16-003819CON East Florida-Dmc, Inc. vs. Agency For Health Care Administration Status: Closed Recommended Order on Tuesday, April 30, 2019.

Summary: When evaluated in the context of the applicable statutory and rule criteria, neither applicant for a new hospital in the Doral area of Dade County established need for its proposal.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EAST FLORIDA - DMC, INC.,

Petitioner,

vs. Case No. 16 - 3819CON

AGENCY FOR HEALTHCARE

ADMINISTRATION,

Respondent,

and

CGH HOSPITAL, LTD, d/b/a CORAL

GABLES HOSPITAL; TENET HIALEAH

HEALTHSYSTEM, INC., d/b/a

HI ALEAH HOSPITAL; LIFEMARK

HOSPITALS, INC., d/b/a PALMETTO

GENERAL HOSPITAL; AND THE PUBLIC

HEALTH TRUST OF MIAMI - DADE

COUNTY, FLORIDA, d/b/a JACKSON

HOSPITAL WEST,

Intervenors.

_______________________________/

THE PUBLIC HEALTH TRUST OF

MIAMI - DADE COUNTY, FLORIDA,

d/b/a JACKSON HOSPITAL WEST,

Petitioner,

vs. Cas e No. 16 - 3820CON

AGENCY FOR HEALTHCARE

ADMINISTRATION,

Respondent,

and

KENDALL HEALTHCARE GROUP, LTD,

d/b/a KENDALL REGIONAL MEDICAL

CENTER; CGH HOSPITAL, LTD, d/b/a

CORAL GABLE S HOSPITAL; TENET

HIALEAH HEALTHSYSTEM, INC.,

d/b/a HIALEAH HOSPITAL; AND

LIFEMARK HOSPITALS, INC., d/b/a

PALMETTO GENERAL HOSPITAL,

Intervenors.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on September 10 through 14, 17 through 21 , and 24 through 26,

2018, in Tallahassee, Florida, before W. David Watkins, the

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For The Public Health Trust of Miami - Dade County, Florida ;

d/b/a Jackson Hospital West:

Thomas F rancis Panza, Esquire

Elizabeth L. Pederson, Esquire

Paul C. Buckley, Esquire

Angelina Gonzale z, Esquire

Alec J. Zavell, Esquire

Panza Maurer & Maynard, P.A.

2400 East Commercial Boulevard , S uite 905

Ft. Lauderdale, Florida 33308

For East Florida - DMC, Inc. ; and Kendall Healthcare Group,

Ltd, d/b/a Kendall Regional Medical Center:

Stephe n A. Ecenia, Esquire

Craig D. Miller, Esquire

Gab riel F.V. Warren, Esquire

Rutledge Ecenia, P.A.

119 South Monroe Street, Suite 202

Tallahassee, Florida 32301

For Agency for Healthcare Administration:

Richard Joseph Saliba, Esquire

Kevin Michael Marker, Esquire

Agency for Healthcare Administration

Fort Knox Building III , Mail Stop 7

2727 Mahan Drive

Tallahassee, Florida 32308

For CGH Hospital, Ltd , d/b/a Coral Gables Hospital ; Tenet

Hialeah HealthSystem, Inc. , d/b/a H ialeah Hospital ; and Lifemark

Hospitals, Inc. , d/b/a Palmetto General Hospital:

Michael J. Glazer, Esquire

Eugene Dylan Rivers, Esquire

Stephen C. Emmanuel, Esquire

Ausley & McMullen

123 South Calhoun Street

Tallahassee, Florida 32301

STATEMENT OF TH E ISSUE S

The issue s in th e s e case s are whether Certificate of Need

(CON) Application No. 10432 filed by East Florida - DMC, Inc.

(DMC) , to build an 80 - bed acute care hospital in Miami - Dade

County, Florida, AHCA District 11, or CON Application No. 10433

filed by T he Public Health Trust of Miami - Dade County, Florida

d/b/a Jackson Hospital West (JW), to build a 100 - bed acute care

hospital in Miami - Dade County, Florida, AHCA District 11, on

balance, satisfy the applicable criteria ; and, if so, whether

either or b oth should be approved.

PRELIMINARY STATEMENT

The proceeding involves two CON applications filed in the

first batching cycle of 2016. Each applicant sought approval to

build and operate an acute care hospital in the City of Doral

within Miami - Dade County, Florida, AHCA District 11. CON

Application No. 10432, filed by DMC, is for an 80 - bed hospital,

and CON Application No. 10433, filed by JW, is for a 100 - bed

hospital.

Following its review of the two applications, the Agency

for Healthcare Administration (Agency or AHCA) issued a State

Agency Action Report (SAAR) recommending that both CON

applications be denied. The SAAR was signed by Marisol Fitch,

AHCAÓs health administration s ervices m anager.

DMC and JW timely filed challenges to the preliminary

denials of their applications, and AHCA referred their

respective petitions to the Division of Administrative Hearings

(DOAH) to conduct formal administrative hearings pursuant to

sections 120.569, 120.57(1), and 408.039, Florida Statu t es. At

DOAH, DMC and J WÓs petitions were assigned Case Nos. 16 - 3819CON

and 16 - 3820CON, respectively, and the undersigned was designated

as the Administrative Law Judge (ALJ) to conduct the

proceedings. Variety ChildrenÓs Hospital , d/b/a Nicklaus

ChildrenÓs Hospital (NCH) , file d a Petition for Leave to

Intervene in each of the two proceedings , and three hospitals:

CGH Hospital, Ltd., d/b/a Coral Gables Hospital (CGH); Tenet

Hialeah Healthsystem, Inc., d/b/a Hialeah Hospital (Hialeah);

and Lifemark Hospitals, Inc., d/b/a Palmet to General Hospital

(PGH) (collectively the Tenet Hospitals or Tenet), filed a Joint

Motion to Intervene in each of the two proceedings. JW filed a

Motion to Intervene in DOAH Case No. 16 - 3819CON , and Kendall

Healthcare Group, Ltd, d/b/a Kendall Regional Medical Center

(KRMC) , filed a Motion to Intervene in DOAH Case No. 16 - 3820CON.

On July 19, 2016, the undersigned entered an Order of

Consolidation that consolidated DOAH Case Nos. 16 - 3819CON and

16 - 3820CON (the consolidated cases). By July 20, 2016, th e

undersigned had entered Orders in the consolidated cases that

granted each of the outstanding petitions and motions to

intervene.

On July 20 , 2016 , NCH, CGH, Hialeah, and PGH filed an

Amended Joint Unopposed Motion for Abeyance in Case No. 16 -

3819CON. T he motion represented that the parties were then

involved in four consolidated cases , DOAH Case Nos. 16 - 0112CON,

16 - 0113CON, 16 - 0114CON, and 16 - 0115CON ( the Batch One

Proceedings or the Batch One Case). The Batch One Proceedings

involved the same party ap plicants, virtually the same CON

applications (albeit in an earlier batching cycle, the second

cycle in 2015) for the same proposed projects, and the same

parties in opposition to the CON applications as these

consolidated cases. The unopposed motion requ ested that the

consolidated cases be placed in abeyance until 30 days after the

issuance of the f inal o rder in the Batch One Proceedings. The

motion also referred to JWÓs Motion to Intervene in Case No. 16 -

3819 CON , and JWÓs slightly different request for relief that the

matter be set for a 30 - day hearing beginning on or after July 1,

2017, in order to allow for the issuance of a final order in the

Batch One Proceedings. A similar but separate Joint Unopposed

Motion for Abeyance was filed on July 19, 2016, by NCH, the

Tenet Hospitals, and JW in Case No. 16 - 3820CON. The partiesÓ

requests for relief were identical to the partiesÓ requests in

the Amended Joint Unopposed Motion filed in Case No. 16 - 3819 CON .

On July 20, 2016, the undersigned entered an Order Pl acing

Cases in Abeyance that granted the motions for abeyance filed in

each of the consolidated cases and ordered the parties to confer

and advise in writing no later than a certain date, as to the

status of the matter and the length of time required for t he

final hearing, and several mutually - agreeable dates for

scheduling the final hearing, should one be necessary. During

the abeyance, NCH filed a notice of voluntary dismissal of its

petitions in the consolidated cases on November 20, 2017, and

NCH did n ot participate in the proceedings thereafter.

Following a number of joint status reports and Orders

continuing the cases in abeyance, the parties filed a joint

status report on May 10, 2018. They reported that AHCA had

issued a Final Order in the Batch On e Cases that denied the CON

applications of both DMC and JW. 1/ A scheduling conference was

held with all parties and the consolidated cases were set for

hearing for 15 days the following September. The consolidated

cases proceeded to hearing as scheduled .

At the hearing, JW presented the testimony of the following

witnesses: Carlos Migoya, accepted as an expert in healthcare

administration; Peter Glen Paige, M.D., accepted as an expert in

hospital and healthcare administration and emergency medicine;

Ger alyn Lunsford, accepted as an expert in hospital

administration; Girish Bobby Kapur, M.D., accepted as an expert

in emergency medicine; Wilfredo Alvarez, accepted as an expert

in fire rescue and emergency medical services ( EMS ) ; Richard

Garcia, P.E., accep ted as an expert in transportation

engineering; Mark Knight, accepted as an expert in healthcare

finance and healthcare innovation; Michael Goldberg, M.D.,

accepted as an expert in anesthesiology and perioperative

services; Henry Iler, accepted as an exper t in urban planning

and land use; Armand Edward Balsano, accepted as an expert in

healthcare planning; David S. Levitt, accepted as an expert in

healthcare planning; Laura Hunter, accepted as an expert in

healthcare strategic planning and development; Juan Pablo

Zambrano, M.D., accepted as an expert in cardiology,

interventional cardiology, vascular medicine, and endovascular

medicine; and, Rick Knapp, accepted as an expert in healthcare

finance. JW offered the following exhibits which were received

into e vidence: Exhibits 1, 2, 5, 6, 8, 11, 13, 17 - 22, 39 - 43,

45, 50 - 59, 62 - 64 , 67 - 75, 77 - 146, 149 - 151, 156, 162, 163, 167,

172, 209, 211 , and 229.

DMC and KRMC presented the testimony of the following

witnesses: Brandon Lee Haushalter, chief executive o fficer at

KRMC, accepted as an expert in healthcare and hospital

administration; Michael Joseph, p resident of Hospital

Corporation of AmericaÓs Florida division, accepted as an expert

in hospital and healthcare administration; Carlos Santiago,

M.D., accepted as a n expert in general surgery and robotic

surgery; Eduardo Franca, M.D., accepted as an expert in

interventional radiology; Mark McKenney, M.D., accepted as an

expert in surgery, surgical critical care and trauma;

Christopher Heggen, accepted as an expert in transportation

engineering; Braulio Sabates, M.D., accepted as an expert in

general surgery and laparoscopic surgery; Darryl Weiner,

accepted as an expert in healthcare finance; Katherine Platt,

accepted as an expert in health planning and health finance; and

Daniel J. Sullivan, accepted as an expert in healthcare planning

and finance. DMC and KRMC offered the following exhibits which

were received as evidence: Exhibit s 1 - 3, 13, 17, 18, 20 - 22,

25 - 28, 33 - 36, 39, 42, 43, 46, 47, 85, 112, 114, 118, 130, 13 1,

and 143.

