17-000554CON Marion Community Hospital, Inc., D/B/A Ocala Regional Medical Center, Citrus Memorial Hospital, Inc., D/B/A Citrus Memorial Hospital And Marion Community Hospital, Inc., D/B/A West Marion Community Hospital vs. Munroe Hma Hospital, Llc, D/B/A Munroe Regional Medical Center And Agency For Health Care Administration Status: Closed Recommended Order on Wednesday, November 15, 2017.

Summary: Petitioners proved by a preponderance of evidence that the Certificate of Need requested by Munroe Regional should not be approved.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARION COMMUNITY HOSPITAL, INC.,

d/b/a OCALA REGIONAL MEDICAL

CENTER ; CITRUS MEMORIAL

HOSPITAL, INC., d/b/a CITRUS

MEMORIAL HOSPITAL ; AND MARION

COMMUNITY HOSPITAL, INC., d/b/a

WEST MARION COMMUNITY H OSPITAL,

Petitioners,

vs. Case No. 17 - 0554CON

MUNROE HMA HOSPITAL, LLC, d/b/a

MUNROE REGIONAL MEDICAL CENTER

AND AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondents.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice to all parties, a final hearing was

held in this case before the Honorable R. Bruce McKibben,

Administrative Law Judge, on July 11 through 14 and 17 through

21, 2017, in Tallahassee, Florida. The purpose of the final

hearing was to conduct a de no vo review of the evidence ,

including but not limited to the approval, vel non, of CON

Application Number 10449 .

APPEARANCES

For Petitioner s , Marion Community Hospital, Inc. d/b/a

Ocala Regional Medical Center (ÐO cala RegionalÑ) ; Citrus

Memorial Hospital, I nc. d/b/a Citrus Memorial Hospital (ÐCitrus

Memorial Ñ); and Marion Comm unity Hospital, Inc. d/b/a West

Marion Community Hospital (ÐWest MarionÑ) (collectively, the

ÐPetitionersÑ) :

J. Stephen Menton, Esquire

Craig D. Miller , Esquire

Rutledge Ecenia, P.A.

119 South Monroe Street, Suite 202

Tallahassee, Florida 32301

For Respondent , Munroe HMA Hospital, LLC d/b/a Munroe

Regional Medical Center (ÐMunroe RegionalÑ) :

Susan C. Smith, Esquire

Geoffrey D. Smith, Esquire

Smith & Associates

1499 South Harbor City Boulevard

Melbourne, Florida 32901

For Respondent, Agency for Health Care Administration

(ÐAHCAÑ o r the ÐAgencyÑ):

Richard Joseph Saliba, Esquire

Lindsey Miller Hailey, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 7

T allahassee, Florida 32308

STATEMENT OF THE ISSUE

This proceeding involves Certificate of Need (ÐCONÑ)

application number 10449, submitted to the Agency by Munroe

Regional , seeking to establish a 66 - bed general acute care

hospital in Marion County, Flori da, District 3, Subdistrict 3 - 4.

The nature of the controversy is whether, on balance, the CON

application satisfies the applicable statutory and rule criteria

and should be approved.

PRELIMINARY STATEMENT

Munroe Regional filed its CON application in th e Hospital

Beds and Facilities CON batching cycle of August 2016. AHCA

issued a State Agency Action Report (ÐSAARÑ) addressing each of

the CON applications filed in that cycle. The SAAR relating to

Munroe Regional preliminarily recommended approval of CO N 10449.

The AgencyÓs notice of preliminary approval was published in

Volume 42, Number 234 of the Florida Administrative Regist er .

T he Petitioners jointly filed a detailed written statement of

opposition (ÐDWSOÑ) to Munroe RegionalÓs approval in accorda nce

with section 408.039(5)(c), Florida Statutes. (Unless otherwise

specifically stated herein, all references to Florida Statutes

will be to the 201 7 version.) The Petitioners also , on

December 23, 2016, filed a Petition for Formal Administrative

Hearin g with the Agency , challenging the preliminary approval of

Munroe RegionalÓs CON application. Munroe Regional filed an

Answer to the Petition for Formal Administrative Hearing on

January 9, 2017.

On January 23, 2017, the Petition for Formal Administrative

Hearing was forwarded to the Division of Administrative Hearings

(ÐDOAHÑ) and assigned to Administrative Law Judge James H.

Peterson. The case was subsequently transferred to the

undersigned on April 17, 2017.

On June 26, 2017, Munroe Regional filed a mo tion in limine,

seeking to limit certain evidence to be presented by Petitioners

at final hearing. The motion was denied. On June 30, 2017,

the parties submitted a Joint Pre - Hearing Stipulation setting

forth their positions in th is dispute and identifyin g their

anticipated witnesses and exhibits. Munroe Regional listed

32 witnesses, plus impeachment witnesses, rebuttal witnesses,

authenticating witnesses, all persons name d or listed in CON

application 10449, any witnesses named by other parties, and all

witnesses deposed in this matter. Munroe Regional identified

246 exhibits, plus various general categories of other possible

exhibits. The Agency named one witness and listed one E xhibit .

Petitioners identified 29 witnesses, plus impeachment, rebuttal

a nd authenticating witnesses, all witnesses name d by any other

party, and all witnesses deposed in this matter. They also

listed 100 exhibits, plus categories of other possible exhibits.

A t the final hearing, Munroe Regional called the following

11 witnes ses: Patti Greenberg, accepted as an expert in

healthcare and hospital planning and hospital finance; Ken

Colen, president of On Top Of The World; Christopher Rison,

senior planner, Marion County; Ryan Ott, president of TLC

Management, Inc.; Kevin Sheille y, president and CEO of Ocala

Chamber and Economic Partnership; Kevin McDonald; Patricia

Gabriel; Rodney Mascho , division chief of Marion County Fire -

Rescue Emergency Medical Services (ÑEMSÑ); Erika Browne, RN,

nurse manager of the Monroe Regional emergenc y department ,

accepted as an expert in emergency room nursing ; Bob Moore,

CEO of Munroe Regional , accepted as an expert in hospital

administration ; and Michael Pittman, EMS coordinator . Greenb erg

and Moore also testified in rebut t al. 1 81 of Munroe Region alÓs

E xhibits were offered and accepted into evidence , including

numbers : 1 through 3, 5 through 13, 15 through 27, 29 through

109, 130 through 135, 137 through 158, 163, 165 through 169,

172, 174 through 177, 180, 181, 183 through 192, 195 through

198, 2 01 through 203, 206 through 208, 212, 217, 219, 222, 224,

228, 229, 243, and 254 through 259.

