09-000695
Miami Jewish Home And Hospital For The Aged, Inc. vs.
Agency For Health Care Administration
Status: Closed
Recommended Order on Monday, May 11, 2009.
Recommended Order on Monday, May 11, 2009.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8MIAMI JEWISH HOME AND HOSPITAL )
14FOR THE AGED, INC., )
19)
20Petitioner, )
22)
23vs. ) Case No. 09-0695
28)
29AGENCY FOR HEALTH CARE ADMINISTRATION, )
35)
36)
37Respondent. )
39)
40RECOMMENDED ORDER
42This case was heard by David M. Maloney, Administrative Law
52Judge of the Division of Administrative Hearings, on March 24
62and 25, 2009, in Tallahassee, Florida.
68APPEARANCES
69For Petitioner: Shaddrick Haston, Esquire
74Agency for Health Care Administration
79Fort Knox Building, Mail Stop 3
852727 Mahan Drive, Suite 3431
90Tallahassee, Florida 32308
93For Respondent: Karl David Acuff, Esquire
99Watkins & Associates, P.A.
1033051 Highland Oaks Terrace, Suite D
109Post Office Box 15828
113Tallahassee, Florida 32317-5828
116STATEMENT OF THE ISSUE
120Florida Administrative Code Rule 59C-1.018(3)(c) requires
126that a request for an extension of a CON's validity period be
138made 15 days in advance of the period's expiration (the "15-Day
149Requirement.") The issue is whether the Agency for Health Care
160Administration should waive the 15-Day Requirement for Miami
168Jewish Home.
170PRELIMINARY STATEMENT
172On February 10, 2009, the Division of Administrative
180Hearings (DOAH) received a notice from the Agency for Health
190Care Administration ("AHCA" or the "Agency"). Attached was a
201request for a formal administrative hearing (the "Petition")
210from Miami Jewish Home and Hospital for the Aged, Inc. ("MJHHA"
222or "Miami Jewish Home".)
227The Petition challenged: (1) AHCA's Determination that CON
2359893 Terminated and (2) AHCA's Denial of its Emergency Petition
245for Variance or Waiver of Rule 59C-1.018(3), F.A.C. (the
"254Emergency Petition"). Miami Jewish Home requests entry of a
264final order "granting a variance or waiver of [the application]
274of Rule 59C-1.018(3)(c), F.A.C. to Petitioner." The Petition
282at 11.
284The final hearing was held on March 24 and 25, 2009. At
296the hearing, Miami Jewish Home presented three witnesses:
304Tanira Ferreira, M.D., accepted as an expert in Medicine with
314specialties in pulmonary medicine, critical care, internal
321medicine, sleep disorders, and pulmonary care program
328development including ventilator programs; Mark Knight, CFO of
336MJHHA and accepted as an expert in health care finance and
347health care system and facilities operations; and, Jay Cushman,
356accepted as an expert in health planning, Certificate of Need
366(CON) review and regulation, and Medicare reimbursement. Miami
374Jewish Home's Exhibits 1 through 33 were admitted into evidence.
384Miami Jewish Home also requested official recognition of a
393composite of documents marked for identification as OR-1 and two
403other documents marked for identification as OR-2 and OR-3. No
413objection was raised as to the first and second requests and
424official notice of them was taken. Objection to the third was
435raised by AHCA on the ground that the request was made late,
447that is, on the morning of the second day of hearing after MJHHA
460had rested its case the day before.
467The material requested for recognition by OR-3 is Section
4761.01, Florida Statutes, which bears the catchline:
"483Definitions." Of particular import to MJHHA's request is
491subsection (1) which reads:
495In construing these statutes and each and
502every word, phrase, or part hereof, where
509the context will permit:
513(1) The singular includes the plural and
520vice versa.
522§ 1.01 (1), Fla. Stat. The objection by AHCA was overruled and
534official recognition was taken of the material in OR-3.
543The Agency presented its case-in-chief through the
550testimony of Jeffrey H. Gregg, Chief of AHCA's Bureau of Health
561Facility Regulation, accepted as an expert in health care
570planning, certificate of need review and health care regulation.
579It offered five exhibits marked consecutively for identification
587as AHCA 1 through 5. The first of the five was admitted. The
600Agency withdrew its offer with regard to the other four with the
612understanding that they were duplicates of MJJHA Exhibits 12,
62113, 14, and 15, all admitted into evidence earlier in the case.
633The final hearing concluded on March 25, 2009. Proposed
642recommended orders were timely filed by both parties and have
652been considered.
654FINDINGS OF FACT
657CON 9893 and its Construction Timeline
6631. On June 29, 2007, AHCA awarded CON 9893 (the "CON") to
676MJHHA. The CON authorized MJHHA to establish a 30-bed long term
687acute care hospital (LTCH) in Dade County.
6942. The Agency determined that the LTCH authorized by the
704CON was needed and would be of benefit in the service district
716(AHCA Acute Care District 11) where it would be located. It
727also determined that the LTCH would enhance access to health
737care in conformance with the goals of the Health Facilities and
748Services Development Act.
7513. The determination followed a contested comparative
758review proceeding at DOAH in which it was found that Miami
769Jewish Home had "demonstrated need for its project through a
779thorough and conservative analysis." MJHHA Ex. 26, p. 49, para.
789106. All findings of fact and conclusions of law of the
800administrative law judge in the Recommended Order were accepted
809by the Agency in its Final Order that approved MJHHA's CON
820application. Un-rebutted evidence in this proceeding, moreover,
827establishes that the need for the LTCH continues to exist in
838AHCA Acute Care District 11.
8434. Miami Jewish Home proposed to locate the LTCH on its
854Douglas Gardens Campus, the site of a broad array of health and
866social services that span the continuum of health care. The
876continuum includes services related to community outreach,
883independent and assisted living facilities, nursing home
890diversion, chronic illness, outpatient programs, acute care
897hospital, rehabilitation and post-acute care, Alzheimer's
903disease, pain management, skilled nursing and hospice.
9105. The community surrounding the campus is an area known
920as "Little Haiti," one of the most densely populated areas of
931Dade County. The community is primarily low-income. It is a
941federally-designated "medically underserved area." Miami Jewish
947Home is a "safety net" provider of health care services, one of
959only 20 or so in the entire state. Its skilled nursing facility
971is the largest provider of Medicaid skilled nursing services in
981the state.
9836. Miami Jewish Home operates Florida's only Teaching
991Nursing Home program. Medical students, interns, and other
999health professionals rotate through the service program in the
1008nursing home and hospital on a regular basis. In its teaching
1019capacity, Miami Jewish Home serves as a student and resident
1029training site for the University of Miami and Nova Southeastern
1039University Medical Schools and the Barry University, Florida
1047International University and University of Miami nursing
1054schools.
10557. The LTCH was proposed as a hospital-in-a-hospital
1063(HIH), that is, it would be part of an existing hospital and
1075constructed within the hospital's existing structure rather than
1083as a free-standing facility. Its status as an HIH meant that
1094the construction required for it to achieve operable status
1103would be more in the nature of renovation as opposed to breaking
1115new ground as in the case of a free-standing LTCH facility.
1126The Construction Deadline
11298. Paragraph (a) of Subsection 408.040(2), Florida
1136Statutes, requires successful applicants for CONs to commence
1144construction within 18 months of the CON's issuance. If
1153construction is not timely commenced, the CON validity period
1162expires and the CON terminates. By operation of law, therefore,
1172December 28, 2008, was the deadline for the commencement of
1182construction (the "Commencement of Construction Deadline" or the
"1190Deadline"). See Finding of Fact 1.
1197The Approach of the Deadline
12029. In the wake of the issuance of the CON, Miami Jewish
1214Home worked to develop the project approved by the CON and to
1226implement it.
