence 3 & 4 rejected as speculation. Sentence 5 accepted. Sentence 6 rejected as argument. Sentence 7 accepted. Sentence 8 rejected as argument or contrary to the weight of the evidence. Rejected as contrary to the weight of the evidence. Rejected as irrelevant except for the last sentence which is argument, not Finding of Fact. Sentences 1-3 rejected as argument. Sentence 4 et seq. accepted. By Respondent Accepted. Accepted. Accepted. Accepted. First sentence accepted, Second sentence rejected as irrelevant. Accepted. Accepted. Accepted. Sentences 1 & 2 accepted. Sentences 1 & 2 rejected as recitations of the evidence. Sentence 3 rejected as contrary to the better evidence. Sentence 4 et seq. are recitations of the evidence and not Finding of Fact. Rejected as a recitation of the evidence. Accepted. No numbered paragraph. Accepted. COPIES FURNISHED: Dorothy Faircloth, Executive Director Florida Board of Medicine 130 North Monroe Street Tallahassee, Florida 32301 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold M. Braxtone Esquire Suite 406, Datran Center 9100 South Dadeland Blvd. Miami, Florida 33156 Catherine Lannon, Esquire Department of Legal Affairs Room 1601, The Capitol Tallahassee, Florida 32399-1050 =================================================================
The Issue The issues presented concern the question of whether Dr. Paul Joseph Rucinski (Petitioner) has completed the prerequisites for standing the license examination of the State of Florida, Department of Professional Regulation, Board of Medicine (Respondent). This examination is known as the FLEX examination. In particular, Petitioner has been denied the opportunity to take this examination based upon the perception held by the Respondent that Petitioner did not complete core clerkship training in internal medicine, one of the prerequisites to undergo the examination session.
Findings Of Fact Petitioner attended medical school at Ross University in the British West Indies and received his medical degree. Consequently, for purposes of license examination in Florida, Dr. Rucinski is considered to be a foreign medical graduate. Part of the medical training in his undergraduate course work was received in the United States. This education was in association with completion of clerkships necessary to obtain his medical degree. An organization known as the Jacksonville Health Education Program, constituted of certain hospitals in the city of Jacksonville, Florida, was providing clerkship training for medical students during the time within which Petitioner received his clerkship training. The Jacksonville Health Education Program (JHEP) was affiliated with the University of Florida School of Medicine and as such was part of that institution's educational program. In this connection, Petitioner was referred to JHEP as an organization which could arrange for his clinical clerkship training. As described in Petitioner's Exhibit 4 admitted into evidence, Petitioner received clerkship training in psychiatry, ob/gyn, surgery, pediatrics, family practice, dermatology, anesthesiology, general surgery, emergency room medicine and critical care, all through JHEP. Respondent takes no issue with the sufficiency of that training to establish credentials for license examination in Florida. This point of view is held because Respondent is convinced that the institutions within which the training in the various specialties was conducted were allopathic institutions. The only contention in this cause arises based upon the Respondent's belief that the clerkship training which Petitioner received in internal medicine was not given in an institution associated with JHEP and did not have allopathic emphasis. Instead, the focus of the training in internal medicine was alleged by the Respondent to be osteopathic. This speaks to core clerkship training the Petitioner received in internal medicine at Jacksonville General Hospital, Jacksonville, Florida, now known as Jacksonville Medical Center. The period of time within which the training was received was November 5, 1982, to January 27, 1983, and again on April 11, 1983, to June 17, 1983. The clerkship in internal medicine was supervised by Dr. Glenn J. Gerber, an osteopathic physician. According to Dr. Gerber, Petitioner successfully completed his core clerkship training in internal medicine as evidenced by the evaluation forms set forth in Petitioner's composite Exhibit 7 admitted into evidence. Although Dr. Gerber is not licensed pursuant to Chapter 458, Florida Statutes, to practice allopathic medicine, he was board certified by the American Board of Internal Medicine in the field of internal medicine effective 1978. This board is a board pertaining to allopathic medicine. Moreover, Dr. Gerber's unrefuted testimony establishes that training in internal medicine for allopathic medical students versus osteopathic medical students does not differ. To his understanding, textbooks do not exist which deal with osteopathic internal medicine separate and apart from allopathic internal medicine. During the time that Dr. Gerber taught at the Jacksonville General Hospital, to include the time of instruction pertaining to Petitioner, other students who sought medical degrees in allopathic medicine were involved in training which he conducted. Dr. Gerber served as the director of clinical education for the Jacksonville General Hospital during the period 1981 through 1984. The nature of the internal medicine training which Petitioner received through Jacksonville General Hospital was under the auspices of an internal medicine service for students as well as residents. The daily functions of the core internal medicine training included daily rounds where patients were met who had been admitted the night before and involvement with patients who were being managed on an ongoing basis. This training included frequent pathology rounds, cardiology rounds almost daily and radiology rounds daily. Typically, different topics were considered which had been assigned the night before. An example would be miocardial infraction. Discussions were entered into on current management and therapy. On October 18, 1976, Jacksonville General Hospital was informed by letter that it had been accepted as a member of the JHEP Consortium. This correspondence was from D. J. Lanahan, president of the JHEP Board of Trustees and appears on the stationery of J. Hillis Miller Health Center, College of Medicine, University of Florida, Jacksonville Division. A copy of the letter is found as Petitioner's Exhibit 10 admitted into evidence. This correspondence does not set forth a circumstance whereby Jacksonville General Hospital is received as a member for purposes of offering core clerkship training in allopathic medicine, nor does it establish a contrary position. On the other hand, Lois Gray, director of medical legal affairs at Jacksonville Medical Center, offered unrefuted testimony that Dr. Gerber held a faculty appointment with JHEP. Petitioner's Exhibit 11 admitted into evidence, which describes the nature of JHEP's affiliation with the University of Florida, J. Hillis Miller Health Center, speaks to the concept of undergraduate medical education but it is silent on the question of Jacksonville General Hospital's involvement in the education of undergraduate medical students and their clinical clerkship training. Respondent's Exhibit 4 admitted into evidence concerns the fact that the Jacksonville General Hospital in the years 1982 and 1983 was associated with the American Osteopathic Association and provided internship programs and residency programs related to osteopathic medicine; however, this excerpt of the yearbook and directory of osteopathic physicians does not exclude the possibility of affiliation with the accrediting organization related to hospitals that provide allopathic care. In fact, Jacksonville General Hospital was recognized as an allopathic facility by the Joint Commission on Accreditation of Hospitals in the relevant time frame. Further, an excerpt of the 1982-83 directory of residency training programs accredited by the accreditation council of graduate medical education, a complimentary copy from the American Medical Association, was offered and received as Respondent's Exhibit 5 admitted into evidence. This document speaks to the provision of residency training by Jacksonville hospitals affiliated with JHEP. It does not include an indication that Jacksonville General Hospital was one of the institutions providing residency training in the Jacksonville, Florida, area in the relevant years. However, it does not speak to undergraduate medical training. Therefore, it does not establish the fact that Jacksonville General Hospital did not offer allopathic medical training in internal medicine to the Petitioner as part of core clerkship training. Finally, Respondent's attempt to introduce the remarks of Dr. Will Neal of the University of Florida, School of Medicine, does not serve to corroborate competent evidence offered by the Respondent on the subject of Jacksonville General Hospital's lack of affiliation with JHEP and failure to provide undergraduate medical training in allopathic medicine. His remarks are hearsay and stand alone and cannot be utilized in fact finding for reasons explained in the conclusions of law. Jacksonville General Hospital, in 1982, had among its active staff, 40 M.D.s and 31 D.O.s. On the whole, Dr. Rucinski is found to have received appropriate allopathic medical training in his core clerkship in internal medicine. Dr. Rucinski is currently undergoing training at the University of Wisconsin, affiliated hospitals program, St. Luke's Hospital, Milwaukee, Wisconsin. This is a hospital that has association with the American Medical Association. Dr. Rucinski