18-000068CON Marion Community Hospital, Inc., D/B/A West Marion Community Hospital, And Ocala Regional Medical Center vs. Agency For Health Care Administration
 Status: Closed
Recommended Order on Wednesday, February 6, 2019.


View Dockets  
Summary: Waterman Hosp., Lake Co., better for "needed" 12-bed CMR unit. Not normal circumstances proved need for two 12-bed CMR units, one in Lake Co. and one in Marion Co. Not normal argument was not an application amendment.

1S TATE OF FLORIDA

5DIVISION OF ADMINISTRATIVE HEARINGS

9MARION COMMUNITY HOSPITAL, INC.,

13d/b/a WEST MARION COMMUNITY

17HOSPITAL AND OCALA REGIONAL

21MEDICAL CENTER,

23Petitioners,

24vs. Case Nos. 18 - 0068CON

3018 - 0075CON

33AGENCY FOR HEALTH CARE

37ADMINISTRATION AND FLORIDA

40HOSPITAL WATERMAN, I NC., d/b/a

45FLORIDA HOSPITAL WATERMAN,

48Respondents.

49_______________________________/

50RECOMMENDED ORDER

52Administrative Law Judge John D. C. Newton, II, of the

62Division of Administrative Hearings con ducted the final h earing

72in this cause on June 18 through 22 and 25, 2018, in Tallahassee,

85Florida.

86APPEARANCES

87For Petitioner s Marion Community Hospital, Inc. , d/b/a West

96Marion Community Hospital and Oc ala Regional Medical

104Center

105Craig D. Miller, Esquire

109J. Stephen Menton, Esquire

113Rutledge Ecenia , P.A.

116119 South Monroe Street, Suite 202

122Tallahassee, Florida 32301

125For Respondent Agency for Health Care Admi nistration

133Richard Joseph Saliba, Esquire

137Lindsey L. Miller - Hailey, Esquire

143Agency for Health Care Administration

148Mail Stop 7

1512727 Mahan Drive

154Tallahasse e, Florida 32308

158For Respondent Florida Hospital Waterman , Inc., d/b/a

165Florida Hospital Waterman

168Stephen K. Boone, Esquire

172Boone , Boone , Boone , and Koda , P.A.

1781001 Avenida D el Circo

183Post Office Box 1596

187Venice, Florida 34284

190Mia L. McKown, Esquire

194Holland & Knight , LLP

198315 South Calhoun Street, Suite 600

204Tallahassee, Florida 32301

207STATEMENT OF T HE ISSUE S

213A. Should the Agency for Health Care Administration

221(Agency) approve Certificate of Need (CON) Application No. 10499

230of Marion Community Hospital, Inc. (Marion Community) , d/b/a West

239Marion Community Hospital (West Marion), to add 12 comprehensi ve

249medical rehabilitation (CMR) beds to its facility?

256B. Should the Agency approve CON Application No. 10496 of

266Florida Hospital Waterman , Inc. (Waterman) , to add 12 CMR beds to

277its facility?

279PRELIMINARY STATEMENT

281West Marion and Waterman are acute care h ospitals located in

292Agency Health Service Planning District 3. For the applicable

301planning horizon, the Agency calculated a need for 12 new CMR

312beds in District 3. West Marion and Waterman each would like to

324add 12 CMR beds to their facility. They do no t oppose each other

338adding beds. They agree that Ðnot normal circumstancesÑ

346establish a need for at least 24 new CMR beds in District 3.

359Each maintains that if only one may add CMR beds, it is the one.

373The Agency approved WatermanÓs application and deni ed West

382MarionÓs application . This proceeding followed.

388At the hearing, West Marion presented the testimony of Chad

398Christianson, Carrie Garay - Quirantes, Jeff Nasman, Gene Nelson,

407and Katherine M. T. Platt. West Marion Exhibits 1 through 8, 12,

41914, 17, 1 8, and 20 through 23 were accepted into evidence. After

432the hearing, West Marion submitted the deposition transcript of

441Cory Hewitt, which was admitted in lieu of live testimony as West

453Marion Exhibit 35. On August 27, 2018, West Marion filed the

464deposit ion transcript of James Duke, which was accepted as West

475Marion Exhibit 25. The record was closed at this point.

