Findings Of Fact At all times relevant hereto Respondent was licensed as a physician in the State of Florida having been issued license number ME0040318. Respondent completed a residency in internal medicine and later was a nephrology fellow at Mayo Clinic. He was recruited to Florida in 1952 by Humana. In 1984 he became associated with a Health Maintenance Organization (HMO) in an administrative position but took over treating patients when the owner became ill. This HMO was affiliated with IMC who assimilated it when the HMO had financial difficulties. At all times relevant hereto Respondent was a salaried employee of IMC and served as Assistant Medical DIRECTOR in charge of the South Pasadena Clinic. On October 17, 1985, Alexander Stroganow, an 84 year old Russian immigrant and former cossack, who spoke and understood only what English he wanted to, suffered a fall and was taken to the emergency Room at a nearby hospital. He was examined and released without being admitted for inpatient treatment. Later that evening his landlady thought Stroganow needed medical attention and again called the Emergency Medical Service. When the ambulance with EMS personnel arrived they examined Stroganow, and concluded Stroganow was no worse than earlier when he was transported to the emergency Room, and refused to again take Stroganow to the emergency Room. The landlady then called the HRS hotline to report abuse of the elderly. The following morning, October 18, 1985, an HRS case worker was dispatched to check on Stroganow. Upon arrival, she was admitted by the landlady and found an 84 year old man who was incontinent, incoherent, and apparently paralyzed from the waist down, with whom she could not engage in conversation to determine his condition. She called for a Cares Unit team to come and evaluate Stroganow. An HRS Cares Unit is a two person team consisting of a social worker and nurse whose primary function is to screen clients for admission to nursing homes and adult congregate living facilities (ACLF). The nurse on the team carries no medical equipment such as stethoscope, blood pressure cuff, or thermometer, but makes her evaluation on visual examination. Upon arrival of the Cares Unit, and, after examining Stroganow, both members of the team agreed he needed to be placed where he could be attended. A review of his personal effects produced by his landlady revealed his income to be above that for which he could qualify for medicaid placement in a nursing home; that he was a member of IMC's Gold-Plus HMO; his social security card; and several medications, some of which had been prescribed by Dr. Dayton, Respondent, a physician employed by IMC at the South Pasadena Clinic. The Cares team ruled out ACLF placement because Stroganow was not ambulatory, but felt he needed to be placed in a hospital or nursing home and not left alone with the weekend approaching. To accomplish this, they proceeded to the South Pasadena HMO clinic of IMC to lay the problem on Dr. Dayton, who was in charge of the South Pasadena Clinic, and, they thought, was Stroganow's doctor. Stroganow had been a client of the South Pasadena HMO for some time and was well known at the clinic as well as by EMS personnel. There were always two, and occasionally three, doctors on duty at South Pasadena Clinic between 8:00 and 5:00 daily and, unless the patient requested a specific doctor he was treated by the first available doctor. Stroganow had not specifically requested to be treated by Respondent. When the Cares unit met with Respondent they advised him that Stroganow had been taken to Metropolitan General Hospital Emergency Room the previous evening but did not advise Respondent that the EMS squad had refused to return Stroganow to the emergency Room when they were recalled for Stroganow the same evening. Respondent telephoned the Metropolitan General Emergency Room and had the emergency Room medical report on Stroganow read to him. With the information provided by the Cares unit and the hospital report, Respondent concluded that Stroganow needed emergency medical treatment and the quickest way to obtain such treatment would be to call the EMS and have Stroganow taken to an emergency Room for evaluation. When the Cares unit arrived, Respondent was treating patients at the clinic. A clinic, or doctors office, is not a desirable or practical place to have an incontinent, incoherent, and non-ambulatory patient brought to wait with other patients until a doctor is free to see him. Nor is the clinic equipped to perform certain procedures that may be required for emergency evaluation of an ill patient. At a hospital emergency Room such equipment is available. EMS squads usually arrive within minutes of a call being placed to 911 for emergency medical treatment and it was necessary that someone be with Stroganow when the EMS squad arrived. Accordingly, Respondent suggested that the Cares team return to Stroganow and call 911 to transport Stroganow to an emergency Room for an evaluation. Upon leaving the South Pasadena clinic the Cares team returned to Stroganow. Enroute they stopped to call a supervisor at HRS to report that the HMO had not solved their problem with Stroganow. The supervisor then called the Administrator at IMC Tampa Office to tell them that one of their Gold-Plus HMO patients had an emergency situation which was not being property handled. Respondent left the South Pasadena Clinic around noon and went to IMC's Tampa Office where he was available for the balance of the afternoon. There he spoke with Dr. Sanchez, the INC Regional Medical Director, but Stroganow was not deemed to be a continuing problem. By 2:00 p.m. when no ambulance had arrived the Cares Unit called 911 for EMS to take Stroganow to an emergency Room. Upon arrival shortly thereafter the EMS squad again refused to transport Stroganow. The Cares team communicated this to their supervisor who contacted IMC Regional Office to so advise. At this time Dr. Sanchez authorized the transportation of Stroganow to Lake Seminole Hospital for admission. Although neither Respondent nor Sanchez had privileges at Lake Seminole Hospital, IMC had contracted with Lake Seminole Hospital to have IMC patients admitted by a staff doctor at Lake Seminole Hospital. Subsequent to his meeting with the Cares team Respondent received no further information regarding Stroganow until well after Stroganow was admitted to Lake Seminole Hospital. No entry was made on Stroganow's medical record at IMC of the meeting between Respondent and the Cares Unit. Respondent was a salaried employee whose compensation was not affected by whether or not he admitted an IMC Gold-Plus patient to a hospital.
Conclusions Having reviewed the four Notices of Intent to Deny Application issued May 13-18, 2010, attached hereto and incorporated herein (Ex. 1, 2, 3, and 4), and all other matters of record, the Agency for Health Care Administration (“Agency”) has entered into a Settlement Agreement (Ex. 5) with the other party to these proceedings, and being otherwise well-advised in the premises, finds and concludes as follows: ORDERED: 1. The attached Settlement Agreement is approved and adopted as part of this Final Order, and the parties are directed to comply with the terms of the Settlement Agreement. 2. The Petitioner shall remit to the Agency, within thirty (30) days of the entry of a Final Order adopting this agreement, an administrative fee in the sum of thirty thousand dollars ($30,000.00) to resolve the Agency's allegations of unlicensed activity, in the interest of expediently resolving these matters and in recognition of the expense and uncertainty of litigation. 3. Checks should be made payable to the “Agency for Health Care Administration.” The check, along with a reference to this case number, should be sent directly to: Filed January 10, 2012 1:47 PM Division of Administrative Hearings Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS# 14 Tallahassee, Florida 32308 4. Unpaid amounts pursuant to this Order will be subject to statutory interest and may be collected by all methods legally available. 5. Any requests for an administrative hearing are withdrawn. The parties shall bear their own costs and attorney’s fees. This matter is closed. DONE and ORDERED this [0 day of ~ Bettie: ; 20/2, in Tallahassee, Leon County, Florida. — Ds we { izabeth Dudek, retary fey ir wacked 0. th€are Administration A PARTY WHO JS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW OF PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED. Copies furnished to: Lance P. Cohen, Esquire Warren J. Bird, Asst. General Counsel Cohen & Thurston, P.A. Office of the General Counsel 1723 Blanding Boulevard, Suite # 102 Agency for Health Care Administration Jacksonville, Florida 32310 2727 Mahan Drive, Bldg #3, MS #3 (U. S. Mail) Tallahassee, Florida 32308 (Interoffice Mail) Jan Mills Agency for Health Care Administration 2727 Mahan Drive, Bldg #3, MS #3 Tallahassee, Florida 32308 (Interoffice Mail) Roger Bell Health Care Clinic Unit Manager Agency for Health Care Administration 2727 Mahan Drive, MS #53 Tallahassee, Florida 32308 (Interoffice Mail) Agency for Health Care Administration Office of Finance and Accounting Revenue Management Unit 2727 Mahan Drive, MS# 14 Tallahassee, Florida 32308 (Interoffice Mail) Suzanne F. Hood Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399 (U.S. Mail) CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of this Final Order was served on the oa above-named person(s) and entities by U.S. Mail, or the method designated, on this the 10 day of aaa » 2012" Agency for Health Care Administration 2727 Mahan Drive, Building #3 Tallahassee, Florida 32308-5403 (850) 412-3630 Certified Article Number , ?bbO 390) Y5778 8971 SEMDERS RECORD i", Certified Article Number (?160 3901 9846 7935 1337 SENDERS RECORD One Nofice $1149/1° CHARLIE CRIST FIORDAAGENCY FOR HEATH CARE ADMINS TRATION Better Health Care for ail Floridians THOMAS W. ARNOLD GOVERNOR SECRETARY May 12, 2010 Physicians Medical Centers - Jax Inc File Number: 8428 1680 Dunn Ave Case #: 2010004935 Ste 39 Jacksonville, FL 32218 F INTENT TO DENY APP TION It Is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 1680 DUNN AVE, STE 39, JACKSONVILLE, FL, 32218, be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes. You were notified by correspondence dated April 9, 2010 to provide further Information addressing identified apparent errors or omissions within twenty-one days (21) from the receipt of the Agency's correspondence. Our records indicate you received this correspondence by certified mail on April 15, 2010. The outstanding issues remaining are: A copy of the closing documents, stock or similar certificates signed and dated by both the buyer and seller is required, In addition, the Agency received information that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). EXPLANATION OF RIGH Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. ce: Agency Clerk, Mail Stop 3 ; Legal Intake Unit, Mall Stop 3. EXHIBIT 14 Visit AHCA online at http://ahca.myflorida.com 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 " Certified Article Number , 7260 3901 9648 57748 8995 SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CHARLIE CRIST THOMAS W. ARNOLD GOVERNOR Better Health Care for all Floridians SECRETARY May 12, 2010 Physicians Medical Centers - Jax Inc File Number: 8430 9826 San Jose Blvd Case #: 2010004881 Jacksonville, FL 32257 .. : NOTICE OF INTENT TO DENY APPLICATION It is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 9826 San Jose Bivd, Jacksonville, FL, 32257, be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes. You were notified by correspondence dated March 27, 2010 to provide further information addressing identified apparent errors or omissions within twenty- one days (21) from the receipt of the Agency's correspondence. Our records indicate you received this correspondence by certified mail on April 8, 2010, The outstanding issues remaining are: Subpart 1.B, Name-of.Applicant: The name of the applicant must be the corporation or legal entity as it is registered with. the Division of Corporations, it must also match-the FEIN indicated in section 1.C. This subpart was submitted as a response to the omissions, but the. applicant's name indicated does not match the FEIN# listed in section 1.C. of the application. : As this facility did a change of ownership, provide a copy of the closing documents signed and dated by both the buyer (new owner) and seller (previous owner). Acceptable documentation may include any one of the following: Copy of final sale/transfer documents showing date of final transfer and signatures of buyer(s) and seller(s), or a signed, written statement from an attorney, on letterhead, that confirms sale/transfer completion and provides the date of final action. : In addition, the Agency received information that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). TION OF HT! Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing, In order to obtain a formal proceeding before -the Division of Administrative Hearings under Section 120,57(1), F.S., your request for an administrative hearing-must conform to the - requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. ; : : Visit AHCA online at http://ahca.myflorida,com 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 EXHIBIT 2 Physicians Medical Centers -. . Inc Page 2 : May 12, 2010 SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 Te thictee-Va thet [9 Number fd60 3901 9848 7495 a2, SENDERS RECORD FLORIDA AGENCY FOR HEALTH CARE ADMINISTRATION CHARLIE CRIST THOMAS W. ARNOLD GOVERNOR Better Health Care for all Floridians SECRETARY May 13, 2010 Physicians Medical Centers - Jax Inc File #8427 5960 Beach Blvd : Case #2010004956 Ste3 ; Jacksonville, FL 32207 NOTICE OF INTENT TQ DENY APPLICATION It is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 5960 Beach Bivd., Ste 3, Jacksonville, FL, 32207, be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes. You were notified by correspondence dated April 7, 2010 to provide further information addressing identified apparent errors or omissions within twenty- one days (21) from the receipt of the Agency's correspondence. Our records indicate you received this correspondence by certified mail on Apri! 9, 2010. The outstanding issues remaining are: As this facility did a change of ownership, provide a copy of the closing documents signed and dated by both the buyer (new owner) and seller (previous owner). Acceptable documentation may include any one of the following: Copy of final sale/transfer documents showing date of final transfer and signatures of buyer(s) and seller(s), or a signed, written statement from an attorney, on letterhéad, that confirms sale/transfer completion and provides the date of final action. ; In addition, the Agency received information that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). EXPLANATION OF RIGHTS Pursuant to Section 120.569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. EXHIBIT 3 Visit AHCA online at http://ahca.myflorida.com 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 Physicians Medical Centers - Jax Page 2 May 13, 2010 SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS. Health Cae Clinic Unit ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 RTE ecm 3901 94a 7935 yy74 SENDERS RECORD FLORIDA AGENCY TOR HEALTH CARE ADMINISTRATION oe ERNGS Better Health Care for all Floridians THOMAS W. ARNOLD May 18, 2010 CERTIFIED MAIL / RETURN RECEIPT REQUESTED File Number: 8429 Physicians Medical Centers - Jax, Inc 2020 Kingsley Ave Case #: 2010005135 Suite A Orange Park, FL 32073 NOTICE OF INTENT TO DENY APPLICATION It is the decision of this Agency that the application for certificate of exemption from health care clinic licensure for Physicians Medical Centers - Jax Inc, located at 2020 Kingsley Avenue, Suite A, Orange Park, Florida, 32073 be DENIED. The specific basis for this determination is based on the fact that: Requested information was not complete or timely received by the Agency pursuant to Section 408.806(3)(b), Florida Statutes, You were notified by correspondence dated April 9, 2010 to provide further information addressing identified apparent errors or omissions within twenty-one days (21) from the receipt of the Agency’s correspondence, Our records indicate you received this correspondence by certified mail on April 12, 2010, The outstanding issues remaining are: Evidence of Ownership — Information received by the Agency states that Victoria Critzer is the owner of Physicians Medical Centers-Jax Inc. Provide the following documentation as evidence of ownership: * A copy of the final closing documents such as a bill of sale or stock purchase agreement. signed and dated by both the buyer and seller including the effective date sale or transfer. The closing documents should contain the signature of Gordon Garver DC, previous owner of Physicians Medical Center-Jax Inc and Joseph Thomas MD, new owner of Physicians Medical Center-Jax Inc. ¢ A copy of the cancelled and reissued stock certificates transferring shared to Joseph Thomas MD. ¢ Acopy of the lease agreement that includes the name(s) of the owner(s). e Acopy of the business tax receipt that includes the name of the corporation and owner. In addition, the Agency received information indicating that the facility does not meet exemption requirements as it is not wholly owned by a Florida licensed health care practitioner, pursuant to Section 400.9905(4)(g). EXHIBIT 2727 Mahan Drive,MS-53 Tallahassee, Florida 32308 Visit AHCA online at http://ahca.myflorida.com . Physicians Medical Centers - Ja... .nc Page 2 May 18, 2010 EXPLANATION OF RIGHTS Pursuant to Section 120,569, F.S., you have the right to request an administrative hearing. In order to obtain a formal proceeding before the Division of Administrative Hearings under Section 120.57(1), F.S. your request for an administrative hearing must conform to the requirements in Section 28-106.201, Florida Administrative Code (F.A.C), and must state the material facts you dispute. ey SEE ATTACHED ELECTION AND EXPLANATION OF RIGHTS FORMS, For questions regarding this notice, please contact Ruby Schmigel, Health Services & Facilities Consultant with the Health Care Clinic Unit at (850) 412-4413. oger Bgl, Mandger Health Care Clinic Unit ce: Agency Clerk, Mail Stop 3 Legal Intake Unit, Mail Stop 3 STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS PHYSICIANS MEDICAL CENTERS-JAX, INC., Petitioner, DOAH Case Nos. 10-3202, 10-3203, 10-3204 and 10-3205 vs. AHCA CASE Nos.: 2010004881, 2010004956 AGENCY FOR HEALTH CARE 2010004935 and 2010005135, ADMINISTRATION, Respondent. / SETTLEMENT AGREEMENT Respondent, State of Florida, Agency for Health Care Administration (hereinafter the “Agency”), through its undersigned representatives, and Petitioner, Physicians Medical Centers- Jax, Inc. (hereinafter “Petitioner”), pursuant to Section 120.57(4), Florida Statutes, each individually, a “party,” collectively as “parties,” hereby enter into this Settlement Agreement (“Agreement”) and agree as follows: WHEREAS, the Petitioner applied for four certificates of exemption from licensure pursuant to Section 400.9935(6), Florida Statutes and Chapter 59A-33, Florida Administrative Code; and WHEREAS, Victoria Critzer has applied for four initial health care clinic licenses, expressly intending to purchase the interest of Dr. Joseph Thomas in Petitioner upon issuance by the Agency of those licenses; and WHEREAS, the Agency has jurisdiction of the license and exemption applications described in the foregoing paragraphs, by virtue of being the regulatory and licensing authority over the said licenses and exemptions; and EXHIBIT 5 WHEREAS, the Agency served the Petitioner with four Notices of Intent to Deny Application on or about May 13, 2010, notifying the Petitioner of the Agency’s intent to deny the certificates of exemption for the reasons stated thereon, in Agency cases numbered 2010004881, 2010004956, 2010004935 and 2010005135; and WHEREAS, Petitioner timely requested a formal hearing pursuant to Section 120.57(2), Florida Statutes, and in response to said request the matters were forwarded to the Division of Administrative Hearings (DOAH), and were designated as cases numbered 10-3202, 10-3203, 10-3204 and 10-3205 in that tribunal; and subsequently the parties agreed to, and did abate those cases in DOAH, for the purpose of discussing settlement; and WHEREAS, the Agency alleges, and Petitioner denies, that during the period of processing of the aforementioned applications, Petitioner operated one or more unlicensed health care clinics in violation of Florida law as to which no formal administrative, civil or criminal action has thus far been brought; and WHEREAS, the parties have agreed that a fair, efficient, and cost effective resolution of this dispute would avoid the expenditure of substantial sums to litigate the dispute; and WHEREAS, the parties stipulate to the adequacy of consideration exchanged; and WHEREAS, the parties have negotiated in good faith and agreed that the best interest of all the parties will be served by a settlement of these proceedings; and NOW THEREFORE, in consideration of the mutual promises and recitals herein, the parties intending to be legally bound, agree as follows: 1. All recitals are true and correct and are expressly incorporated herein. 2. Both parties agree that the “whereas” clauses incorporated herein are binding findings of the parties. 3. Joseph Thomas, M.D. hereby acknowledges, affirms and certifies that, at the time this agreement is executed by him, he is the sole owner of the Florida corporation Physicians Medical Center-Jax, Inc. 4, Victoria Critzer hereby acknowledges, affirms and certifies that, at the time this agreement is executed by her, she is the sole owner of the Florida corporation Physicians Medical Center, Inc. 5. Upon full execution of this Agreement, Petitioner agrees to waive any and all proceedings and appeals to which it may be entitled including, but not limited to, an informal proceeding under Subsection 120.57(2), a formal proceeding under Subsection 120.57(1), appeals under Section 120.68, Florida Statutes; and declaratory and all writs of relief in any court or quasi-court (DOAH) of competent jurisdiction; and further agrees to waive compliance with the form of the Final Order (findings of fact and conclusions of law) to which it may be entitled. Provided, however, that no Agreement herein, shall be deemed a waiver by either party of its right to judicial enforcement of this Agreement. 