is a resident in postgraduate year 3. Dr. Rucinski is interested in general medicine, family practice. As part of his postgraduate training, he has had extensive training in internal medicine which he has successfully responded to. He has not been able to discern differences in the underlying emphasis in the internal medicine training received as a resident in St. Luke's Hospital and that received at Jacksonville General Hospital. Against this background, prior to August 15, 1986, Petitioner made timely application to take the FLEX examination to gain a license to practice medicine in the state of Florida. This examination was to be given December 2- 4, 1986. On November 12, 1986, Dr. Rucinski was invited to appear before the Foreign Medical Graduate Committee of the Board of Medicine. A copy of that invitation may be found as part of Petitioner's Exhibit 6 admitted into evidence. In addition to the invitation, a second item within that exhibit describes the subjects upon which he could be interrogated and makes specific reference to items which could be submitted in furtherance of this session, but these items were not exclusive. This speaks to his passport and visa involved with time periods when he was out of the United States during his medical training. The second page indicated that the Petitioner should be prepared to provide documentation of his physical location for periods of medical education. Petitioner made the appearance on November 21, 1986, and was examined by members of the Foreign Medical Graduate Committee, and it was determined to deny Petitioner's opportunity to stand the FLEX examination based upon the belief held by the committee members that his internal medicine clerkship was osteopathic training and unacceptable. Petitioner was made aware that the committee would recommend to the Board of Medicine that he not be allowed to take the FLEX examination. These remarks were offered at the time of Petitioner's appearance before the foreign medical graduate committee on November 21, 1986. On the next day, the Board of Medicine, in furtherance of the recommendation of the committee, declared Petitioner ineligible to stand examination. On November 24, 1986, Petitioner was advised in writing of the decision of the Board of Medicine. A copy of that exhibit may be found as Petitioner's Exhibit 5 admitted into evidence, and it states that the request to stand examination is denied. It goes on to suggest that an order would be prepared which set forth the reasons for denial. The letter identifies the fact that the Petitioner could then request a hearing pursuant to Section 120.57, Florida Statutes, following receipt of the final order. That final order was entered on February 19, 1987, and may be found as part of Respondent's composite Exhibit 1 admitted into evidence. It indicates that the reason for denial is that the Petitioner had failed to complete allopathic medical education as described in Chapter 458, Florida Statutes, related to the inadequacy, as the Board of Medicine saw it, of Petitioner's core clerkship in internal medicine, in that the training was osteopathic in nature and not allopathic medical education. The Petitioner received a copy of the order of denial in late February 1987. Petitioner took issue with this point of view and petitioned for a formal Section 120.57(1), Florida Statutes, hearing. That petition was received as filed before the Respondent on March 15, 1987. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Section 120.57(1), Florida Statutes. Respondent's Exhibit 4 is admitted into evidence. The proffered testimony of Dr. Will Neal is not accepted as evidence which can lead to factual findings. This determination is made in accordance with Section 120.58, Florida Statutes. Although a reasonably prudent person might expect the individual who is associated with the University of Florida medical school, such as Dr. Neal, would have some understanding of those institutions which are part of the JHEP program, his remarks do not constitute an exception to the proposition that hearsay evidence is not competent evidence. Furthermore, his remarks do not serve to supplement, corroborate or explain otherwise competent evidence. Consequently, they cannot be relied upon in determining relevant facts in this inquiry. In the deposition of Dr. Gerber wherein he attempts to explain the similarities between the core clerkship program in internal medicine at Jacksonville General Hospital and the residency program in internal medicine that he had some involvement with at St. Vincent's Hospital in Jacksonville, Florida, is not accepted, based upon the belief that it is irrelevant testimony. Petitioner, who seeks licensure, has the burden to prove his entitlement to stand the FLEX examination. See Balino vs. Dept. of Health & Rehab. Serv., 348 So.2d 349 (Fla. 1st DCA 1977). To that end, Respondent has accepted his candidacy for licensure with the exception of the question of his training in internal medicine while a medical student. That training must have been allopathic medical education as envisioned by Section 458.331(3), Florida Statutes (Supp. 1986). On balance, Petitioner has carried the burden. He received training in an institution which he was led to believe had affiliation with JHEP, an accepted educational outreach from the University of Florida medical school. The institution where he received internal medicine training and core clerkship was one accredited by the accrediting agency for allopathic hospitals. The training was supervised by an osteopathic physician. Nonetheless, this physician and the Petitioner have established that the nature of training in internal medicine for allopaths and osteopaths at the student level is akin. Moreover, the expertise of Dr. Gerber in internal medicine had been recognized by the board certifying organization related to allopathic internal medicine practice. It is not unreasonable to expect that these credentials could be brought to bear in the training of Dr. Rucinski. Finally, although it does not speak directly to the question of his competence gained through undergraduate medical training at the point in time wherein he sought the opportunity to take the FLEX examination, Dr. Rucinski's successful performance in his residency program in an allopathic hospital in the subject area of internal medicine should allay any fears that he is not a fit candidate to stand examination at this point in time. Respondent, in considering the fitness of the Petitioner to stand license examination in the December 1986 examination session did not act contrary to the purposes of Section 120.60, Florida Statutes. Based upon a consideration of the facts found and conclusions of law reached, it is, RECOMMENDED: That a final order be entered which grants the Petitioner the opportunity to take the FLEX examination for licensure to practice medicine in the state of Florida in accordance with Section 458, Florida Statutes. DONE AND ENTERED this 10th day of September, 1987, at Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of September, 1987. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 87-1593 Having considered the fact proposals of the parties, those proposals were accepted with the following exceptions: Petitioner's facts At paragraph 2, the reference to December 21, 1986, is corrected to November 21, 1986. Paragraph 5 is subordinate to facts found. Paragraph 6 is a recitation of a statutory provision. It is not fact finding. Paragraphs 7 through 18 are subordinate to facts found. Paragraph 19 constitutes legal argument and not fact finding. Respondent's facts Paragraphs 1, 2 and 3 are subordinate to facts found. Paragraph 4 is accurate, but it is also noted that Jacksonville General Hospital offered allopathic care as well. Paragraphs 5 and 6 are subordinate to facts found. Paragraph 7 is contrary to facts found. Paragraph 8 is subordinate to facts found. COPIES FURNISHED: Frank M. Gafford, Esquire Post Office Box 1789 34 North Marion Street Lake City, Florida 32056-1789 Patricia V. Russo, Esquire M. Catherine Lannon, Esquire Assistant Attorneys General Department of Legal Affairs Room 1601, The Capitol Tallahassee, Florida 32399-1050 Dorothy Faircloth, Executive Director Board of Medicine Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Tom Gallagher, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue The ultimate issue is whether the application of Petitioner, University Medical Park, for a certificate of need to construct a 130-bed acute care hospital in northern Hillsborough County, Florida should be approved. The factual issues are whether a need exists for the proposed facility under the Department's need rule and, if not, are there any special circumstances which would demonstrate the reasonableness and appropriateness of the application notwithstanding lack of need. The petitioner, while not agreeing with the methodology, conceded that under the DHRS rule as applied there is no need because there is an excess of acute care beds projected for 1989, the applicable planning horizon. The only real factual issue is whether there are any special circumstances which warrant issuance of a CON. The parties filed post-hearing findings of fact and conclusions of law by March 18, 1985, which were read and considered. Many of those proposals are incorporated in the following findings. As indicated some were irrelevant, however, those not included on pertinent issues were rejected because the more credible evidence precluded the proposed finding. Having heard the testimony and carefully considered the Proposed Findings of Fact, there is no evidence which would demonstrate the reasonableness and appropriateness of the application. It is recommended that the application be denied.