485Waterman presented the testimony of Abel Biri, Julian

493Coomes, Tracey Estok, Mitchell Freed, David Levitt, and Michelle

502Maes. Waterman Exhibit s 1, 3 through 9, and 11 were accepted

514into evidence.

516The Agency presented the test imony of Marisol Fitch. Agency

526Exhibits 1 and 2 were admitted into evidence.

534A T ranscript of the hearing was filed. The parties obtained

545two extensions of the date for f iling proposed recommended

555orders. West Marion and Waterman timely filed proposed

563recommended orders. Waterman also filed a Memorandum of Law.

572The Agency timely filed a Memorandum of Law. The undersigned has

583considered the partiesÓ submissions in prepa ration of this

592Recommended Order.

594FINDING S OF FACT

598Stipulations

5991. There is a published need for 12 CMR beds in District 3.

6122. Waterman is an existing licensed hospital that currently

621operates a 269 - bed facility in Service District 3,

631Sub - District 7, La ke County.

6383. Ocala Regional Medical Center (Ocala Regional) is an

647existing licensed hospital that operates a 222 - bed acute care

658facility in S ervice District 3, Sub - District 4, Marion County.

6704. West Marion is an existing licensed hospital that

679currently operates a 138 - bed facility in District 3, Sub - District

6924, Marion County.

6955. Marion Community Hospital, Inc. , d/b/a Ocala Regional

703Medical Center , is a verified Level II trauma center.

7126. West Marion and Waterman satisfy the CON review criteria

722regardin g the costs and methods of the proposed construction,

732including the costs and methods of energy provision and the

742availability of alternative, less costly, or more effective

750methods of construction. § 408.035(1)(h), Fla . Stat . (2018). 1/

7617. Schedules 1 th rough 10 of each hospitalÓs application

771are reasonable.

7738. West Marion and Waterman satisfy the CON application

782review criteria regarding the immediate and long - term financial

792feasibility of their proposals. § 408.035( 1 )(f), Fla. Stat.

802Parties

803The Age ncy

8069. The Agency is the state agency charged with administering

816the CON program. Section 408.034(1) , Florida Statutes authorizes

824the Agency to evaluate CON applications.

830West Marion

83210. Marion Community owns West Marion and Ocala Regional.

841Both are a cute care hospitals. Marion Community proposes to

851establish a 12 - bed CMR unit at its W e st Marion campus. This is a

868new service. West Marion and Ocala Regional operate using one tax

879ID number and one Medicare billing number. One medical executive

889commit tee governs the medical staff for both facilities. They

899have the same Chief Executive Officer and Chief Financial Officer.

909They have different physical facilities and locations. These

917facilities, along with Summerfield freestanding emergency

923department, operate as the Ocala Health System (Ocala Health).

93211. Ocala Regional is located in Ocala, Marion County,

941Florida. West Marion is also located in Ocala. West MarionÓs

951primary service area is Marion County (Sub - District 4).

96112. Ocala Health is a fast g rowing health system. It serves

973a large geriatric (65 and older) population. West Marion and

983Ocala Regional provide acute health care services to patients who

993need CMR services.

99613. Ocala Regional treats a more acutely ill patient

1005population. That pop ulation includes patients recovering from

1013bilateral joint replacements (replaci ng both knees at once) ;

1022patients recovering from trauma injuries, especially severe brain

1030and spinal cord injuries; and patients recovering from strokes.

103914. Marion Community p lans to locate the CMR beds at West

1051Marion. West Marion is located on 50 acres that provide plenty of

1063space for the CMR unit and room for future growth. West Marion

1075should complete its most recent expansion by March 2019,

1084increasing its inventory of acut e care beds to 174.

109415. West Marion plans to contract with Strive Physical

1103Therapy Centers (Strive) . Strive is the contracted p hysical

1113therapy, occupational therapy , and speech therapy provider for the

1122Ocala Health System, providing outpatient and inpati ent services.