AHCA called on e witness , Marisol Fitch, supervisor of the

CON Planning Unit at AHCA , accepted as an expert in health care

planning and CON ; AHCAÓs E xhibit 1 was a ccepted into evidence.

Petitioners called the following 10 witnesses: Ginger

Carroll, CEO of West Marion , accepted as an expert in health

care and hospital administration ; Chad Christianson, CEO,

Ocala Health/Ocala Regional , accepted as an expert in healt h

care and hospital administration ; Ralph Aleman, CEO, Citrus

Memorial; Sydney Clevinger, chief medical officer, northern

division of H ospital C orporation of A merica (ÐHCAÑ) , accepted

as an expert in family medicine ; George Mavros, COO, Citrus

Memorial , ac cepted as an expert in health care and hospital

administration ; Bhadresh Patel, M.D.; Jon Voight, RN ,

accepted as an expert in nursing, nursing administration, and

emergency services ; Jonathan Thigpen , accepted as an expert in

transportation engineering ; D arryl Weiner, accepted as an expert

in healthcare finance; and Gene N elson, accepted as an expert

in health planning. 33 of PetitionerÓs E xhibits were offered

and accepted into evidence , including numbers : 2 through 9,

11 through 16, 18, 20, 22 through 2 6, 28, 29, 57, 58, 95, 96,

98, 101 - 1, and 102 through 105 .

The Transcript of the final hearing, con sisting of

15 volume s , was filed at DOAH on August 15, 2017. By agreement

of the parties, proposed recommended o rders (ÐPROsÑ) were to be

filed on or befor e September 29, 2017, and were to be no more

than 50 pages. Due to Hurricane Irma and other events outside

the control of the parties, the d eadline was extended to

October 16 , 2017 . Each of the parties timely filed a PRO for

consideration.

FINDING S OF FA CT

( The following findings of fact are derived from

the stipulation of the parties , the admitted

exhibits, and the oral testimony at final hearing

in this matter . )

Parties

1 . AHCA is the state agency responsible for, inter alia,

the review and approval ( or denial) of CON applications. As

previously noted, AHCA made a preliminary decision to approve

issuance of CON 10449 to Munroe Regional.

2 . Munroe Regional is a 421 - bed tertiary care hospital

located in Ocala, Marion County, Florida , that offers inpati ent,

outpatient, medical, surgical, and emergency care . Its license

covers both the 421 - bed facility and a freestanding emergency

department (known as TimberRidge) in the western part of Marion

County. Munroe Regional is accredited by the Joint Commissio n

on Accreditation of Healthcare Organizations and features a

certified Chest Pain Center with specific accredi tations for

atrial fibrillation and heart failure. It is a general medical -

surgical facility, including trauma care, obstetrics, pediatric

servi ces, surgery, neurosurgery, etc. It does not include care

for burn patients, do transplants, or provide psychiatric

services.

3 . Munroe Regional was open ed in 1898 as a county - owned ,

not - for - profit hospital . In 1901 the hospital moved to a three -

story b uilding located at the corner of Adams and Orange Street,

now Northwest Second Street and First Avenue. The hospital was

upgraded to a 73 - bed fac ility in 1927, and that hospital space

now serves as administrative offices . The expansi on to 421 beds

occurr ed in 2003, at which time Munroe Regional underwent a

200,000 square foot expansion. In 2013, Health Management

Associates (ÐHMAÑ) took over operation of Munroe Regional by way

of a long - term (40 year) lease. In 2014, HMA was acquired by

Community Health Systems (ÐC H SÑ), a national for - profit

healthcare provider. The acquisition by CHS was not well

received by some hospital staff and there were many who decided

not to work for the new owner, including a large number of

nurses. Some of those nurses have since returned, but the

exodus had some negative impact on Munroe Regional at the time.

4 . Meanwhile, in 2002 Munroe Regional had opened

TimberRidge, the first freestand ing emergency department

(ÐEDÑ) in the State of Florida. T imberRidge i s located at

95 21 S outhwest State Road 200 , just west of the Ocala city

limits. It has 12 examination rooms as well as four additional

rooms utilized for treatment. TimberRidge i s the second busiest

ED in the state (second only to the facility located in

Tallahassee).

5 . When CHS took over operations, the lease agreement

with the hospital obligated CHS to spend $150 million on major

capital improvements and another $75 million in needed

infrastructure improvements. CHS initially planned to construct

a new bed tower on the current site of Munroe Regional. That

plan was later changed, resulting in the plan to build a new

hospital at the TimberRidge ED site. CHS determined that

alternative to be a better way to improve service in the area.

6 . TimberRidge is located in an area of Marion County

generally referred to as the Ð200 Corridor,Ñ an area identified

by State Road 200 as it goes from northeast to southwest in

Marion County , starting at I nterstate Highway 75 (ÐI - 75Ñ).

I - 75 is a federal highway which runs north and south through the

center of Marion County, effectively dividing the county in

half, east and west. The 200 Corridor is a rapidly growing area

of west Marion County and includes a number of adult (age 55 -

plus) comm unities such as Top of the World, whic h has been

approved for up to 36,000 lots for development. Although those

lots have been ÐentitledÑ for development since 1972, only about

seven thousand have actually been built out . There are several

other age - restricted communities in the area as well , including

Oak Run, Pine Run, Palm Cay, and Cherrywood Estates, to name a

few. It is clear that the 200 Corridor is populated largely by

middle - aged to elderly adults.