The Tenet Hospitals presented the testimony of the

following witnesses: Anna Mederos, an expert in nursing and

hospital administration; Christina Jimenez, accepted as an

expert in hospital administration; Jorge Perez, M.D., accepted

as an expe rt in pathology; and Patricia Greenberg, accepted as

an expert in healthcare planning and finance. Tenet offered the

following exhibits which were received as evidence: Exhibit s 1,

2, 5, 6, 9 - 11, 14, 15, 17 - 54, 56 - 72, 91, 99, 107, and 124.

Official recognition was take n of Tenet Exhibits 108 - 111

and 115.

Consistent with the announcement made at the outset of the

hearing that, ÐAHCA is not taking a position at this hearing on

the applications and does not intend to present evidence in the

proceeding,Ñ the Agency did not present the testimony of any

witnesses and offered no exhibits.

The 24 - volume T ranscript of the final hearing was filed

with DOAH on November 2, 2018. Thereafter the parties timely

filed their respective Proposed Recommended O rders, each o f

which has been carefully considered in the preparation of this

Recommended Order.

All references to Florida Statutes are to the 2018 version

unless indicated otherwise.

P REFACE TO FINDINGS OF FACT

As stipulated by the parties, at issue in this proceeding

are the CON applications filed in the first batching cycle of

2016 . The parties stipulated that the Batch One Proceedings

involved the same party applicants, virtually the same CON

applications (albeit in an earlier batching cycle, the second

cycle in 20 15), for the same proposed projects, and the same

parties in opposition to the CON applications as these

consolidated cases. Given the similarity of the two

applications, the issues to be determined in both cases, and the

evidence presented (often by witn esses that also testified in

the Batch One hearing), the undersigned notes that many of the

Findings of Fact in the instant proceeding are similar to the

Findings of Fact made in the Batch One Recommended Order.

However, pursuant to section 120.57(1)(k), the hearing conducted

by the undersigned was de novo , and the Findings of Fact set

forth below are based upon the evidence adduced at hearing, as

well as the entire record of this proceeding as defined by

section 120.57(1)(f). 2/

FINDING S OF FACT

Based upon the partiesÓ stipulations, the demeanor and

credibility of the witnesses, other evidence presented at the

final hearing, and on the entire record of this proceeding, the

following Findings of Fact are made:

I. The Parties

The Public Health Trust of Miami - Dade County d/b/a Jackson

Hospital West and Jackson Health System (JHS)

1 . JHS is a taxpayer - funded health system located in and

owned by Miami - Dade County. It is governed by The Public Health

Trust of Miami Dade - County, Florida (PHT), a seven - member b oard.

JHS owns and operates three acute care hospitals in Miami - Dade

County -- Jackson Memorial Hospital (JMH) ; Jackson North Medical

Center (JN) ; and Jackson South Medical Center (JS) -- as well as

three specialty hospitals: Holtz ChildrenÓs Hospital (Holtz );

Jackson Rehabilitation Hospital; and Jackson Behavioral Health

Hospital. JHS also owns and operates numerous other non -

hospital healthcare facilities within Miami - Dade County. JHSÓs

applicant in this proceeding is JW which, if approved, will be

anothe r acute care hospital in JHS.

2 . JHS is an academic teaching institution, and the

University of Miami (UM) is JHSÓs affiliated medical school.

Over 1,000 UM residents staff JMH pursuant to an operating

agreement with JHS. JN and JS are not academic medi cal centers.

3 . JHS annually receives sales tax and ad valorem tax

revenues from Miami - Dade County in order to help fund its

operations.

4 . JS and JN are community hospitals operated as part of

JHS. JS was acquired in 2001. JS is licensed for 226 beds and

is also home to a verified Level II trauma center.

5 . The JN facility was acquired by JHS in 2006. The

facility is licensed for 382 beds.

East Florida (DMC)

6 . DMC is an affiliate of HCA Healthcare, Inc. (HCA), the

largest provider of acute care ho spital services in the world.

DMC will operate within HCAÓs East Florida Division (EFD), which

is comprised of 15 hospitals, 12 surgery centers, two diagno stic

imaging centers, four free standing emergency departments, nine

behavioral health facilities , an d one regional laboratory, along

with other related services. There are thre e HCA - affiliated

hospitals in Miami - Dade County: KRMC; Aventura Hospital and

Medical Center (Aventura); and Mercy Hospital, a campus of

Plantation General Hospital (Mercy).

Kendall Regional (KRMC)

7 . KRMC, which is located at the intersection of the

Florida Turnpike and S outhwest 40th Street in Miami - Dade County,

is a 417 - bed tertiary provider compr ised of 380 acute care beds,

23 inpatient adult psychiatric beds, eight Level II n eonatal

intensive care unit (NICU) beds, and five Level III NICU beds.

It is a Baker Act receiving faci lity. KRMC is a verified

Level I trauma center. It also has a burn program.

8 . KRMC is also an academic teaching facility, receiving

freestanding institutional accreditation from the Accrediting

Council for Graduate Medical Education (ACGME) in 2013. KRMC

currently has six residency programs including, among others,

surgery, internal medicine, podiatry, anesthesia, and surgical

critical care. Its tea ching programs are affiliated with the

University of South Florida, Nova Southeastern University, and

Florida International University. KRMC also participates in

scholarly and clinic al research.

9 . In 2017, KRMC had over 82,000 Emergency Department (ED)

visits. It treated over 115,000 total inpatients and

outpatients that year. There are 850 physicians on KRMCÓs

medical staff. It offers a full range of medical surgery

services, interventional procedures, obstetrics (OB) , pediatric ,

and neonatal care, a mong many other service lines.

10 . KRMC primarily serves southern and western portions of

Miami - Dade County but also receives referrals from the Florida

Keys up through Broward County, Palm Beach County , and the

Treasure Coast. Its main competitors inclu de, but are not

limited to: Baptist Hospital; Baptist West; South Miami

Hospital; PGH; Hialeah; CGH; JS , and Palm Springs General

Hospital.

The Tenet Hospitals

11 . PGH, Hialeah, and CGH are wholly - owned subsidiaries of

Tenet South Florida. These are al l for - profit hospitals.

12 . PGH is a 368 - bed tertiary facility that opened in the

early 1970s. It has 297 licensed acute care beds, 48 adult

psychiatric beds, 52 ICU beds, and 15 Level II NICU beds. It is

located at the Palmetto Expressway and Northwest 122nd Street in

Hialeah, Florida . The hospital employs about 1,700 people and

has over 600 physicians on its medical staff.

13 . PGH is a tertiary - level facility offering a variety of

specialty services , including adult open heart surgery, a

comprehensiv e stroke center, and robotic surgery. It has

inpatient mental health beds and serves the community as a Baker

Act receiving facility. It also offers OB and Level II NICU

services with approximately 1,500 births a year. It has

approximately 70,000 ED vis its and between 17,000 and 18,000

inpatient admissions per year. In addition to its licensed

inpatient beds, PGH operates 31 observation beds.

14 . PGH is ACGME accredited and serves a significant

teaching function in the comm unity. It has approximately

89 residents and fellows. The hospital provides fellowships in

cardiology, critical care and interventional cardiology, and

also has rotations in neurology and gastroenterology. Residents

from Larkin General Hospital also rotate through PGH.

15 . PGH gen erally serves the communities of Opa Locka,

Hialeah, Miami Lakes, Hialeah Gardens, Doral , and Miami Springs.

In reality, all of the hospitals in the county are competitors,

but more direct competition comes from Palm Springs Hospital,

Memorial in Miramar, Mount Sinai, Kendall, and even its sister

hospital, Hialeah.

16 . Hialeah first opened in 1951 and is a 378 - bed acute

care facility. It has 356 acute care beds, 12 adult psychiatric

beds, and 10 Level II NICU beds. The ED has 25 beds and about

40,000 vi sits per year. It has approximately 14,000 inpatient

admissions and 1,400 babies delivered annually. It offers

services including cardiac, stroke, robotic surgery, colorectal

surgery, and OB services. The hospital has a Level II NICU with

12 beds.

17 . CGH is located in the City of Coral Gables and is near

the border between Coral Gables and the City of Miami on Douglas

Road. It first opened in 1926. Portions of the original

structure are still in use.

18 . CGH has 245 license d beds, over 725 employees ,

367 physicians, and over 100 additional allied providers on its

medical staff. The hospital has a full - service ED. Its service

lines include general surgery, geriatrics, urology, treatment of

cardiovascular and pulmonary disease, and others. The hospi tal

has eight operating rooms and offers robotic surgery. The ED

has 28 beds divided into the main area and a geriatric emergency

room. It had about 25,000 ED visits last year, which is lower

than prior years, due in part to the presence of over a dozen

nearby urgent care centers.

19 . CGH has over 8,500 inpatient admissions per year and

is not at capacity. While patient days have grown slightly, the

average occupancy is still just a little over 40%, meaning, on

average, it has over 140 empty inpatient beds on any given day.

The hospital is licensed for 245 beds, but typically there are

only 180 beds immediately available for use.

Agency for Healthcare Administration (AHCA)

20 . AHCA is the state health - planning agency charged with

administration of th e CON program as set forth in sections

408.31 - 408.0455, Florida Statutes.

II. The Proposals

Doral Medical Center (DMC)

21 . DMC proposes to build an 80 - bed community hospital

situated within the residential district of Doral. The hospital

will be locate d in southwestern Doral in z ip c ode 33126 and will

serve the growing population of Doral, along with residential

areas to the north and south of Doral.

22 . The hospital will be located in the City of DoralÓs

residential district on Northwest 41 st Street b etween Northwest

109th Avenue to the east, and Northwest 112th Avenue to the

west. Doral has seen significant growth in the past 15 years

and has been consistently included on the list of the fastest

growing cities in Florida.

23 . The new facility w ill have a bed complement of

80 licensed acute care beds , inc luding 72 medical/surgical and

eight OB beds. The proposed acute care hospital will be fully

accredited by t he Joint Commission for the Accreditation of

Healthcare Facilities and licensed by the Sta te of Florida. No

public funds will be utilized in construction of the hospital

and it will contribute to the s tate, c ounty, and m unicipal tax

base as a proprietary corporation.

24 . DMC will offer a full range of non - tertiary services,

including emergency services, imaging, surgery, intensive care,

cardiac catheterization , and women's services, including an OB

unit, and pediatric care. DMC will be a general medical

facility that will include a general medical component and a

surgery component. Althoug h DMC will operate an OB unit, NICU

services will not be offered at DMC. If DMCÓs patients need

more advanced services, including NICU, the EFD hopes they will

receive them from KRMC. The open medical staff will be largely

community - based, but University of Miami physicians would be

welcome at DMC.

25 . Before the hospital is built, KRMC will construct and

operate a freestanding emergency department (FSED) at the

location that will eventually become the ED of DMC.

Construction of the FSED is now underwa y, and Brandon

Haushalter, chief executive officer ( CEO ) of KRMC, estimate d

that it will open in March or April of 2019.

Jackson West

26 . JHS proposes to build a community hospital to be known

as ÐJackson WestÑ near the eastern edge of Doral. The propo sed

100 - bed general acute care hospital would have medical surgical

and obstetrical beds and offer basic acute care services.

27 . JHS is a public health system owned by Miami - Dade

County. All of JHSÓs assets, as well as its debts, belong to

the c ounty. JHS is a not - for - profit entity, and therefore does

not pay taxes, though it receives hundreds of millions of

dollars from property taxes and sales taxes in Miami - Dade

County.