Findings Of Fact General Petitioner is a limited partnership composed almost entirely of physicians, including obstetricians/gynecologists (OB/GYN) and specialists providing ancillary care, who practice in the metropolitan Tampa area. (Tr. Vol. 1, pp. 103-104). Petitioner's managing general partner is Dr. Robert Withers, a doctor specializing in OB/GYN who has practiced in Hillsborough County for over thirty years. (Tr. Vol. 1, pp. 24- 26, 28-29.) Dr. Withers was a prime moving force in the founding, planning and development of University Community Hospital and Women's Hospital. (Tr. Vo1. 1, pp. 26-28, 73; Vol. 4, pp. 547-548.) Petitioner seeks to construct in DHRS District VI a specialty "women's" hospital providing obstetrical and gynecological services at the corner of 30th Street and Fletcher Avenue in northern Hillsborough County and having 130 acute care beds. 1/ (Tr. Vol. 1, pp. 34, 74-75, Vol. 5, pp. 678-679, Northside Ex.-1, pp. 1-2, Ex.-4A.) The proposed hospital is to have 60 obstetrical, 66 gynecological and 4 intensive care beds. (Tr. Vol. 8, P. 1297, Northside Ex.-1 Table 17, Ex.-B.) DHRS District VI is composed of Hardy, Highlands, Hillsborough, Manatee and Polk counties. Each county is designated a subdistrict by the Local Health Council of District VI. Pasco County, immediately north of Hillsborough, is located in DHRS District V and is divided into two subdistricts, east Pasco and west Pasco. If built, Northside would be located in the immediate vicinity of University Community Hospital (UCH) in Tampa, Hillsborough County, Florida. Less than 5 percent of the total surgical procedures at UCH are gynecologically related, and little or no nonsurgical gynecological procedures arc performed there. (Tr. Vol. 4, p. 550.) There is no obstetrical practice at UCH, although it has the capacity to handle obstetric emergencies. The primary existing providers of obstetrical services to the metropolitan Tampa area are Tampa General Hospital (TGH) and Women's Hospital (Women's). (Tr. Vol. 1, p. 79, Northside Ex.-4, Tr. Vol. 7, pp. 1074-1075.) TGH is a large public hospital located on Davis Islands near downtown Tampa. (Tr. Vol. 1, pp. 47-48, Vol. 8, pp. 1356, 1358.) TGH currently has a 35 bed obstetrical unit, but is currently expanding to 70 beds as part of a major renovation and expansion program scheduled for completion in late 1985. (Tr. Vol. 7, pp. 1049, 1095, Vol. 8, pp. 1367-1368, Vol. 10, P. 1674, Northside Ex.- 2, P. 3.) In recent years, the overwhelming majority of Tampa General's admissions in obstetrics at TGH have been indigent patients. (Tr. Vol. 1, P. 61, Vol. 8, pp. 1375- 1379; Vol. 9, P. 1451; TGH Ex.-3.) Tampa General's internal records reflect that it had approximately 2,100 patient days of gynecological care compared with over 38,000 patient days in combined obstetrical care during a recent eleven month period. (TGH Ex.-3..) Women's is a 192 bed "specialty" hospital located in the west central portion of the City of Tampa near Tampa Stadium. (Tr. Vol. 1, pp. 63-64, 66-67; Vol. 10 P. 1564; Northside Ex.-4.) Women's Hospital serves primarily private-pay female patients. (Vol. 1, pp. 79, 88-89; Vol. 6, pp. 892-893.) Humana Brandon Hospital, which has a 16 bed obstetrics unit, and South Florida Baptist Hospital in Plant City, which has 12 obstetric beds, served eastern Hillsborough County. (Tr. Vol. 7, P. 1075; Northside Ex.-2, P. 3; Northside Ex.-4 and Tr. Vol. 1, P. 79; Northside Ex.-4.) There are two hospitals in eastern Pasco County, which is in DHRS District V. Humana Hospital, Pasco and East Pasco Medical Center, each of which has a six bed obstetric unit. Both hospitals are currently located in Dade City, but the East Pasco Medical Center will soon move to Zephyrhills and expand its obstetrics unit to nine beds. (Tr. Vol. 1, pp. 108- 109; Tr. Vol. 7, P. 1075; Vol. 8, pp. 1278-1281; Northside Ex.-4.) There are no hospitals in central Pasco County, DHRS District V. Residents of that area currently travel south to greater Tampa, or, to a lesser extent, go to Dade City for their medical services. (Tr. Vol. 2, pp. 266-267, 271-272; Vol. 7, p. 1038.) Bed Need There are currently 6,564 existing and CON approved acute care beds in DHRS District VI, compared with an overall bed need of 5,718 acute care beds. An excess of 846 beds exist in District VI in 1989, the year which is the planning horizon use by DHRS in determining bed need applicable to this application. (Tr. Vol. 7, pp. 1046-1047, 1163, 1165-66; DHRS Ex.-1.) There is a net need for five acute care beds in DHRS District V according to the Department's methodology. (Tr. Yolk. 7, pp. 1066, 1165; DHRS Ex.-1.) The figures for District VI include Carrollwood Community Hospital which is an osteopathic facility which does not provide obstetrical services. (Tr. Vol. 1, P. 158; Vol. 7, p. 1138; Vol. 8, P. 1291.) However, these osteopathic beds are considered as meeting the total bed need when computing a11 opathic bed need. DHRS has not formally adopted the subdistrict designations of allocations as part of its rules. (Tr. Vol. 7, pp. 1017-1017, 1019; Vol. 8, pp. 1176, 1187.) Consideration of the adoption of subdistricts by the Local Health Council is irrelevant to this application. 2/ Areas of Consideration in Addition to Bed Need Availability Availability is deemed the number of beds available. As set forth above, there is an excess of beds. (Nelson, Tr. Vol. VII, P. 1192.) Tampa General Hospital and Humana Women's Hospital offer all of the OB related services which UMP proposes to offer in its application. These and a number of other hospitals to include UCH, offer all of the GYN related services proposed by Northside. University Community Hospital is located 300 yards away from the proposed site of Northside. UCH is fully equipped to perform virtually any kind of GYN/OB procedure. Humana and UCH take indigent patients only on an emergency basis, as would the proposed facility. GYN/OB services are accessible to all residents of Hillsborough County regardless of their ability to pay for such services at TGH. (Williams, Tr. Vol. IX, P. 1469; Baehr, Tr. Vol. X, P. 1596; Splitstone, Tr. Vol. IV, P. 582; Hyatt, TGH Exhibit 19, P. 21.) Utilization Utilization is impacted by the number of available beds and the number of days patients stay in the hospital. According to the most recent Local Health Council hospital utilization statistics, the acute care occupancy rate for 14 acute care hospitals in Hillsborough County for the most recent six months was 65 percent. This occupancy rate is based on licensed beds and does not include CON approved beds which are not yet on line. This occupancy rate is substantially below the optimal occupancies determined by DHRS in the Rule. (DHRS Exhibit 4; Contis, Tr. Vol. VII, P. 1069.) Utilization of obstetric beds is higher than general acute care beds; however, the rules do not differentiate between general and obstetric beds. 3/ Five Hillsborough County hospitals, Humana Women's, St. Joseph's, Tampa General, Humana Brandon, and South Florida Baptist, offer obstetric services. The most recent Local Health Council utilization reports indicate that overall OB occupancy for these facilities was 82 percent for the past 6 months. However, these computations do not include the 35 C0N-approved beds which will soon be available at Tampa General Hospital. (DHRS Exhibit 4). There will be a substantial excess of acute care beds to include OB beds in Hillsborough County for the foreseeable future. (Baehr, Tr.w Vol. X, pp. 1568, 1594, 1597.) The substantial excess of beds projected will result in lower utilization. In addition to excess beds, utilization is lowered by shorter hospital stays by patients. The nationwide average length of stay has been reduced by almost two days for Medicare patients and one day for all other patients due to a variety of contributing circumstances. (Nelson, Tr. Vol. VII, P. 1192; Contis, Tr. Vol. VII, P. 1102; Baehr, Tr. Vol. X, pp. 1583-84; etc.) This dramatic decline in length of hospital stay is the result of many influences, the most prominent among which are: (1) a change in Medicare reimbursement to a system which rewards prompt discharges