7 . There was significant testimony at final hearing

concerning recent population gro wth and e xpectations for the

future. Although it is clear that Marion County is growing, the

testimony was not persuasive as to whether that growth alone

would not necessitate building another hospital in the county.

8 . In 2016, Munroe Regional filed CO N application number

10449, seeking approval of a new 66 - bed general acute care

hospital in Marion County , Florida . The hospital would be

located on the same site as TimberRidge . I ts proposed primary

service area would be zip codes 34481, 34476, 34473, 3 4432 , and

34474 in District 3, Subdistrict 3 - 4. Its secondary service

area would be zip codes 34442, 34431, 34482, and 34434. 1/ The

proposed hospital would be a non - specialty/non - tertiary care

facility. It would not include care in the area of obstetric s,

newborns, psychiatry, substance abuse, burns, trauma,

transplants, neurosurgery, or comprehensive medical

rehabilitation.

9 . Munroe Regional timely submitted a letter of intent,

providing notice of its intent to file the aforementioned CON

applicatio n number 10449. AHCA deemed the application to have

satisfied , on balance, the statutory requirements for approval.

Preliminary approval of the application was published in the

Florida Administrative Regist er .

10 . Ocala Health Systems operates Ocala Re gional, a n

existing 222 - bed general acute care hospital located in Marion

County. Ocala Regional is a Level II trauma center. Ocala

Health Systems also operates West Marion, an existing 94 - bed

acute care hospital also located in Marion County , and operat es

a free - standing ED in the southern portion of Marion County.

Ocala Health Systems is an affiliate of Hospital Corporation of

America (ÐHCAÑ). As both Ocala Regional and West Marion are

operated by the same parent, the hospitals are much like a

single entity with two locations (exactly as Munroe Regional is

proposing for TimberRidge).

11 . Citrus Memorial is an existing 204 - bed general acute

care hospital locate d in District 3, Subdistrict 3 - 5 , comprised

of Citrus County . After experiencing operationa l and ownership

difficulties beginning around 2008, Citrus Memorial began to

decline. In 2014, HCA assumed operations of the hospital and

began to make improvements. Citrus Memorial was experiencing

very low utilization (around 50 percent ) and its reputa tion in

the community was poor. HCA has made strides in changing the

community perception .

12 . Each of the Petitioners, as exi s ting providers in the

same District, could be substantially affected by the approval

of the Munroe Regional CON application. Each of the Petitioners

has standing to challenge the preliminary approval of the CON to

Munroe Regional .

Statutory Rule Criteria

Subsection 408.035(1) (a) , Florida Statutes: The need for the

health care facilities and health services being proposed

13 . Munroe Regional raised several categories of facts

that it suggests support the need for the proposed new hospital

on the 200 Corridor. Those categories are, generally: 1) A

large number of elderly persons living within close proximity to

the proposed h ospital; 2) R ecent high occupancy rates at

existing hospitals in Marion County; 3) The potentially positive

impact on EM S transports if another hospital existed in the

county ; and 4) The possible reduction of Ðwall timesÑ and other

delays in emergency room s if the hospital is approved . 2/ Each of

those areas will be discussed more fully below.

Elderly P opulation in the Service Area

14 . The service area proposed by Munroe Regional for the

new hospital would be primarily within the 200 Corridor, mostly

in th e age - restricted communities. However, the facility would

be available to all residents of Marion County and surrounding

areas.

15 . There are approximately 146,000 residents living

within the area designated by Munroe Regional as its anticipated

primary service area . Of those, some 123,000 are adults , with

more than 70,000 of those being elderly, i.e., over 65 years of

age. It is axiomatic that elderly adults utilize hospital

services more than others. That fact may also explain why there

are so many m edical and doctorsÓ offices in the TimberRidge

area . There are also other healthcare facilities in the service

area, including a nursing home and a hospice. Several community

representatives testified as to their desire to see a new

hospital built on the 200 Corridor, but their testimony was not

persuasive as to the ÐneedÑ (versus the ÐwantÑ) for a new

hospital. T he witnesses described the location of the new

hospital as a convenience for local residents rather than

addressing actual need. For example, Mrs. Gabriel frankly

asserted that, ÐWe would rather have [a hospital] right here in

our own back yard.Ñ Transcript, Vol. 2, page 296.

16 . Munroe RegionalÓs witness, Mr. Ott, spoke of his

companyÓs involvement in building healthcare communities

(assisted living facilities, nursing homes, etc.) in the rapidly

growing area near TimberRidge . He noted, however, that such

facilities had a singular goal of keeping people out of the

hospital as much as possible. This militates against the

addition of new hospi tal beds in Marion County.

17 . There was no persuasive testimony that the mere

existence of a large elderly population near the 200 Corridor

warranted construction of a new hospital in that area.

Occupancy Rates at Existing Hospitals

18 . Munroe Regional has experience d low occupancy rates

during the last few years and it continues to decline . Prior to

its acquisition by CHS in early 2014 , the hospitalÓs occupancy

was around 67 percent. From Apri l 2014 until December 2014,

the occupancy averaged 63 perce nt. From January 2015 to

December 2015, it was at 6 1 percent . And for calendar year

2016, the occupancy rate was at 56 percent. However, Munroe

Regional asserts that calculation of occupancy is not a static

event; there are many other factors that could be considered,

e.g., semi - private rooms may be utilized by a person with an

infection, thereby making the other bed in the room inaccessible

to another patient; rooms or entire units may be taken out of

use during renovations (and Munroe Regional is in th e midst of

renovating its entire hospital, unit by unit); certain units may

not be full, such as OB - GYN, but the beds within that unit are

not available for other types of patients, etc. Although AHCA

data show Munroe RegionalÓs most recent occupancy rate to be

around 56 percent , Munroe Regional calculates its Ð practical

occupancy Ñ to be in the range of 70 percent. And, if certain

specialty units were omitted from consideration , Munroe Regional

would say that its occupancy is close to capacity.