6. Upon full execution of this Agreement, the parties agree to the following: a. Petitioner's four (4) applications for exemption from licensure are hereby withdrawn, and Petitioner expressly waives its right to challenge or appeal, or both, in DOAH or elsewhere, the denial by the Agency of the exemptions. b. The Agency will resume processing the four initial licensure applications submitted by Victoria Critzer as intended future 100% owner of Physicians Medical Centers-Jax, Inc., now pending, and if the applications are complete and the applicant qualified under applicable law, the Agency will issue the licenses upon full payment by Petitioner of an agreed upon sum, as set forth below, to resolve the Agency's claim of unlicensed activity against Physicians Medical Center, Inc. Ms. Critzer agrees to use reasonable diligence to timely remedy any omissions from the applications cited by the Agency, to make the facilities available as required by law for all inspections required in connection with the licensure of the facilities, and to otherwise comply with all requirements of the application process, and all statutes and administrative rules thereunto appertaining, including background screening as may be applicable. c. The Agency agrees to use all reasonable diligence to process the initial license applications, and to issue the initial licenses as expeditiously as reasonably possible, provided that Ms. Critzer timely complies with all reasonable requests for additional information to which the Agency is entitled as a component of the application and licensure process, and provided that Victoria Critzer, and the applications she presented, are qualified for the licenses under all applicable statutes and administrative rules. d. Victoria Critzer will maintain the health care clinic license #HCC6732 currently held by Physicians Medical Center Inc. (PMC), for purposes of billing health care services provided solely at the licensed location, 9826 San Jose Boulevard, Suite B, Jacksonville, Florida. Whereas, Ms. Critzer, through counsel, has advised the Agency of a change of address for the license from 9826 San Jose Boulevard, to 9826 San Jose Boulevard, Suite B, PMC will submit a change of address application to the Agency together with the appropriate fee, within 10 days of execution of this agreement, and prior to resumption by the Agency of processing of the subject licensure applications. The license will be maintained 7. under a different federal employer identification number from any other licenses issued to Victoria Critzer or any entity in which she has a controlling interest. A separate health care clinic license must be obtained for any other location at which any health care services will be provided and third-party reimbursement sought for on behalf of Physicians Medical Centers Inc. e. Physicians Medical Centers, Inc. agrees to pay the sum of thirty thousand and no/100s dollars ($30,000.00) to the Agency, to resolve the Agency's allegations of unlicensed activity, in the interest of expediently resolving these matters and in recognition of the expense and uncertainty of litigation. The sum will be paid in lump sum at the time that the initial licenses referenced in paragraph b., above, are issued, or within 30 days following rendition of a Final Order by the Agency that incorporates this Agreement, whichever occurs first. f. Nothing in this Agreement shall prohibit the Agency from denying Petitioner’s application for licensure based upon any statutory and/or regulatory provision, including, but not limited to, the failure of Petitioner to satisfactorily complete a survey reflecting compliance with all statutory and rule provisions as required by law. By executing this Agreement, the Petitioner neither admits nor denies the allegations raised in the Notices of Intent to Deny referenced herein. 8. Upon full execution of this Agreement, the Agency shall enter a Final Order adopting and incorporating this Agreement in its entirety, and closing the above-styled case(s). The cases resident in DOAH, referenced above as DOAH cases numbered 10-3202, 10-3203, 10- 3204 and 10-3205, are currently closed by Order entered in that tribunal on October 7, 2010. The parties hereby further agree that those cases shall remain closed permanently, and each party hereby waives its right to seek to have any of those cases re-opened. 9. Each party shall bear its own costs and attorney’s fees. 10. This Agreement shall become effective on the date upon which it is fully executed by all the parties. 11. The Petitioner for itself and for its related or resulting organizations, its successors or transferees, attorneys, heirs, and executors or administrators, does hereby discharge the Agency and its agents, representatives, and attorneys of all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, arising out of or in any way related to this matter and the Agency’s actions, including, but not limited to, any claims that were or may be asserted in any federal or state court or administrative forum, including any claims arising out of this Agreement, by or on behalf of the Petitioner or related or resulting organizations. 12. This Agreement is binding upon all parties herein and those identified as a party, or a beneficiary, of the provisions of this Agreement, and each signatory acknowledges same and the adequacy of consideration therefor. 13. In the event that Petitioner is or was a Medicaid provider, this settlement does not prevent the Agency from seeking Medicaid overpayments or from imposing any sanctions pursuant to Rule 59G-9.070, Florida Administrative Code. This Agreement does not prohibit the Agency from taking action regarding Petitioner’s Medicaid provider status, conditions, requirements or contract. 14. The undersigned have read and understand this Agreement and have authority to bind their respective principals to it. Both parties have been represented by counsel in the negotiation and execution of this Agreement. The Petitioner fully understands that counsel for the Agency represents solely the Agency and Agency counsel has not provided legal advice to or influenced the Petitioner in its decision to enter into this Agreement. 15. This Agreement contains the entire understandings and Agreements of the parties. 16. | This Agreement supersedes any prior oral or written Agreements between the parties. This Agreement may not be amended except in writing. Any attempted assignment of this Agreement shall be void. 17. Venue for any action brought to interpret, challenge or enforce the terms of this Agreement or the Final Order entered pursuant hereto shall lie solely in the Circuit Court in Leon County, Florida. 18. ‘Ifa court of competent jurisdiction finds any part of this Agreement to be void, voidable, or unenforceable, then the remainder of the contract shall remain in full force and effect. 19. All parties agree that a facsimile signature suffices fe 20. The following representatives and beneficiaries hereby ae duly S. to enter into this Agreement. Molly McKéns eputy Secretary {_ panes P. Céhen, Esquire Health Quality ance Cohen & Thurston, P.A. Agency for Health Care Administration 1723 Blanding Boulevard, Suite 102 2727 Mahan Drive, Bldg #3 Jacksonville, Florida 32310 Tallahassee, Florida 32308 Counsel to Petitioner DATED: (frolir DATED: 1-1 U~ aye William R. Roberts Acting General Counsel Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 DATED: /7 [(3l 4 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 DATED: Uf (5) WH Physicians Medical Centers-Jax, Inc. 9826 San Jose Boulevard Jacksonville, Florida 32257 patep: _})-14~!/ ~~ x. 1 _f- Victoria Critzer as president, sole director and 100% Owner Physicians Medical Center, Inc. 9826-B San Jose Boulevard Jacksonville, Florida 32257 DATED: _|1- (4-//
The Issue The issue to be presented is whether Respondent violated section 458.331(1)(t), Florida Statutes (2005), and if so, what penalty should be imposed?
Findings Of Fact The Department is the state agency charged with regulating the practice of medicine pursuant to section 20.43 and chapters 456 and 458, Florida Statutes. Respondent, John Lee, M.D., is a licensed physician in the State of Florida, having been issued license number ME 50043. Dr. Lee specializes in obstetrics and gynecology, but is not board certified at this time. He has a solo practice. Dr. Lee has had one prior final order imposing discipline against him. On November 7, 1996, the Board of Medicine entered a Final Order approving an amended Consent Agreement entered between the Agency for Health Care Administration (the Department's predecessor with respect to regulation of health care professionals) and Dr. Lee. The Final Order imposed a letter of concern, a fine of $2,000, and 20 hours of continuing medical education. On or about November 2, 2005, patient R.R. first saw Respondent with a complaint of chronic pelvic pain and an inability to function. Based upon his examination of R.R., Respondent recommended that R.R. undergo a bilateral salpingo- oophorectomy (removal of both ovaries and fallopian tubes). R.R. decided to have the recommended surgery and on December 13, 2005, Respondent performed a bilateral salpingo- oophorectomy, as well as an appendectomy, lysis of adhesions and partial omentectomy. There are three layers to the bowel: the serosa is the thin outer protective layer; under the serosa is the muscularis; a third layer below the muscularis called the mucosa. Dr. Lee's surgical notes indicate that there was some serosal denuding of the sigmoid colon, but with no luminal extravasion (no leakage from the bowel). Dr. Lee described the serosal denuding as an irritation of the serosa from removal of adhesions, and not a complication of the surgery. In any event, there are no allegations in the Administrative Complaint claiming that either Dr. Lee's decision to perform the surgery or the performance of the surgery itself deviated from the appropriate standard-of- care, and no findings to that effect are found. R.R. was discharged from the hospital on December 15, 2005. At that time, she was ambulatory, tolerating liquids, had passed flatus and had a small bowel movement. At that time she had no documented fever and a normal white count. The next day, Friday, December 16, 2005, R.R.'s husband called Dr. Lee's office at approximately 3:00 p.m. According to R.R., she spoke to Brandi Melvin, now known as Brandi Harper (Ms. Harper), the medical assistant for Dr. Lee, and told her that she was running a fever of 101.8 degrees, did not feel well and wanted Dr. Lee to call her. She testified that at that time, she did not feel well, was achy all over, had pain in her abdomen and had chills. R.R. testified that Ms. Harper told her to increase her Dilaudid in accordance with her prescription and to continue rotating Tylenol and Motrin. She denies being told to go to the emergency room if her fever did not go down, and denies being instructed to pick up a prescription for an antibiotic. Brandi Harper is a medical assistant in Dr. Lee's office, and has been since 2004. She is a certified nurse's assistant and has completed a year and a half toward her registered nursing degree. Part of Ms. Harper's duties include screening calls that come in from patients post-surgery. In doing so, she follows a set protocol that has been established in that office. In accordance with Dr. Lee's preferences, she inquires not only about the symptoms the patients report having, but also about symptoms they may not be having. Consistent with that protocol, she testified that, with respect to the call from R.R. and her husband, she asked whether R.R. was having any drainage from the incision; any abdominal pain; or was experiencing any other symptoms. Ms. Harper testified that R.R. did not report having any abdominal pain above expected soreness, and did not report difficulty breathing or shortness of breath; drainage from the incision; vomiting; bloating or distension of the abdomen. Ms. Harper's testimony is credited. After receiving the telephone call from R.R., Ms. Harper wrote a note to Dr. Lee which referenced