1131It is a competent professional health care provider.

11391 6 . West Marion operates a very busy orthopedic joint

1150replacement program that has become a destination center for total

1160joint replacement patients. The joint replacements conducted at

1168West Marion include many of the most complex types, including

1178bilateral replacements , revision replacements of joint

1184replacements, surgeries for severely overweight patients, and

1191surgeries for patients over the age of 85.

11991 7 . Many of these patients requi re intensive and prolonged

1211rehabilitation. CMR services would benefit them greatly.

12181 8 . This category of West MarionÓs patients experiences

1228problems accessing CMR services.

12321 9 . Ocala Regional recently began a $64 million expansion

1243project. It includes the addition of 12 emergency department

1252beds, 34 additional beds at the hospital , two additional operating

1262rooms , and the infrastructure necessary for comprehensive stroke

1270center certification.

127220 . Ocala Regional operates a Level II t rauma c enter.

1284Trauma service is a regional program. T he sweep of a 40 - mile

1298radius around the hospital circumscribe s Ocala Regional's trauma

1307service area . The area includes Marion, Citrus, and Hernando

1317Counties. It contains approximately one million people.

13242 1 . Ocala Regi onalÓs trauma center is the fourth busiest

1336trauma center in Florida. Since opening in December 2012, the

1346trauma center has experienced a yearly growth rate of 11 percent.

1357This is greater growth than other Florida trauma centers, likely

1367the result of grow th in the size of the areaÓs geriatric

1379population. Members of that population are more prone to serious

1389injury in accidents. Ocala Regional Ó s Trauma Center treats

1399approximately 3,500 trauma patients a year.

14062 2 . Ocala RegionalÓs high acuity trauma progra m cares for

1418patients with traumatic brain and spinal cord injuries. Ocala

1427Regional has a highly trained staff, including seven trauma

1436critical care physicians and three neurosurgeons, specializing in

1444treatment of traumatic brain injuries and severe spinal cord

1453injuries.

14542 3 . Ocala Regional recently expanded its facility to include

1465a state of the art intensive care unit that will increase the

1477number of high acuity patients in need of CMR services.

14872 4 . Sixty - five percent of Ocala Regional Ó s trauma patient s

1502come from Marion County. The rest come in roughly equal numbers

1513from Lake, Sumter, and Citrus C ounties. Ocala Regional is also a

1525receiving facility for trauma patients from The Villages Regional

1534Hospital in Sumter County, and for advanced trauma patien ts of

1545another area hospital, Munroe HMA Hospital, LLC , d/b/a Munr o e

1556Regional Medical Center . 2/

156125 . Need for CMR services correlates naturally with the

1571provision of trauma services because trauma patients often require

1580intensive and prolonged rehabilitatio n therapies to return to

1589normal daily activities. These patients can benefit greatly from

1598the intensive rehabilitation services offered through CMR units.

16062 6 . Ocala Regional also operates a certified primary stroke

1617center. It currently provides all trea tment modalities, with the

1627exception of interventional neurology. Ocala Health serves a high

1636volume of stroke patients, in part due to the large geriatric

1647population that it serves. As with trauma services, the elderly

1657are more likely to need CMR service s than the general population.

166927 . Stroke patients are the biggest driver of CMR admissions

1680because a stroke patient requires the intensive, multi - discipline

1690therapies that CMR units provide. West Marion operates a primary

1700stroke center. Patients of thi s center also experience problems

1710accessing CMR services.

17132 8 . Ocala Regional is in the final stages of obtaining

1725approval to operate as a comprehensive stroke center. This

1734provides care for patients suffering large vessel strokes, the

1743most serious sort.

17462 9 . When a stroke patient meets the criteria for large -

1759vessel disease, a primary stroke center is not as good a treatment

1771option as a comprehensive stroke center, which is able to provide

1782necessary interventional neurology services.