19 . By comparison, t he occupancy rates at Ocala Regional

and West Marion were very high during the past three years.

Though the testimony and evidence was contradictory in many

regards, depending on which beds or patients were actually

included, it is clear from the totality of the evidence that

both hospitals operated at or near capacity for much of the

time. There were periods during which West Marion operated at

over one hundred percent of its capacity, indicating the rapid

transition of patients on a given d ay.

20 . The high occupancy at West Marion is being actively

addressed by the hospital . West Marion first added 25 new beds,

which went on - line in April 2015 . There are 44 additional beds

which have been approved and will be available early in 2018 .

W est Marion has also built an additional floor of Ðshelled inÑ

space, which could house up to 48 additional medical surgical

beds. That shelled - in space , however, has also been offered as

space to house new comprehensive medical rehabilitation (ÐCMRÑ)

beds for which West Marion has applied , but the CON for those

beds ha s not been approved by AHCA at this time. If approved,

West Marion will look elsewhere for space to add additional

medical surgical beds.

21 . Ocala Regional begins to look at expansion wh en its

inpatient occupancy reaches about 8 0 percent , exclusive of

observation patients. 3 / 80 percent is a recognized level of

Ðfunctional capacity Ñ for a hospital in Marion County . In

recognition of that loose standard and its present state of

affairs, O cala Regional will have a new 34 - bed addition coming

on line in late 2018 . That addition will also contain 12 new

beds in its ED and two new operating rooms. Though disputed by

Munroe Regional, it seems logical the addition of those beds

will reduce occu pancy levels at Ocala Regional.

22 . The data presented by Munroe Regional as to the two

competing hospitals was not entirely persuasive as to whether

the high occupancy rates at the other hospitals constituted need

for another hospital. In total, the e vidence supports the

contention that occupancy rates were high, but nothing more.

23 . Although Munroe Regional does not acknowledge the

potential impact of its proposed new hospital on Citrus

Memorial, it is clear from the evidence that Citrus Memorial ha s

grave concerns about the proposed project. It is already

difficult for Citrus Memorial to hire and retain professional

staff; a new hospital in the area would further exacerbate that

problem. The same is true concerning Citrus MemorialÓs patient

census . Already suffering from low utilization, another

hospital just 25 to 30 miles northwest of Citrus Memorial (and

only a short drive from many residents of Citrus County) could

have significant negative impact on the hospital. Occupancy

rates at Citrus Me morial of around 60 percent over the past

three years cannot be ignored. Its CEO noted that there is very

little in - migration from other counties by persons seeking

healthcare in Citrus County. However, many Citrus County

residents out - migrate for health care services to surrounding

counties. In contrast to Munroe RegionalÓs position, Citrus

Memorial sees its low occupancy as Ðroom for growthÑ rather than

Ðfunctional occupancy.Ñ All in all, Munroe RegionalÓs dismissal

of the potential negative impact on Citrus Memorial is not well

taken.

24 . Furthermore, the occupancy rate at Munroe Regional

over the past three years effectively defuses its claim of need

for a new hospital, especially one operated by the same

organization. As noted above, t he evidence s hows that a number

of beds, even entire units, at Munroe Regional have been closed

and out of use in the recent past. There is enormous capacity

for additional patients at Munroe Regional, militating against

approval of a new hospital in the subdistrict.

25 . Though not a hospital, TimberRidge is also a very busy

provider of healthcare services. Annually, TimberRidge cares

for over 32,000 emergency patients, a number greater than half

of the hospital - based EDs around the state. TimberRidge

transfers abou t 2,500 patients per year to hospitals for in -

patient care , around 8 to 10 patients a day. Most of those

patients go to Munroe Regional. And, although Munroe Regional

operates at a fairly low occupancy, TimberRidge reports that

patients sometimes have to wait 8 to 10 hours for a bed to

become available. If the CON is approved, TimberRidge w ill add

14 more emergency treatment rooms, presumably handling even more

emergency patients.

Impact on EM S Transport

26 . Emergency transport to hospitals in Marion Co unty is

provided by a single entity, the Marion County Fire - Rescue

service. This service consists of three different departments:

Du n nellon Fire - Rescue , a non - transport, basic life support

(ÐBLSÑ) service; Ocala Fire - Rescue , a non - transport advanced

life support ( ÐALSÑ) service; and Marion County Fire - Rescue, an

ALS entity that is both a non - transport unit and is the primary

transportation provider for Ðscene calls,Ñ i.e., to pick up

patients at the scene of an accident or event. There is another

BLS tra nsport provider in Marion County which is allowed to do

minimal inter - facility transfers, but it is not authorized to

transport from scenes or to emergency rooms . About 450 to

475 emergency medical technicians (Ð EMTs Ñ) and paramedics work

within the syste m. It operates about 32 vehicles a day, seven

days a week, on a regular basis , with some increase during peak

season. 4 / The annual call volume for Marion County Fire - Rescue

is about 70 ,000 to 75 ,000 calls; of that number about 45 ,000 to

47 ,000 result in persons being transported to a hospital. The

medical director for Marion County Fire - Rescue is Frank

Fraunfelter , who , coincidentally, also works with the Munroe

Regional ED.

27 . When a person is placed in an ambulance, he or she has

the right to be tr ansported to the hospital of their choice. If

they do not have a preference o r cannot make the decision, the

transport will go to the nearest available hospital or ED.

(Besides the freestanding TimberRidge ED, the Ocala Health

System also operates a free standing ED in the southeast quadrant

of Marion County. ) The patientÓs condition or malady may

dictate where they are taken, regardless of their preference.

For example, heart attack victims or stroke alert patient s

usually require transport to the close st of either Munroe

Regional, Ocala Regional, or West Marionauma alert patient s

may only go to Ocala Regional. Pediatric trauma patient s are

sped to Shands, in Gainesville.