R.R. and stated, "[t]aking the cephalexin you gave her on discharge. Is running 102 temp, just sore. She has been rotating Tylenol and nothing has brought it down. Informed her to drink plenty of fluids. Do you want to add anything?" Neither Ms. Harper's notes nor her testimony reflect that she told the patient to increase pain medication. Nor does the note reflect that R.R. wanted to speak with Dr. Lee. Because Dr. Lee was seeing patients, Ms. Harper placed the note on his desk for his review. After reviewing the note, Dr. Lee wrote "Levaquin 500mg, #10, 1 a day." Ms. Harper then called the patient to tell her that a prescription was being called in for her and confirmed the pharmacy the patient used. At that time, consistent with the protocol established by Dr. Lee, she told R.R. or her husband that if the fever did not go down after two hours, to go to the emergency room at West Florida Hospital. She did not tell her to call the office back because, at the time of the return phone call, it was approximately 3:30 p.m. on a Friday afternoon, and in two hours the office would be closed. Ms. Harper then called the prescription in to Burklow's Pharmacy, as identified by the patient, and noted the prescription in patient's medication log. She noted the time of the call and the name of the pharmacist with whom she spoke. Ms. Harper did not note in the medical record that she advised the patient to go to the emergency room if her fever did not go down, and did not specifically note the return call to the patient. However, she plausibly explained that she could not call in the prescription to Burklow's without speaking to the patient, because there were two different pharmacies noted in her file previously. She also credibly testified that she always calls the patient back in conjunction with the call to the pharmacy, and gives standard instructions to post-operative patients regarding further action (in this case, going to the West Florida Hospital emergency room) should their condition not change. She does not necessarily document the return call because she does it so many times daily. Dr. Lee also testified that instructions to call back if the office is open or go to the emergency room if symptoms do not improve in a few hours is part of the standard protocol. Ms. Harper's and Dr. Lee's testimony is credited. R.R. did not go to the emergency room over the weekend and there was no evidence that she ever called Dr. Lee's office back after the 3:00 Friday afternoon call. She continued to not feel well, however, and on Monday morning, December 19, 2005, at approximately 5:00 a.m., she woke up in intense pain between her shoulder blades. She went by ambulance to Santa Rosa Medical Center (SRMC). R.R. went to SRMC as opposed to West Florida Hospital because it was much closer to her home. Dr. Lee does not have privileges at SRMC. Although R.R. went to the emergency room early December 19, 2005, there was no determination that first day that she had a bowel perforation, and she was not admitted to the hospital until approximately 8:30 that evening. At the time of admission, she had a white blood count of 3.3, with a differential count of 12 neutrophil bands. The history and physical taken at the hospital and signed by Dr. Michael Barber, M.D., states in part: HISTORY OF PRESENT ILLNESS: [R.R.] is a 33- year-old, . . . who underwent abdominal surgery six days ago by Dr. John Lee at West Florida Hospital. She had bilateral salpingo-oophorectomy, partial omentectomy, appendectomy, and extensive adhesiolysis. . . . She states that although this surgery was prolonged and reportedly difficulty (sic), she tolerated the surgery well and by the second postoperative day was ambulating and voiding freely, tolerating a regular diet with a bowel movement and positive flatus. She stated her pain was well managed with 4 mg of Dilaudid q4h as needed. She was sent home on Cephalexin 500 mg q6h, Phenergan 25 mg q6h and Dilaudid 4 mg q6h. She was also on Hydrochlorothiazide for chronic hypertension, Klonopin and Effexor for anxiety and depression. She states that after going home she had some anorexia that was doing well until the morning of admission. She was awakened from her sleep at approximately 6 a.m. with remarkable abdominal distention and severe diffuse abdominal pain. She developed nausea as the pain progressed but has had no vomiting. She states that other than the bowel movement immediately post surgery, she had not had any bowel activity since discharge in six days. After several hours and worsening of pain, she presented to the emergency room at Santa Rosa Medical Center. On admission, a CT scan of the abdomen was accomplished and revealed a moderate volume loss infiltrate in the left lung base, apparent present to a lesser extent on the right. There was free air noted within the abdomen and also noted to be some free fluid. This was felt to be due to the patient's prior surgery, however, a more acute process could not be ruled out. There were also some distended loops of small bowel with apparent decompression of the distal small bowel which suggested at least a partial small bowel obstruction, although again, the diagnosis included ileus. A CT of the pelvis was unremarkable except as noted on the CT scan. There was some free fluid and free air within the pelvis. Since transfer to West Florida Hospital and the patient's attending physician could not be arranged, decision was made to admit to Dr. Barber on GYN service. * * * IMPRESSION: Severe abdominal pain 6 days post exploratory surgery with bilateral salpingo-oophorectomy, partial omentectomy, appendectomy and adhesiolysis. No signs at this time of active infection or perforation. The most likely diagnosis is a severe postoperative ileus, however, the patient warrants close observation. An ileus occurs when the bowel is "asleep" and not moving. Dr. Barber transferred R.R. to the Intensive Care Unit overnight for close observation. R.R.'s temperature at the time of admission was 96.8. The History of Present Illness taken from R.R. does not mention the rise in temperature following discharge from West Florida Hospital, or the phone call to Dr. Lee's office. On December 20, 2005, Dr. Althar saw R.R. in consultation. At that time, her white count was 8.4 with 48 bands, indicating overwhelming sepsis. Dr. Althar took her immediately to surgery. Surgery revealed a bowel perforation of the sigmoid colon, and Dr. Althar performed a sigmoid colectomy, end colostomy, and Hartmann procedure. R.R. suffered some complications after surgery, which were not unexpected, and remained in the hospital until her discharge January 16, 2006. The Department presented the expert testimony of Robert W. Holloway, M.D. Dr. Holloway graduated from Vanderbilt University Medical School; completed his residency in Obstetrics and Gynecology at the University of Alabama at Birmingham; and completed a fellowship in gynecology oncology at Georgetown University Hospital. Dr. Holloway has been licensed as a medical doctor in Florida since 1990, and is board certified in obstetrics and gynecology, and gynecologic oncology. He is currently the co-Medical Director of the Gynecologic Oncology program at the Florida Hospital Cancer Institute in Orlando, Florida, and a clinical instructor for the Obstetrics and Gynecology Residency Program at Orlando Regional Medical Center. Dr. Holloway is in an office on the Florida Hospital campus, where there are four attending physicians and three follows in training. Fifty to 60 percent of his patients are oncology patients, with the remainder having benign issues. Dr. Holloway opined that in this case, the bowel perforated most likely late Sunday evening or early Monday morning, probably 6-12 hours before R.R. woke up in extreme pain. He found no violation of the standard-of-care regarding the denuding of the serosa in the original surgery, viewing it as an anticipated outcome with a difficult case of endometriosis. However, he opined that Dr. Lee fell below the appropriate standard-of-care when he failed to evaluate the patient on Friday afternoon when she had a temperature of 102 degrees. Dr. Holloway indicated that the most common indications of bowel perforation in post-operative patients are abdominal pain and fever. He knew of no cases where a perforation occurred with the patient presenting with fever alone. He also agreed that it is common for physicians to rely on their staff to triage patients, and to relay information back to patients. It is common, according to Dr. Holloway, for doctors to train staff to tell the patient to call back or go to the emergency room if a problem does not resolve itself, and staff normally does the majority of charting. With respect to the directions to the patient to call back or go to the emergency room, Dr. Holloway could not say that those directions are always noted in the chart for patients in his office, although they frequently are. Most importantly, Dr. Holloway could not conclude that Ms. Harper did not give the instructions to R.R. because it was not specifically noted in the chart, and he would be apt to give the staff the benefit of the doubt. He could not conclude from the absence of the note that proper instructions were not given. Dr. Holloway also indicated that he did not believe the bowel had perforated as of Friday afternoon when the call was made to Dr. Lee's office. Respondent presented the testimony of John Douglas Davis, M.D., who serves as the Director of Gynecology and Associate Residency Director of the Department of Obstetrics and Gynecology at the University of Florida College of Medicine. Dr. Davis graduated from medical school at Wake Forest University and received his post-doctoral training at the University of Florida. Dr. Davis is licensed as a medical doctor in the State of Florida, and has been board certified in obstetrics and gynecology since 1992. Ninety-five percent of his patients are gynecological patients. Dr. Davis did not believe that Respondent violated the appropriate standard-of-care in his treatment of R.R. He opined that it is reasonable to rely on staff to perform triage functions with respect to calls from patients, and would interpret the note from Ms. Harper as not being indicative of bowel perforation. He testified that it was more likely to assume that the fever was caused by a pulmonary source, and the prescription for Levaquin was consistent with that assumption. In addition, the CT scan upon admission to SRMC was consistent with findings of pneumonia, and in Dr. Davis' view, the eventual determination that the bowel perforated does not mean that pneumonia was not also present. Like Dr. Holloway, Dr. Davis testified that bowel perforation does not present without severe abdominal pain, which was not reported to Dr. Lee. Dr. Davis opined that R.R.'s fever of 102 degrees must be interpreted in light of the patient's situation at discharge from the hospital, which Dr. Lee already knew. Most importantly, Dr. Davis testified that not seeing R.R. on Friday afternoon did not have an impact on her subsequent clinical course. His testimony is credited. In summary, it is found that Ms. Harper did instruct the patient to go to the emergency room at West Florida Hospital should her symptoms not improve after a couple of hours with the new medication. Dr. Lee's reliance on her to give that instruction is within the standard-of-care for a reasonably prudent similar physician under similar conditions and circumstances.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED that the Florida Board of Medicine enter a Final Order dismissing the Administrative Complaint in its entirety. DONE AND ENTERED this 23rd day of September, 2011, 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 23rd day of September, 2011. COPIES FURNISHED: Elana J. Jones, Esquire Ian Brown, Esquire Department of Health 4052 Bald Cypress Way, Bin C-65 Tallahassee, Florida 32399-3265 Brian A. Newman, Esquire Pennington, Moore, Wilkinson, Bell and Dunbar, P.A. 215 South Monroe Street, Second Floor Post Office Box 10095 Tallahassee, Florida 32302 Nicholas W. Romanello, General Counsel Department of Health 4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32299-170 Joy A. Tootle, Executive Director Board of Medicine Department of Health 4052 Bald Cypress Way Tallahassee, Florida 32399