122810. Shortly after the award of the CON, Miami Jewish Home
1239contracted for the construction and development work with an
1248architectural firm, Louis Sousa & Associates ("Sousa"). The
1258firm was engaged "to do preliminary drawings to cost out [the]
1269project and get more detail on other issues that [might] be
1282encountered in the renovation of the area." Tr. 68. Garrett's
1292Construction was identified as the construction company that
1300would perform the construction on the basis of the Sousa
1310drawings.
131111. After the issuance of the CON, a new Chief Executive
1322Officer took the helm at MJHHA. Eventually, Sousa completed a
1332full scale set of drawings that included changes and expansions
1342in the program that had not been shown on the drawings that
1354accompanied the CON application. Among the expansions were the
1363addition of an elevator tower, a drive-through canopy and a
1373second operating room in which the new CEO took an interest
1384because of his development background.
138912. The completed drawings were submitted to the City of
1399Miami for approval and Sousa was engaged to be the architect
1410during construction.
141213. There were several surprises during the process of
1421developing the drawings. These were described at hearing by
1430Mr. Knight, MJHHA's Chief Financial Officer:
1436It was identified that the backup generator
1443located in the Chernin Building was not
1450sufficient and could not bear the load to
1458support a 30-bed acute care hospital [the
1465LTCH.]
1466* * *
1469In addition . . . , it was identified that
1478the current 02 or oxygen tank farm that we
1487have on the west side of the property was
1496problematic. It was freezing up.
1501. . . it was advised . . . by an external
1513vendor that it would not be able to
1521accommodate the additional 30 beds [beyond]
1527the 30 beds in operation.
1533***
1534It was a little over a million two [hundred
1543thousand dollars] for both of those projects
1550. . . , a significant increase over what we
1559had anticipated to be the total cost of the
1568project.
1569Tr. 69-70. Submitted in June of 2008 to the City of Miami,
1581permits for the generator and the 02 farm project were received
1592in December of 2008. The 02 farm project started in the third
1604week of March 2009 and was fully underway at the time of the
1617final hearing in this case. Demolition for the generator
1626project was scheduled to commence within two weeks of the
1636conclusion of the hearing, that is, in April of 2009.
164614. By December of 2008, however, none of the construction
1656plans had been submitted for review to AHCA. (In fact, none had
1668been submitted by the last day of final hearing in this case,
1680March 25, 2009.)
168315. AHCA's review "of plans . . . is an essential part of
1696implementing a project that requires construction." Tr. 263.
1704Following cross-examination on this point at hearing, Mr. Gregg
1713was asked by AHCA's counsel to review the definition of
"1723commenced construction" in the Health Facility and Services
1731Development Act:
"1733Commenced construction" means initiation of
1738and continuous activities beyond site
1743preparation associated with erecting or
1748modifying a health care facility, including
1754procurement of a building permit applying
1760the use of agency-approved construction
1765documents , proof of an executed
1770owner/contractor agreement or an irrevocable
1775or binding forced account, and actual
1781undertaking of foundation forming with steel
1787installation and concrete placing.
1791§ 408.032(4), Fla. Stat. (emphasis added.) After his review of
1801the definition, Mr. Gregg explained that construction cannot be
1810commenced without AHCA plan review because "it's a[]. . .
1820technical . . . area that requires the expertise of the people
1832in [AHCA's] office of plans and construction to give a project
1843an okay from the health care perspective before it proceeds to
1854the point of construction." Tr. 319.
186016. Plans were not submitted and construction was not
1869commenced by the Deadline because of difficulty in financing the
1879construction. The more than one million dollars required to
1888update the generator system and the O2 Farm, unanticipated at
1898the time of the CON approval, contributed to the difficulty. In
1909the main, however, the delay was due to what the stipulation of
1921the parties describes as "unique in the history of Florida's CON
1932regulation," that is, the financial crisis of which the public
1942became generally aware in the early fall of 2008.
1951Distress in the Financial Markets
195617. In the early autumn of 2008, as the Commencement of
1967Construction Deadline neared, the financial markets in the
1975United States became unstable. World-wide financial markets
1982followed suit. The gravity of the financial situation has been
1992widely acknowledged to be the most serious since the Great
2002Depression that immediately preceded World War II. During the
2011years that Florida's CON regime has been in place, there has
2022been no time period during which economic distress has been as
2033severe as the period that commenced in September of 2008 and
2044continued at least into early 2009, after the expiration of the
2055Deadline.
205618. The problems in financial markets made further
2064development of the CON unreasonable. Miami Jewish Home had
2073proposed and was approved to pay for the costs of the
2084implementing the LTCH from its cash on hand and other assets.
2095At the time of the approval, the "cash-on-hand" approach was
2105reasonable. It continued to be achievable, despite cost
2113increases, until the late 2008 financial crisis' serious
2121negative impact on MJHHA's investments.
2126Loss in Investment Income
213019. Miami Jewish Home's un-audited balance sheet, admitted
2138into evidence as MJHHA's Ex. 1, shows a steep reduction in Net
2150Assets over the six months from June 30, 2008 to December 31,
21622008, the six months in which the financial crisis occurred.
2172The Balance Sheets June 30, 2008 column (audited) shows "Net
2182Assets" of $101,363,000. The 12/31/2008 column shows "Net
2192Assets" of $82,209,000 a reduction in net assets of between $19
2205million and $20 million.
220920. Over $12 million of the loss was due to losses
2220suffered by MJHHA's endowment and foundation account which
2228represents Miami Jewish Homes investments. This "investment
2235account" was $72 million on June 30, 2008 and had shrunk to $50
2248million by the end of 2008. At the time of hearing, the
2260investment account had lost another $40 million, making MJHHA's
2269decision not to proceed with the LTCH appear to be a prudent one
2282at the time of final hearing.
228821. The decision was prudent not merely because of a loss
2299of funds. The impact of the loss of investment funds was
2310compounded for Miami Jewish Home because of the use of income
2321from those funds to keep MJHHA's nursing home operation afloat.
2331Mr. Knight explained, "when the significant decrease in cash
2340occur[red], that also reduced the income potential on that cash
2350and ultimately the subsidy back to the nursing home." Tr. 74.
236122. Miami Jewish Home's nursing home operation's financial
2369stability was also threatened by Medicaid reimbursement "looking
2377to be getting worse." Tr. 75. With the Deadline approaching,
2387the situation was summed up by Mr. Knight:
2395[B]etween the incremental costs that were
2401identified [with regard to the generator and
2408the O2 farm] and the significant decrease in
2416our ability to fund from cash [the loss of
2425investment return produced by the investment
2431account] and ultimately the . . . loss on
2440the nursing home operations, in September
2446and October of '08 [MJHHA] began the process
2454of seeking another developer or another
2460potential acquirer of a certificate of need.
2467Tr. 77.
2469Looking for a Purchaser of the CON
247623. As Miami Jewish Home became aware of the deterioration
2486of its financial situation, it began to seek alternative means
2496to finance the development of the LTCH, including standard loans
2506and alternative financing. It approached its commercial banker
2514SunTrust. The deterioration of MJHHA's finances, however, was
2522occurring at the same time as "the credit crunch came into
2533place." Tr. 96. SunTrust was not interested in financing the
2543LTCH.
254424 . With the realization that it could not reasonably fund
2555the development of the LTCH and still believing it to be a
2567needed service, MJHHA began to seek out other operators and
2577developers.
257825. At first, MJHHA looked for a known LTCH company or a
2590compatible provider to develop the LTCH on the Miami Jewish Home
2601campus. Promise Health Care and Mt. Sinai were approached. For
2611various reasons, no firm commitments were forthcoming.
261826. As autumn wore on, Miami Jewish Home continued to make
2629progress toward the permits necessary to develop the LTCH, but
2639it became clear it was not in a financial position to go forward
2652with construction. It scheduled a call with AHCA for December
266218, 2009, to inform AHCA that it would be abandoning the
2673project.