28 . When responding to calls on the west side of I - 75,

EMT drivers say man y patients do not want to go all the way

Ð into town Ñ for care. That leaves West Marion and TimberRidge

as the available sites for delivery of the patient. Though

there was some evidence to suggest that individuals prefer not

to go all the way into town, i.e., to Munroe Regional or Ocal a

Regional, the evidence was not sufficient to establish that

preference as an absolute fact.

29 . Due to the layout of Marion County, it often takes EM S

longer to transport patient s from the western areas of the

county to the two downtown hospitals. Another hospital located

on the 200 Corridor would obviously cut down on their drive time

for some patients (if the patient chose to go to that hosptial ).

The number of facility - to - facility transfers could also be

reduced if patients at TimberRidge ED had the option to remain

at the new hospital rather than being transferred to Munroe

Regional .

30 . The EM S drivers noted t hat it sometimes takes 20 to

30 minutes to reach the downtown hospitals (Munroe Regional and

Ocala Regio nal), followed by 20 to 30 minutes waiting at the

hospital ED, plus 20 to 30 minutes to drive back to the station.

The time spent at the hospital involves getting the hospital

room assignment from the charge nurse, discussing the patientÓs

status with the RN who will be taking over care of the patient,

and getting the patient transferred to a hospital bed or gurney.

The division chief of Marion County Fire - Rescue supports the

addition of the hospital at TimberRidge, but it seems to be

because it would be more advantageous to his business , i.e., not

because there is a ÐneedÑ for the hospital. He said, ÐIÓd love

to see a hundred more beds at each of the hospitals. More beds

means they are off my stretcher; gets my truck back in service.Ñ

Transcript, Vol. 3, page 392. His stated ÐpreferenceÑ does not

support need for a new hospital in the area.

31 . While wall times and diversions have been a problem in

Marion County for some time, the evidence suggests that the

problem is less acute in recent months. Eve ryone involved seems

to be working to eliminate delays. The EMS division chief

noted, for example, that the addition of beds at West Marion has

had a positive effect on transportation times. The additional

beds coming on line at that hospital should furt her impact this

improvement. So should the renovations of the EDs at Munroe

Regional and Ocala Regional.

32 . There was extensive testimony at final hearing

concerning drive times and how long it took EMS to reach this

hospital or that. The testimony was not persuasive, a s

witnesses seemed to presuppose that all patients would be picked

up at a location furthest from the hospital being discussed.

For example, EMTs testified that it takes up to 30 minutes to

get from the 200 Corridor to Ocala Regional or Munroe Regional.

But the 200 Corridor is a fairly long stretch of road. It

cannot possibly take Ðup to 30 minutesÑ for every patient, no

matter where on the Corridor they were picked up. And,

obviously, traffic patterns change; sometimes it is heavier t han

others. The drive time testimony seemed very speculative and

unreliable.

33 . One important issue became clear through testimony in

this proceeding : A s the single provider of transportation in

the county, Marion County Fire - Rescue could reli e ve its busy

schedule by allowing ALS facility - to - facility transfers to be

done by a private entity . There does not seem to be a n absolute

need for Marion County Fire - Rescue ambulances (which are needed

for emergency situations) to be utilized for such transfers .

One reason is that EMS drivers consider facility - to - facility

transfers to be rather mundane; they would prefer to transfer

patients directly from the scene of an accident or event. (This

was described as a ÐmoraleÑ issue for the drivers.) The issue

ha s been addressed with Marion County Fire - Rescue by the county

hospitals, but it seems they are getting push - back from the EM S

provider for some reason .

3 4 . It also seems that having EMS testify concerning the

need for a new hospital is, as one witness sug gested, like the

tail wagging the dog. Perhaps it should be Marion County Fire -

Rescue adding additional stations or vehicles rather than

building a new hospital costing up to $100 million dollars .

Reduction of Wall Times

3 5 . Marion County, like many oth er areas within

Florida and nationwide, has historically experienced chronic

difficulties by EM S transporters (ambulances) in d ischarging of

patients at hospitals in a timely fashion. Often, the driver of

an ambulance must wait extended periods of time fo r a hospital

to admit the patient or accept the patient into the hospitalÓs

care. This so - called Ðwall timeÑ results in the EMT not being

available to respond to other calls in the community. Wall

times may exist for a number of reasons, including but no t

limited to: a major accident within the vicinity might requir e

simultaneous treatment for numerous victims; a n unforeseen spike

in the number of persons needing treatment at one time; a

natural calamity resulting in injuries; other hospital EDs being

fu ll, etc. A major factor faced by m any hospitals is that there

simply are not enough beds available within the hospital at

certain times to which the ED patients could be admitted. The

patient, therefore, must occupy an ED bed, denying the use of

the ED b ed s to later - arriving patients. This problematic

situation is exacerbated by the common practice of uninsured

people utilizing the ED as their private doctorÓs office. When

those persons show up at an ED with a non - emergency complaint,

they occupy space which would otherwise be available to treat

patients brought in by EMS from accident sites or the like.

3 6 . One method utilized by individual hospital EDs to

reduce wall times is a process called Ðdiversion.Ñ This simply

means the hospital will contact the EM S provider and ask that

all emergency patients be diverted to another hospital for a

prescribed period of time, usually about an hour or two. The

diversion allows the hospital to catch up on its existing

patients before others are brought into the ED. Diversion is a

commonly accepted means of dealing with ED overcrowding. There

are some exceptions to a hospital Ós request for diversion. For

example, patients suffering a heart attack or other similar

problem will be sent to the nearest appropriate hospital,

whether it is on diversion or not. And if two hospitals ask for

diversion at the same time, then all hospitals are denied

diversion. Diversion, however, is only applicable to patients

who arrive at an ED by way of emergency transport, which is

about 15 percent of the total ED patients. The great majority

of patients, who arrive via other means ( personal car, family,

friends, taxi , etc.) are accepted by the ED even if it is on

diversion.

3 7 . Munroe Regional is restructuring its ED, adding four

additional beds (or bays) and reconfiguring the ED so that EMTs

have better access to the area. The changes will also make it

easier for nurses to maintain visual contact with the patients.