28 . JHSÓs main campus is a large health campus located

near the Midtown Miami a rea in between Allapattah (to the north)

and Little Havana (to the south). In addition to JMH, the

campus includes Holtz ChildrenÓs Hospital, a behavioral health

hospital, an inpatient rehabilitation hospital, and several

specialty clinics. Bascom - Palmer Eye Institute, a Veterans

Administration hospital, and University of Miami Hospital are

also located adjacent to Jackson West Ós main campus.

29 . JMH is a 1 , 500 - bed hospital with a wide array of

programs and services, including tertiary and quaternary ca re,

and a Level I trauma program, the Ryder Trauma Center. JMH

receives patients from throughout Miami - Dade County, elsewhere

in Florida, and internationally.

30 . JMH is a teaching hospital and has a large number of

residents , as well as professors from the University of Miami ,

on staff. UM and JMH have had a relationship for many years,

and in addition to research and teaching, UM provides physician

staffing to JMH.

31 . JN is a 342 - bed community hospital located in between

Miami Gardens and North Miam i Beach, just off of I - 95 and the

Turnpike.

32 . JS is a 252 - bed community hospital located in the

Palmetto Bay area just south of Kendall. It has stroke

certification and interventional cardiology, and was recently

approved for a trauma program, which b egan in May 2016.

33 . Both JN and JS were existing hospitals that were

acquired by JHS. JHS has never built a hospital from the ground

up.

34 . In 2014, JHS leadership directed its internal planning

team to review the healthcare needs of county residents . JHSÓs

analysis identified a need for outpatient services in western

Miami - Dade, the only remaining quadrant of the c ounty in which

JHS did not have a hospital or healthcare program at the time.

As part of its due diligence, JHS then consulted healthcar e firm

Kurt Salmon & Associates (KSA) to independently evaluate the

data. KSAÓs investigation validated a need in the west county

for adult and pediatric outpatient services, including need for

a n FSED. This prompted JHS to explore opportunities for

expansion of outpatient services where needed: in the western

corridor of Miami - Dade. This was also the genesis of JHSÓs

long - range plan to first build a n FSED in the Doral area, to be

followed ultimately by the addition of a general acute care

hospital at t he site.

35 . The JW site is a 27 - acre parcel of land located just

west of the Palmetto Expressway and north of 25th Street. The

site is in an industrial area only a short distance from the

western end of the runways at Miami International Airport. The

site is located in zip code 33122, which is very sparsely

populated.

36 . JW proposed a primary service area (PSA) consisting of

zip c odes 33126, 33144, 33166, 33172/33122, 33174, 33178,

and 33182, and a secondary service area (SSA) of zip

codes 33155, 331 65, 33175, and 33184. JW intends to serve

general, acute care non - tertiary patients and OB patients.

Detailed below, trends in the JW service area do not demonstrate

need for its proposed hospital.

37 . The location of the JW site will not contribute to the

viability of the proposed hospital. According to 2010 census

data, only 328 people live within a one - mile radius of the JW

site. Since 2000, only 32 total people have moved into that

same area around the JW site -- an average of three per year.

There are virtually no residences within a one - mile radius of

the JW site. From 2000 to 2010, the population within a two -

mile radius of the JW site decreased by a rate of 9.4%.

38 . The JW health planner projects JWÓs home zip c o de

of 33122 will have a total p opulation of only eight (8) people

in 2022.

39 . From 2012 to 2014, the use rate in the JW service area

for non - tertiary patients decreased by 3.9%. That decline

continued at a steeper pace of 4.2% from 2014 to 2017. This was

largely due to the 65 age c ohort, the demographic of patients

that utilize inpatient services the most. The 65 age cohort is

growing at a slower pace in the JW service area than in Miami -

Dade or Florida as a whole. Non - tertiary discharges in the JW

service area are declining at a greater pace than that of Miami -

Dade County -- negative 4.2% compared to negative 1.9%.

40 . The rate of projected population growth in the JW PSA

is decreasing. The projected rate of growth for the JW service

area is lower than that of Miami - Dade County a nd Florida as a

whole. The OB patient base JW intends to rely on is projected

to remain flat.

41 . The inpatient discharges for all ages in the JW

service area have declined from 2014 to 2017. For ages 0 - 17,

discharges in the JW service area declined 21. 4% during that

time period. The discharges for ages 18 - 44 declined by 4.8%,

and the discharges for ages 45 - 64 declined by 8.9%. The

discharges for the important 65 age cohort declined by 0.1%.

Specifically, the discharges for ages 65 - 74 declined by 6.5 %,

and the discharges for ages 75 - 84 declined by 3.3%. The

discharges for ages 85 are the only age cohort that has not

declined from 2012 to 2017. Overall, the non - tertiary

discharges per 1,000 population (i.e., use rate) for all ages in

the JW service area declined from 2012 to 2014 by 6% , and from

2014 to 2017 by 7.8%.

42 . Despite these declines in discharges in the JW service

area, the health planners who crafted the JW projections used a

constant use rate for the 0 - 17, 18 - 44, and 45 - 64 age cohorts.

The JW health planners used a declining use rate for the 65 age

cohort. These use rates were applied uniformly across all zip

c odes, despite wide variance in actual use rates in each zip

c ode.

43 . Applying the zip code specific use rates in

conjunction with the other assumptions used by the JW health

planner demonstrates that the JW projections are unreasonable.

For instance, JWÓs reliance on a uniform use rate over - projects

the number of discharges in JW PSA zip c ode 33178 by nearly

1,000 patients. T his occurs because the population is only

growing at a 2% rate in the zip code, but JWÓs reliance on

service area - wide projections cause the discharges to grow at an

extraordinary rate of 8.9% per year. Applying actual use rates

across all zip codes cause s a drastic change in the JW PSA and

SSA definition.

44 . Section 408.037(2) requires a CON applicant to

identify its PSA and SSA by listing zip codes in which it will

receive discharges in descending order, beginning with the zip

code with the highest amo unt of discharges, then proceeding in

diminishing order to the zip code with the lowest amount of

discharges. The zip codes , which comprise 75% of discharges ,

constitute the PSA ; and the remaining zip codes, which consist

of the remaining 25% of discharge s, makes up the SSA. However,

JW did not project its utilization in this manner.

45 . In its application, JW did not define its service

area, PSA, and SSA zip codes in descending order by number or

percentage of discharges. When this correct adjustment i s made,

its PSA consists of zip c odes 33126, 33172, 33178, 33174, 33144,

and 33165; and its SSA consists of zip codes 33175, 33166,

33155, 33182, and 33184. Z ip c odes 33166 and 33182 were in the

original JW PSA, and zip c ode 33165 was in the original JW S SA.

As such, JWÓs home zip code should actually be in its SSA. JW

health planners call this illogical, but it demonstrates that

the JW site is located within a zip code that has almost no

population of potential patients.

46 . JHS is developing a n FSE D and outpatient/ambulatory

facilities on the JW site regardless of whether its CON

application for a hospital is approved. Construction has begun

on the JW site, and JHS is actually building a Ðshelled inÑ

structure intended to house a future hospital, n otwithstanding

lack of CON approval for the hospital. There is no contingency

plan for use of the shelled - in hospital space if CON approval is

not obtained. JHS executives unequivocally stated that they

intend to continue pursuing CON approval for the JW hospital,

even if the proposed DMC hospital is approved. Indeed, JHS has

filed third and fourth CON applications for its proposed JW

hospital.

47 . The budget for the JW campus is $252 million. Sixty

to $70 million is being funded from a bond issuance a pproved by

voters in Miami - Dade County. Notably, the bond referendum

approved by voters made no mention of a new hospital. The

remaining $180 to $190 million is being funded by JHS, which has

chosen to only keep 50 days cash - on - hand, and put any surplus

toward capital projects. This is wel l below the number of days

cash - on - hand ws advisable for a system like JHS.

48 . The specific programs and services to be offered at JW

have not been finalized, but it is clear that JW will be a small

community hospital that will not offer anything unique or

different from any of the existing hospitals in the area, nor

will it operate NICU beds. Patients presenting to JW in need of

specialized or tertiary services will need to be transferred to

another hospital with the capability of serving them, most

likely JMH.

III. The ApplicantsÓ Arguments

Doral Medical Center (DMC)

49 . DMCÓs arguments in support of its proposed hospital

may be summarized as follows:

(1) Geographic features surrounding Doral

create transportation access barriers for

the residents of the area;

( 2 ) Doral is a densely - populated community

that is growing quickly and lacks a readily

accessible hospital;

( 3 ) KRMC, which is the provider of choice

for Doral residents, is a growing tertiary

facilit y that cannot sufficiently expand to

meet its future demands. DMC will serve

much of the same patient population

currently served by KRMC and help decompress

KRMCÓs acute care load so KRMC can focus on

its tertiary service lines;

(4) From a geographic standpoint, the Doral

community and its patients are isolated from

much of Miami - Dade County to the north,

west, and east, and the nearest hospitals.

50 . East Florida - DMC is a subsidiary of HCA and would be a

part of the HCA EFD. Michael Joseph is the p resident of the

EFD, which includes 15 hospitals and other facilities from Miami

north through the Treasure Coast.

51 . Mr. Joseph authorized the filing of the DMC CON

application, which proposes an 80 - bed basic acute care hospital

that includes 72 medica l surgical and eight OB beds. As noted,

there will be neither unique services at DMC nor any tertiary

services , such as a NICU. HCA anticipates that DMC patients

needing tertiary services would be referred and treated at KRMC.

52 . The proposed hospital would be built on 41st Street,

between Northwest 109 th Avenue and Northwest 112 th Avenue. This

site is located on the western edge of Doral, just east of the

Everglades.

53 . When the consultants were retained to write the first

DMC CON application, HCA h ad already made the decision to go

forward with the project.

54 . Mr. Joseph described Miami - Dade County as one of the

most competitive markets in the country for hospital services.

There is robust competition in the Miami - Dade market from the

standpoints of payors, physicians, and the many hospitals

located in the county, including Jackson, HCA, Tenet, Baptist

and others.

55 . HCA is not proposing this project because any of the

existing hospitals in the area do not provide good quality care.

56 . HCA is currently building a n FSED on the DMC site that

will open regardless of whether the DMC hospital is approved.

57 . Mr. Joseph acknowledged that there is a trend toward

outpatient rather than inpatient care. Inpatient occupancy of

acute care hospitals in Miami - Dade County has been declining in

recent years. Managed care has added further pressure on

reducing inpatient admissions.

58 . Surgical advances have also resulted in fewer

inpatient admissions. Surgeries that formerly required an

inpatient stay a re now often done on an outpatient basis.

59 . Mr. Joseph agreed that 30 minutes is a reasonable

travel time to access an acute care hospital.

60 . The home zip code for the proposed DMC hospital is

33178. KRMCÓs market share for that zip code is 20 % .

Individuals in that zip code are currently accessing a wide

variety of hospitals. PGH is only 6.7 miles away and has the

fourth highest market share in that zip code.

61 . HCAÓs healthcare planning expert, Dan Sullivan,

acknowledged that, if approved, DMC would likely have an adverse

financial impact on KRMC and other area hospitals.