Conclusions THIS CAUSE comes before the State of Florida, Agency for Health Care Administration (‘the Agency") concerning the preliminary approval of Certificate of Need (“CON”) Application No. 10220, submitted by Palm Coast Behavioral Health, LLC’s (“Palm Coast”) to establish a 63- bed adult inpatient psychiatric hospital in Service District 4, Flagler County. 1. On June 9, 2014, the Agency published its preliminary approval of Application No. 10220 submitted by Palm Coast Behavioral Health, LLC’s (“Palm Coast”) to establish a 63- bed adult inpatient psychiatric hospital in Service District 4, Flagler County. 2. In response, Halifax Hospital Medical Center (“Halifax”) filed a petition for formal hearing contesting the approval of CON Application 10220. The case was forwarded to the Division of Administrative Hearings. 3. Halifax subsequently voluntarily dismissed its petition for formal hearing. It is therefore ORDERED: 1. The preliminary approval of CON Application No. 10220 is upheld subject to the conditions in the State Agency Action Report for Application No. 10220. Filed October 2, 2014 11:06 AM Division of Administrative Hearings ORDERED in Tallahassee, Florida, on this 27 _ day ot Seem foec ans Elizabeth Dutek, Secretary Agency for Health Care Administration NOTICE OF RIGHT TO JUDICIAL REVIEW. A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and correct copy of this Final Order was served on the below- on named persons by the method designated on this ate PRAL 2014. CSCO Richard J. Shoop, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, Mail Stop #3 Tallahassee, Florida 32308 (850) 412-3630 Jan Mills Lorraine M. Novak, Esquire Facilities Intake Unit Agency for Health Care Administration Office of the General Counsel Agency for Health Care Administration (Electronic Mail) (Electronic Mail) James McLemore, Supervisor Marisol Fitch Certificate of Need Unit Health Services & Facilities Consultant Agency for Health Care Administration Certificate of Need Unit (Electronic Mail) Agency for Health Care Administration (Electronic Mail) 2 Karen A. Putnal, Esquire Susan C. Smith, Esquire Robert A. Weiss, Esquire Corinne T. Porcher, Esquire Moyle Law Firm, P.A. Geoffrey D. Smith, Esquire Kputnal@moylelaw.com Smith and Associates Rweiss@moylelaw.com Susan@smithlawtlh.com (Electronic Mail) Corinne@smithlawtlh.com Geoffi@smithlawtlh.com (Electronic Mail) R. Bruce McKibben Administrative Law Judge Division of Administrative Hearings (Electronic Mail)
Findings Of Fact Upon consideration of the oral and documentary evidence presented the following facts are found: Petitioners each made application for a certificate of need under the provisions of Sections 381.493 through 381.497, Florida Statutes, 1975, which applications were submitted to the Bureau of Community Medical Facilities and accepted as complete by the bureau. Each application seeks a certificate of need for a third generation computerized axial tomography scanner (whole body unit) hereinafter referred to as a CAT scanner. There is presently in Jacksonville a head scanner installed at St. Vincent Hospital in November, 1975, and a whole body scanner at St. Luke's Hospital which has been in full operation since January, 1976. All three Petitioners are located in Jacksonville, Florida. The applications were processed by the appropriate Health Systems Agency. After due consideration the Health Systems Agency recommended that each of the three applications be granted. At the request of the Bureau of Community Medical Facilities, Department of Health and Rehabilitative Services, the State Hospital Advisory Council reviewed the applications and upheld the Health Systems Agency's determination that the three applications should be granted certificates of need. After consideration of the applications, the Health Systems Agency's recommendation the State Hospital Advisory Council's recommendation, Mr. Art Forehand, Administrator, Office of Community Medical Facilities, Respondent herein, notified each of the three Petitioners that their applications were not favorably considered. Mr. Forehand's notification set forth three reasons for the unfavorable consideration. Those were (1) lack of demonstrated need for the requested scanner, (2) failure of each application to demonstrate positive action toward containment of cost for services rendered to the public, and (3) lack of demonstrated unavailability, unaccessability, and inadequacy of like services within the Jacksonville area. At the time of his decision Mr. Forehand had no material or information available to him which was not available to the Health Systems Agency or the State Hospital Advisory Council at the time of their decision. At the time the three applications were denied Mr. Forehand felt that there did exist a need for one additional scanner in the Jacksonville area but he did not feel that he should bear the burden of deciding which one of the three applications should be granted and therefore all three were denied. Except for those matters set forth in Mr. Forehand's denial and noted above, none of the parties to this proceeding disputed that the criteria for determining need found in Section 101-1.03(c), F.A.C., were met. A study of computerized axial tomography with suggested criteria for review of certificate of need applications was conducted by the staff of the Health Systems Agency of Northeast Florida relative to the Duval County area. This study was published in April of 1976 and its findings appear to have been accepted by the Health Systems Agency. As one of its suggested criteria for determining need it found that a hospital or applicant should have a potential case load of at least 1,000 CAT scans per year. The study went on to project a potential case load for the three Petitioners herein. That projection for Baptist Memorial Hospital shows a a potential case load of 2,512 scans per year. The study noted that Baptist Memorial projected 1,300 scans for the first year during start up operations and 2,080 scans during the second and third years of their forecast. The study found that Riverside Hospital has a potential case load of 1,196 scans per year compared to their own projections of 1,432 scans per year. The study finally found that the University Hospital has a potential case load of 1,558 scans per year compared to their projection of 2,904. Testimony on behalf of the Respondent shows that in the opinion of Respondent full use of a CAT scanner is 10 scans per day on a 20-day work month working five days a week. As shown by unrebutted testimony the existing scanner at St. Luke's Hospital in Jacksonville is presently averaging 10 scans per day, five-days a week. Further, according to the evidence presented by Respondent, the existing scanner at St. Vincent is being utilized to at least 85 percent of its capacity. Respondent took the position at the hearing that when existing scanners are being used to 85 percent or more of their capacity a need exists for more equipment. Thus, it appears that using the criteria of utilization adhered to by Respondent, the existing CAT scanners in Jacksonville are being utilized to the extent that there is a need for additional scanners. University Hospital has 310 licensed beds and is the community hospital in Duval County with the responsibility of serving the indigent on an emergency and short term basis. It is the trauma center of the city and has the most active emergency room. It is also the major teaching hospital in Duval County. Respondent agrees that it has the greatest need of any hospital in Duval County for a CAT scanner. The University Hospital has approximately 300 visits per month to its emergency room. In the four months prior to the date of final hearing the hospital did 586 skull x-rays due to trauma. In the case of acute trauma patients frequently may not be moved from one hospital to another for the purpose of a CAT scan nor, in some cases, should other dangerous invasive techniques be used for diagnosis. Baptist Hospital has 567 licensed beds and is a major oncology center or cancer center and does a large amount of surgical cancer work in additional to radiation therapy. With the possible exception of University Hospital, Baptist Hospital is the largest pediatric hospital in the area. According to the testimony of the administrator of the hospital it would take 14 to 18 months after receipt of a certificate of need to have a CAT scanner in service. Riverside Hospital has 183 licensed beds. The hospital has been a specialty hospital since its establishment in 1908 and serves the Riverside Clinic. The hospital has approximately 200 specialized physicians, all board certified, on-staff. Riverside is a unique hospital because of its degree of specialty and its relationship to Riverside Clinic. Riverside Hospital does 100 percent of the Riverside Clinic's radiology work. Riverside Hospital has been known as an established diagnostic center. Witnesses for Riverside Hospital testified that if they were not able to have a CAT scanner their reputation and ability to provide first class service would be seriously diminished. CAT scanners represent a significant development in diagnostic medicine. They reduce the need for many dangerous, painful and costly injections of dye, air and radioactive isotopes required by some of the more traditional diagnostic procedures. The three most common tests displaced by CAT scanners are pneumoencephalography, angiography and radioactive isotope scanning. The first two of the foregoing are particularly expensive procedures and require hospitalization. At present, patients at the three Petitioner hospitals have to be transported to another facility in order to use a scanner. The transfer of an inpatient to another hospital for a scan may effectively consume the better part of a patient's day and may require an extra day of hospitalization. The cost of transportation, increased hospital stay and ancillary matters increase the actual cost to the Patient. Patients suffering from severe trauma or otherwise in a critical state, may not be transported out of a hospital to a scanner. All three of the Petitioners have an active neurological and neurosurgical staff and qualified radiologists. The unrebutted testimony indicates that, although CAT scanners are a new development whose potential has not yet been fully explored and whose development may not yet be final, they nevertheless have become an essential diagnostic tool of regular use.
The Issue Whether Certificate of Need (CON) Application No. 10130, filed by Florida Regional Medical Center (FRMC) for an 80-bed acute-care hospital in Palm Beach County, Florida, Agency for Health Care Administration (AHCA) health planning district 9, sub-district 9-4, satisfies, on balance, the applicable statutory and rule criteria.