of patients and penalizes overutilization ("DGRs"), (2) the adaptation by private payers (insurance companies, etc.) of Medicare type reimbursement, (3) the growing availability and acceptance of alternatives to hospitalization such as ambulatory surgical centers, labor/delivery/recovery suites, etc. and (4) the growing popularity of health care insurance/delivery mechanisms such as health maintenance organizations ("HMOs"), preferred provider organizations ("PPOs"), and similar entities which offer direct or indirect financial incentives for avoiding or reducing hospital utilization. The trend toward declining hospital utilization will continue. (Nelson, Tr. Vol. VII, pp. 1192-98; Baehr, Tr. Vol. X, pp. 1584-86; etc.) There has been a significant and progressive decrease in hospital stays for obstetrics over the last five years. During this time, a typical average length of stay has been reduced from three days to two and, in some instances, one day. In addition, there is a growing trend towards facilities (such as LDRs) which provide obstetrics on virtually an outpatient basis. (Williams, Tr. Vol. IX, P. 1456; Hyatt, Tr. Vol. IV, P. 644.) The average length of stay for GYN procedures is also decreasing. In addition, high percentage of GYN procedures are now being performed on an outpatient, as opposed to inpatient, basis. (Hyatt, Tr. Vol. IV, P. 644, etc.) The reduction in hospital stays and excess of acute care beds will lower utilization of acute care hospitals, including their OB components, enough to offset the projected population growth in Hillsborough County. The hospitals in District VI will not achieve the optimal occupancy rates for acute care beds or OB beds in particular by 1989. The 130 additional beds proposed by UMP would lower utilization further. (Paragraphs 7, 14, and 18 above; DHRS Exhibit 1, Humana Exhibit 1.) Geographic Accessibility Ninety percent of the population of Hillsborough County is within 30 minutes of an acute care hospital offering, at least, OB emergency services. TGH 20, overlay 6, shows that essentially all persons living in Hillsborough County are within 30 minutes normal driving time not only to an existing, acute care hospital, but a hospital offering OB services. Petitioner's service area is alleged to include central Pasco County. Although Pasco County is in District V, to the extent the proposed facility might serve central Pasco County, from a planning standpoint it is preferable to have that population in central Paso served by expansion of facilities closer to them. Hospitals in Tampa will become increasingly less accessible with increases in traffic volume over the years. The proposed location of the UMP hospital is across the street from an existing acute care hospital, University Community Hospital ("UCH"). (Splitstone, Tr. Vol. IV, P. 542.) Geographic accessibility is the same to the proposed UMP hospital and UCH. (Smith, Tr. Vol. III, P. 350; Wentzel, Tr. Vol. IV, p. 486; Peters, Tr. Vol. IX, P. 1532.) UCH provides gynecological services but does not provide obstetrical services. However, UCH is capable of delivering babies in emergencies. (Splitstone, Tr. Vol. IV, p. 563.) The gynecological services and OB capabilities at UCH are located at essentially the same location as Northside's proposed site. Geographic accessibility of OB/GYN services is not enhanced by UMP's proposed 66 medical-surgical beds. The accessibility of acute care beds, which under the rule are all that is considered, is essentially the same for UCH as for the proposed facility. As to geographic accessibility, the residents of Hillsborough and Pasco Counties now have reasonable access to acute care services, including OB services. The UMP project would not increase accessibility to these services by any significant decrease. C. Economic Accessibility Petitioner offered no competent, credible evidence that it would expand services to underserved portions of the community. Demographer Smith did not study income levels or socioeconomic data for the UMP service area. (Smith, TR. Vol. III, pp. 388, 389.) However, Mr. Margolis testified that 24 percent of Tampa General's OB patients, at least 90 percent of who are indigents, came from the UMP service area. (Margolis, Tr. Vol. X, P. 1695.) The patients proposed to be served at the Northside Hospital are not different than those already served in the community. (Withers, Tr. Vol. II, P. 344.) As a result, Northside Hospital would not increase the number of underserved patients. Availability of Health Care Alternative An increasing number of GYN procedures are being performed by hospitals on an outpatient basis and in freestanding ambulatory-surgical centers. An ambulatory-surgical center is already in operation at a location which is near the proposed UMP site. In fact, Dr. Hyatt, a UMP general partner, currently performs GYN procedures at that surgical center. (Withers, Tr. Vol. I, P. 150; Hyatt, Tr. Vol. IV, pp. 644, 646. Ambulatory surgical centers, birthing centers and similar alternative delivery systems offer alternatives to the proposed facility. Existing hospitals are moving to supply such alternatives which, with the excess beds and lower utilization, arc more than adequate to preclude the need for the UMP proposal. (Nelson, Tr. Vol. VII, P. 1204, 1205, 1206; Williams, Tr. Vol. IX, pp. 1453, 1469; Contis, Tr. Vol. VII, pp. 1154; Contis, Tr. Vol. VII, pp. 1151, 1154.) Need for Special Equipment & Services DHRS does not consider obstetrics or gynecology to be "special services" for purposes of Section 381.494(6)(c)6, Florida Statutes. In addition, the services proposed by UMP are already available in Hillsborough and Pasco Counties. (Nelson, Tr. Vol. VII, pp. 1162, 1210.) Need for Research & Educational Facilities USF currently uses Tampa General as a training facility for its OB residents. TCH offered evidence that the new OB facilities being constructed at Tampa General were designed with assistance from USF and were funded by the Florida Legislature, in part, as an educational facility. (Powers, Tr. Vol. IX, P. 1391; Williams, Tr. Vol. IX, pp. 1453-1455.) The educational objectives of USF for OB residents at Tampa General are undermined by a disproportionately high indigent load. Residents need a cross section of patients. The UMP project will further detract from a well rounded OB residency program at Tampa General by causing Tampa General's OB Patient mix to remain unbalanced. (Williams, Tr. Vol. IX, P. 1458; Margolis, Tr. Vol. X, P. 1695.) UMP offered no evidence of arrangements to further medical research or educational needs in the community. (Nelson, Tr. Vol. VII, P. 1213. UMP's proposed facility will not contribute to research and education in District VI. Availability of Resources Management UMP will not manage its hospital. It has not secured a management contract nor entered into any type of arrangement to insure that its proposed facility will be managed by knowledgeable and competent personnel. (Withers, Tr. Vol. I, p. 142.) However, there is no alleged or demonstrated shortage of management personnel available. Availability of Funds For Capital and Operating Expenditures The matter of capital funding was a "de novo issue," i.e., evidence was presented which was in addition to different from its application. In its application, Northside stated that its project will be funded through 100 percent debt. Its principal general partner, Dr. Withers, states that this "figure is not correct." However, neither Dr. Withers nor any other Northside witness ever identified the percentage of the project, if any, which is to be funded through equity contributions except the property upon which it would be located. (UMP Exhibit 1, p. 26; Withers, Tr. Vol. I, P. 134.) The UMP application contained a letter from Landmark Bank of Tampa which indicates an interest on the part of that institution in providing funding to Northside in the event that its application is approved. This one and one half year year old letter falls short of a binding commitment on the part of Landmark Bank to lend UMP the necessary funds to complete and operate its project and is stale. Dr. Withers admitted that