62 . Several witnesses testified that the travel time from

the DMC site to KRMC is about 10 minutes, and that an ambulance

could do it in as little as five minutes.

63 . As t o the argument that the residents of Doral face

geographic access barriers, the evidence did not indicate that

there is anything unique about Doral from a traffic standpoint

compared to other parts of Miami - Dade County. People come in

and out of Doral on a daily basis in significant numbers for

work and other reasons via various access points.

64 . Witnesses agreed that 25 to 30 minutes is a reasonable

drive time for non - tertiary acute care services, and the

evidence showed that residents of Doral, and the DMC service

area, are well within 30 minutes of multiple hospitals providing

more intensive services than are proposed by DMC. Indeed, many

residents of DMCÓs service area are closer to other hospitals

than to the DMC site.

65 . None of the DMC witnesses were able to identify any

patient in Doral who had been unable to access acute care

services, or had suffered a bad outcome because of travel from

Doral to an area hospital. The evidence did not establish that

there currently exists either geographic or financial access

barriers within the service area proposed to be served by DMC.

Jackson West

66 . As in its Batch One application, J W advances six

arguments as to why its proposed hospital should be approved.

They are:

1) It will serve a significant amo unt of

indigent and Medicaid patients.

2) JHS already serves residents of the

proposed service area, which JW

characterizes as Ðfragmented , Ñ in that

residents go to a number of different

hospitals to receive services.

3) Development of the freestanding ED and

ambulatory center is under way.

4) JW would provide an additional

opportunity to partner with UM and FIU.

5) There is physician and community support

for the project.

6) JW will add to the financial viability

of JHS and its ability to continu e its

mission.

67 . JW presented very little analysis of the types of

factors typically considered in evaluating need for a new

hospital. JW did not discuss existing providers and their

programs and services, the utilization of existing hospitals ,

and wh ether they have excess capacity, or other important

considerations. Instead, JW advanced the six arguments noted

above, for approval of its proposed hospital, none of which

truly relate to the issue of need.

68 . First, JW states that its proposed hospita l will serve

a significant level of Medicaid and indigent patients. While it

is true that JHS serves a significant amount of Medicaid and

indigent patients, there are a number of reasons why this is not

a basis to approve its proposed hospital.

69 . As an initial matter, JW treads a fine line in touting

its service to Medicaid and indigent patients, while also

targeting Doral for its better payer mix and financial benefit

to JHS. JHS also receives an enormous amount of tax dollars to

provide care to indig ent and underserved patients. While other

hospitals in Miami - Dade County provide care to such patients,

they do not receive taxpayer dollars, as does JHS, although they

pay taxes, unlike JHS. Also, Medicaid is a good payer for JHS.

With its substantial supplement, JHS actually makes money from

Medicaid patients, and it costs the system more for a Medicaid

patient to be treated at a JHS hospital than elsewhere. More

significantly, there is not a large Medicaid or indigent

population in Doral, nor evidenc e of financial access issues in

Doral.

70 . Second, JW argues that its CON application should be

approved because JHS already serves patients from the Doral

area, which JW characterizes as ÐfragmentedÑ because area

residents go to several different hospita ls for care. This so -

called ÐfragmentationÑ is not unique to Doral, and is not

unusual in a densely - populated urban market with several

existing hospitals. The same phenomenon occurs in other areas

of Miami - Dade County, some of which actually have a hosp ital in

the localized area. The fact that Doral residents are accessing

several different hospitals demonstrates that there are a number

of existing providers that are accessible to them. As discussed

in greater detail below, residents of the Doral area have

choices in every direction (other than to the west, which is the

Everglades). JHS itself already serves patients from the Doral

area. If anything, this tells us that patients from Doral

currently have access to the JHS hospitals.

71 . Third, JW argu es that its CON application should be

approved because development of the JW campus is under way.

This is irrelevant to the determination of need, and is simply a

statement of JHSÓs intent to build a n FSED and outpatient

facilities on a piece of land that was acquired for that

purpose, regardless of CON approval.

72 . Fourth, JW argues for approval of its proposed

hospital because it would provide an additional opportunity to

partner with UM and Florida International University ( FIU ) .

However, the statuto ry criteria no longer address es research and

teaching concerns, and JHSÓs relationship with UM or FIU has no

bearing on whether there is a need for a new hospital in the

Doral area. Moreover, JW did not present any evidence of how it

would partner with UM or FIU at JW, and there does not seem to

be any set plans in this regard.

73 . Fifth, JW claims that there is physician and community

support for its proposed hospital, but it is very common for CON

applicants to obtain letters in support for applications .

Indeed, the DMC application was also accompanied by letters of

support.

74 . Sixth and finally, JW argues that its proposed

hospital will add to the financial viability of HSA and allow it

to continue its mission. However, JW provided no analysis of

the projected financial performance of its proposed hospital to

substantiate this. The only financial analysis in the record is

from KSA, a consulting firm that JHS hired to analyze the

programs and services to be developed at JW. The KSA analysis

posits th at the JW FSED project will lose millions o f dollars

and not achieve break - even unless there is an inpatient hospital

co - located there so that JW can take advantage of the more

lucrative hospital - based billing and reimbursement.

75 . The sixth ÐneedÑ arg ument relates to the issue of

JHSÓs historical financial struggles, which bear discussion.

Only a handful of years ago, the entire JHS was in dire

financial trouble, so much so that selling all or parts o f it

was considered. Days cash - on - hand was in the single digits, and

JHS fell out of compliance with bond covenants.

76 . JHSÓs financial difficulties prompted the appointment

of an outside monitor to oversee JHSÓs finances. Price

Waterhouse served in that role, and made several recommendations

for J HS t o improve its revenue cycle, make accounting

adjustments, and improve its staffing and efficiency. As a

result of these recommendations, JHS went through a large

reduction in force, and began to more closely screen the income

and residency of its patients . As a result of these measures ,

overall financial performance has since improved.

77 . Despite its improved financial position, JHS still

consistently loses money on opera tions, including a

$362,000,915 loss as of June 30, 2018. JHS clearly depends upon

the hundreds of millions of non - operating tax - based revenues it

receives annually.

78 . JHSÓs CEO expressed concerns over decreases in the

systemÓs non - operating revenue sources, and claimed that JHS

needs to find ways to increase its operating revenue to offset

this. JW is being proposed as part of this strategy. However,

JHSÓs chief financial o fficer testified that Ðthe non - operating

revenues are a fairly stable source of income.Ñ In fact, JHSÓs

tax revenues have gone up in the last few years.

79 . JH S sees the more affluent Doral area as a source of

better paying patients that will enhance the profitability of

its new hospital. Beyond this aspiration however, there is no

meaningful analysis of the anticipated financial performance of

its proposed hos pital. This is a glaring omission given that a

significant impetus for spending millions of public dollars on a

new hospital is to improve JHSÓs overall financial position.

80 . The KSA analysis referenced above determined that

changes to the Hospital Out patient Prospective Payment System

rule would result in the JW campus losing hundreds of millions

of dollars and never reaching Ðbreak even , Ñ absent an inpatient

hospital on the campus for Ðhospital basedÑ billing and

reimbursement.

81 . Though a financia l benefit to the system, the

increased reimbursement JHS would receive by having an inpatient

hospital on the JW campus would be a financial burden on the

healthcare delivery system since it would cost more for the same

patient to receive the same outpatie nt services in a hospital -

based facility.

82 . Reports by KSA also state that a strategic purpose of

JW is to attract patients that would otherwise go to nearby

facilities like PGH and Hialeah, and to capture tertiary or

higher complexity cases which would then be sent to JMH. JW Ós

witnesses and healthcare planning experts fully expect this to

happen.

83 . I n 2015, and again in 2017, JHS conducted a ÐCommunity

Health Needs Assessment,Ñ which is required by law to be

performed by public safety net hospitals . The assessments were

conducted by gathering responses to various questions from a

wide array of community leaders and stakeholders, including the

CEOs of JHSÓs hospitals, about the healthcare needs of the

community.

84 . The final Community Health Needs Assessment documents

are lengthy and cover a variety of health - related topics, but

most notable for this case is that: (1) nowhere in either the

2015 or 2017 assessment is the development of a new hospital

recommended; and (2) expansion into western Miam i - Dade County

scored by far the lowest on a list of priorities for JHS.

85 . In its application and at hearing, JW took the

position that JW can enter the Doral area market without

impacting existing providers to any meaningful extent. While JW

acknowledg es that its proposed hospital would impact the Tenet

H ospitals, it argues that the impact is not significant.

86 . The evidence established that the financial impact to

the Tenet H ospitals (calculated based upon lost contribution

margin) would total roughl y $3 million for lost inpatients, and

$5.2 million including lost outpatients. While these losses

will not put the Tenet Hospitals in financial peril, they are

nonetheless significant and material.

The Existing Healthcare Delivery System

87 . Miami - Dade County is home to 18 freestanding acute

care hospitals, comprising a total of 7,585 licensed and

approved acute care beds. With an average annual occupancy of

53.8% in calendar year 2017, there were, on average,

approximately 3 , 500 unoccupied acute care beds in the county on

any given day. While the countywide occupancy rate fluctuates

from year to year, it has been on a downward trend in the past

several years.

88 . As pointed out by several witnesses, the lack of a

hospital in Doral is not itself an in dication of need. In

addition, population growth, and the demands of the population

for inpatient hospital beds, cannot be considered in a vacuum.

Sound healthcare planning requires an analysis of existing area

hospitals, including the services they offe r and their

respective locations; how area residents travel to existing

hospitals and any barriers to access; the utilization of

existing hospitals and amount of capacity they have; and other

factors which may be relevant in a given case.

89 . The populat ion of Doral currently is only about

59 ,000 people. It is not as densely populated as many areas of

Miami - Dade County, has a number of golf course communities, and

is generally a more affluent area with a higher average

household income than much of Miami - Dade County. As set forth

in JWÓs CON application, the better payer mix in Doral was a

significant factor behind its decision to file its CON

application.

90 . Although there is not a hospital within the Doral city

limits, there are a number of healthca re providers in Doral and

several hospitals nearby. PGH and Palm Springs Hospital are

just north of Doral. KRMC is just south of Doral. Hialeah is

northeast of Doral. CGH, Westchester General, and NCH are

southeast of Doral. JMH and all of its facilit ies are east of

Doral. And there are others within reasonable distance. KRMC

is only six miles due south of the proposed DMC site, and PGH is

just eight miles north of the DMC site. As to the JW site, PGH

is 6.9 miles distant, CGH is 8.6 miles distant, and Hialeah is

7.4 miles distant.

91 . Residents of the Doral area have many choices in

hospitals with a wide array of services, and they are accessing

them. The parties to this case, as well as other existing

hospitals, all have a share of the Doral ar ea market. JW calls

this ÐfragmentationÑ of the market and casts it in a negative

light, but the evidence showed this to be a normal phenomenon in

an urban area like Miami , with several hospitals in healthy

competition with each other.

92 . Among the expe rts testifying at the hearing, it was

undisputed that inpatient acute care hospital use rates are on

the decline. There are different reasons for this, but it was

uniformly recognized that decreasing use rates for inpatient

services, and a shift toward ou tpatient services, are ongoing

trends in the market. Recognizing the need for outpatient

services in the Doral area, both JW and DMC (or, more

accurately, their related entities) have proposed outpatient

facilities and services to be located in Doral.