267427. Nearly resigned to the loss of the project, MJHHA
2684management met with principals of the Sanderling group in mid-
2694December 2008. Sanderling showed a desire to work through the
2704details of the LTCH project with Miami Jewish Home.
271328. A general agreement was reached between Sanderling and
2722Miami Jewish Home by the time of the scheduled call with AHCA.
2734When the call took place on December 18, 2008, instead of
2745relinquishing the CON, MJHHA informed AHCA that there was a
2755provider compatible with Miami Jewish Home that intended to
2764purchase the CON and develop the LTCH. During the call, the
2775Agency responded verbally that MJHHA should do whatever it
2784needed to do to keep the project moving forward. Miami Jewish
2795Home took immediate action. It submitted a written request for
2805the extension of the validity period of the CON.
2814The December 18 Written Request for an Extension
282229. On the same day as the call, Miami Jewish Home
2833provided AHCA with written notice of intent to transfer the CON.
2844The letter informed AHCA of MJHHA's financial difficulty due to
"2854additional costs . . . required to develop the LTCH which were
2866material, . . . the large (20%)losses to the Homes endowment
2877. . . and] [g]iven these changed circumstances, . . . [that]
2889the Home . . . cannot justify the development costs to
2900implement [the CON] without impacting other services." MJHHA
2908Ex. 11. Dated December 18, 2009, the letter bears the heading,
" 2919Via Electronic Mail ". Id.
292430. The letter went one step further. It specifically
2933noted that paragraph (c) of Florida Administrative Code Rule
294259C-1.018(3) (the "Transfer Extension Paragraph"), provides that
2950a 60-day extension of the life of the CON would be granted upon
2963receipt of a notice and application for a transfer if the notice
2975and application were received 15 days prior to the deadline for
2986commencement of construction. After quoting the paragraph
2993verbatim, the letter asked for relief under the variance and
3003waiver provision of the Administrative Procedure Act,
"3010[p]ursuant to Section 120.542, F.S., we are requesting a waiver
3020of the 15 days prior notice provision." Id. at 2. Noting that
"3032there is no statutory requirement for the 15 days notice," the
3043letter asserted that the notice and proof of the closing of the
3055acquisition would be submitted "with the initial transfer
3063application as soon as possible and before the December 28, 2008
3074termination date." Id.
307731. The written request that comprised the letter (the
"3086December 18 Written Request") was furnished five days later
3096than required by the Transfer and Extension Paragraph. Had it
3106been submitted on December 13, 2008, instead of December 18,
31162008, it would have been timely.
312232. Before AHCA responded in writing to the December 18
3132Written Request, Miami Jewish Home took further action. It
3141submitted a more formal request for relief: an emergency
3150petition.
3151The Emergency Petition
315433. On December 24, 2008, six days after the submission of
3165the December 18 Written Request, Miami Jewish Home filed with
3175AHCA a document entitled, "Emergency Petition for Variance of
3184Waiver of Rule 59C-1.018(3)(c), F.A.C." (the "Emergency
3191Petition"). See MJHHA Ex. 12. Denominated an emergency "because
3201the CON is scheduled to terminate on December 28, 2008," id. at
32132, the Emergency Petition pointed out that "the 90 days
3223typically provided for review of petitions for variance or
3232waiver would not allow the resolution of this petition." Id.
324234. Substantially similar to the December 18 Written
3250Request, the petition expressed one new fact and pointed out an
3261additional significant feature for AHCA's consideration. The
3268new fact was that the initial application for transfer of the
3279CON to Sanderling had been submitted to AHCA on December 24,
32902009, along with the petition. The featured consideration was
3299asserted in the petition's final paragraph:
3305Granting the waiver will foster the goals of
3313the Health Facility and Services Development
3319Act as stated in the Recommended Order and
3327Final Orders in DOAH Case No. 06-557 (AHCA
3335No. 2006000716) approving CON 9893.
3340Id. at para. 12., p. 4 (emphasis added.) This assertion
3350amounted to the claim that the statute underlying the Transfer
3360Extension Paragraph and the entire Termination and Extension
3368Rule is not merely the law implemented by the rule but the
3380entire Health Facility and Services Development Act.
3387The Act
338935. The Act is a subset of one part of Chapter 408,
3401Florida Statutes. The chapter governs "Health Care
3408Administration" and is composed of Parts I - IV.
341736. Part I consists of Sections 408.031 through 408.7071.
3426Fifteen sections, Sections 408.031 through 408.045, comprise the
3434Act. "Sections 408.031-408.045 shall be known and may be cited
3444as the "Health Facility and Services Development Act."
3452§ 408.031, Fla. Stat.
345637. Of the Act's fifteen statutory sections, several stand
3465out as having been applied by the Agency and the DOAH in the
3478process that led to the approval of Miami Jewish Home's
3488application and the award of the CON. These include Section
3498408.037, which prescribes the content for a CON application,
3507Section 409.035, which delineates the criteria for review of a
3517CON application, and Section 408.039, which establishes the
3525process for review of a CON application.
353238. The Act recognizes the transfer of CONs from the
3542holder of a CON to another. See § 408.042, Fla. Stat., the
3554catchline of which is: "Limitation on Transfer." This
3562recognition is reflected in the section's opening sentence:
"3570The holder of a certificate of need shall not charge a price
3582for the transfer of the certificate of need to another person
3593that exceeds the total amount of the actual costs incurred by
3604the holder in obtaining the certificate of need." (emphasis
3613added.)
361439. One of the 15 provisions of the Act bears particular
3625relevance to this proceeding: Section 408.040, Florida
3632Statutes, the "Conditions and Monitoring" Section.
3638Section 408.040, Conditions and Monitoring
364340. Section 408.040 has two subsections: the first is
3652concerned primarily with "conditions," the second with
3659monitoring." The section, accordingly, bears the catchline,
"3666Conditions and monitoring."
366941. Subsection (2), the "monitoring" subsection, is
3676directly at issue in this case because it is cited in Rule 59C-
36891.018 as its "law implemented." It provides, in pertinent part:
3699(2)(a) Unless the applicant has commenced
3705construction . . . , a certificate of need
3713shall terminate 18 months after the date of
3721issuance. The agency shall monitor the
3727progress of the holder of a certificate of
3735need in meeting the timetable for project
3742development specified in the application,
3747and may revoke the certificate of need, if
3755the holder of the certificate is not meeting
3763such timetable and is not making a good
3771faith effort, as defined by rule, to meet
3779it.
3780* * *
3783(c) The certificate-of-need validity period
3788for a project shall be extended by the
3796agency, to the extent that the applicant
3803demonstrates to the satisfaction of the
3809agency that good-faith commencement of the
3815project is being delayed by litigation or by
3823governmental action or inaction with respect
3829to regulations or permitting precluding
3834commencement of the project.
3838§ 408.040(2), Fla. Stat. Because the subsection is concerned
3847with termination and extension of the deadlines for commencement
3856of construction of CON project, the subsection will be referred
3866to in this order as the "Termination and Extension Subsection."
387642. Paragraph (a) of the Termination and Extension
3884Subsection focuses on the 18-month CON validity period during
3893which the agency is to monitor the progress toward project
3903development. It provides for revocation of a CON if a good
3914faith effort is not being made toward meeting the 18-month
3924timetable. It further provides for termination of the CON at
3934the end of the 18-month CON validity period.
394243. Paragraph (c) of the Termination and Extension
3950Subsection focuses on when the time for termination may be
3960extended and the circumstances for such an extension: in cases
3970plagued by litigation or when governmental action or inaction
3979causes delay.
398144. One observation of the Termination and Extension
3989Subsection is of particular import to this proceeding. It is
3999silent with regard to extensions of a deadline for commencement
4009of construction when a CON is transferred.