Northside had no firm commitment as of the date of the hearing to finance its facility, or any commitment to provide 1196 financing as stated in its application. (UMP Exhibit I/Exhibit Dr. Withers, Tr. Vol. I, P. 138.) Contribution to Education No evidence was introduced to support the assertion in the application of teaching research interaction between UMP and USF. USF presented evidence that no such interaction would occur. (Tr. Vol. IX, P. 1329.) The duplication of services and competition for patients and staff created by UMP's facility would adversely impact the health professional training programs of USF, the state's primary representative of health professional training programs in District VI. (Tr. Vol. IX, pp. 1314-19; 1322-24; 1331-1336.) Financial Feasibility The pro forma statement of income and expenses for the first two years of operation (1987 and 1988) contained in the UMP application projects a small operating loss during the first year and a substantial profit by the end of the second year. These pro formas are predicated on the assumption that the facility will achieve a utilization rate of 61 percent in Year 1 and 78 percent in its second year. To achieve these projected utilization levels, Northside would have to capture a market share of 75-80 percent of all OB patient days and over 75% of all GYN patient days generated by females in its service area. (UMP, Exhibit 1; Withers, Tr. Vol. I, P. 145, Dacus; Tr. Vol. V, P. 750-755.) These projected market shares and resulting utilization levels are very optimistic. It is unlikely that Northside could achieve these market shares simply by making its services available to the public. More reasonable utilization assumptions for purposes of projecting financial feasibility would be 40-50 percent during the first year and 65 percent in the second year. (Margolis, Tr. Vol. X, P. 1700; Baehr, Tr. Vol. X, pp. 1578, 1579, 1601.) UMP omitted the cost of the land on which its facility is to be constructed from its total project cost and thus understates the income necessary to sustain its project. Dr. Withers stated the purchase price of this land was approximately $1.5 million and it has a current market value in excess of $5 million. (Withers, Tr. Vol. I, pp. 139, 140.) Dr. Withers admitted that the purchase price of the land would be included in formulating patient charges. As a matter of DHRS interpretation, the cost of land should be included as part of the capital cost of the project even if donated or leased and, as such, should be added into the pro formas. UMP's financial expert, Barbara Turner, testified that she would normally include land costs in determining financial feasibility of a project, otherwise total project costs would be understated (Withers, Tr. Vol. I, P. 141; Nelson, Tr. Vol. VII, pp. 1215, 1216; Turner, Tr. Vol. X, P. 1714.) In addition, the pro formas failed to include any amount for management expenses associated with the new facility. Dr. Withers admitted UMP does not intend to manage Northside and he anticipates that the management fee would be considerably higher than the $75,000 in administrator salaries included in the application. (Withers, Tr. Vol. I, pp. 143, 144.) Barbara Turner, UMP's financial expert, conceded that the reasonableness of the percent UMP pro formas is predicated on the reasonableness of its projected market share and concomitant utilization assumptions. These projections are rejected as being inconsistent with evidence presented by more credible witnesses. The UMP project, as stated in its application or as presented at hearing, is not financially feasible on the assumption Petitioner projected. VIII. Impact on Existing Facilities Approval of the UMP application would result in a harmful impact on the costs of providing OB/GYN services at existing facilities. The new facility would be utilized by patients who would otherwise utilize existing facilities, hospitals would be serving fewer patients than they are now. This would necessarily increase capital and operating costs on a per patient basis which, in turn, would necessitate increases in patient charges. (Nelson, Tr. Vol. VII, pp. 1217-1219; Baehr, Tr. Vol. X, P. 1587.) Existing facilities are operating below optimal occupancy levels. See DHRS Exhibit 4. The Northside project would have an adverse financial impact on Humana, Tampa General Hospital, and other facilities regardless of whether Northside actually makes a profit. See next subheading below. The Northside project would draw away a substantial number of potential private-pay patients from TGH. Residents of the proposed Northside service area constitute approximately 24 percent of the total number of OB patients served by TGH. The Northside project poses a threat to TGH's plans to increase its non- indigent OB patient mix which is the key to its plans to provide a quality, competitive OB service to the residents of Hillsborough County. (Nelson, Tr. Vol. VIII, P. 1225; Margolis, Tr. Vol. X, P. 1695.) Impact Upon Costs and Competition Competition via a new entrant in a health care market can be good or bad in terms of both the costs and the quality of care rendered, depending on the existing availability of competition in that market at the time. Competition has a positive effect when the market is not being adequately or efficiently served. In a situation where adequate and efficient service exists, competition can have an adverse impact on costs and on quality because a new facility is simply adding expense to the system without a concomitant benefit. (Baehr, Tr. Vol. X, p. 1650.) Competition among hospitals in Hillsborough County is now "intense and accelerating." (Splitstone, Tr. Vol. IV, p. 558.) Tampa General is at a competitive disadvantage because of its indigent case load and its inability to offer equity interests to physicians in its hospital. (Blair, Tr. Vol. VI, pp. 945, 947-948); Powers, Tr. Vol. IX, P. 1405.) Tampa General Hospital is intensifying its marketing effort, a physician office building under construction now at Tampa General is an illustration of Tampa General's effort to compete for private physicians and patients. (Powers, Tr. Vol. IX, pp. 1405-1406.) The whole thrust of Tampa General's construction program is to increase its ability to compete for physicians. (Nelson, Tr. Vol. VII, P. 1224; Powers, Tr. Vol. IX, p. 1442.) The Tampa General construction will create new competition for physicians and patients. (Contis, Tr. Vol. VII, p. 1099.) Patients go to hospitals where their doctors practice, therefore, hospitals generally compete for physicians. (Splitstone, Tr. Vol. IV, P. 563; Blair, Tr. Vol. VI, pp. 898, 928.) Because many of the UMP partners are obstetricians who plan to use Northside exclusively, approval of the Northside project would lessen competition. (Popp, TGH Exhibit 18, P. 11.) It is feasible for Tampa General to attract more private pay OB patients. (Williams, Tr. Vol. IX, pp. 1460- 1461.) At its recently opened rehabilitation center, Tampa General has attracted more private pay patients. (Powers, Tr. Vol. IX, pp. 1393-1396.) USF OB residents at Tampa General are planning to practice at Tampa General. (Williams, Tr. Vol. IX, pp. 1460-1461.) The state-of-the-art labor, delivery, recovery room to be used at Tampa General will be an attractive alternative to OB patients. (Williams, Tr. Vol. IX, pp. 1460- 1461); Popp, TGH Exhibit 18, p.26) IX. Capital Expenditure Proposals The proposed Northside hospital will not offer any service not now available in Tampa. (Hyatt, TGH Exhibit 19, p. 21).
Recommendation Petitioner having failed to prove the need for additional acute care beds to include OB beds or some special circumstance which would warrant approval of the proposed project, it is recommended that its application for a CON be DENIED. DONE and ORDERED this 25th day of June, 1985, in Tallahassee, Florida STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of June, 1985.
The Issue Whether Florida Administrative Code Rule 59C-1.008(4) (Rule) constitutes an invalid exercise of delegated legislative authority because it enlarges, modifies, or contravenes the specific provisions of law implemented.