Kendall Regional Medical Center

93 . KRMC is currently the dominant hospital provider in

the Doral area. Regarding his motivation for filing the DMC

application, Mr. Joseph readily admitted ÐitÓs as much about

protecting what I already currently provide, num ber one.Ñ

94 . KRMC treats Medicaid and indigent patients. KRMC has

never turned away a patient because it did not have a contract

with a Medicaid - managed care company. The CEO agreed that there

is no access problem for Medicaid or charity patients justi fying

a new hospital.

95 . It was argued that KRMC is crowded, and the DMC

hospital would help ÐdecompressÑ KRMC, but the evidence showed

that KRMC has a number of licensed beds that are not being used

for inpatients. In addition, its ED has never gone on

diversion, and no patient has ever been turned away due to the

lack of a bed. Moreover, the census at KRMC has been declining.

It had 25,324 inpatient admissions in 2015, 24,649 admissio ns in

2016, and 23,301 in 2017.

96 . The most recent data available at the time of hearing

reflected that KRMC has been ru nning at a little less than

75% occupancy, before its planned bed additions. KRMC is

between an eight to 10 minute drive from Doral, and currently

has the largest market share within the applicantsÓ d efined

service areas. KRMC is readily available and accessible to the

residents of Doral.

97 . KRMC currently has a $90 million dollar expansion

project under way. It involves adding beds and two new floors

to the West Tower -- a new fifth floor which will add 24 ICU beds

and 24 step - down beds, and a new sixth floor which will house

the relocated pediatric unit and 12 new medical - surgical beds.

KRMC is also adding a new nine - story, 765 parking space garage

and other ancillary space. This expansion will re duce the

occupancy rate of KRMCÓs inpatient units, and in particular its

ICUs. These bed additions, in conjunction with increasing

emphasis on outpatient services and the resultant declining

inpatient admissions , will alleviate any historical capacity

constraints KRMC may have had.

98 . There are also a number of ways KRMC could be further

expanded in the future if needed. The West Tower is designed so

it could accommodate a seventh floor, and the East Tower is also

designed so that an additional floor co uld also be added to it.

In addition, KRMC recently completed construction of a new OR

area that is built on pillars. The new construction includes a

third floor of shelled - in space that cou ld house an additional

12 acute care beds. Moreover, this new O R tower was designed to

go up an additional two to three floors beyond the existing

shelled - in third floor.

99 . It is clear that KRMC has implemented reasonable

strategies for addressing any bed capacity issues it may have

experienced in the past. Decomp ression of KRMC is not a reason

to approve DMC.

Palmetto General Hospital

100 . Evidence regarding PGH was provided by its CEO Ana

Mederos. Ms. Mederos is a registered nurse and has lived in

Miami - Dade Co unty for many years. She has a master of business

education from Nova University and has worked in several

different hospitals in the c ounty. Specifically, she was the

chief operating o fficer ( COO ) at Cedars Medical Center, the CEO

at North Shore Medical Center, the CEO at Hialeah Hospital, and

has been the CEO at PGH since August of 2006.

101 . Ms. Mederos is one of the few witnesses that actually

lives in Doral. She travels in and out of the area on a daily

basis. Her average commute is only about 15 minutes , and she

has multiple convenient options in and out of Doral.

102 . PGH is located just off the Palmetto Expressway at

68th Street. It opened in the early 1970s and has 368 licensed

beds , including 52 ICU beds. T he hospital employs about

1,800 people and has over 600 physicians on its medical staff.

103 . PGHÓs occupancy has declined from 79.8% in 2015 to

64% in 2016 , and even further to 56.7% in 2017. There are many

reasons for this decline, including pressure from managed care

organizations, the continued increase in the use of outpatient

pr ocedures, improvements in technology, and increased

competition in the Miami - Dade County market. Ms. Mederos

expects that inpatient demand will continue to decline into the

foreseeable future.

104 . PGH recently activated 31 observation beds to help

improve throughput and better accommodate the increasing number

of observation patients.

105 . PGH offers high - quality care and uses various metrics

and indicators to measure and monitor what is going on in the

hospital. The hospital has also been recognized w ith numerous

awards.

106 . Through its parent, Tenet, PGH has contracts with

just about every insurance and managed care company that serves

the community. The hospital treats Medicaid and indigent

patients. PGHÓs Medicaid rate of $3,580 per patient is

significantly lower than the rate paid to JMH. PGH has an

office dedicated to helping patients get qualified for Medicaid

or other financial resources, which not only helps the hospital

get paid for its services, it also assists patients and families

to ma ke sure that they have benefits on an ongoing basis.

Roughly 9 - 10% of PGHÓs patients annually are completely

unfunded.

107 . PGH only transfers patients if there is a need for a

service not provided at the hospital, or upon the patientÓs

request. PGH d oes not transfer patients just because they

cannot pay. PGH pays physicians to take call s in the ED which

also obligates those physicians to provide care to patients that

are seen at the hospital.

108 . PGH is a for - profit hospital that pays income taxes

and property taxes, and does not receive any taxpayer subsidie s

like those received by JHS .

109 . Ms. Mederos reviewed the applications of JW and DMC,

and articulated a number of reasons why, in her opinion, neither

application should be approved. She see s no delays in providing

care to anyone in the area, as there are hospitals serving Doral

in every direction. There are a multitude of FSEDs available

and additional FSEDs are being built in Doral by both

applicants. There is another FSED being built clo se to PGH by

Mount Sinai Medical Center. NCH has also opened a n FSED that

has negatively affected the volume of pediatric patients seen at

PGH. There are also multiple u rgent care centers. It was

Ms. Mederos Ó firm belief that persons living in Doral hav e

reasonable geographic access to both inpatient and outpatient

medical services. Ms. MederosÓ testimony in this regard is

credited.

1 10 . There are no programs or services being proposed by

either applicant that are not already available in the area.

Ms. Mederos also noted that there is currently no problem with

access to OB services in the area. However, she has a

particular concern in that both applicants propose to offer OB

services, but neither is proposing to offer NICU services. The

evidence show ed that most all of the hospitals that provide OB

services to the Doral area offer at least Level II and some

Level III NICU services. Thus, in terms of OB care, both

proposed hospitals would be a step below what has developed as

the standard of care for OB patients in the county.

11 1 . Ms. Mederos acknowledged that PGH does not have a

huge market share in the zip codes that the applicants are

proposing to serve, but that does not mean that the impact from

either would not be real and significant. If a ho spital is

built by either applicant, it will need physicians, with some

specialists in short supply. There are tremendous shortages in

certain medical fields , such as orthopedics and neurology. In

addition, there will be additional competition for nurses and

other staff , which will increase the cost of healthcare .

112 . The loss of $1.3 to $2 million in contribution

margin , as projected by TenetÓs healthcare planner , is a

negative impact on PGH as hospital margins become thinner, and

those numbers do not include costs like those needed to recruit

and retain staff. PGH is again experiencing a nursing shortage,

and losing nurses, incurring the higher cost for contract labor,

paying overtime, and essentially not having the staff to provide

the required servi ces is a serious potential adverse impact from

either proposed new hospital. JHS also tends to provide more

lucrative benefits than PGH, and a nearby JW hospital is a

threat in that regard.

11 3 . As a final note, Ms. Mederos stated that her

conviction tha t there is no need for either proposed hospital in

Doral is even more resolute than when she testified in the Batch

One Case. With continued declines in admissions, length of stay

and patient days, the development of more services for the

residents of Dor al, the shortages of doctors and nurses, the

ever increasing role of managed care that depresses the demand

for inpatient hospital services and other factors, she

persuasively explained why no new hospitals are needed in the

Doral area.

Coral Gables Hospit al (CGH)

11 4 . Maria Cristina Jimenez testified on behalf of CGH,

where she has worked in a variety of different capacities since

1985. She was promoted to CEO in March 2017. She has lived in

Miami her entire life.

11 5 . Ms. Jimenez has been involved in initiatives to make

her hospital more efficient. She is supportive of efforts to

reduce inpatient hospitalizations and length of stay , as this is

what is best for patients. Overall, the hospital length of stay

is dropping, which adds to the decreasing de mand for inpatient

services.

11 6 . CGH is accredited by the Joint Commission, has

received multiple awards, and provides high - quality care to its

patients. It also has contracts with a broad array of managed

care companies as do the other Tenet hospitals.

11 7 . CGH treats Medicaid patients, and its total Medicaid

rate is less than $3,500 per inpatient. The hospital has a

program similar to PGH to help patients get qualified for

Medicaid and other resources.

11 8 . CGH also provides services to indigent pa tients, and

self - pay/charity is about 6% of the hospitalÓs total admissions.

The hospital does not transfer patients just because they are

indigent. Physicians are compensated to provide care in the

emergency room and are expected to continue with that c are if

the patients are admitted to the hospital, even if they do not

have financial resources. CGH also pays income and property

taxes , but does not receive any taxpayer support.

11 9 . CGH generally serves the Little Havana, Flagami,

Miami , and Coral Gab les communities, and its service area

overlaps with those of the applicants.

1 20 . In order to better serve its patients and to help it

compete in the highly competitive Miami - Dade County marketplace,

CGH is developing a freestanding ED at the corner of Bi rd Road

and Southwest 87th Avenue, which is scheduled to open in January

2020. This will provide another resource for patients in the

proposed service areas.

12 1 . Ms. Jimenez had reviewed the CON applications at

issue in this case. She does not believe that either hospital

should be approved because it will drain resources from CGH, not

only from a financial standpoint, but also physician and nurse

staffing. CGH experiences physician shortages. Urologists are

in short supply, as are gastrointestinal ph ysicians that perform

certain procedures. Hematology, oncology , and endocrinology are

also specialty areas with shortages. The addition of another

hospital will exacerbate those shortages at CGH.

12 2 . While CGH does not have a large market share in the

proposed PSA of either applicant, anticipated impact from

approval of either is real and substantial. A contribution

margin loss of $1.2 to $2.2 million per year, as projected by

TenetÓs healthcare planner, would be significant. The drain on

resources, including staff and physicians, is also of

significant concern.

Hialeah Hospital

12 3 . Dr. Jorge Perez testi fied on behalf of Hialeah.

Dr. Perez is a pathologist and medical director of laboratory at

the hospital. More significantly, Dr. Perez has been on the

hospitalÓs staff since 2001 and has served in multiple

leadership roles , including c hair of the Performance Improvement

Council, chief of s taff ; and since 2015, c hair of the Hialeah

Hospital Governing Board.

12 4 . Hialeah offers obstetrics services an d a Level II

NICU with 12 beds. Approximately 1,400 babies a year are born

there.

12 5 . Hialeah Ós occupancy has been essentially flat for the

past three years, at below 40%, and it clearly has ample excess

capacity. On an average day, over 200 of Hialeah Ós beds are

unoccupied. Like other hospitals in the c ounty, Hialeah has a

number of competitors. The growth of managed care has affected

the demand for inpatient beds and services at Hialeah.

12 6 . Hialeah treats Medicaid and indigent patients.

Approximately 15% of HialeahÓs admissions are unfunded.

12 7 . As with its sister Tenet hospitals, Hialeah is a for -

profit hospital that pays taxes and does not receive tax dollars

for providing care to the indigent.

12 8 . Dr. Perez succinctly and persuasively iden tified a

variety of reasons why no new hospital is needed in Doral.