401645. Although not mentioned as a basis for an extension in
4027the Termination and Extension Statute, transfer of a CON is a
4038basis for an extension under paragraph (c) of Section (3) of
4049Florida Administrative Code Rule 59C-1.018 (the "Termination
4056Rule").
4058The Termination Rule
406146. The Termination Rule is divided into three sections.
407047. The first, denominated "Validity Period of Certificate
4078of Need," restates the Termination and Extension Subsection's
4086prescription that a CON shall terminate 18 months after issuance
"4096unless the holder meets the applicable conditions for an
4105extension set forth in Section 408.040(2), F.S., and this rule."
4115Fla. Admin. Code R. 59C-1.018(1).
412048. The second section of the Termination Rule, called
"4129Undertaking a Project Authorized by a Certificate of Need,"
4138prescribes minimum requirements to prevent termination of a CON
4147and the expiration of its validity period. These requirements
4156govern both new construction or renovation projects and non-
4165construction projects that involve capital expenditures.
417149. The third section of the Termination Rule governs
4180extension of a CON's validity period. It is divided into three
4191paragraphs.
419250. Paragraph (a) deals with extensions when there is a
4202demonstration that "good faith commencement of the project is
4211being delayed by litigation or governmental action or inaction,"
4220Fla. Admin. Code R. 59C-1.018(3)(a), related to regulation which
4229precludes commencement. Delay caused by litigation or
4236government are the two bases for an extension provided by the
4247statutory Termination and Extension Subsection. Unlike the case
4255where extensions are sought because of a transfer, the filing of
4266a request under paragraph (a) does not extend the validity
4276period of a CON. A paragraph (a) extension request requires the
4287Agency to pay close attention to a number of details in its
4299review. The requester must make a showing of good faith. Other
4310details the Agency must examine are revealed by the following
4320provisions:
4321The request must provide the agency a
4328detailed explanation of the problem and a
4335plan of action to be undertaken by the
4343holder to resolve the problem within the
4350time frame requested.
43531. Land zoning issues will be considered
4360for extension of the certificate of need
4367validity period beyond the 18 months, if the
4375certificate of need holder can demonstrate
4381that action has been initiated to obtain
4388proper zoning for the proposed site for the
4396facility, and that such action was timely
4403with respect to the requirements for
4409obtaining proper zoning.
44122. Untimely filing of submission of plans
4419and requests for local and state permits,
4426based on the processing time required by the
4434state and local governments for such plans
4441and permits, will not be considered as
4448justification for an extension beyond the
445418-month period.
4456Fla. Admin. Code R. 59C-1.018(3)(a).
446151. Paragraph (b) contains yet another consideration for
4469the Agency in cases of extensions requests on the basis of
4480litigation. The extension "shall be granted for the actual time
4490of the validity period which is equivalent to the period of
4501litigation, including appeal." Fla. Admin. Code R. 59C-
45091.018(3)(b).
451052. Paragraph (c) (the "Transfer Extension Paragraph")
4518deals with extensions requests in the case of transfers, as in
4529this case:
4531Upon written request from the holder of a
4539certificate of need received at least 15
4546days prior to the termination date of the
4554certificate of need, and upon submission of
4561a transfer application by the proposed
4567transferee, the agency will extend the
4573validity period of the proposed transferred
4579certificate of need for a period of 60 days
4588to ensure that the certificate of need
4595remains valid throughout the agency's
4600timetable for review of the transfer
4606application. Only one such request for a 60
4614day extension will be granted under the
4621provisions of this subsection.
4625Fla. Admin. Code R. 59C-1.108(3)(c) (emphasis added.)
463253. The terms of the Transfer Extension Paragraph that
4641govern "transfer extensions" are significantly different from
4648the terms of paragraphs (a) for other extensions.
465654. For one, there is no showing of "good faith" required
4667on the part of the holder of the CON as there is with paragraph
4681(a). Instead, Paragraph (c) directs extension upon the
4689submission of two documents: a written request and a transfer
4699application ("the agency will extend the validity period . . .",
4711emphasis added). By comparison, paragraph (a) is written in
"4720discretionary" language: "[e]xtensions . . . may be requested
4729by a certificate of need holder . . .". (emphasis added.)
474155. Paragraph (a) extensions require much more review by
4750the Agency; the paragraph sets up points at which the Agency may
4762exercise discretion in turning down the request. In addition to
4772the "good faith" demonstration by the holder of the CON, there
4783must be a detailed explanation offered and a plan of action to
4795resolve the problem within the time frame requested. In
4804contrast, review triggered under the Transfer Extension
4811Paragraph by a written extension request is minimal. All the
4821Agency need determine is whether a transfer application has been
4831submitted by the transferee and that no other requests on the
4842basis of a transfer have been granted previously.
485056. Miami Jewish Home seeks a waiver from only one clause
4861in the Transfer and Extension Paragraph: that its written
4870request must have been received fifteen days prior to the
4880termination date of the CON (the "15-day Requirement"). It
4890makes the request for the waiver under Section 120.542, Florida
4900Statutes.
4901Section 120.542: the Variance and Waiver Statute
490857. Section 120.542, Florida Statutes (the "Variance and
4916Waiver Statute") was enacted in 1996 as part of a major revision
4929to Chapter 120, Florida Statutes. Described as perhaps "the
4938most significant aspect of the revised APA," Loosening the
4947Chains that Bind: the New Variance and Waiver Provision in
4957Florida's Administrative Procedure Act , Vol. 24, at 353, Florida
4966State University Law Review (1997), the section sets forth the
4976legislative intent in two straightforward sentences:
4982Strict application of uniformly applicable
4987rules requirements can lead to unreasonable,
4993unfair and unintended results in particular
4999instances. The Legislature finds that it is
5006appropriate in such cases to adopt a
5013procedure for agencies to provide relief to
5020persons subject to regulation.
5024§ 120.542, Fla. Stat.
502858. The operative part of the Variance and Waiver Statute
5038is found in subsection (2), the first sentence of which reads,
"5049Variances and waivers shall be granted when the person subject
5059to the rule demonstrates that the purpose of the underlying
5069statute will be or has been achieved by other means by the
5081person and when application of a rule would create a substantial
5092hardship or would violate principles of fairness."
509959. The Variance and Waiver Statute provides a process for
5109agencies in dealing with variance and waiver petitions. The
5118agency is to give notice to the Department of State within 15
5130days of receipt of the petition. The Department of State, in
5141turn, publishes notice of the petition in the first available
5151issue of the Florida Administrative Weekly. See § 120.542(6),
5160Fla. Stat. Within 30 days of receipt of the petition, the
5171agency is to review it and request additional information it is
5182permitted to require, see Section 120.542(7), Florida Statutes,
"5190except for requests for emergency variances or waivers". Id.
5200Agency Response to the December 18 Written Request
520860. The Agency did not rule on the December 18 Written
5219Request prior to the expiration of the CON's validity period on
5230December 28, 2008.
523361. The December 18 Written Request was hand-delivered to
5242Mr. Gregg's office six days before the filing of the Emergency
5253Petition (December 24, 2008). Mr. Gregg took the December 18
5263Written Request to the legal staff and said "please respond to
5274this." Tr. 265.
527762. Before any response to the December 18 Written Request
5287was issued in writing, the Emergency Petition was filed with
5297AHCA together with the transfer application.
5303Agency Response to the Emergency Petition
530963. The timing of the filing of the Emergency Petition,
5319Christmas Eve, was problematic for the Agency. Mr. Gregg
5328explained at hearing:
5331[B]eing the holiday season, various key
5337people were not there . . .
5344The chief facilities counsel had broken his
5351foot. The deputy secretary was out before
5358Christmas. I was out after Christmas. This
5365is a perfect example, apart from the fact
5373that we all are juggling many different
5380subjects, of why we would need [a] review
5388period [as called for by the 15-Day
5395Requirement] in order to develop an opinion
5402about any request for extension or a request
5410for a variance and transfer.