The changes will make the process of safeguarding bays for

psych iatric patients much faster and easier. T hese changes will

have a positive impact on the ED and contribute to less wall

time for EMTs.

3 8 . After having the largest amount of time on diversion

from July 2015 to June 2016, Munroe Regional has not gone on

d iversion for over one full calendar year. It has taken steps

to improve its ED wall times. The low occupancy at Munroe

Regional would seem to suggest that it would not have a problem

finding ED patients a bed within the hospital, thus alleviating

at leas t that one reason for going on diversion . But even

though Munroe Regional has more vacant beds than other hospitals

in the subdistrict, that fact does not automatically mean that

it has more beds to which patients may be admitted. If the

available beds a re in an area of the hospital that is not

appropriate for admission of an ED patient, the patient must

still wait for an appropriate bed .

3 9 . Still, o ne must wonder why a hospital operating at

less than 60 percent occupancy would have trouble finding a bed

for patients who are waiting in the ED . Munroe Regional

provided no empirical data at final hearing as to the needs of

its ED patients versus the kinds of open beds at the hospital,

so a conclusion cannot be reached in that regard. By

comparison, Wes t Marion had the shortest wall times despite

having the highest occupancy rate of the county hospitals. The

correlation between census and delays is nebulous at best.

40 . Munroe RegionalÓs EMS coordinator confirmed the

regular phenomenon of beds not be ing available for patients

coming in through the emergency rooms, but acknowledged that the

current closure of many units contributes to that problem.

Also, Munroe Regional is in the process of renovating its

emergency department, which should help allevi ate some of the

wall time problems.

4 1 . Ocala Regional has shown the longest wall times of all

hospitals in the county. Its high occupancy and downtown

location contribute to that fact. The hospital has taken steps

to reduce wall times and has made so me progress. As the wall

time issue continues to improve county - wide, Ocala RegionalÓs

wall times have decreased around 50 percent as well.

Subsection 408.035(1)( b ) : The availability, accessibility, and

extent of utilization of existing health care fac ilities and

health services in the service district of the applicant

4 2 . All citizens have access to the existing hospitals and

EDs in Marion County, as well as t w o facilities in surrounding

counties. In the service area identified by Munroe County for

its new hospital, the closest hospitals are, in geographic

order , Marion West, Munroe Regional , Ocala Regional , and Citrus

Memorial .

43 . The occupancy rates at the existing hospitals are

discussed above and need not be repeated here. Suffice to say

that Munroe Regional is arguably not being utilized to the same

extent of the other Marion County hospitals. Reasons for the

lower utilization include the fact that Munroe Regional has

several diverse medical units. Some beds in the open heart or

neurosurgery units might be empty, whil e OB - GYN beds are needed.

It is not possible to utilize beds in the former units to treat

the latter patients. Thus, beds remain empty even as beds are

needed. It is a difficult problem for any hospital to manage.

4 4 . It shou ld be noted, however, that there are no

established desired occupancy rates for hospitals. That is,

AHCA does not penalize a hospital for having a high or low

occupancy.

Subsection 408.035(1)(e): The extent to which the proposed

services will enhance access to health care for residents of the

service district

45 . Clearly, having another hospital on the 200 Corridor

would be more convenient for persons living in that area of

town. The new hospital would, therefore, enhance access Î at

least to the extent access is equated to less travel time for

some residents . The new hospital would not offer any services

which are not already available at area hospitals.

46 . The most persuasive evidence is that the approval of

the TimberRidge hospital would not significantly improve drive

time for persons living in the areas that hospital would serve.

Of the 27 zip codes which are in or near the TimberRidge

proposed service area, only six would have reduced drive times

to a ho spital. (One of those zip codes wou ld be affected by

about three minutes.) The large age - limited communities

addressed by TimberRidge are all within 20 minutes Ó drive time

to West Marion Î the existing hospital in western Marion County.

4 7 . If the new hospital is not approved, 98 percen t of the

population of Marion County would still be within 30 minutes Ó

drive time of an existing hospital. Stated differently, only

about 5,500 people in the population of 266,000 would realize a

significantly positive impact on their drive time to a hosp ital ,

if the TimberRidge hospital is approved . (Note: Testimony and

evidence to the contrary at final hearing was not persuasive.)

4 8 . From a purely transportation perspective, the existing

TimberRidge ED is moving most of its patients needing acute car e

to Munroe Regional, i.e., its sister facility. Munroe Regional

presumes those same patients would prefer to remain at

TimberRidge if a hospital was a vailable on - site, but of

course that is speculative. If all patients arriving at the

TimberRidge ED cho se to stay at TimberRidge Hospital, then

access for th ose patients would be greatly enhanced (as long as

there were beds available). The same cannot be said for the

remainder of the populace.

Subsection 408.035(1)g): The extent to which the proposal wil l

foster competition that promotes quality and cost - effectiveness

49 . The new hospital would necessarily compete with West

Marion, its closest unaffiliated facility. Because it would be

located within Marion County, it would also compete somewhat

with O cala Regional. It would also compete to a much lesser

degree with Citrus Memorial.

50 . It seems reasonable that the new hospital would also

ÐcompeteÑ with Munroe Regional, i.e., it would retain patients

from the TimberRidge ED who might otherwise be tran sferred to

Munroe Regional. Such competition could have a negative impact

on Munroe RegionalÓs ability to i mprov e its already - flagging

census.

51 . It would appear that a satellite hospital for Munroe

Regional would increase cost - effectiveness for CHS, wh ich would

then be operat ing two hospitals within the county.

52 . The question is whether the competition would promote

quality and cost - effectiveness overall . The most persuasive

evidence suggests that it would not.

5 3 . The primary problem espoused by the Ocala Health

System witnesses about the proposed new hospital had to do with

staffing. There is a shortage of nurses in Marion County,

similar to the shortage across the state and the country . There

are, e.g., some 67,000 nursing vacancies in Florida at this

time.