First and foremost, there is plenty of capacity at the existing

hospitals in the area, including Hialeah. Second, both

inpatient admissions and length of stay continue trending

downward. Care continues to shift toward outpatient services,

thereby reducing the demand for inpatient care.

12 9 . According to Dr. Perez, if a new hospital is approved

in Doral it will bring with it adverse impacts on existing

hospitals, including Hialeah. A ne w hospital in Doral will

attract patients, some of which would have otherwise gone to

Hialeah. Moreover, Doral has more insured patients, meaning the

patients that would be lost would be good payors. There would

also be a significant risk of loss of staf f to a new hospital.

Dr. PerezÓs testimony in this regard is credible.

IV. Statutory and Rule Review Criteria

1 30 . In 2008, the Florida Legislature streamlined the

review criteria applicable for evaluating new hospital

applications. Mem Ó l Healthcare Gr p. v. AHCA , Case No. 12 -

0429CON, RO at 32 ( Fla. DOAH Dec. 7, 2012). The criteria

specifically eliminated included quality of care, availability

of resources, financial feasibility, and the costs and methods

of proposed construction. Lee Mem Ó l Health Syst em v. AHCA , Case

No. 13 - 2508CON, RO at 135 ( Fla. DOAH Mar. 28, 2014). The

remaining criteria applicable to new hospital projects are set

forth at section 408.035(1), Florida Statutes.

Section 408.035(1)(a): The need for the healthcare

facilities and heal th services being proposed.

13 1 . Generally, CON applicants are responsible for

demonstrating need for new acute care hospitals, typically in

the context of a numeric need methodology adopted by AHCA.

However, AHCA has not promulgated a numeric need met hodology to

calculate need for new hospital facilities. Florida

Administrative Code R ule 59C - 1.008(2)(e) provides that if no

agency need methodology exists, the applicant is responsible for

demonstrating need through a needs assessment methodology , which

must include, at a minimum, consideration of the following

topics, except where they are inconsistent with the applicable

statutory and rule criteria:

(a) Population demographics and dynamics;

(b) Availability, utilization and quality

of like services i n the district,

subdistrict, or both;

(c) Medical treatment trends; and

(d) Market conditions .

13 2 . Both applicants propose to build small community

hospitals providing basic acute care and OB services in the

Doral area of western Miami - Dade County. Both applicants point

to the increasing population and the lack of an acute care

hospital in Doral as evidence of need for a hospital. The DMC

application focuses largely on geographic access concerns, while

the JW application is premised upon six argum ents as to why JHS

contends its proposed JW hospital should be approved.

13 3 . The lack of a hospital in Doral is not itself an

indication of need. 3/ In addition, population growth, and the

demands of the population for inpatient hospital beds, cannot be

considered in a vacuum. Sound healthcare planning requires an

analysis of existing area hospitals, including the services they

offer and their respective locations; how area residents travel

to existing hospitals, and any barriers to access; the

utilizati on of existing hospitals and amount of capacity they

have; and other factors which may be relevant in a given case.

13 4 . Doral is in the west/northwest part of Miami - Dade

County, in between the Miami International Airport (to the east)

and the Everglades (to the west). It is surrounded by major

roadways, with US Highway 27/Okeechobee Road running diagonally

to the north, US Highway 836/Dolphin Expressway running along

its southern edge, US Highway 826/Palmetto Expressway running

north - south to the east, a nd the Florida Turnpike running north -

south along the western edge of Doral. To the west of the

Turnpike is the Everglades, where there is minimal population

and very limited development possible in the future.

13 5 . The City of Doral itself has an area o f about 15

square miles, and is only two or three times the size of the

Miami International Airport, which sits just east of Doral.

Much of Doral is commercial and industrial, with the largest

concentration of residential areas being in the northwest part

of the city.

13 6 . While there is unquestionably residential growth in

Doral, the population of Doral is currently only about

59,000 people. Doral is not as densely populated as many areas

of Miami - Dade County, has a number of golf course communities,

and is generally a more affluent area with a higher average

household income than much of Miami - Dade County.

13 7 . JW proposes to locate its hospital on the eastern

side of Doral, just west of Miami International Airport, while

the DMC site is on the west ern side of Doral, just east of the

Everglades. JWÓs site is located in an industrial area with few

residents, while the DMC site is located in an area where future

growth is likely to be limited. Both sites have downsides for

development of a hospital, with both applicants spending

considerable time at hearing pointing out the flaws of each

otherÓs chosen location.

13 8 . Both applicants define their service areas to include

the City of Doral, but also areas outside of Doral. Notably,

the entire DMC serv ice area is contained within KRMCÓs existing

service area, with the exception of one small area. While the

population of Doral itself is only 59,000 people, there are more

concentrated populations in areas outside of Doral (except to

the west). However, the people in these areas are closer to

existing hospitals like PGH, Hialeah, KRMC, and others.

13 9 . For the population inside Doral, there are several

major roadways in and out of Doral, and area residents can

access several existing hospitals with plent y of capacity within

a 20 - minute drive time, many closer than that.

1 40 . It was undisputed that inpatient acute care hospital

use rates continue to decline. There are different reasons for

this, but it was uniformly recognized that decreasing inpatient

u se rates, and a shift toward outpatient services, are ongoing

trends in the market. These trends existed at the time of the

Batch One Case. As observed by TenetÓs healthcare planner at

hearing: ÐThe occupancy is lower today than it was two years

ago, th e use rates are lower, and the actual utilization is

lower.Ñ

14 1 . Both applicants failed to establish a compelling case

of need. While there is growth in the Doral area, it remains a

relatively small population, and there was no evidence of

community ne eds being unmet. Sound healthcare planning, and the

statutory criteria, require consideration of existing hospitals,

their availability, accessibility, and extent of utilization.

These considerations weigh heavily against approval of either

CON applicati on, even more so than in the prior case.

Section 408.035(1)(b): The availability, accessibility,

and extent of utilization of existing healthcare facilities

and health services in the service district of the

applicant ; and Section 408.035(1)(e): The exte nt to which

the proposed services will enhance access to healthcare for

residents of the service district.

14 2 . As stated above, there are several existing hospitals

in close proximity to Doral. Thus, the question is whether they

are accessible and have capacity to serve the needs of patients

from the Doral area. The evidence overwhelmingly answers these

questions in the affirmative.

14 3 . Geographic access was a focal point of the DMC

application, which argued that there are various barriers to

access in and around Doral, such as a canal that runs parallel

to US Highway 27/Okeechobee Road, train tracks and a rail yard,

industrial plants, and the airport. While the presence of these

things is undeniable, as is the fact that there is traffic in

Miami, based upon the evidence presented, they do not present

the barriers that DMC alleges. Rather, the evidence was

undisputed that numerous hos pitals are accessible within

20 minutes of the proposed hospital sites, and some within 10 to

15 minutes. All of Dora l is within 30 minutes of multiple

hospitals. These are reasonable travel times and are not

indicative of a geographic access problem, regardless of any

alleged Ðbarriers.Ñ

14 4 . In addition, existing hospitals clearly have the

capacity to serve the Doral community, and they are doing so.

Without question, there is excess capacity in the Miami - Dade

County market. With approximately 7 , 500 hospital beds in the

county running at an average occupancy just over 50%, there are

around 3 , 500 beds available at an y given time. Focusing on the

hospitals closest to Doral (those accessible within 20 minutes),

there are hundreds of beds that are available and accessible

from the proposed service areas of the applicants. KRMC is

particularly noteworthy because of its proximity to, and market

share in, the Doral area. The most recent utilization and

occupancy data for KRMC indicate that it has, on average, 100

vacant beds. This is more than the entire 80 - bed hospital

proposed in the DMC application (for a service area that is

already served and subsumed by KRMC). Moreover, KRMC is

expanding , and will soon have even more capacity at its location

less than a 10 - minute drive from the DMC site.

14 5 . From a programmatic standpoint, neither applicant is

proposing any progr ams or services that are not already

available at numerous existing hospitals, and , in fact, both

would offer fewer programs and services than other area

hospitals. As such, patients in need of tertiary or specialized

services will still have to travel to other hospitals like PGH,

KRMC, or JMH. Alternatively, if they present to a small

hospital in Doral in need of specialized services, they will

then have to be transferred to an appropriate hospital that can

treat them. The same would be true for babies born at either

DMC or JW in need of a NICU.

14 6 . Similarly, there are bypass protocols for EMS to take

cardiac, stroke, and trauma patients to the closest hospital

equipped to treat them, even if it means bypassing other

hospitals not so equipped, like JW and DMC. Less acute patients

can be transported to the closest ED. And since both applicants

are building FSEDs in Doral, there will be ample access to

emergency services for residents of Doral.

14 7 . This criterion does not weigh in favor of approval of

either hospital. To the contrary, the evidence overwhelmingly

established that existing hospitals are available and accessible

to Doral area residents.

Section 408.035(1)(e), (g) and (i): The extent to which

the proposed services will enhance access t o healthcare ,

the extent to which the proposal will foster competition

that promotes quality and cost - effectiveness, and the

applicantÓs past and proposed provision of healthcare

services to Medicaid patients and the medically indigent.

14 8 . It goes with out saying that any new hospital is going

to enhance access to the people closest to its location; but as

explained above, there is no evidence of an access problem, or

any pressing need for enhanced access to acute care hospital

services. Rather, the evi dence showed that Doral area residents

are within very reasonable travel times to existing hospitals,

most of which have far more extensive programs and services than

either applicant is proposing to offer. Indeed, the proposed

DMC service area is contain ed within KRMCÓs existing service

area, and KRMC is only 10 minutes from the DMC site.

14 9 . Neither applicant would enhance access to tertiary or

specialized services, and patients in need of those services

will still have to travel to other hospitals, or worse, be

transferred after presenting to a Doral hospital with more

limited programs and services.

1 50 . Although it was not shown to be an issue, access to

emergency services is going to be enhanced by the FSEDs being

built by both applicants. Thus, to the extent that a new

hospital would enhance access, it would be only for non - emergent

patients in need of basic, non - tertiary level care. Existing

hospitals are available and easily accessible to these patients.

In addition, healthy competition exists between several existing

providers serving the Doral area market. That healthy

competition would be substantially eroded by approval of the DMC

application, as HCA would likely capture a dominant share of the

market.

15 1 . While approval of the JW applica tion might not create

a dominant market share for one provider, it would certainly not

promote cost - effectiveness given the fact that it costs the

system more for the same patient to receive services at a JHS

hospital than other facilities. Indeed, approv al of JWÓs

application would mean that the JW campus will have the more

expensive hospital - based billing rates.

15 2 . Florida Medicaid diagnosis related group (DRG)

payment comparisons among hospitals are relevant because both

DMC and JW propose that at le ast 22% of their patients will be

Medicaid patients. Data from the 2017 - 18 DRG calculator

provided by the Medicaid program office was used to compare JHS

to the three Tenet hospitals, KRMC, and Aventura Hospital,

another EFD hospital in Miami - Dade County. The data shows that

JHS receives the highest Medicaid rate enhancement per discharge

for the same Medicaid patients ($2,820.06) among these six

hospitals in the county. KRMC r eceives a modest enhancement

of $147.27.