5415Tr. 273. Since Mr. Gregg was not available to review the
5426Emergency Petition the day of its submission, it was reviewed by
5437the Deputy Secretary and Acting General Counsel. They
5445formulated the Agency response: denial. Later, after Mr. Gregg
5454had returned to the office and read the Emergency Petition, "we
5465all agreed it was not something that we could grant." Tr. 266.
547764. In the wake of the receipt of the Emergency Petition
5488and the transfer application, the Agency followed prescribed
5496process. It issued a CON application omissions letter to
5505Sanderling. Notice of the receipt of the Emergency Petition was
5515published on January 16, 2009 in the Florida Administrative
5524Weekly . Notice was also published on the Agency internet site.
553565. In the meantime, AHCA notified counsel for MJHHA that
5545the CON had expired. The Agency letter, dated
5553January 15, 2009, states:
5557It has been determined that the holder of
5565CON Number 9814 for the above referenced
5572project [CON 9893] has violated the
5578provision of section 408.040(2)(a), Florida
5583Statutes . . . and Rule 59C-1.018(2) Florida
5591Administrative Code in that the project has
5598not commenced continuous construction, as
5603defined in section 408.032(4), F.S., by the
5610December 28, 2008 termination date.
5615Therefore the CON has expired.
5620* * *
5623The final determination on your request for
5630an emergency waiver could have an impact on
5638whether or not this CON remains valid.
5645Exhibit "E" attached to MJHHA Ex. 13.
565266. On January 22, 2009, written comments in opposition to
5662the Emergency Petition were received from Victoria Healthcare,
5670Inc., a wholly owned subsidiary of Select Medical Corporation
5679and from Kindred Hospitals East, L.L.C. No comments were
5688received in support of the petition.
569467. On January 23, 2009, the Agency issued a Final Order
5705denying the Emergency Petition.
5709The Agency's Final Order
571368. The findings of fact in the Final Order relate the
5724history of the CON and the filing of the Emergency Petition.
5735The order does not make reference to the December 18 Written
5746Request.
574769. The findings of fact also cite and quote text from
5758relevant statutory and rule provisions. The sixth and last
5767finding of fact in the final order is:
5775Since CON 9893 expired on December 28, 2008,
5783Rule 59C-1.018(3)(c) required . . . the
5790request and transfer application be received
5796by the Agency no later than December 13,
58042008. The petition and transfer application
5810were received on December 24, 2008, eleven
5817days late.
5819MJHHA Ex. 13, at 2-3.
582470. The Final Order does not identify the specific statute
5834underlying the Termination and Extension Rule. Nonetheless, it
5842concludes with regard to the first prong of the Waiver and
5853Variance Statute that the Emergency Petition comes up short:
5862Beyond the bare, unsupported, and conclusory
5868allegation in paragraph 9 of the Petition
5875that "requiring the CON to terminate would
5882be detrimental to the goals of the Health
5890Facility and Services Development Act and
5896the accessibility and quality of health care
5903services to the community," and a reference
5910in passing to the Recommended and Final
5917Orders in DOAH Case No. 06-0557 CON, the
5925Petition does not address or provide
5931specifics explaining how waiving the 15 day
5938prior notice rule requirement would achieve
5944the purpose of the statute.
5949Id.
595071. After its conclusion that MJHHA failed to meet the
5960first prong, the Final Order reflects the Agency's conclusion
5969that it was not necessary to address the second prong of the
5981Variance and Waiver Statute. The order, however, reflects the
5990Agency's decision to deal with the second prong "briefly."
5999MJHHA Ex. 13, at 5. The Final Order finds that MJHHA failed to
6012demonstrate that application of the rule would work create a
6022substantial hardship or that principles of fairness had been
6031violated. Accordingly, the Final Order denies the Emergency
6039Petition.
6040Section 120.57(1) Petition
604372. The Final Order's denial of MJHHA's request for a
6053variance was challenged by a petition filed on February 2, 2009
6064(the "Section 120.57(1) Petition"). In the Section 120.57(1)
6073Petition, MJHHA characterizes the December 18, 2009 Written
6081Request, as a "written request" within the meaning of the term
6092in the Termination Rule and characterizes the Emergency Petition
6101as a "second" written request.
610673. The Section 120.57(1) Petition, of course, raises the
6115issue of whether it demonstrated that both prongs of the
6125Variance and Waiver Statute had been met. It also raises a
6136number of issues surrounding the emergency nature of the
6145Emergency Petition, whether the CON terminated, and whether
6153there is a statutory basis for the 15-Day Requirement. See
6163Section 120.57(1) Petition, at 7-9.
6168Stipulated Facts
617074. Prior to hearing, the parties filed a joint pre-
6180hearing stipulation. The stipulation contains a section
6187entitled, "Facts Which Are Admitted and Require No Proof at
6197Hearing." The section contains the following:
6203AHCA is the state agency responsible for the
6211administration of the Certificate of Need
6217program in Florida.
6220AHCA did not provide MJHHA copies of the
6228relevant statutes and rules when it was
6235presented with a request for relief (the
6242December 18 letter) from the provisions of
6249the rule. (Item a of the petition)
6256The current financial crisis is unique in
6263the history of the Florida's CON regulation.
6270(Item g of the petition)
6275Joint Pre-hearing Stipulation, at. 4.
6280Final Hearing
628275. At final hearing, the Agency identified the statute it
6292believes underlies the Termination and Extension Rule: Section
6300408.040(2), Florida Statutes, referred to in this order as the
6310Termination and Extension Subsection.
631476. The Agency offered further evidence of the context in
6324which its decision was made. Mr. Gregg opined that Miami Jewish
6335Home was not positioned to request an extension. Construction
6344plans had not been submitted for AHCA review. The extension
6354request was first presented to AHCA ten days before the
6364Construction Deadline; normally, AHCA is informed months in
6372advance of the need for an extension. The Agency denied the
6383request in an "attempt to be consistent and treat each situation
6394in the same way." Tr. 274. Mr. Gregg further opined:
6404And in the case of CON, given that we know
6414that the financial situation is very
6420widespread, if we were to be too liberal in
6429our application of these laws and rules, I
6437can guarantee you that we would quickly have
6445other people asking us to do a similar
6453thing, based upon financial problems. And
6459we don't feel we have [that] flexibility . .
6468. .
6470In recognition of that, we have proposed . .
6479. a total extension of the CON validity
6487period that would extend it from 18 month to
6496three years. And that is included in a bill
6505that is generally referred to in this season
6513as the agency's regulatory reform bill.
6519[Without such legislation] we don't think we
6526have authority to [give MJHHA an extension.]
6533Tr. 275-6.
653577. Mr. Gregg also mentioned another instance in which a
6545CON holder "had communicated . . . that they have financial
6556problems . . . but they also happen to have local planning and
6569zoning issues and environmental issues as well." Tr. 274. That
6579instance was a case involving Hillsborough Extended Care, LLC.
6588The Hillsborough Case
659178. On August 30, 2005, CON 9814 was issued to
6601Hillsborough Extended Care, LLC, ("Hillsborough") to relocate
6610120 existing community nursing home beds from one facility in
6620Tampa to a new freestanding 120-bed facility. The deadline for
6630commencing construction of the project authorized by CON 9814
6639was February 28, 2007 .
664479. Prior to November of 2007, Hillsborough invoked the
6653Termination and Extension Rule on four separate occasions.
6661Extensions were granted each time on February 1, May 17,
6671June 15, and August 13, 2007.
667780. The letter granting the last extension informed
6685Hillsborough that the CON validity period expired
6692October 7, 2007 "and specifically stated that to request another
6702extension pursuant to Rule 59C-1.018, Florida Administrative
6709Code, that the extension request must have been received by the
6720Agency no later than October 7, 2007." MJHHA Ex. 21 at 2; see
6733also the fourth page of Exhibit "B" attached to MJHHA Ex. 21.