Findings Of Fact The Parties The Applicant and affiliates The applicant in this case, FRMC, is a Florida, for- profit, corporation formed for the purpose of filing CON Application No. 10130. FRMC is a wholly-owned subsidiary of Tenet Healthcare Corporation (Tenet). Tenet is one of the largest, for-profit, hospital organizations in the nation. It operates 49 hospitals throughout the country. Tenet owns and operates five hospitals in Palm Beach County: Palm Beach Gardens Medical Center (PBGMC), St. Mary’s Medical Center (St. Mary's), Good Samaritan Medical Center (Good Samaritan), West Boca Medical Center, and Delray Medical Center. PBGMC, St. Mary's, and Good Samaritan are all located in AHCA sub-district 9-4, in the northern half of Palm Beach County. The three hospitals have a combined total of 854 licensed, acute-care beds making up approximately 60% of the licensed, acute-care beds in the sub-district. Jupiter Medical Center JMC is a stand alone, not-for-profit, 163-bed, acute- care hospital in sub-district 9-4 located on a 30-acre campus at 1210 Old Dixie Highway, Jupiter, Florida 33458. JMC also owns and operates a 120-bed, skilled-nursing facility on that campus. JMC is approximately three miles from FRMC's proposed location. West Palm and affiliates West Palm is a 245-bed, acute care, for-profit hospital located at 2201 45th Street, West Palm Beach, Florida 33407, approximately 12 miles from FRMC's proposed location. Its 245 beds include 157 acute-care beds and 88 specialty psychiatric beds. West Palm is affiliated with Hospital Corporation of America (HCA) which operates 163 hospitals in 20 states and Great Britain. HCA’s East Coast Division includes 14 hospitals in South Florida and the Treasure Coast, including two hospitals in addition to West Palm in Palm Beach County: Palms West Hospital (Palms West), located in Loxahatchee, AHCA sub-district 9-4; and JFK Medical Center (JFK), located in Atlantis, sub- district 9-5. Agency for Health Care Administration AHCA is the state health-planning agency responsible for administering the certificate of need (CON) program under the Health Facility and Services Development Act, sections 408.031-.0455, Florida Statutes, and related administrative rules found in chapters 59C-1 and 59C-2 of the Florida Administrative Code.5/ The Proposal Overview FRMC's CON Application No. 10130 (CON Application, Proposal, or proposed hospital) is for "the establishment of a new, general acute-care hospital of 80 licensed beds," to be composed of 64 general, medical-surgical beds and 16 intensive care unit (ICU) beds. The proposed hospital is to be located in Palm Beach Gardens, Palm Beach County, AHCA planning district 9, sub-district 9-4. The proposed service area is a ten zip code area with nine of the zip codes in northern Palm Beach County and one in southern Martin County. The Proposal states that "FRMC's CON application represents the first phase of a multi-year development project that is anticipated to result in an academic teaching and research hospital of 200 beds to serve the long-term needs of residents of District 9 and potentially other parts of the State." According to the Proposal, "[t]he first phase of the Hospital's development will be geared toward providing routine medical/surgical services to residents of the immediate area as well as a platform for its future role as an academic medical center and teaching hospital." The Proposal also states that "[n]on-Tertiary types of cases for adults [15 years old and older] are the focus of the proposed [FRMC] during its initial operation and the basis upon which this CON application is being submitted." FRMC defines the "non-tertiary" acute-care services planned to be offered by excluding psychiatric, substance abuse, inpatient rehabilitation, open-heart surgery, major cardiovascular surgery procedures, therapeutic cardiac catheterization, neonatal intensive care, burn care, transplants, neurosurgical and selected spinal surgery procedures, and major significant trauma services. There is a list of diagnostic-related groups (DRGs) attached to the CON Application which further describes additional tertiary services, as well as non-tertiary obstetrical services, that are specifically excluded from the Proposal. In addition, the Proposal explains that no pediatric services will be offered because of the proximity of St. Marys, which offers pediatrics. There is no indication in the CON Application whether the excluded services will ever be offered. The Proposal discusses a "20 Year Build-Out Plan," and maintains that it is appropriate to consider the vision of FRMC becoming a 200-bed, teaching hospital in cooperation with The Scripps Research Institute (Scripps) and Florida Atlantic University (FAU). The CON Application states, however, that "[e]stimation of the parameters of bed need 20 years into the future is speculative and . . . not specifically subject to CON review at this time ” The Proposed Site The site for the proposed hospital is in zip code 33418, between I-95 and Military Trail, on the south side of Donald Ross Road. The proposed hospital would be located on a 70-acre parcel of land owned by Palm Beach County within an 863- acre tract of undeveloped land known as the Briger Tract, east of I-95 in Palm Beach County. The 70-acre parcel is located just south of Donald Ross Road in Palm Beach Gardens, directly across the road from Scripps, FAU Wilkes Honors College MacArthur campus, and the Max Planck Florida Institute. The proposed hospital would occupy approximately 30 acres of the 70- acre parcel. Zoning for the site of the proposed hospital is not an issue in this proceeding. Palm Beach County leases the 70-acre parcel to Scripps for an annual lease payment of $1. The ground lease expires in 2021, but Scripps has an option to purchase the 70-acre parcel for $1 prior to the end of the lease if it meets certain covenants relating to job growth based on operations. If FRMC is constructed on the site, jobs associated with that project will count toward Scripps' job creation goal. On July 25, 2011, Scripps and Tenet entered into a letter of intent (Letter of Intent) regarding the proposed hospital which anticipates that Tenet will sublease the proposed hospital site from Scripps. Under the Letter of Intent, it is contemplated that Tenet will pay Scripps approximately $5,000,000 annually as a combined payment for the sublease, participatory interest distributions, and mission support payments. The commercial value of the sublease is between $560,000 to $680,000 annually. Stated Goals for the Project First, the CON Application states that FRMC is needed to decompress PBGMC and resolve access issues that patients and physicians currently experience there. FRMC proposes that all of its inpatients will be patients “redirected” from PBGMC, and states that, therefore, “[t]he impact of the new hospital will be limited solely to Palm Beach Gardens Medical Center.” According to FRMC, the "decompression" will allow PBGMC to “modernize for the future by re-configuring the space vacated by the non-tertiary patients who will use the new Florida Regional Medical Center.” Second, the CON Application states that the proposed hospital is designed to provide a unique blend of treatment, teaching, and research with the collaboration of Scripps, FAU, and FRMC. According to FRMC, the project will not only meet the needs of Scripps and FAU, but will also advance and improve health care in northern Palm Beach County. AHCA’s Preliminary Review and Approval Tenet met with AHCA officials twice before the CON Application was filed. The first meeting included representatives from Tenet and Scripps and the chief of AHCA's CON unit, Jeff Gregg. During the first meeting, Scripps indicated that the proposed hospital would not be just “another community hospital in Palm Beach County,” but rather a facility to further Scripps’ “translational research”6/ that would complement Scripps’ existing resources. The CON Application, however, does not specify whether or how FRMC would further Scripps’ translational research. At the second meeting, representatives from Tenet and Scripps and the president of FAU met with Mr. Gregg and AHCA Secretary Elizabeth Dudek. The President of FAU suggested that the proposed hospital would become a "facility of regional impact" that would "offer services that [are comparable to or] even differ from those that are available at academic medical centers in Miami-Dade County." Neither the CON Application nor the evidence, however, supports a finding that FRMC would offer services comparable to those that are available at academic medical centers in Miami-Dade County. After the CON Application was filed, AHCA undertook its review and made its preliminary determination, which are detailed in the State Agency Action Report (SAAR). The SAAR was primarily authored by AHCA CON unit manager, James McLemore, and edited by Mr. Gregg. Although draft SAARs often contain a recommendation whether to approve or deny an application, the draft SAAR for the Proposal did not contain such recommendation. Mr. Gregg felt that whether the CON should be granted was a close call. He discussed the Proposal and draft SAAR with Secretary Dudek and then, at Secretary Dudek's suggestion, Mr. Gregg drafted the following language which was incorporated into the final version of the SAAR: . . . . However, the most important factor in project approval is FRMC’s commitment to develop a world-class research and teaching hospital that has the potential to become a regional rather than a local community resource. The coalition of organizations associated with the proposed facility must work together on an ongoing basis to ensure that the population gains access to services that it would otherwise not have. There is no need for an additional small community hospital that offers basic services. Contrary to the language in the SAAR, there is no “commitment to develop a world-class research and teaching hospital” in the CON Application, and the evidence does not support such a finding. Rather, the evidence only supports a finding that FRMC, Scripps, and FAU had a vision of collaboration in the future. The Letter of Intent between FRMC and Scripps regarding the proposed hospital, by its terms, is not binding, and the parties to the letter of intent "acknowledge that it would be imprudent and unreasonable to rely on the expectation of entering into a contract regarding the subject matter of this letter." At the final hearing, Mr. Greg reiterated AHCA's preliminary determination that there "is no need for an additional small community hospital that offers basic services." He confirmed that such determination was based upon AHCA's consideration of the applicable statutory and regulatory criteria in view of the proposal for an 80-bed, acute-care hospital serving the ten zip code service area. Statutory and Rule Review Criteria The statutory criteria for reviewing CON applications for new hospitals are found in section 408.035, Florida Statutes. Before 2004, section 408.035 review criteria included: The needs of research and educational facilities, including, but not limited to, facilities with institutional training programs and community training programs for health care practitioners and for doctors of osteopathic medicine and medicine at the student, internship, and residency training levels. § 408.035(5), Fla. Stat. (2003). In 2004, however, the quoted provision was deleted from the CON review criteria. See ch. 2004-383, § 5, Laws of Fla. The 2004 changes also removed the requirement that existing facilities undergo CON review for increasing the number of their acute-care beds, so that now, after notifying AHCA, existing acute-care hospitals can generally add acute-care beds without CON review. Id., § 6 (amending § 406.036). In 2008, the Florida Legislature further modified section 408.035 by limiting the criteria applied to CON applications for general hospitals to "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) [of section 408.035(1)]." See ch. 2008-29, § 1, Laws of Fla. As a result of the 2008 amendments, the statutory review criteria found in section 408.035(1), which are no longer applicable to CON applications for general hospitals, are: 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. (f) The immediate and long-term financial feasibility of the proposal. (h) 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 statutory CON review criteria in section 408.035 that remain applicable to general hospital applications since the 2008 amendments are subsections 408.035(1): 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. (e) The extent to which the proposed services will enhance access to health care for residents of the service district. (g) The extent to which the proposal will foster competition that promotes quality and cost-effectiveness. (i) The applicant’s past and proposed provision of health care services to Medicaid patients and the medically indigent. Each of the applicable review criterion under section 408.035(1)(a), (b), (e), (g), and (i), as related to the facts of this case is discussed under separate headings, below. Section 408.035(1)(a): The need for the health care facilities and health services being proposed. AND Section 408.035(1)(b): 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 analyses under subsections 408.035(1)(a) and (1)(b) are generally combined. For instance, in applying the statutory review criteria to the CON Application, the SAAR cites subsections 408.035(1)(a) and (1)(b) in framing the issue as: "Is need for the project evidenced by the availability, accessibility, and extent of utilization of existing healthcare facilities and health services in the applicant's service area?" Following the 2004 changes in the CON law, AHCA repealed its rule relating to the need for acute-care beds.7/ As a result, AHCA does not presently have a need methodology for acute-care hospitals or acute-care beds. Florida Administrative Code Rule 59C-1.008(2)(e)2. provides, in pertinent part: . . . . If an agency need methodology does not exist for the proposed project: The agency will provide to the applicant, if one exists, any policy upon which to determine need for the proposed beds or service. The applicant is not precluded from using other methodologies to compare and contrast with the agency policy. If no agency policy exists, the applicant will be 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 or 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. While there is no evidence that AHCA has a written policy apart from statutory and rule criteria, Mr. Gregg has summarized AHCA’s “policy” regarding criteria for approval of a new hospital as requiring: One, a primary service area with a large and rapidly growing population base. Two, an expanding market in the applicant’s service area, especially the primary service area, which minimizes the impact on existing providers. And three, the benefit of enhanced access outweighs the adverse impact on existing hospitals. AHCA’s unwritten policy as expressed by Mr. Gregg is consistent with existing statutory and rule criteria. The required topics listed in rule 59C- 1.008(2)(e)2.a.