Findings Of Fact The Parties VRBH is an existing hospital in Sarasota County. In the second batching cycle of 2016, VRBH applied to AHCA for a CON to establish a Class I Acute Care Replacement Hospital of up to 312 beds in AHCA District VIII, Subdistrict 8-6, Sarasota County. The CON application was preliminarily approved by AHCA on December 2, 2016. SMH is a public hospital system serving Sarasota County. In the second batching cycle of 2016, SMH applied for a CON to establish a new acute care hospital with 90 beds in AHCA District 8, Acute Care Subdistrict 8-6, Sarasota County. As with the VRBH application, the SMH application also received preliminary approval from AHCA on December 2, 2016. AHCA is designated as the single state agency responsible for administering the CON program under the Health Facility and Services Development Act, sections 408.031 through 408.045, Florida Statutes. The Challenged Rule In part, Florida Administrative Code Rule 59C-1.008(4) requires that CON applications contain the audited financial statements of the applicant, or the applicant’s parent corporation. The Rule states as follows: Certificate of Need Application Contents. An application for a Certificate of Need shall contain the following items: All requirements set forth in Sections 408.037(1), (2) and (3), F.S. The correct application fee. An audited financial statement of the applicant or the applicant’s parent corporation if the applicant’s audited financial statements do not exist. The following provisions apply: The audited financial statement of the applicant, or the applicant’s parent corporation, must be for the most current fiscal year. If the most recent fiscal year ended within 120 days prior to the application filing deadline and the audited financial statements are not yet available, then the prior fiscal year will be considered the most recent. Existing health care facilities must provide audited financial statements for the two most recent consecutive fiscal years in accordance with subparagraph 1. above. Only audited financial statements of the applicant, or the applicant’s parent corporation, will be accepted. Audited financial statements of any part of the applicant or the applicant’s parent corporation, including but not limited to subsidiaries, divisions, specific facilities or cost centers, will not qualify as an audit of the applicant or the applicant’s parent corporation. To comply with Section 408.037(1)(b)1., F.S., which requires a listing of all capital projects, the applicant shall provide the total approximate amount of anticipated expenditures for capital projects which meet the definition in subsection 59C-1.002(7), F.A.C., at the time of initial application submission, or state that there are none. An itemized list or grouping of capital projects is not required, although an applicant may choose to itemize or group its capital projects. The applicant shall also indicate the actual or proposed financial commitment to those projects, and include an assessment of the impact of those projects on the applicant’s ability to provide the proposed project; and, Responses to applicable questions contained in the application forms. The 2008 CON Legislative Changes In 2008, the Florida Legislature made numerous changes to streamline the CON application process for general hospitals. It is these changes that VRBH asserts removed the requirement for general hospitals to submit audited financial statements with CON applications. Section 408.035 was amended to provide as follows: 408.035 Review criteria.— The agency shall determine the reviewability of applications and shall review applications for certificate-of-need determinations for health care facilities and health services in context with the following criteria, except for general hospitals as defined in s. 395.002: The need for the health care facilities and health services being proposed. The availability, quality of care, accessibility, and extent of utilization of existing health care facilities and health services in the service district of the applicant. The ability of the applicant to provide quality of care and the applicant’s record of providing quality of care. The availability of resources, including health personnel, management personnel, and funds for capital and operating expenditures, for project accomplishment and operation. The extent to which the proposed services will enhance access to health care for residents of the service district. The immediate and long-term financial feasibility of the proposal. The extent to which the proposal will foster competition that promotes quality and cost-effectiveness. The costs and methods of the proposed construction, including the costs and methods of energy provision and the availability of alternative, less costly, or more effective methods of construction. The applicant’s past and proposed provision of health care services to Medicaid patients and the medically indigent. The applicant’s designation as a Gold Seal Program nursing facility pursuant to s. 400.235, when the applicant is requesting additional nursing home beds at that facility. For a general hospital, the agency shall consider only the criteria specified in paragraph (1)(a), paragraph (1)(b), except for quality of care in paragraph (1)(b), and paragraphs (1)(e), (g), and (i). (Emphasis added). Section 408.035 has not been revised since 2008. Additionally, section 408.037 was amended to read as follows: 408.037 Application content.— Except as provided in subsection (2) for a general hospital, an application for a certificate of need must contain: A detailed description of the proposed project and statement of its purpose and need in relation to the district health plan. A statement of the financial resources needed by and available to the applicant to accomplish the proposed project. This statement must include: A complete listing of all capital projects, including new health facility development projects and health facility acquisitions applied for, pending, approved, or underway in any state at the time of application, regardless of whether or not that state has a certificate-of-need program or a capital expenditure review program pursuant to s. 1122 of the Social Security Act. The agency may, by rule, require less- detailed information from major health care providers. This listing must include the applicant’s actual or proposed financial commitment to those projects and an assessment of their impact on the applicant’s ability to provide the proposed project. A detailed listing of the needed capital expenditures, including sources of funds. A detailed financial projection, including a statement of the projected revenue and expenses for the first 2 years of operation after completion of the proposed project. This statement must include a detailed evaluation of the impact of the proposed project on the cost of other services provided by the applicant. An audited financial statement of the applicant or the applicant’s parent corporation if audited financial statements of the applicant do not exist. In an application submitted by an existing health care facility, health maintenance organization, or hospice, financial condition documentation must include, but need not be limited to, a balance sheet and a profit-and-loss statement of the 2 previous fiscal years’ operation. An application for a certificate of need for a general hospital must contain a detailed description of the proposed general hospital project and a statement of its purpose and the needs it will meet. The proposed project’s location, as well as its primary and secondary service areas, must be identified by zip code. Primary service area is defined as the zip codes from which the applicant projects that it will draw 75 percent of its discharges. Secondary service area is defined as the zip codes from which the applicant projects that it will draw its remaining discharges. If, subsequent to issuance of a final order approving the certificate of need, the proposed location of the general hospital changes or the primary service area materially changes, the agency shall revoke the certificate of need. However, if the agency determines that such changes are deemed to enhance access to hospital services in the service district, the agency may permit such changes to occur. A party participating in the administrative hearing regarding the issuance of the certificate of need for a general hospital has standing to participate in any subsequent proceeding regarding the revocation of the certificate of need for a hospital for which the location has changed or for which the primary service area has materially changed. In addition, the application for the certificate of need for a general hospital must include a statement of intent that, if approved by final order of the agency, the applicant shall within 120 days after issuance of the final order or, if there is an appeal of the final order, within 120 days after the issuance of the court’s mandate on appeal, furnish satisfactory proof of the applicant’s financial ability to operate. The agency shall establish documentation requirements, to be completed by each applicant, which show anticipated provider revenues and expenditures, the basis for financing the anticipated cash- flow requirements of the provider, and an applicant’s access to contingency financing. A party participating in the administrative hearing regarding the issuance of the certificate of need for a general hospital may provide written comments concerning the adequacy of the financial information provided, but such party does not have standing to participate in an administrative proceeding regarding proof of the applicant’s financial ability to operate. The agency may require a licensee to provide proof of financial ability to operate at any time if there is evidence of financial instability, including, but not limited to, unpaid expenses necessary for the basic operations of the provider. The applicant must certify that it will license and operate the health care facility. For an existing health care facility, the applicant must be the licenseholder of the facility. (Emphasis added). Section 408.037 has only been amended once since 2008. The