674581. On October 16, 2007, nine days late, Hillsborough
6754filed a fifth extension request. The Agency sent a letter to
6765Hillsborough on October 23, 2007. It denied the request and
6775informed Hillsborough as follows:
6779It has been determined that the holder of
6787CON Number 9814 . . . has violated the
6796provisions of section 408.040(2)(a), Florida
6801Statutes . . . and Rule 59C-1.018(2),
6808Florida Administrative Code in that the
6814project has not commenced continuous
6819construction, as defined in Section
6824408.032(4), F.S., by the October 22, 2007
6831termination date. Therefore, the CON has
6837expired.
6838Fifth page of Exhibit "B" attached to MJHHA Ex. 21.
684882. Hillsborough filed an emergency petition for a
6856variance from or a waiver of the Termination Rule. The
6866emergency petition invoked the Variance and Waiver Statute. The
6875emergency petition recognized the law implemented by the
6883Termination Rule to be the Termination and Extension Subsection,
6892Section 408.040(2), Florida Statutes. With regard to the
"6900underlying statute," Hillsborough took a position similar to
6908that of Miami Jewish Home in this proceeding, that is, that the
6920underlying statute is the Act. See MJHHA Ex. 20 at 2. The
6932emergency petition asserted that in support of the end promoted
6942by the Act, "the orderly development of health facilities and
6952services in the State," id. , the Agency had determined a need
6963for the nursing home beds authorized to be relocated by CON
69749814.
697583. The Agency issued a Final Order denying Hillsborough's
6984emergency petition on December 28, 2007 (the "Hillsborough Final
6993Order of December 28, 2007.") The Agency found that although a
7005need for the nursing home beds had been determined when CON 9814
7017was issued, "there is no longer a need for these beds in
7029Hillsborough County." MJHHA Ex. 21. The Agency at first, see
7039Finding of Fact 86, below, concluded that the statute underlying
7049the Termination Rule was the Termination and Extension
7057Subsection not the Act.
706184. The Agency in the order further concluded that while
"7071it appears there may have been ongoing litigation or other
7081matters pending relating to permitting which may have justified
7090a fifth extension of CON 9814," id. at 5, that the issue was
7103whether a variance from or waiver should be granted as to the
711515-Day Requirement. The Agency recognized that the 15-Day
7123Requirement is not statutory. See MJHHA Exhibit 21 at 6, para.
713418: "[i]t is true that there is nothing in the statute
7145explicitly requiring that CON validity extension requests by
7153received at least 15 days prior to the extension date . . .".
716785. The Agency further concluded that Hillsborough did not
7176demonstrate that the purpose of the underlying statute, the
7185Termination and Extension Subsection, would be met by a variance
7195from or waiver of the 15-Day Requirement. In fact, the Agency
7206wrote an untimely request "is contrary to the purpose of the
7217underlying statute, which requires the Agency to determine
7225whether an extension is justified before the CON has expired."
7235Id. at 7.
723886. The Agency expanded upon the meaning of the term,
"7248underlying statute" when it wrote the following in the
7257Hillsborough Extended Care final order:
7262Moreover, the entire CON statute, found at
7269Chapter 408, Part I, [the Act] is dedicated
7277to the principle that a CON is granted when
7286there is a demonstrated need.
7291* * *
7294Therefore, the purpose of the underlying CON
7301statute [emphasis added] has not been met in
7309this case: this district does not need these
7317beds [any longer.] The issue, always, in
7324the CON program is whether there is a need
7333for a facility or service, not whether it
7341would be desirable to have additional
7347options and choices beyond that need. In
7354this case, the need does not exist. The
7362Petitioners have not demonstrated that they
7368have met the purpose of the underlying
7375statute . [emphasis added.]
7379Id. at 7-8. Thus, the Agency concluded that the Act is the
7391statute underlying the Termination Rule as well as the law
7401implemented, a provision contained within the Act. The
7409Hillsborough Final Order or December 28, 2007, accordingly
7417denied Hillsborough's emergency petition.
742187. Hillsborough challenged the decision by filing two
7429petitions for formal administrative hearings. On February 19,
74372008, the Agency entered a second final order (the "Hillsborough
7447Final Order of February 19, 2008.") It reports, "[t]he Agency
7458and Hillsborough have reached a settlement by which the AHCA
7468notices are superseded and Hillsborough is given an extension to
7478begin continuous construction pursuant to the time line schedule
7487included in the Settlement Agreement." MJHHA Ex. 22 at 2. The
7498final order approves and adopts the Settlement Agreement as part
7508of the final order.
751288. The Settlement Agreement in its "whereas" clauses
7520describes action and inaction of the local government that
7529justified an extension. See MJHHA Ex. 22, Settlement Agreement
7538at 3-4.
754089. With regard to the 15-day Requirement that its earlier
7550letter had found Hillsborough to have violated, the Settlement
7559Agreement recites the following in a "whereas" clause: "the
7568parties agree that AHCA has evenly enforced its fifteen day
7578requirement for filing an extension request and did nothing
7587incorrect in denying the late filed extension request and
7596canceling the CON ...". Id. at 5. Neither the Hillsborough
7607Final Order of February 19, 2008 nor the Settlement Agreement
7617attached to it provides any explanation as to why the 15-Day
7628Notice Requirement was no longer to be enforced against
7637Hillsborough. The lack of explanation is particularly worthy of
7646observation in light of the agreement that AHCA did nothing
7656incorrect in enforcing it in the first place.
766490. The Settlement Agreement sets out a detailed schedule
7673for plan review, commencing construction and continuing
7680construction. Id.
768291. As for future extensions, the Settlement Agreement
7690contained a few additional provisions that relate to
7698circumstances that would support further extensions and timely
7706requests for extensions:
7709e. The schedule and continuous construction
7715commencement date of CON 9814 may only be
7723extended by agreement of the parties because
7730of governmental action or inaction or for
7737unforeseen natural disasters or Acts of God.
7744f. If such an extension or extensions
7751become necessary, the Petitioner agrees to
7757timely file the request(s) for extension in
7764full compliance with the requirements of
7770Rule 59C-1.018(3)(a), F.A.C., and upon
7775failure to fully comply with the
7781requirements of said rule, Petitioner agrees
7787that CON 9814 shall become null and void by
7796operation of law, without further action by
7803the agency, and without any further
7809administrative or legal remedies being
7814available to the Petitioner.
7818Id. at 7-8.
7821The Agency's Position at Final Hearing
782792. At final hearing, the Agency embellished upon the
7836circumstances that led to its decision to deny the Emergency
7846Petition, including its view of why the outcome in the
7856Hillsborough case is justifiably different from the Agency's
7864preliminary denial in the Final Order in this case. See Finding
7875of Fact 76.
787893. In essence, the Agency adhered to the position taken
7888in the Final Order in this case: that MJHHA's Emergency Petition
7899should be denied because it was filed eleven days late and Miami
7911Jewish Home had failed to demonstrate a basis for waiving the
792215-Day Requirement.
7924CONCLUSIONS OF LAW
792794. The Division of Administrative Hearings has
7934jurisdiction over the parties to and the subject matter of this
7945proceeding. §§ 120.569 and 120.57(1), Fla. Stat.
795295. As the party seeking a variance or waiver, Miami
7962Jewish Home has the burden of establishing entitlement to the
7972relief it seeks. It must prove its case by a preponderance of
7984the evidence. Dep't of Banking and Finance, Div. of Securities
7994and Investor Prot. v. Osborne Stern & Co. , 670 So. 2d 932 (Fla.
80071996); Florida Dep't of Transp. v. J.W.C. Co. , 396 So. 2d 778
8019(Fla. 1st DCA 1981); Balino v. Dep't of Health and
8029Rehabilitative Services , 348 So. 2d 349 (Fla. 1st DCA 1977).