5 4 . Munroe Regional normally has 50 to 60 vacancies on its

nursing staff at any given time. Right after CHS took over ,

Munroe Regional was down about 240 nurses; j ust prior to the

final hearing, that number was at around 100 vacancies.

However, there are currently 80 nurses in orientation at Munroe

Regional who will be coming on board soon. No evidence was

presented as to whether these would be experienced nurses ,

recent nursing school graduates , LPNs or RNs . Munroe Regional

generally has a turnover rate for nurses of about 24 percent,

which is very high. That means about one in four positions are

vacant at any given time. This rate is comparable to Citrus

Memorial, which currently has 15 to 20 percent of its nursing

positions vacant.

5 5 . Many of the area hospitals are operating with less

than a full nursing staff. Many nurse positions have to be

filled by Ðtravelers , Ñ i.e., nurses who go from community to

community for interim work positions. The travelers demand

higher salaries th an local, permanent nurses. They are,

however, simply needed at certain times to meet a hospitalÓs

needs.

5 6 . The same is true for physicians needed to staff the

area hospitals; they are hard to recruit and difficult to

retain. This is especially true for Citrus Memorial, located in

an area that does not provide the cultural amenities desired by

families of many physicians. Citrus Memorial often has to rely

on temporary doctors, locum tenens , to fill needed positions

when no permanent doctors are avail able.

57 . The competition for nurses and physicians would not

promote quality and cost - effectiveness. To the contrary, such

competition could have significantly negative consequences for

all hospitals in the area.

Subsection 408.035(1)( i ) : The app licantÓs past and proposed

provision of health care services to Medicaid patients and the

medically indigent

5 8 . Munroe RegionalÓs payor mix includes about 24 percent

Medicaid and indigent care; its emergency department Ós Medicaid

average i s around 39 pe rcent ; and TimberRidge Ós is at about

37 percent . In the CON application, Munroe Regional agreed to a

condition equal to the current community average for Medicaid

and charity care, i.e., 13 percent .

CONCLUSIONS OF LAW

59 . The Division of Administrative H earings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.5 7 (1) and 408.039(5)(b), Fla. Stat.

60 . In order for an existing health care facility to have

standing in a CON proceeding, it must show that it will be

Ðsubst antially a ffectedÑ by approval of the CON Application at

issue. § 408.039(5), Fla. Stat.

61 . Petitioners have each prove n , by a preponderance of

the evidence , that they ha ve standing to participate as a party

in this proceeding. Though Citrus Memorial w ould not lose a

large volume of patients if TimberRidgeÓs hospital is approved,

there could be a significant negative impact on its ability to

hire doctors and nursing staff.

6 2 . Munroe Regional , as the applicant, has the burden of

proving, by the prepo nderance of the evidence, entitlement to a

CON. Boca Raton Artificial Kidney Ctr., Inc. v. DepÓt of HRS ,

475 So. 2d 260 (Fla. 1st DCA 1985); § 120.57(1)(j), Fla. Stat.

Balancing the Applicable Statutory and Rule Criteria

6 3 . The award of a CON must be ba sed on a balanced

consideration of all applicable statutory and rule criteria.

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

Ð[T]he appropriate weight to be given to each individual

criterion is not fixed, but rather must vary on a case - by - case

basis, depending upon the facts of each case.Ñ Collier Med.

Ctr., Inc. v. DepÓt of HRS , 462 So. 2d 83, 84 (Fla. 1st DCA

1985).

6 4 . An administrative heari ng involving disputed

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

administrat ive law judge 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), Fla. Stat. The AgencyÓs

preliminary decision on a CON application, including its

findings in the SAAR , is not entitled to a presumption of

correctness. Id. 5 / Generally, health care planning should

not be done on an institution - specific basis. See Amisub

(North Ridge Hosp.), Inc. v. Ag . for Health Care Admin. , Case

Nos. 94 - 1012, 94 - 1016, 94 - 10 17, and 94 - 1018 (Fla. DOAH Mar. 17,

1995, ¶ 145; Fla. AHCA June 9, 1995); St. Joseph's Hosp. v.

Dep't of H RS , Case No. 86 - 1542 (Fla. DOAH Sept. 8, 1987, ¶ 67;

Fla. D HRS Dec. 15, 1987), aff'd , 536 So. 2d 346 (Fla. 1st DCA

1988); Morton F. Plant Hosp. Ass'n, Inc. v. D ep't of H RS , Case

Nos. 83 - 1275, 84 - 0296, and 84 - 0699 (Fla . DOAH Mar. 27, 1985;

DHRS Oct. 4, 1985)("The purpose of the Certificate of Need law

is not only to eliminate unnecessary duplication of health

services, but also to rationally examine alternative me thods of

achieving health goals, 'and to aid in their achievement through

the most effective means possible within the limits of available

resources.' Section 381.493(2 ), Florida Statutes." RO ¶ 39),

aff'd , 491 So. 2d 586 (Fla. 1st DCA 1986).

6 5 . In thi s case, AHCA accepted Munroe RegionalÓs

arguments regarding need without verification or detailed

analysis. The Agency took the assertions, applied reasonable

health planning principles, and concluded that the CON should be

approved. A more detailed exam ination of the proposal (as was

done at final hearing) , indicates no valid basis for approval at

this time. The needs assessment presented by Munroe Regional,

though thorough and well - presented, fell short of establishing a

proven need for a hospital at t he TimberRidge location at this

time.

6 6 . The evidence did not establish a need for the new

hospital, that it would enhance access, or that it would improve

competition. Further, there is significant evidence that the new

hospital would have a negative impact on the existing facilitiesÓ

ability to hire and retain healthcare professionals.

67 . Ð[ A ]n applicant is not required to set forth in its

application every piece of evidence, testimony, or argument upon

which it intends to rely if a challenge is br ought to its

application, but must simply raise all issues which it contends

support its application.Ñ Sarasota C n ty. Pub. Hosp. Bd., d/b/a

MemÓl Hosp., Sarasota, and Adventist Health Sys . /Sunbelt, Inc.,

d/b/a Med. Ctr. Hosp. v. DepÓt of HRS , Case No. 89 - 1412 (Fla.