15 3 . Comparison of Medicaid Managed Care Reimbursement

over the period of fiscal years 2014 - 2016 show that JHS receives

substantially more Medicaid reimbursement per adjusted patient

day than any of the hospitals in this proceeding, with the other

hospitals receiving between one - third and on e - half of JHS

reimbursement. In contrast, among all of these hospitals , KRMC

had the lowest rate for each of the three years covered by the

data, which means KRMC (and by extension DMC) would cost the

Medicaid program substantially less money for care of Medicaid

patients.

15 4 . Under the new prospective payment system instituted

by the S tate of Florida for Medicaid reimbursement of acute care

hospital providers, for service between July 1, 2018 , and

March 31, 2019, JHS is the beneficiary of an automatic r ate

enhancement of more than $8 million. In contrast, KRMCÓs rate

enhancement is only between $16,000 and $17,000. Thus, it will

cost the Medicaid program substantially more to treat a patient

using the same services at JW than at DMC. Furthermore, rath er

than enhance the financial viability of the JHS system, the

evidence indicates that the JW proposal will be a financial

drain on the JHS system.

15 5 . Finally, JHSÓs past and proposed provision of care to

Medicaid and indigent patients is noteworthy, bu t not a reason

to approve its proposed hospital. JW is proposing this hospital

to penetrate a more affluent market, not an indigent or

underserved area, and it proposes to provide Medicaid and

indigent care at a level that is consistent with the existing

hospitals.

15 6 . JHS also receives the highest Low Income Pool (LIP)

payments per charity care of any system in the state, and is one

of only a handful of hospital systems that made money afte r

receipt of the LIP payments. HCA - affiliated hospitals, by

com parison, incur the second greatest cost in the state for

charity care taking LIP payments into consideration.

15 7 . Analysis of standardized net revenues per adjusted

admission (NRAA) among Miami - Dade County acute care hospitals, a

group of 16 hospitals, s hows JHS to be either the second or the

third highest hospital in terms of NRAA. KRMC, in contrast,

part of the EFD/HCA hospitals, is about 3 % below the average of

the 16 hospitals for NRAA.

15 8 . DMCÓs analysis of standardized NRAA using data from

2014, 2015 , and 2016 , among acute care hospitals receiving local

government tax revenues , shows JHS receives more net revenue

than any of the other hospitals in this grouping.

15 9 . Using data from FY 2014 to F Y 2016, DMC compared

hospital costs among the four existing providers that are

parties to this proceeding and JMH as a representative of JHS.

Standardizing for case mix, fiscal year end, and location, an

analysis of costs per adjusted admission shows that the

hospitals other than JMH have an average cost of between a half

and a third of JMHÓs average cost. The same type of analysis of

costs among a peer group of eight statutory teaching hospitals

shows JHSÓs costs to be the highest.

1 60 . It should also be noted that if JW were to fail or

experience significant losses from operations, the taxpayers of

Miami - Dade County will be at risk. In contrast, if DMC were to

fail financially, EFD/HCA will shoulder the losses.

16 1 . When the two applications are evaluated in the

context of the above criteria, the gr eater weight of the

evidence does not mitigate in favor of approval of either.

However, should AHCA decide to approve one of the applicants in

its final order, preference should be given to DMC because of

its lower costs per admission for all categories o f payors, and

in particular, the lower cost to the Florida Medicaid Program.

In addition, the risk of financial failure would fall upon

EFD/HCA, rather than the taxpayers of Miami - Dade County.

Rule 59C - 1.008(2)(e): Need considerations.

16 2 . Many of the considerations enumerated in r ule 59C -

1.008(2)(e) overlap with the statutory criteria, but there are

certain notable trends and market conditions that warrant

mention. Specifically, while the population of Doral is

growing, it remains relatively smal l, and does not itself

justify a new hospital. And while there are some more densely

populated areas outside of the city of Doral, they are much

closer to existing hospitals having robust services and excess

capacity.

16 3 . Doral is a more affluent area, and there was no

evidence of any financial or cultural access issues supporting

approval of either CON application.

16 4 . The availability, utilization , and quality of

existing hospitals are clearly not issues, as there are several

existing hospitals with plenty of capacity accessible to Doral

area residents.

16 5 . In terms of medical treatment trends, it was

undisputed that use rates for inpatient hospital services

continue trending downward, and that trend is expected to

continue. Concomitantly, there is a marked shift toward

outpatient services in Miami - Dade County and elsewhere.

16 6 . Finally, both applicants are proposing to provide OB

services without a NICU, which is below the standard in the

market. While not required for the provision of obstetric s,

NICU backup is clearly the most desirable and best practice.

16 7 . For the foregoing reasons, the considerations in

rule 59C - 1.008(2)(e) do not weigh in favor of approval of either

hospital.

CONCLUSIONS OF LAW

16 8 . The Division of Administrative Heari ngs has

jurisdiction over the subject matter of and the parties to this

proceeding. §§ 120.569, 120.57(1), and 408.039(5), Fla. Stat.

16 9 . In order for an existing healthcare facility to have

standing to intervene in a CON proceeding, it must show that i t

will be Ðsubstantially affectedÑ by approval of the CON

application at issue. § 408.039(5), Fla. Stat.

1 70 . JW and DMC , as applicants , have party status and,

therefore, appropriate standing in this matter. §§ 120.52(13)

and 408.039(5), Fla. Stat. The others have standing to

participate as existing providers who allege the addition of a

new hospital in Miami - Dade County will have a substantial and

adverse impact on their operations.

17 1 . Specifically, the Tenet H ospitals proved by a

preponderance of t he evidence that they have standing to

participate as a party in this proceeding. The three hospitals

are in the same district, and are proximate to the proposed

hospital sites. Direct annual contribution margin losses per

hospital were reasonably projec ted in the range of over

$1. 1 million to almost $2.9 million. This does not include the

loss of tertiary referrals, which is particularly an issue for

PGH as a tertiary hospital.

17 2 . There was also significant and persuasive evidence

regarding the impac t of a new hospital on staffing. A hospital

requires physicians and nursing staff regardless of volume, and

this staff will likely be recruited from other providers. This

drives up the cost of healthcare .

17 3 . While none of this adverse impact will impe ril the

Tenet H ospitals, it is certainly substantial enough to establish

standing for PGH, Hialeah , and CGH. It should be noted,

however, that had the applicants established need for their

proposed hospitals, which they did not, this adverse impact

would not have been significant enough to warrant deni al of the

applications.

17 4 . The parties stipulated that section 408.035(2)

establishes the statutory review criteria applicable to general

hospital applications. The review criteria are set forth in

sectio n 408.035(1).

17 5 . The award of a CON must be based on a balanced

consideration of all applicable statutory and rule criteria.

Balsam v. DepÓt of HRS , 486 So. 2d 1341 (Fla. 1st DCA 1986).

The appropriate weight to be given to each criterion is not

fixed , but rather varies based upon the facts of the case. See,

e.g. , Morton F. Plant Hosp. AssÓn, Inc. v. DepÓt of H RS , 491 So.

2d 586, 589 (Fla. 1st DCA 1986) (quoting North Ridge Gen. Hosp.,

Inc. v. NME Hosps., Inc. , 478 So. 2d 1138, 1139 (Fla. 1st DCA

1985 )); Collier Med. Ctr., Inc. v. DepÓt of H RS , 462 So. 2d 83,

84 (Fla. 1st DCA 1986).

17 6 . A CON applicant bears the burden to prove by a

preponderance of the evidence that its CON application should be

approved. See, e.g. , Boca Raton Artificial Kidney Ctr ., Inc. v.

DepÓt of H RS , 475 So. 2d 260, 263 (Fla. 1st DCA 1985);

§ 120.57(1)(j), Fla. Stat.

17 7 . An administrative hearing involving disputed issues

of material fact is a de novo proceeding in which the ALJ

independently evaluates the evidence presented . Fla. DepÓt of

Transp. v. J.W.C. Co. , 396 So. 2d 778, 787 (Fla. 1st DCA 1981);

§ 120.57(1) (k) , Fla. Stat. AHCAÓs preliminary decision with

regard to JW and DMCÓs CON applications and its findings in the

SAARs are not entitled to a presumption of correct ness. Id .

17 8 . As stipulated to by the parties, the CON applications

at issue in this case are Ðvirtually the same applicationsÑ that

were filed in the Batch One Case. It is a Ðcore principle of

our justice systemÑ that like cases should be treated alik e.

Gessler v. Dep Ó t of Bus . and Prof Ó l Reg . , 627 So. 2d 501 (Fla.

4th DCA 1993), superseded on other grounds , Caserta v. Dep Ó t of

Bus . and Prof Ól Reg . , 686 So. 2d 651 (Fla. 5th DCA 1996). This

core principle applies to decisions issued by state agencies.

Id. at 503.

17 9 . Being mindful of the CourtÓs holding in J.W.C. as to

the de novo nature of this proceeding, it is also true that

inconsistent orders based on similar facts, without rational

explanation, violates principles of fundamental fairness. Id.

at 504. Accordingly, Ð[a]n agency generally must follow its own

precedents.Ñ Flagship Manor, LLC v. Fla. Hous. Fin. Corp. , 199

So. 3d 1090, 1094 (Fla. 1 st DCA 2016) (citing Bethesda

Healthcare Sys., Inc. v. Ag . for Healthcare Admin. , 945 So. 2d

574, 576 (Fla. 4th DCA 2006)); see also Nordheim v. DepÓt of

Envtl. Prot. , 719 So. 2d 1212, 1214 (Fla. 3d DCA 1998), affÓd

sub nom. Nordheim v. Fla. Fish & Wildlife Conser . CommÓn , 785

So. 2d 523 (Fla. 3d DCA 2000) (holding it was error for agency

to fail to consi der its own prior precedent).

1 80 . In the context of successive CON applications, an

application for a previously denied project is not subject to

traditional notions of res judicata , but in order to reach a

different result (approval), it is incumbent up on the applicant

to come forward with Ðnew facts, changed conditions, or

additional submissions.Ñ Delray Med . Ctr . , Inc. v. AHCA , 5 So.

3d 26, 30 (Fla. 4th DCA 2009) (quoting Thomson v. Dept. of

Envtl . Reg . , 511 So. 2d 989, 991 - 92 (Fla. 1987)). A differe nt

result on the same application must be based upon Ðsubstantial

changes in material circumstances between the two applications.Ñ

Delray , 5 So. 3d at 30.

Balancing the Applicable Statutory and Rule Criter i a

18 1 . AHCA is tasked with utilizing the statuto ry review

criteria in section 408.035 in evaluating each hospitalÓs

proposed project. The 2008 amendments to the CON law

significantly modified the application and review process for

CON applications for general hospitals, including the criteria

considere d. Certain previously applicable review criteria were

eliminated, but significantly, "need" (as codified at section

408.035(1)(a) and (b)) was not altered, and remains the focus of

the CON law.

18 2 . Section 408.035(2) specifically outlines the CON

review criteria set forth in section 408.035(1) that are

applicable to general hospital applications, which include the

following:

(a) The need for the healthcare facilities

and health services being proposed.

(b) The availability, accessibility, and

extent o f utilization of existing healthcare

facilities and health services in the

service district of the applicant.

* * *

(e) The extent to whic h the proposed

services wil l enhance access to healthcare

for residents of the service district.

* * *

(g) The ex tent to which the proposal will

foster competition that promotes quality and

cost - effectiveness.

* * *

(i) The applicantÓs past and proposed

provision of healthcare services to Medicaid

patients and the medically indigent.