8039The Hillsborough Case
804296. As AHCA recognizes, the extensions in the Hillsborough
8051Case were entered on the basis of litigation or government
8061action and inaction whereas the extension in this case is sought
8072on the basis of a transfer. The Hillsborough Case, therefore,
8082is not on all fours with this case. The difference in the bases
8095for the extensions serves the Agency attempt to distinguish the
8105two cases.
810797. The Settlement Agreement attached to the Hillsborough
8115Final Order of February 19, 2008, that granted the fifth
8125extension also demonstrates the import that the Agency places on
8135the 15-Day Requirement. This emphasis is appropriate in a case
8145in which an extension is sought on the basis of litigation or
8157government action or inaction. In such a case, the Agency is
8168called upon to determine a number of matters that require
8178careful review that is often time-consuming. The Agency must
8187determine that the holder of a CON seeking the extension has
8198acted in good faith after it received the CON in moving toward
8210the commencement of construction. The Agency must evaluate the
8219nature and effect of litigation or the nature and effect of what
8231government is or is not doing. These determinations are
8240required by statute when an extension is sought on the basis of
8252delay caused by litigation or government. In addition, the
8261Termination Rule requires that the Agency pay close attention to
8271a number of details dependent on what type of government action
8282or inaction serves as the basis for the request. See Finding of
8294Fact 48.
829698. The review period under such a request not only
8306requires close attention to a number of details but also
8316requires evaluation and analysis of facts related to
8324governmental concerns or litigation if there is to be a good
8335decision about whether to grant the extension or not.
834499. Unlike the extensions sought in the Hillsborough Case,
8353however, the extension in this case required no such detailed
8363analysis. All the Agency is required to do under the Transfer
8374Extension Paragraph of the Termination Rule when the 15-Day
8383Requirement is observed is to check for two matters that do not
8395require evaluation or analysis: (1) is the written request
8404supported by a transfer application by the proposed transferee
8413and, (2) has the Agency ever granted a extension before on the
8425basis of a transfer.
8429100. There is no contention in this case that any other
8440extension of the Construction Deadline for the CON had ever been
8451granted. The Agency's documents of record, moreover, show that
8460a transfer application by Sanderling had been submitted to the
8470Agency long before it entered the Final Order denying the
8480extension.
8481101. The minimal review required by the Transfer Extension
8490Paragraph of the Termination Rule defeats the Agency's
"8498Christmas Eve" argument. The argument is defeated, too, by the
8508fact that the December 18 Written Request was sufficient to
8518trigger the review required by the Transfer Extension Paragraph.
8527Including the day the request first appeared at the Agency, AHCA
8538had four working days before Christmas Eve to make the
8548relatively simple determinations of whether a transfer
8555application had been filed and whether an extension had been
8565granted previously. That the transfer application was not
8573received until December 24 is of little moment. The December 18
8584Written Request had promised the transfer application would be
8593filed before the Commencement of Construction Deadline. All
8601that needed to be done after review of the request under the
8613circumstances was to instruct appropriate staff to be alert for
8623the filing of the transfer application and to grant the request
8634once it was filed.
8638102. The Hillsborough Case has additional value in this
8647case: it is precedent in one significant way. It demonstrates
8657that AHCA, despite its claim to the contrary, does have
8667authority for waiving the 15-Day Notice Requirement. The
8675authority is that used in the Hillsborough Case: Section
8684120.542, Florida Statutes, the Variance and Waiver Statute.
8692Application of the Variance and Waiver Statute
8699103. As the Agency has recognized and as evident from the
8710statute's plain meaning, the test for granting a waiver of the
872115-Day Notice Requirement is two-pronged.
8726104. The Findings of Fact here easily satisfy the second
8736of the two prongs: a demonstration by Miami Jewish Home that
8747application of the Termination Rule would create a substantial
8756hardship or would violate principles of fairness.
8763105. Application of the 15-Day Notice Requirement in this
8772case would create substantial hardship. Substantial hardship
8779was created by the interaction of a number of factors beyond
8790Miami Jewish Home's control. These included an environment in
8799which MJHHA lost investment income necessary to fund the project
8809(at a time when the entire country suffered a massive reduction
8820in the value of equities), a moment when credit necessary to
8831substitute for the loss of cash had become generally
8840unavailable, and an inability despite diligence to find a
8849transferee for the CON until a point in time at which notice to
8862the Agency was untimely.
8866106. Whether Miami Jewish Home has demonstrated that the
8875purpose of the underlying statute will be or has been achieved
8886by other means is a more difficult question. The answer
8896requires identification of the statute that underlies the
8904Termination Rule.
8906The Underlying Statute.
8909107. The Agency's claim that the Termination Subsection
8917underlies the Termination Rule and the Transfer Extension
8925Paragraph is certainly correct. After all, "408.040(2) FS" is
8934shown as the law implemented by the Termination Rule in the
8945Florida Administrative Code. Certainly, the law implemented by
8953a rule should be a statute underlying the rule.
8962108. But the claim is beset by a curiosity. There is not
8974a single word in the Termination Subsection nor in all of
8985Section 408.040, Florida Statutes, about extensions in the case
8994of "transfers," the basis of the extension sought by Miami
9004Jewish Home.
9006109. Nor is the 15-Day Requirement, the clause in the
9016Transfer Extension Paragraph, mentioned in Section 408.040,
9023Florida Statutes. That the 15-Day Requirement is not
9031statutory is a fact the Agency wrestled with in the Hillsborough
9042Case. See Finding of Fact 84.
9048110. At the same time, the place in the statutes which
9059references CON transfers is Section 408.042, Florida Statutes,
9067which governs "limitations on transfers." Section 408.042 is
9075not listed by the Florida Administrative Code as a law
9085implemented under the Termination Rule.
9090111. Here the Hillsborough Case is again of assistance.
9099The Agency referred in the Hillsborough December 28, 2007, Final
9109Order to "the entire CON statute, found at Chapter 408, Part I,"
9121MJHHA Exhibit 21 at 7, paragraph 20, as the statute underlying
9132the 15-Day Requirement and the Termination Rule. See MJHHA
9141Exhibit 21 at 7-8 and Finding of Fact 86.
9150112. In the Hillsborough Final Order of February 19, 2008,
9160when AHCA granted the extension instead of denying it as in the
9172earlier final order, it did not retreat from its language with
9183regard to the meaning of "underlying statute." Without such a
9193retreat which would have necessitated a reasonable explanation
9201for the departure, the Agency is required to follow the
9211Hillsborough Case's December 27, 2007, Final Order's
9218construction of "underlying statute," that is, that "underlying
9226statue" means the Act, not just the law implemented by the
9237Termination and Extension Rule. See Nordheim v. Dep't of Envtl.
9247Prot. , 719 So. 2d 1212, 1214 (Fla. 3d DCA 1998); Gessler v.
9259Dep't of Bus. & Prof. Reg. , 627 So. 2d 501, 503-4 (Fla. 4th DCA
92731993).
9274113. Furthermore, unlike substantive CON statutes and its
9282own rules for which the Agency's interpretation is given
9291deference because of its expertise in substantive CON Law, the
9301term "underlying statute" occurs in this case in a procedural
9311context. The Agency enjoys no deference in construing terms in
9321the Waiver and Variance Statute, a provision of the
9330Administrative Procedure Act, Chapter 120, Florida Statutes.
9337See generally Barfield v. Dep't of Health , 805 So. 2d 1008 (Fla.
93491st DCA 2001) and Deep Lagoon Boat Club, Ltd., v. Sheridan , 784
9361So. 2d 1140, 1144 (Fla. 2d DCA 2001).
9369114. The view as to the meaning of the term "underlying
9380statute" as used in the Variance and Waiver Statute taken by the
9392Agency in the December 28, 2007 Final Order in the Hillsborough
9403Case, moreover, is a better one than the construction AHCA
9413advances in this case.