revisions are not relevant to the issue presented in this Rule challenge.2/ The Parties’ Positions In support of its argument that the Rule contravenes the statutes, VRBH asserts that the Rule is an invalid exercise of delegated legislative authority because it enlarges, modifies, or contravenes the laws implemented. Simply put, VRBH contends that the Rule is contrary to sections 408.035 and VRBH advances three reasons for its position that the Rule modifies the laws implemented; all three center on the assertion that in 2008, the Legislature removed the requirement for the submission of audited financial statements with general hospital CON applications: Requiring a general hospital to comply with the requirements of section 408.037(1), Florida Statutes, by submitting an audited financial statement with its CON application violates the express provision of the statute which specifically excludes general hospitals from the requirements of subsection (1); Requiring a general hospital to submit an audited financial statement with the CON application directly contradicts the submission requirements set forth in section 408.037(2), Florida Statutes, which only requires a general hospital to provide a statement of intent that it will “furnish satisfactory proof of the applicant’s financial ability to operate” if the CON application is approved by final order of the agency. Requiring a general hospital to submit an audited financial statement with the CON application contradicts the 2008 legislative changes to section 408.035, Florida Statutes, which streamlined the application process for general hospitals by removing the short and long term financial feasibility of the project as a review criteria. (VRBH Petition, ¶¶ 15-17). AHCA’s ultimate position is that the Rule should be interpreted as not requiring audited financial statements for general hospital CON applicants. To reach this conclusion, AHCA relies on 59C-1.008(4)(a), which provides that a CON application must contain “all requirements set forth in Sections 408.037(1), (2), and (3), Florida Statutes.” AHCA interprets the introductory phrase contained in section 408.037(1)--“except as provided in subsection (2) for a general hospital, an application for a certificate of need must contain”--to mean that only subsection (2) of section 408.037 applies to an application for general hospitals. Because section 408.037(2) does not mention audited financial statements, AHCA reasons that they are not required. Therefore, despite the plain language of the Rule, AHCA contends that the Rule does not require the submission of audited financial statements because: the Rule references sections 408.037(1), (2), and (3); AHCA interprets only section 408.037(2) as applying to general hospitals; and section 408.037(2) does not mention audited financial statements. SMH contends that the Rule does not enlarge, modify, or contravene the laws implemented and, therefore, is a valid exercise of delegated legislative authority. Specifically, SMH contends that section 408.037 itself requires general hospital applicants to submit audited financial statements because subsection (2) does not wholesale replace subsection (1) for general hospitals. Subsection (1) applies to general hospitals, unless there is an exception to those requirements listed in subsection (2). Subsection (1) requires the submission of audited financial statements for all CON applicants; nothing in subsection (2) creates an exception to that requirement. SMH also argues that audited financial statements are reliable documents that AHCA can quickly access for relevant information, including an applicant’s provision of health care services to Medicaid patients and the medically indigent, both of which are prominent considerations during the review of a general hospital’s CON application. See § 408.035(1)(i), (2), Fla. Stat. Post 2008 Rule Challenged Rule 59C-1.008(4) does not expressly exclude or differentiate between general hospital CON applications and other CON applications. Instead the Rule cross-references to the statutory requirement. AHCA asserts that by doing so, the Rule incorporates the statutory scheme by reference and does not require a CON application for a general hospital to include audited financial statements. The above-cited statutory provisions clearly state that a general hospital CON application need not include an audited financial statement and that financial condition is not relevant to the CON application review process. Any rule that requires a general hospital CON applicant to provide an audited financial statement with the application would be contrary to the requirements of section 408.037. It follows, therefore, that a rule contrary to the requirements of a statute would be invalid as it would exceed AHCA’s delegated legislative authority. Requiring a general hospital applicant to comply with the requirements of section 408.037(1) would violate the provision of the statute, which expressly excludes general hospitals from the requirements of subsection (1). Further, requiring a general hospital applicant to submit an audited financial statement with its CON application directly contradicts the submission requirements set forth in section 408.037(2). AHCA’s interpretation of rule 59C-1.008 is that it must be read in conjunction with section 408.037, subsections (1), (2), and (3), and accordingly, AHCA does not require that a general hospital applicant submit an audited financial statement as part of its application. AHCA’s interpretation is consistent with the differences in the content of the CON application forms published by AHCA for general hospital applications when compared to non-general hospital applications, for instance, those seeking other beds and services such as comprehensive medical rehabilitation, psychiatric, hospice, and other CON- regulated beds in a hospital. The requirements of each application type correspond to the statutory requirements for each application type. Application forms for projects “except for general hospitals” correspond to the CON application content requirements of section 408.037(1), which requires a statement of financial resources that must include capital projects (Schedule 2 of the CON application); capital expenditures and source of funds (Schedules 1 and 3 of the CON application); and a detailed financial projection, including revenues and expenses for the first two years (Schedules 5 through 8 of the CON application). The general hospital CON application does not have these requirements. General hospitals are not required to submit proof of financial ability to operate at the time of the submission of the CON application. In accordance with rule 59C-1.010(2)(d), general hospitals are required to comply with the requirements of sections 408.035(2) and 408.037(2). Neither of those statutes requires that a general hospital applicant submit proof of financial ability to operate until 120 days after the issuance of the final CON to the applicant. AHCA’s representative, Marisol Fitch, testified that AHCA does not require applicants for general hospitals to submit audited financial statements in the CON application, and that proof of financial ability to operate is required within 120 days after the final approval of the CON application, consistent with the statutory provisions. She testified that the Rule being challenged, when read in conjunction with the AHCA CON application form (incorporated by reference into the Rule) and other AHCA rules, including 59C-1.010 and 59C-1.030, is consistent with the statute, and that no audited financial statements are required. SMH asserts that an audited financial statement for hospitals might contain useful information, such as information on a hospital’s current payor mix. However, the unrefuted testimony is that audited financial statements are not required to include payor mix information, and normally do not since they are typically used to look at an applicant’s financial feasibility to operate. Further, regardless of whether such information might be “useful,” the specific requirement of section 408.037(2) expressly “excepts” general hospitals from the requirement to include such statements in the CON application. Pursuant to rule 59C-1.010(2)(d), “an application for a general hospital must meet the requirements of Sections 408.035(2) and 408.037(2), F.S.,” neither of which require that a general hospital CON applicant provide audited financials or financial feasibility data with the CON application. However, the challenged language in rule 59C-1.008(4) does not contain the “exception” for general hospital applications. Rule 59C-1.008(4) provides, without qualification, that a CON application must contain audited financial statements. Therefore, rules 59C-1.008(4) and 59C-1.010(2)(d) are contradictory. The primary purpose of an audited financial statement in a CON application is to review the short-term and long-term financial feasibility of the proposal. Requiring this financial information is contrary to the clear language of the 2008 changes to section 408.035, which removed the short-term and long-term financial feasibility of the project as review criteria in order to streamline the general hospital CON application process. AHCA has stated that their interpretation of rule 59C-1.008(4) is that it must be read in pari materia with rule 59C-1.010(2)(d) and sections 408.037 and 408.035, therefore, general hospital CON applicants are not required to submit audited financials with the CON application. According to AHCA’s interpretation, rule 59C-1.008(4) does not require a general hospital CON applicant to submit an audited financial statement with the CON application. However, regardless of AHCA’s interpretation, rule 59C-1.008(4) expressly states that a CON application must contain audited financial statements, in contravention of sections 408.035 and 408.037.
The Issue The issues to be determined are whether Petitioner meets the requirements for licensure by endorsement pursuant to section 458.313, Florida Statutes (2013), and whether the Board’s interpretation of section 458.311(3), Florida Statutes, is an unadopted rule in violation of section 120.54(1), Florida Statutes (2013).