DOAH Sept. 28, 1989; Fla. DHRS Nov. 17, 1989). See also NME

Hosp., Inc., d/b/a West Boca Med. Ctr. v. DepÓt of HRS , Case

No. 90 - 7037 (Fla. DOAH Feb. 25, 1992; Fla. DHRS April 8, 1992)

(evidence is admissible that explains or elaborates on

asser tions made in a CON application, and does not change the

nature and scope of the proposal); Columbia Hosp. Corp. of South

Broward, d/b/a Westside RegÓl Med. Ctr. v. AHCA , Case No. 94 -

1020 (Fla. DOAH Jan. 31, 1996; Fla. AHCA Mar. 6, 1996) (Ðit was

appropriat e for Westside to provide [such] data . . . at hearing

in an attempt to explain or elaborate on the information

originally submitted. . . .Ñ); Marriott Ret. Comm. v. DepÓt of

HRS , Case No. 91 - 2231 (Fla. DOAH Feb. 11, 1992; Fla. DHRS May 6,

1992)(details pr esented at hearing which supplied the basis for

statements contained in the application did not constitute an

impermissible amendment -- an applicant is not required to set

forth in its application every piece of evidence upon which it

may rely if it proceed s to hearing).

6 8 . If this proceeding concerned a ÐCertificate of WantÑ

rather than a Certificate of Need, Petitioners would have proven

by a clear preponderance of evidence that many citizens of

Marion County, including specifically , EMS personnel and

re sidents of some adult communities, strongly desire a new

hospital at the site of the existing TimberRidge emergency

center. However, ÐneedÑ for a new hospital involves far more

than citizen preferences. The significant negative impact of a

new hospital o n existing facilities, especially West Marion and

Ocala Regional , coupled with the negative impact on every

hospitalÓs ability to find and hire sufficient medical staff

(doctors, nurses, specialists), militate against the approval of

a new hospital at this time.

6 9 . By a preponderance of evidence, Petitioners proved

that the CON application filed by Munroe Regional should be

denied.

RECOMMENDATION

Based on the foregoing Find ings of Fact and Conclusions

of Law, it is RECOMMENDED that the Agency for Heal th Care

Administration issue an order denying CON 10449 to Munroe

Regional .

DONE AND ENTERED this 1 5 th day of November , 2017 , in

Tallahassee, Leon County, Florida.

S

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 5 th day of November, 2 017 .

ENDNOTE S

1/ The primary and secondary service areas identified by Munroe

Regional are essentially the regions of Marion County from

whence most of its anticipated admissions would arise. However,

like all hospitals, the actual service area could be much

broader and may depend on factors such as patient choice,

critical need, and special services .

2/ ÐWall timeÑ is a term generally used to describe the time a

patient and EMT must wait (usually sitting along the wall)

before the patient is accepte d by the hospital as a patient.

3/ The issue of Ðobservation bed sÑ was extensively discussed

by the parties during the final hearing. The upshot of the

evidence was that some patients are in hospital under the

category of observation. Such patients are not counted in the

daily census numbers as Ðpatients,Ñ but they often occupy a bed

that might otherwise house a regular patient. Exactly how such

patients are counted in the occupancy rate at a hospital is

disputed and, depending on the hospital, handled somewhat

differently. Even the internal data at a hospital seems to

be interpreted differently by various hospital employees. The

sum and substance of the differentiation of observation patients

is that it only minimally affect s the occupancy data and i s

not significant or important in the instant case. The state

does not provide guidance as to how a hospital should record

observation patients. Therefore, each hospital makes the

determination individually, resulting in meaningless comparisons

from one hospital to the next.

4 / Marion County has historically had a significant change in

population during the winter months. This has been the result

of Ðsnow birdsÑ from the north flocking to Florida to escape

cold weather. The influx is not as large in recent years as

many of the birds have decided to nest in Florida permanently.

5 / In its PRO, ACHA argues that it s Ðinterpretation of the [CON]

statuteÑ should somehow be the end of the argument as to whether

the CON should be issued to Munroe Regional. That position is

contrary to law and is not accepted.

COPIES FURNISHED:

Richard Joseph Saliba, Esquire

Agency for Health Care Administration

Fort Knox Building III, Mail Stop 7

2727 Mahan Drive

Tallahassee, Florida 32303

(eServed)

Stephen A. Ecenia, Esquire

Rutledge Ecenia, P.A.

119 South Monroe Street, Suite 202

Post Office Box 551

Tallahassee, Florida 32302 - 0551

(eServed)

Lindsey L. Miller - Hailey, Esquire

Agency for Health Care Administration

Mail Stop 7

2727 Mahan Drive

Tallahassee, Florida 3230 8

(eServed)

Timothy Bruce Elliott, Esquire

Smith & Associates

Suite 201

3301 Thomasville Road

Tallahassee, Florida 32308

(eServed)

Kevin Michael Marker, Esquire

Agency for Health Care Administration

Mail Stop 3

2727 Mahan Drive

Tallahassee, Florida 323 08

(eServed)

Corinne T. Porcher, Esquire

Smith & Associates

Suite 201

3301 Thomasville Road

Tallahassee, Florida 32308

(eServed)

Geoffrey D. Smith, Esquire

Smith & Associates

Suite 201

3301 Thomasville Road

Tallahassee, Florida 32308

(eServed)

Susa n Crystal Smith, Esquire

Smith & Associates

Suite 201

3301 Thomasville Road

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Ju stin Senior, Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Stefan Grow, General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

( eServed)

Shena L. Grantham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Flori da 32308

(eServed)

J. Stephen Menton, Esquire

Rutledge Ecenia, P.A.

119 South Monroe Street, Suite 202

Post Office Box 551

Tallahassee, Florida 32302 - 0551

(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.