9417Need
9418115. Finally, it should be stressed that the un-rebutted
9427evidence in this case is that the need for the LTCH authorized
9439by the CON continued as of the time of final hearing. To
9451reiterate what the Agency stated with such clarity in its
9461December 27, 2007 Final Order in the Hillsborough Case, "[t]he
9471issue, always, in the CON program is whether there is a need for
9484a facility or service, not whether it would be desirable to have
9496additional options and choices beyond that need." MJHHA Ex. 21
9506at 7-8 (emphasis added.)
9510MJHHA Has Met its Burden
9515116. Miami Jewish Home has demonstrated that the purpose
9524of the underlying statute (the Act) will be achieved by waiving
9535the 15-Day Notice Requirement. It has also demonstrated that
9544application of the 15-Day Notice Requirement will create a
9553substantial hardship.
9555117. Having demonstrated that both prongs of the test
9564under the Variance and Waiver Statute have been met, the 15-Day
9575Requirement should be waived, the CON should be determined to
9585still have validity, and the CON validity period should be
9595extended for 60 days from the issuance of a final order by the
9608Agency after consideration of this Recommended Order.
9615RECOMMENDATION
9616Based on the foregoing Findings of Fact and Conclusions of
9626Law, it is recommended that the Agency waive the 15-Day
9636Requirement for Miami Jewish Home with regard to its written
9646request to extend the validity period of CON 9893, revoke the
9657termination of the CON, and grant an extension of 60 days of the
9670CON's validity period upon issuance of a final order.
9679DONE AND ENTERED this 11th day of May, 2009, in
9689Tallahassee, Leon County, Florida.
9693S
9694DAVID M. MALONEY
9697Administrative Law Judge
9700Division of Administrative Hearings
9704The DeSoto Building
97071230 Apalachee Parkway
9710Tallahassee, Florida 32399-3060
9713(850) 488-9675
9715Fax Filing (850) 921-6847
9719www.doah.state.fl.us
9720Filed with the Clerk of the
9726Division of Administrative Hearings
9730this 11th day of May, 2009.
9736COPIES FURNISHED :
9739Karl David Acuff, Esquire
9743Watkins & Associates, P. A.
97483051 Highland Oaks Terrace, Suite D
9754Post Office Box 15828
9758Tallahassee, Florida 32317-5828
9761Shaddrick Haston, Esquire
9764Agency for Health Care Administration
9769Fort Knox Building, Mail Stop 3
97752727 Mahan Drive, Suite 3431
9780Tallahassee, Florida 32308
9783Holly Benson, Secretary
9786Agency for Health Care Administration
9791Fort Knox Building, Mail Stop 3
97972727 Mahan Drive, Suite 3116
9802Tallahassee, Florida 32308
9805Justin Senior, General Counsel
9809Agency for Health Care Administration
9814Fort Knox Building, Mail Stop 3
98202727 Mahan Drive, Suite 3116
9825Tallahassee, Florida 32308
9828Richard J. Shoop, Agency Clerk
9833Agency for Health Care Administration
9838Fort Knox Building, Mail Stop 3
98442727 Mahan Drive, Suite 3431
9849Tallahassee, Florida 32308
9852NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
9858All parties have the right to submit written exceptions within
986815 days from the date of this Recommended Order. Any exceptions
9879to this Recommended Order should be filed with the agency that
9890will issue the Final Order in this case.
- Date
- Proceedings
- PDF:
- Date: 06/16/2009
- Proceedings: Transmittal letter from Claudia Llado forwarding three-volume Transcript along with official recognition exhibits numbered 2 and 3, which were inadvertently omitted from the closing package sent out on May 11, 2009, to the agency.
- PDF:
- Date: 05/11/2009
- Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
- PDF:
- Date: 05/11/2009
- Proceedings: Recommended Order (hearing held March 24 and 25, 2009). CASE CLOSED.
- Date: 04/13/2009
- Proceedings: Transcript (Volumes 1-3) filed.
- Date: 03/24/2009
- Proceedings: CASE STATUS: Hearing Held.
- PDF:
- Date: 03/20/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s Response in Opposition to the Agency for Health Care Administration`s Motion in Limine filed.
- PDF:
- Date: 03/18/2009
- Proceedings: MJHHA`s Response in Opposition to AHCA`s Motion for Continuance filed.
- PDF:
- Date: 03/17/2009
- Proceedings: Notice of Hearing Thursday March 19, 2009 at 2:00 p.m. on AHCA`s Motion for Continuance filed.
- PDF:
- Date: 03/10/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s Notice of Service of Answers to AHCA`s First Interrogatories to MJHHA filed.
- PDF:
- Date: 03/10/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s Response to the Agency Health Care Administration`s First Request for Production filed.
- PDF:
- Date: 03/09/2009
- Proceedings: The Agency for Health Care Administration`s Responses to Miami Jewish Home and Hospital for the Aged, Inc.`s First Set of Interrogatories filed.
- PDF:
- Date: 03/09/2009
- Proceedings: Petitioner`s Notice of Filing Agency`s Response to the First Set of Interrogatories filed.
- PDF:
- Date: 03/09/2009
- Proceedings: The Agency for Health Care Administration`s Responses to Miami Jewish Home and Hospital for the Aged, Inc.`s First Request for Production of Documents filed.
- PDF:
- Date: 03/09/2009
- Proceedings: Agency for Health Care Administration`s Notice of Service of Answers to Miami Jewish Home and Hospital for the Aged, Inc.`s First Set of Interrogatories to AHCA filed.
- PDF:
- Date: 03/09/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s Final Witness List filed.
- PDF:
- Date: 03/09/2009
- Proceedings: The Agency for Health Care Administration`s Final Witness List filed.
- PDF:
- Date: 03/05/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s Preliminary Witness List filed.
- PDF:
- Date: 03/04/2009
- Proceedings: The Agency for Health Care Administration`s Preliminary Witness List filed.
- PDF:
- Date: 02/24/2009
- Proceedings: Respondent, Agency for Health Care Administration`s Request for Production of Documents to Petititioner, Miami Jewish Home and Hospital for the Aged, Inc. filed.
- PDF:
- Date: 02/24/2009
- Proceedings: Notice of Service of the Agency for Health Care Administration`s First Set of Interrogatories to Miami Jewish Home and Hospital for the Aged, Inc. filed.
- PDF:
- Date: 02/23/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s Notice of Service of its First Set of Interrogatories on the Agency for Health Care Administration filed.
- PDF:
- Date: 02/23/2009
- Proceedings: Miami Jewish Home and Hospital for the Aged, Inc.`s First Request for Production to the Agency for Health Care Administration filed.
- PDF:
- Date: 02/16/2009
- Proceedings: Notice of Hearing (hearing set for March 24 through 26, 2009; 9:00 a.m.; Tallahassee, FL).
- PDF:
- Date: 02/16/2009
- Proceedings: Order (within 30 days of this Order, the parties shall file a proposed order of pre-hearing instructions).
- PDF:
- Date: 02/10/2009
- Proceedings: Final Order Denying Emergency Petition for Variance or Waiver of Rule 59C-1.018(3)(c), Florida Adminstrative Code filed.
Case Information
- Judge:
- DAVID M. MALONEY
- Date Filed:
- 02/10/2009
- Date Assignment:
- 02/12/2009
- Last Docket Entry:
- 07/02/2009
- Location:
- Tallahassee, Florida
- District:
- Northern
- Agency:
- ADOPTED IN PART OR MODIFIED
Counsels
-
Karl David Acuff, Esquire
Address of Record -
Shaddrick A. Haston, Esquire
Address of Record -
Lorraine M. Novak, Esquire
Address of Record -
Lorraine Marie Novak, Esquire
Address of Record -
Shaddrick Haston, Esquire
Address of Record -
Karl David Acuff, Esquire
Address of Record -
Shaddrick A Haston, Esquire
Address of Record