§ 408.035(1), Fla. Stat.

18 3 . In addition, since AHCA no longer issues a fixed need

pool for acute care beds, the applicants are bound to follow

r ule 59C - 1.008(2)(e)2., which states that:

[T]he applicant will be responsible for

demonstrating need through a needs

assessment methodology which must include,

at a minimum, consideration of the following

topics . . . .

a. Population demographics and dynamics;

b. Availability, utilization and quality of

like services in the district, subdistrict

or both;

c. Medical treatment trends; and,

d. Market conditions.

18 4 . When considered in light of the above four factors,

neither applicant demonstrated need for its proposed hospital.

Specifically, neither applicant established the existence of

typical indicators of "need," such as progr ammatic, financial,

or geographic access barriers to the types of hospital services

proposed.

18 5 . The evidence clearly established that existing

hospitals have available capacity, and on any given day have

more than adequate available beds to serve the c urrent

population and the projected population growth.

18 6 . AHCA does not have a travel - time standard rule with

respect to access to acute care services. See , Mem Ó l Healthcare

Group, Inc. , d/b/a Mem Ó l Hosp . Jacksonville v. Ag . for

Healthcare Admin . and S hands Jacksonville Med . Ctr . , Inc. , DOAH

Case No. 12 - 0429CON , FO at 141 ( Fla. DOAH Dec. 7, 2012; Fla.

AHCA Apr. 10, 2013 ) (hereafter Memorial ) ( citing Wellington Reg.

Med. Ctr., Inc., d/b/a Wellington Reg Ól Med. Ctr. v. Ag. for

Healthcare Admin. , Case Nos. 05 - 2352CON, 05 - 2594CON, and 05 -

2753CON , FO at 110 and 354 - 58 (Fla. DOAH Apr. 5, 2007; Fla. AHCA

Aug. 9, 2007, FO at 27, 34 - 35), aff'd, 5 So. 3d 26 (Fla. 4th DCA

2009).

18 7 . It was concluded in the Memorial decision that Ð20 to

30 minutes is a reasonable travel time standard for accessing

general acute care hospital services, with 30 minutes being the

outside range.Ñ Memorial , FO at 142. Multiple health planning

and hospital operational witnesses that testified in this case

agreed.

18 8 . Approval of ei ther application would not materially

improve geographic access to hospital services for most Doral

area residents. Rather, the evidence established that area

residents are within reasonable drive times to multiple existing

hospitals.

18 9 . The evidence a lso established that approval of the

DMC hospital is not needed to decompress KRMC.

1 90 . Competition for doctors, nurses , and other hospital

personnel is already intense and problematic due to shortages of

nurses and some physician specialties. Approval of either

application would exacerbate this competition, potentially

driving up costs of providing care.

19 1 . As was stated in Memorial :

136. It has been stated that "[n]ot every

city, town or hamlet can or should have its

own hospital." Columbia Hosp. Corp. of

South Broward v. Ag. for Healthcare Admin. ,

Case Nos. 01 - 2891CON and 01 - 2892CON (Fla.

DOAH July 3, 2002, at FOF 62; Fla. AHCA

Sept. 30, 2002) (appl ication to establish a

new 100 - bed hospital in Broward County),

aff'd, 883 So. 2d 283 (Fla. 1st DCA 2004);

see also Manatee Memorial Hosp., L.P. v. Ag.

for Healthcare Admin. , Case Nos. 04 - 2723CON,

04 - 3027CON, and 04 - 3147CON (Fla. DOAH Dec.

1, 2005, at FOF 104; Fla. AHCA Apr. 11,2006)

(application to establish a new acute care

hospital in Sarasota County) ("A community's

desire for a new hospital does not mean

there is a 'need' for a new hospital. Under

the CON program, the determination of need

for a new hospital must be based upon sound

health planning principles, not the desires

of a particular local g overnment or its

citizens.") (cited in Osceola, LLC, d/b/a

St. Cloud Reg'l Med. Ctr. v. Ag. For

Healthcare Admin. and Osceola Reg'l Hosp.,

Inc., d/b/a Osceola Reg'l Med. Ctr. , Case

No. 08 - 0612CON (Fla. DOAH Dec. 31, 2008, at

COL 275; Fla. AHCA Mar. 3, 2009 )).

137. Just as the desires of local

government or citizens may not dictate the

approval of a new hospital, neither should

the motivations of a particular health

system, no matter how noble, trump the

statutory requirement that ÐneedÑ for the

proposal be demonstrated.

19 2 . In its Final Order in the Batch One Case, the Agency

discussed the factual circumstances in three cases involving CON

applications for new acute care hospitals that were submitted to

the Agency after the 2008 changes to the review c riteria in

section 408.035. Those cases were Memorial ; Columbia Hospital

(Palm Beaches) Limited Partnership , d/b/a West Palm Hospital and

Jupiter Medical Center, Inc. , d/b/a Jupiter Medical Center v.

Florida Regional Medical Center and Agency for Healthca re

Admin. , Case Nos. 12 - 0428CON and 12 - 0496CON ( Fla. DOAH Apr. 30,

2013; Fla. AHCA Jun e 6, 2013); and Lee Memorial Health System v.

Agency for Healthcare Admin. , Case Nos. 13 - 2508CON and 13 -

2558CON ( Fla. DOAH Mar. 28, 2014; Fla. AHCA Apr. 24, 2014).

19 3 . Following its discussion of the three above - cited

cases, AHCA concluded:

The case at hand is very similar to those of

Memorial Hospital Jacksonville, Columbia

Hospital and Lee Memorial . The city of

Doral has a relatively small population

(Recommended Orde r at Paragraph 96). The

existing beds in District 11 are

underutilized with an overall occupancy rate

of roughly 53% ( See Transcript, Volume 23,

Page 3660; Tenet Exhibit 5). And, there was

no competent, substantial record evidence

that the "geographic ba rriers to access"

alleged by both JW and DMC prevented

residents of the proposed service area from

accessing existing providers ( See , e.g.

Transcript, Volume 17, Pages 2753 - 2759). In

sum, if the Agency were to grant either

applicant a CON, it would be dep arting from

prior Agency precedent without any rational

explanation.

( FO at 25)

19 4 . JW and DMC, individually and collectively, failed to

demonstrate need for either proposed hospital. To the contrary,

the evidence demonstrated that neither hospital i s needed.

Accordingly, based upon the evidence presented in this case, the

CON applications at issue should be denied.

195. I t is important to note that these second

applications for the same previously denied projects were not

supported by Ðnew facts, changed conditions, or additional

submissionsÑ. The applicants are identical to the prior

applications, and the record in this case does not reflect any

Ðsubstantial changes in material circumstances.Ñ Delray , 5 So.

3d at 30.

19 6 . Indeed, a thorough c omparison of the facts in the

prior case and this case demonstrates that the only things that

have changed (further decline in use rates, more vacant beds,

expansion of Kendall) make the case for need less compelling now

than in the prior case. Thus, ther e is no basis to reach a

different result in this case.

19 7 . Should the Agency reject the above recommendation and

determine to approve one, but not both, of the applications at

issue, preference should be given to the DMC application for the

reasons stated in Findings of Fact Nos. 152 through 161 above.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Agency for Healthcare

Administration enter a final order denying East Florida - DMC,

Inc.Ós CON A pp lication No. 10432 and denying The Public Health

Trust of Miami - Dade County, Florida , d/b/a Jackson Hospital

WestÓs CON Application No. 10433.

DONE AND ENTERED this 30th day of April , 2019 , in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Di vision of Administrative Hearings

this 30th day of April , 2019 .

ENDNOTE S

1/ Kendall Healthcare Group, Ltd. v. The Public Health Trust

of Miami - Dade County, Florida, d/b/a Jackson Hospital West , Case

No. 16 - 0112CON (Fla. DOAH Mar. 16, 2017; Fla. AHCA Apr. 26,

2018). The Batch One Case Final Order is on appeal at the First

DCA. See Case No. 1D18 - 1975.

2/ The corollary of this statement, as announced at the outset

of the hearing, is that none of the Findings of F act made in the

Batch One Proceeding are binding upon the undersigned in this

proceeding. (Tr . p. 19).

3/ Doral is one of 34 municipalities in Miami - Dade County,

several of which do not have a hospital.

COPIES FURNISHED:

Stephen A. Ecenia, Esquire

Rutledge Ecenia, P.A.

Suite 202

119 Sou th Monroe Street

Tallahassee, Florida 32301

(eServed)

Kevin Michael Marker, Esquire

Agency for Healthcare Administration

Mail Stop 7

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

R. David Prescott, Esquire

Rutledge, Ecenia, and Purnell, P.A.

11 9 South Monroe Street, Suite 202

Tallahassee, Florida 32302

(eServed)

Richard Joseph Saliba, Esquire

Agency for Healthcare Administration

Fort Knox Building III, Mail Stop 7

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Michael J. Glazer, Esqu ire

Ausley & McMullen

123 South Calhoun Street

Post Office Box 391

Tallahassee, Florida 32302

(eServed)

Eugene Dylan Rivers, Esquire

Ausley & McMullen, P.A.

123 South Calhoun Street

Tallahassee, Florida 32301

(eServed)

Thomas Francis Panza, Esquire

Pan za, Maurer & Maynard, P.A.

Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

Elizabeth L. Pedersen, Esquire

Panza, Maurer, & Maynard, P.A.

Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

Alec J. Zavell, Esquire

Panza, Maurer, & Maynard, P.A.

Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

Abigail Price - Williams, Esquire

Miami - Dade County

West Wing, Suite 109

1611 Northwest 12th Avenue

Miami, Florida 33 136

Christopher Charles Kokoruda, Esquire

Miami - Dade County

West Wing, Suite 109

1611 Northwest 12th Avenue

Miami, Florida 33136

(eServed)

Eugene Shy, Jr., Esquire

Miami - Dade County

West Wing, Suite 109

1611 Northwest 12th Avenue

Miami, Florida 33136

( eServed)

Laura E. Wade, Esquire

Miami - Dade County

West Wing, Suite 109

1161 Northwest 12th Avenue

Miami, Florida 33136

(eServed)

Craig D. Miller, Esquire

Rutledge Ecenia, P.A.

Suite 202

119 South Monroe Street

Tallahassee, Florida 32301

(eServed)

Paul C. Buckley, Esquire

Panza, Maurer, & Maynard, P.A.

Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

Angelina Gonzalez, Esquire

Panza, Maurer, & Maynard, P.A.

Suite 905

2400 East Commercial Boulevard

Fort Lauderdale, Flor ida 33308

(eServed)

Stephen C. Emmanuel, Esquire

Ausley & McMullen

123 South Calhoun Street

Tallahassee, Florida 32301

(eServed)

Gabriel F.V. Warren, Esquire

Rutledge Ecenia, P.A.

119 South Monroe Street, Suite 202

Tallahassee, Florida 32301

(eServed)

Lindsey L. Miller - Hailey, Esquire

Agency for Healthcare Administration

Mail Stop 7

2727 Mahan Drive

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Healthcare Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Mary C. Mayhew, Secretary

Agency for Healthcare Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stefen Grow , General Counsel

Agency for Healthcare Administration

2727 Mahan Drive, Mail Stop 3

Tallah assee, Florida 32308

(eServed)

K im Kellum , Esquire

Agency for Healthcare Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Healthcare Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.