Findings Of Fact Based upon the stipulations of the parties and the documentary evidence presented, the following facts are found: Petitioner, Leon Rawner, M.D., is a licensed medical doctor in the state of Wisconsin and an applicant for licensure as a medical doctor by endorsement in Florida. The Florida Board of Medicine is the agency charged with the licensing and regulation of allopathic medical doctors pursuant to section 20.43 and chapters 456 and 458, Florida Statutes. Applicants for licensure by endorsement must meet the requirements specified in section 458.313. Those requirements include meeting the qualifications identified in section 458.311(1)(b)-(g) (alternative one) or section 458.311(1)(b)-(e), (g), and (3) (alternative two). Petitioner is over 21 years of age, and has submitted a set of fingerprints on a form and under procedures specified by the Department of Health, along with a payment in an amount equal to the costs incurred by the Department of Health. Petitioner has successfully passed the required criminal background screening. Petitioner’s application for licensure by endorsement demonstrates that he is licensed to practice medicine in another jurisdiction, the state of Wisconsin, and that he has been active in the practice of medicine for at least two of the four years immediately preceding the application. Petitioner has a clean record in his current medical practice in Wisconsin and is not under any investigation in any jurisdiction for an act or offense which would constitute a violation under section 458.331, and has not committed any act or offense in any jurisdiction which would constitute the basis for disciplining a physician pursuant to section 458.331. Petitioner has completed the equivalent of two academic years of pre-professional, postsecondary education, as determined by rule of the Board, which included, at a minimum, courses in anatomy, biology, and chemistry prior to entering medical school. Petitioner received a bachelor’s degree from Brandeis University, an accredited United States university. Petitioner has passed the appropriate medical licensure examinations, the United States Medical Licensing Examination, Step-1, Step-2, and Step-3. Petitioner holds an active, valid certificate issued by the Educational Commission for Foreign Medical Graduates (ECFMG) and has passed the examination used by the Commission. In 2006, Petitioner graduated with a degree of Doctor of Medicine from American University of the Caribbean School of Medicine. Petitioner graduated from an allopathic foreign medical school (American University of the Caribbean School of Medicine) which is recognized by the World Health Organization. Petitioner completed all of the formal requirements for graduation from American University of the Caribbean School of Medicine. Petitioner’s application for licensure demonstrates that he has completed the academic year of supervised medical training prior to graduation as required under section 458.311(3)(d). Petitioner did not graduate from an allopathic medical school or allopathic college recognized and approved by an accrediting agency recognized by the United States Office of Education. Petitioner did not graduate from an allopathic medical school or allopathic college within a territorial jurisdiction of the United States recognized by the accrediting agency of the governmental body of that jurisdiction. Petitioner is not a graduate of an allopathic foreign medical school registered with the World Health Organization and certified pursuant to section 458.314, Florida Statutes, as having met the standards required to accredit medical schools in the United States or reasonably comparable standards. Petitioner has not completed an approved residency or fellowship of at least two years in one specialty area. Petitioner’s application for licensure demonstrates that he does not meet the postgraduate training requirements under section 458.311(1)(f)3. Petitioner completed one year of residency training in the Internal Medicine Program at Mt. Sinai-Elmhurst Hospital Center, Queens, New York. Besides the residency training program at Mt. Sinai– Elmhurst Hospital Center, Queens, New York, Petitioner has not completed any other residency or fellowship training. Petitioner does not have two years of any residency or fellowship training which can be counted toward regular or subspecialty certification by a board recognized and certified by the American Board of Medical Specialties. Since January 24, 2011, Dr. Rawner has been practicing medicine in Wausau, Wisconsin, as a staff physician with Knee Pain Solutions Center. Accordingly, he has been in the active practice of medicine for the two years preceding his Florida application. Dr. Rawner submitted his application for licensure by endorsement on March 13, 2013. Supplemental documentation was filed with the Board by letter dated March 18, 2013. In that letter, Dr. Rawner expressly stated that he was relying on the second alternative for establishing licensure by endorsement, which does not include the requirements identified in subsection 458.311(1)(f). On April 3, 2013, the Board requested additional information, and in response, Dr. Rawner provided a copy of his undergraduate degree and information related to his one year of supervised medical training. Other information requested in the April 3, 2013, letter was sent directly to the Board office by the appropriate agencies, including an official United States medical examination transcript, indicating that Dr. Rawner passed USMLE Steps I, II, and III; a letter from the residency program director, indicating that Dr. Rawner completed one year of residency training; confirmation from the Wisconsin Medical Board confirming his current, valid medical license in the state of Wisconsin; an American Medical Association (AMA) profile letter; and Dr. Rawner’s fingerprints and clear background check. Program Operations Administrator Chandra Prine notified Dr. Rawner by letter dated June 26, 2013, that he was required to appear before the Credentials Committee of the Board. The purpose of the appearance was to discuss: Failure to meet the training requirement pursuant to section 458.313(1)(a), 458.311(1)(f)3.c., Florida Statutes. Failure to complete an academic year of supervised clinical training pursuant to section 458.311(3)(d), Florida Statutes. Dr. Rawner appeared before the credentials committee of the Board of Medicine on August 1, 2013. The committee recommended that his license be denied. On August 22, 2013, the Board of Medicine issued a Notice of Intent to Deny Licensure, stating that it intended to deny Dr. Rawner’s application because Dr. Rawner did not meet the requirements of section 458.313(1), which requires an applicant to meet the qualifications outlined in either section 458.311(1)(b)-(g) (alternative one), or in section 458.311(1)(b)- (e), (g) and (3) (alternative two). The notice stated that with respect to alternative one, Dr. Rawner did not meet the requirements of section 458.311(1)(f)3., because he had not completed an approved residency or fellowship of at least two years in one specialty area. With respect to alternative two, the Board determined that Dr. Rawner did not meet the requirements of section 458.311(3)(c) because, in the Board’s view, the section was inapplicable to Dr. Rawner because he had completed all requirements of the foreign medical school, with none outstanding, and did not meet the requirement of (3)(d) because he had not completed an academic year of supervised clinical training in a hospital affiliated with a medical school approved by the Council on Medical Education of the American Medical Association. Dr. Rawner filed a Petition for Administrative Hearing with respect to the Notice of Intent to Deny, and the matter was reconsidered at the credentials committee’s meeting on October 3, 2013. The credentials committee voted to reconsider the application based on the issues presented in the Petition. On October 22, 2013, the Board issued an Amended Notice of Intent to Deny Licensure. With respect to alternative two, in the Amended Notice, the Board stated: [t]he application file reveals that Dr. Rawner fails to meet subsection (3) for the reasons set forth below. Subsection (3) provides: Notwithstanding the provisions of subparagraph (1)(f)3., a graduate of a foreign medical school need not present the certificate issued by the Educational Commission for Foreign Medical Graduates or pass the examination utilized by that commission if the graduate: Has received a bachelor’s degree from an accredited United States college or university. Has studied at a medical school which is recognized by the World Health Organization. Has completed all of the formal requirements of the foreign medical school, except the internship or social science requirements, and has passed part I of the National Board of Medical Examiners examination or the Educations Commission for Foreign Medical Graduates examination equivalent. Has completed an academic year of supervised clinical training in a hospital affiliated with a medical school approved by the Council on Medical Education of the American Medical Association and upon completion has passed part II of the National Board of Medical Examiners examination or the Educational Commission for Foreign Medical Graduates examination equivalent. Subpart (3)(c) provides in relevant part all of the formal requirements of the foreign medical school, except the internship or social service requirements, and has passed certain examinations. A plain reading of this subpart is that the foreign medical school has an internship or social service requirement and that the internship or social service requirement has not been completed. The application file demonstrates that Dr. Rawner graduated in June, 2006, with a degree of Doctor of Medicine from the American University of the Caribbean School of Medicine. Thus, subpart (3)(c) is inapplicable to Dr. Rawner, because the application file reveals that he completed all of the formal requirements of the foreign medical school and there are no outstanding or pending internship or social service requirements. Based on the foregoing, the Board finds that the Applicant has not demonstrated that he meets the requirements for licensure by endorsement set forth in Section 458.313(1)(a), Florida Statutes. The Amended Notice no longer listed failure to complete an academic year of supervised clinical training as a basis for the denial of Dr. Rawner’s application. There is no persuasive evidence presented that Respondent’s interpretation of the requirements of section 458.311, Florida Statutes, as it applies to this case, is a statement of general applicability.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Board of Medicine enter a Final Order approving Leon Rawner, M.D.’s application for licensure by endorsement. DONE AND ENTERED this 28th day of April, 2014, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 28th day of April, 2014. COPIES FURNISHED: Donna C. McNulty, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399 Amy W. Schrader, Esquire GrayRobinson, P.A. 301 South Bronough Street, Suite 600 Post Office Box 11189 Tallahassee, Florida 32302 Allison M. Dudley, Executive Director Board of Medicine Department of Health Division of Medical Quality Assurance Boards/Councils/Commissions 4052 Bald Cypress Way Tallahassee, Florida 32399 Jennifer A. Tschetter, General Counsel Department of Health 4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399 Edward A. Tellechea, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399
The Issue 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.
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. KRMC also participates in scholarly and clinical research. In 2017, KRMC had over 82,000 Emergency Department (ED) visits. 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. Residents from Larkin General Hospital also rotate through PGH. 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 West” 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. JHS has never built a hospital from the ground up. 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. KRMC is just south of Doral. Hialeah is northeast of Doral. CGH, Westchester General, and NCH are southeast of Doral. 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. Decompression of KRMC is not a reason to approve DMC. 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. The hospital has also been recognized with numerous awards. 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-1.008(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.3/ 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. 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.
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. S 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.