-d., quoted above, are compatible with a combined analysis of the review criteria under subsections 408.035(1)(a) and (1)(b), and a discussion of each in view of the facts is organized under subheadings 1 through 4, below. 1. Population demographics and dynamics FRMC’s proposed primary service area is made up of the five zip codes immediately surrounding the proposed hospital, and its proposed secondary service area is derived from five adjacent zip codes.8/ Population growth in the proposed service area and sub-district 9-4 is estimated to be at an annual rate of approximately 1.4% throughout the five-year planning horizon from 2011 through 2016. While some evidence was presented indicating that the population growth in the proposed primary service area is greater than 1.4%, the evidence was insufficient to establish that the proposed primary service area has a large and rapidly growing population base. 2. Availability, [and] utilization and quality9/ of like services in the district, subdistrict or both In July 2011, there were 1,423 licensed, acute-care beds among seven hospitals located in AHCA district 9, sub- district 9-4, plus approvals for 14 more acute-care beds based upon notifications from JMC and West Palm to add 12 beds and two beds, respectively. Those notifications were voided in favor of subsequent notifications from JMC and West Palm in October, 2011, to add 45 and 29 acute-care beds, respectively. JMC’s intended addition of 45 new-licensed, acute-care beds includes renovation of existing space and the addition of an 80,000- square foot wing scheduled to open in the fall of 2015.10/ During calendar year 2010, sub-district 9-4’s overall acute-care bed occupancy averaged 54.22%. That number declined to 53.8% in 2011, leaving an average daily census of 657 empty, acute-care beds within the sub-district. Projected need in the proposed service area is not sufficient to support a new 80-bed, acute-care hospital. Rather, with population growth projected to be less than 1.5% and flat or declining utilization rates, the projected need for acute-care beds for the proposed hospital's five-year planning horizon is only 21 to 27 beds. 3. Medical treatment trends There is a general trend in the hospital industry away from inpatient utilization in favor of outpatient services. The trend is attributable to advances in medical care and technologies, as well as the move toward managed care and changes in reimbursement under Medicaid, Medicare, and the Affordable Care Act that focus on cost savings and efficiencies. In fiscal year 2011, 37.04% of the weighted revenue average for all acute-care hospitals in Florida came from outpatient services. The trend away from inpatient utilization is expected to continue. 4. Market conditions Discharge data for basic, non-tertiary, acute-care services within FRMC's proposed service area for fiscal years 2009 through 2010, show that JMC has the largest percentage of the market, with a total market share of approximately 39.6%, including 41.7% of FRMC’s proposed primary service area (PSA) and 35.2% of FRMC's proposed secondary service area (SSA). PBGMC follows with approximately 29.7% of the market (36% of the PSA and 17.1% of SSA); then St. Mary's with 5.6% (5.3% PSA and 6.1% SSA); Good Samaritan with 4.3% (4.7% PSA and 3.4% SSA); West Palm with 2.4% (2.2% PSA and 2.6% SSA); JFK with 2% (1.7% PSA and 2.5% SSA); Palms West with 1.8% (0.6% PSA and 2.5% SSA); and the remaining 14.8% of the market divided among all other hospitals. Market share figures derived from updated data presented at the final hearing were not appreciably different. FRMC's proposed PSA completely overlaps JMC's PSA and all of the zip codes making up FRMC's proposed PSA are within JMC's existing PSA. Despite the overlap, FRMC contends that the proposed hospital will not affect JMC's market share, nor other hospitals within the subdistrict except PBGMC, because all of FRMC's inpatient admissions will come from a "redirection" of 70% of PBGMC's non-tertiary inpatients. It is unlikely that FRMC will be successful in filling its beds with patients "redirected" from PBGMC without otherwise affecting the market. The greatest factors driving inpatient admissions are patient preference and emergency admissions, not redirection from existing hospitals. There is a substantial overlap between medical staffs at PBGMC and JMC, and it is likely that many of those physicians would obtain staff privilages at FRMC. PBGMC does not control where physicians with privilages at PBGMC admit patients. For instance, PBGMC's largest admitter of patients, Dr. Baqir Murtaza Syed, while in favor of the proposed hospital, has no intention of redirecting patients from PBGMC to the proposed hospital except in cases where there is an access problem or where complex services not available at PBGMC are offered at FRMC. While sharing some administrative functions through common ownership by Tenet, FRMC is not a satellite to PBGMC. Rather, it is designed to be a stand-alone hospital offering basic, non-tertiary services duplicative and not more complex than those general acute-care services available at both PBGMC and JMC. Section 408.035(1)(e): The Extent to Which the Proposed Services Will Enhance Access11/ to Health Care for Residents of the Service District According to the CON Application, FRMC will enhance programmatic access for patients at PBGMC by decompressing PBGMC, enhance geographic and programmatic access to emergency care and basic hospital services, and enhance access to programs and resources of a teaching and research hospital affiliated with FAU and Scripps. Each of these assertions is addressed under separate headings below. 1. Programmatic Access by Decompressing PBGMC The CON Application states that approval will "[e]nhance programmatic access to inpatient and outpatient [sic] at [PBGMC] by decompressing its patient census and allowing it to re-configure the facility's existing space for modernization projects." It also states that decompression will "ease the capacity constraints and crowding that routinely occurs during the peak season months of January — April . . . ." According to FRMC, PBGMC is landlocked and cannot grow horizontally or expand vertically, has no outpatient surgery rooms, and needs to expand seven of its nine operating rooms. In addition, the CON Application complains that the current 1,291-square feet per bed at PBGMC12/ is less than half of the average 2,814-square feet per bed for new, general acute-care hospitals. As previously discussed, however, "decompression" by "redirection" is unlikely. In addition, while seasonal fluxuations may increase average occupancy levels at PBGMC during peak season, total inpatient days at PBGMC have been declining, and the evidence does not otherwise show that present utilization has interfered with recent renovations. First built in 1963, PBGMC has been renovated over time to meet its needs. In addition to its 199 licensed, acute- care beds, PBGMC has three observation beds and leases 11 of its acute-care beds to an unrelated hospice provider. Sixteen of PBGMC's 199 acute-care beds can be converted into semi-private rooms, which would give PBGMC a 218-bed capacity, not including the 11 hospice beds. In contrast to the CON Application's assertion that PBGMC cannot be expanded, in 2009, the City of Palm Beach Gardens approved a site plan ("Site Plan") authorizing PBGMC to expand its emergency department by 10,000-square feet; expand its surgical suite by 3,800-square feet; add 5,000-square feet of storage; add 300 additional acute-care beds; increase its parking; and construct a new 50,000-square-foot medical office building up to 46-feet in height. PBGMC completed the 10,000- square-foot emergency department expansion in 2010, but has not pursued the other authorized Site Plan expansions. PBGMC is currently undergoing renovations to accommodate a nuclear camera and combine two operating rooms. There is no evidence that those renovations, or the 10,000- square-foot emergency department expansion, were hindered by current utilization. In addition, PBGC has not utilized potential additional excess capacity by, for instance, converting the 16 beds that can be converted to semi-private rooms. PBGMC, like JMC, experiences higher occupancy levels during "peak season" each year from January through March. Evidence indicates that, during peak season, PBGMC's overall occupancy levels approach 80%, with even higher utilization in some specialty units such as surgical and cardio intensive care units.13/ As all beds at PBGMC are private, however, this seasonal influx does not present gender or clinical conflicts. The CON Application asserts an even higher utilization for PBGMC during peak season using a formula to derive what FRMC describes as PBGMC's "functional occupancy." FRMC's formula for "functional occupancy," however, is not reliable. It only considers PBGMC's licensed beds and observation beds, without considering emergency room bays or other available areas. In addition, the data utilized in the formula was defective because it does not reflect the number of outpatients and observation patients on any given day, but rather only reflects the day of the month on which hospital services were billed. While maintaining that renovations are cost prohibitive, PBGMC has yet to develop a formal plan of renovation that would "modernize" PBGMC in the manner suggested by the CON Application. In fact, Tenet has not engaged architects or planners to come up with conceptual documents for such a project, and such renovations have not been discussed between Tenet and PBGMC's board of directors. On the other hand, in addition to evidence of unused, excess-bed capacity and the previously approved Site Plan, evidence at the final hearing reasonably suggested that the Site Plan could be modified to permit additional expansion and improvements. PBGMC has been designated as a Planned Unit Development and, as such, has greater planning and renovation flexibility. The evidence showed that the City of Palm Beach Gardens has been supportive of renovations at PBGMC in the past and would likely continue that support in the future. Further, at the final hearing, FRMC's statement that vertical expansion of PBGMC would be cost prohibitive was shown to be premised on a misinterpretation of the Florida Building Code. The misinterpretation erroneously concluded that provisions of the Florida Building Code, Existing would require the entire hospital to be brought up to new code standards if certain vertical and lateral load thresholds were exceeded. Those provisions, however, do not apply to hospitals and other state-licensed facilities, as clarified by the scoping provisions found at section 419 of the Florida Building Code/Building. 2. Geographic and Programmatic Access to Emergency & Basic Hospital Services According to FRMC, the project will make emergency department services more convenient to residents of the area and enhance geographic access to basic hospital services within the immediate vicinity of the proposed hospital. The proposed hospital, however, is only six miles from PBGMC's recently expanded emergency department and less than four miles from JMC. The emergency department at JMC includes 26 treatment bays with an adjacent 10-bed, clinical-decision unit available to handle any temporary emergency department overflow. These factors, together with evidence of existing available acute-care beds and services available within the proposed service area, do not support a finding that the proposed hospital will appreciably enhance access to emergency department or basic hospital services. 3. Access to Programs and Resources of a Teaching and Research Hospital The CON Application states that "[t]he vision for FRMC is to expand the opportunities for clinical research, graduate medical education and medical surgical services while providing even better access to state-of-the-art medical care." It further states: The location of a medical center next to the Scripps Florida Research Institute and FAU's MacArthur campus will foster the positive relationship between science and medicine. Academic medical centers play a pivotal role in the effort to expand access to undergraduate and graduate medical education in the state that benefits students, faculty, and patients. Florida Regional Medical Center will be one of the clinical training sites for FAU's medical students and residents. Thus, programmatic access will be further enhanced by the opportunities to improve the health of the area's residents as well as to train the next generation of physicians and scientists. The CON Application further observes that "District 9 is one of the five districts in Florida without a statutory teaching hospital." Aside from the fact that the need for research and educational facilities has been removed from CON review criteria, and notwithstanding FRMC's acknowledgement that consideration of bed need beyond its immediate plans for an 80- bed, general acute-care hospital is "speculative," the evidence was insufficient to show that FRMC could reach its suggested goals with regard to research and education. Although the CON Application discusses Florida's nine statutory teaching hospitals, FRMC is not envisioned as a statutory teaching hospital. Rather, discussion of the statutory teaching hospitals was included in the application because data from those facilities were used as "parameters" in evaluating the need for FRMC's 20-year vision of a 200-bed facility. With regard to clinical research, the Proposal states that it will establish a clinical research program that will provide a crucial link to Scripps' research efforts. There is an apparent discrepancy, however, between FRMC's concept of the proposed program and Scripps' expectations. The Proposal only commits to the hiring of one full- time equivalent employee as a "research program coordinator." According to Tenet's chief executive officer over Florida Special Projects, the coordinator would be responsible for "setting up the programs" and assisting with the "enrollment of patients, collection of data, completion of reports and compliance with regulations pertaining to clinical research." In contrast, Scripps envisions the proposed research program coordinator as one who would serve a more general role geared toward learning about Scripps "and to know what the hospital is doing and to connect researchers for potential research topics." Scripps believes, and the evidence shows, that clinical studies are complex activities with multiple phases that require a number of staff to coordinate enrollment, interaction with institutional review boards, and protocol compliance.14/ Tenet hospitals in Palm Beach County, however, have no special expertise in enrolling patients and managing clinical research activities. FRMC did not otherwise provide evidence detailing the clinical research program or programs contemplated by the Proposal. In sum, evidence of FRMC's commitment to provide a crucial link to Scripps' research efforts is lacking. Evidence adduced at the final hearing casts doubt on FRMC's ability to become, in the foreseeable future, "one of the clinical training sites for FAU's medical students and residents." While FRMC and FAU have entered into a memorandum of understanding (MOU) which recites FAU's intention to sponsor graduate medical education (GME) and FRMC's intention to accept FAU medical students, FRMC's ability to do so is dependent upon it joining or affiliating with other entities under the FAU College of Medicine GME Consortium Agreement that exists to coordinate and promote the development and implementation of GME in South Florida (the GME Consortium Agreement). FAU is a party to the GME Consortium Agreement, along with Bethesda Memorial Hospital, Boca Raton Regional Hospital, and three Tenet hospitals, which include Delray Medical Center, West Boca Medical Center, and St. Mary's Medical Center. Paragraph B.2. of the MOU provides: GME: Pursuant to the agreement governing the GME Consortium, the admission of additional member institutions to the GME Consortium, as well as the addition of other hospitals and participating sites that may affiliate with the GME Consortium, is subject to the unanimous vote of all members of the GME Consortium, in each member's sole and absolute discretion. FRMC will submit a request to join the GME Consortium and obtain full consideration by the GME Consortium before offering any GME program(s) independently or in concert with any other entity. FRMC will also submit a request to the GME Consortium to be a rotational or participating site for FAU's Residents, as further described in subsequent master affiliation agreements or program letters of agreement as required by the ACGME [Accreditation Council for Graduate Medical Education]. At least one party to the GME Consortium Agreement, Boca Raton Regional Hospital, would not vote in favor of admitting FRMC as a member or participant under the GME Consortium Agreement.15/ The GME Consortium Agreement has a five-year term ending December 1, 2016, with automatic one-year renewals thereafter. The American Association of Medical Colleges (AAMC) is a national association representing medical schools and major teaching hospitals in the United States. Although not defined under Florida Law, the term "academic medical center" is understood by AAMC to refer to large hospitals, generally offering tertiary and more complex services, which are affiliated with and often on the same campus as a medical school. The size of the proposed hospital and complexity of the medical services proposed to be offered by FRMC are less than typical for an academic medical center as recognized by AAMC. FRMC does not even have a target date as to when it may offer services other than the general, non-tertiary hospital services that form the basis of the CON application. Section 408.035(1)(g): The Extent to Which the Proposal Will Foster Competition that Promotes Quality and Cost- Effectiveness Tenet is currently the dominant provider in the proposed service area, with five hospitals in Palm Beach County, including three hospitals located in AHCA sub-district 9-4 with 854 acute-care beds between them, including PBGMC, St. Mary’s, and Good Samaritan. Rather than increasing competition, the addition of FRMC would likely further Tenet’s dominance, thereby decreasing competition. As a large hospital system, Tenet has an advantage over non-affiliated hospitals, such as JMC, in negotiating favorable reimbursement rates with commercial insurers, including managed-care plans. The ability to negotiate favorable rates translates into a better “payor mix” with richer reimbursement from private insurance and less from fixed rate, non-negotiable, governmental programs such as Medicaid and Medicare. Rather than showing that approval of FRMC would promote cost effectiveness, the evidence indicates that another Tenet facility within sub-district 9-4 could further boost Tenet’s negotiating leverage, resulting in a higher payment structure16/ within the area for FRMC’s services reimbursed by private insurance. These factors, together with the fact that the CON Application was submitted for approval of a facility with a focus on non-tertiary acute-care services amply available in the area, do not support a finding that the proposed hospital will foster competition that promotes quality and cost-effectiveness. Moreover, as further discussed under the heading "Adverse Impact," below, approval of the proposed hospital would have a negative impact on both JMC and West Palm. Section 408.035(1)(i): The Applicant’s Past and Proposed Provision of Health Care Services to Medicaid Patients and the Medically Indigent As noted in the CON Application, “[FRMC] is newly incorporated and not an existing healthcare provider with a historical track record of utilization.” As a Proposed CON Condition, FRMC states that it “will provide a minimum of 4% of its total annual patient days to a combination of Medicaid, Medicaid HMO, and Charity patients.” In 2010, 6.3% of the total combined patient days in the proposed service area for non-tertiary, non-OB, adult services were Medicaid, Medicaid HMO, and charity patient days. As FRMC’s proposed 4% condition is less than the 6.3% actually served in the proposed service area in 2010, based on patient days, the evidence does not support a finding that the proposed hospital will enhance access for the medically indigent or underserved. Adverse Impact FRMC contends that there will be no adverse impact from the proposed hospital because its patients will come from a 70% “redirection” of PBGMC’s patients. As previously discussed, however, PBGMC does not have the ability to direct where patients are admitted for hospital care. As FRMC's success in redirection without affecting the market is unlikely, its assumption that neither JMC nor West Palm will lose patients to FRMC is unreasonable.17/ JMC JMC has a good reputation in its community and enjoys strong patient satisfaction and loyalty. As part of its mission to care for the health and welfare of its community, some of the needed services which JMC offers are not profitable for JMC, including obstetric services. No other hospital in north Palm Beach County provides obstetric services. JMC also provides benefits beyond the direct provision of hospital services. In 2011, JMC provided $3 million in charity care, $3.5 million in Medicaid underfunding, plus uncompensated services valued at $1.3 million through the operation of specialty healthcare clinics, including a diabetes clinic and oncology services clinics. JMC also expends approximately $300,000 each year for health education programs and community health screenings. In addition, JMC provides support to the Jupiter Volunteer Health Clinic, a free clinic established through collaboration with the Town of Jupiter, local physicians, Palm Beach County, and the community volunteer organization known as "El Sol." Despite the affluence in northern Palm Beach County, there is also a substantial population of poor without health insurance. The clinic is particularly important because there are no primary care doctors in northern Palm Beach County who accept Medicaid patients in their practice. Patients are often lined up outside the clinic before it opens. Clinic patients that require hospital admission are admitted to JMC. Even though JMC has a reputation for community service and patient loyalty, the establishment of FRMC would have a material effect on JMC’s operations. Proximity of a proposed facility to an existing hospital significantly affects the potential for adverse impact. JMC is the closest hospital to FRMC’s proposed site. The likelihood that JMC will lose patients to FRMC is increased by the fact that FRMC proposes to offer the same services, with the exception of obstetrics, as currently offered by JMC. In addition, there is currently substantial overlap between the medical staffs of JMC and PBGMC. FRMC anticipates that it will be staffed primarily by physicians who now practice both at JMC and PBGMC. The overlap of the medical staffs is yet another factor demonstrating the potential adverse impact on JMC, as many physicians who currently practice at PBGMC and JMC are likely to obtain medical staff privileges and admit a substantial number of their patients to FRMC, including patients they would otherwise admit to JMC. As an independent, not-for-profit, community provider, JMC's operating margins are very thin at 1.5% to 2% annually. JMC would lose a substantial number of inpatient admissions if the proposed hospital is approved. JMC reasonably anticipates the loss of 1,533 cases to FRMC in the first year of operation of the new hospital. There is insufficient population growth in FRMC's proposed service area to offset this adverse impact. Applying JMC's current contribution margin to JMC's projected lost patient volume results in a projected adverse impact to JMC of $11,254,000 in combined inpatient and outpatient lost contribution margin, including a projected loss of up to $5,000,000 of inpatient contribution margin, in the first year of operation of FRMC. While the ability to negotiate favorable payment rates is critical to the financial viability of all hospitals, it is particularly crucial for small, stand-alone, community hospitals like JMC. As the only hospital in its primary service area, JMC presently enjoys some leverage in negotiating terms with private insurers and managed care companies. The establishment of FRMC will eliminate JMC’s geographic advantage and erode JMC's ability to achieve favorable payment rates. The anticipated adverse financial impact on JMC will interfere with JMC's ability to invest in technology and human resources, and will threaten the viability of the Jupiter Volunteer Health Clinic. The evidence is insufficient to show that approval of FRMC will bring countervailing benefits to the community that would offset the adverse impacts on JMC. WEST PALM Although West Palm stands to lose fewer cases than JMC if FRMC is approved, the adverse impact on West Palm is substantial, especially considering its current financial condition. West Palm incurred a bottom line net loss of $7,502,651 in 2011, with a negative operating margin of $14,002,922. If FRMC is approved, a reasonable estimate of lost cases shows that West Palm will lose 118 discharges to FRMC in 2014, 120 discharges in 2015, and 122 in 2016. The 122 lost cases in 2016 amount to 466 patient days. For 466 lost patient days, West Palm’s combined lost contribution margin is estimated at $886,377.18/
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Agency for Health Care Administration issue a Final Order denying CON Application No. 10130. DONE AND ENTERED this 30th day of April, 2013, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III 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, 2013.