178630 . Comprehensive str oke patients are a primary driver for

1797the need for inpatient rehabilitation services . CMR services

1806benefit these patients by addressing immediate post - stroke

1815deficits such as aphasia, hemiparesis (weakness on one side of the

1826body), and cortical blindness. These patients will immediately

1834require the largest amount of CMR services.

18413 1 . Certification of Ocala Regional as a comprehensive

1851stroke program will enable Ocala Regional to serve as the

1861comprehensive stroke program for Marion, Lake, Sumter , and Citru s

1871Counties, an area with a population of approximately one million

1881people. This will promptly drive an increased need for CMR

1891services not accounted for by the Agency rule. The Emergency

1901Medical Treatment and Labor Act requires that large vessel stroke

1911p atients be transported to a comprehensive stroke center.

19203 2 . T he comprehensive stroke programs closest to Marion

1931County are located in Tampa, Gainesville , and North Florida. 3/

1941Once certified, Ocala Health will be the first and only

1951comprehensive stroke center in Ocala. The number of severe stroke

1961patients treated at Ocala Regional will rise and correspondingly

1970immediately increase the need for CMR beds in Marion County.

19803 3 . The geriatric population is growing in District 3, in

1992general, and in Marion County specifically. This area also

2001experiences a s easonal influx of elderly when ÐsnowbirdsÑ come to

2012Florida during the winter. The geriatric population greatly

2020benefits from access to CMR services. It also generates an

2030increased need for CMR services.

20353 4 . Access to CMR beds is a consideration for certification

2047as a trauma center and certification as a comprehensive stroke

2057program. This demonstrates a correlation between these programs

2065and a more robust need for CMR services. Ocala Health Ó s

2077significa nt programs in these vital service areas are a strong

2088consideration in favor of approving CMR services at West Marion.

2098The new CMR beds will ensure access to needed health care services

2110in the community.

21133 5 . Ocala Regional is also developing a graduate m edical

2125education (GME) program for various disciplines. A GME program

2134typically increases the sub - specialties available at a hospital.

2144This in turn facilitates treatment of more complex cases and

2154patients more likely to need CMR services.

21613 6 . Establishm ent of the GME program is helping transform

2173Ocala Regional into a tertiary facility serving the needs of

2183Marion, Lake, Sumter, and Citrus Counties . The GME program will

2194also improve services for trauma patients, complex cardiology

2202cases, and advanced neur osurgical cases. The corresponding

2210increase in patient acuity will bolster the need for CMR beds in a

2223manner which the need rule cannot anticipate.

22303 7 . These patients will benefit greatly from sufficient and

2241timely access to CMR beds and the continuity o f care that

2253accompanies location of a CMR unit in conjunction with an acute

2264care hospital.

2266Waterman

22673 8 . Waterman is a not - for - profit 269 Î bed acute care

2283hospital located in Tavares, Lake County, Florida, in the

2292southeastern corner of District 3. It ser ves residents of north,

2303central, and west Lake County. Waterman proposes to establish a

231312 - bed CMR unit at its Tavares facility. Waterman accepts all

2325patients, regardless of their ability to pay.

23323 9 . Waterman is part of the Florida Hospital System, whic h

2345has facilities on 23 campuses and serves communities throughout

2354Florida. Waterman is also part of the Adventist Health System.

2364The system owns a broad variety of health care facilities

2374including 42 hospitals in ten states.

238040 . Waterman is opening a 60 - bed skilled nursing facility on

2393its campus. WatermanÓs new skilled nursing facility will provide

2402some rehabilitation services to patients discharged from the

2410hospital. The services, however, will not be an adequate

2419substitute for the more intense CMR services. This is also true

2430of home health services.

24344 1 . Waterman is a tertiary level hospital. It serves a

2446large, fast - growing area. It is the busiest hospital in Lake

2458County as measured by emergency visits and discharges. Waterman

2467offers a wide arra y of high quality medical and surgical services.

2479They include an accredited cancer institute, open - heart surgery,

2489knee and hip replacements, extracorporeal membrane oxygenation,

2496and 24 - hour advanced emergency services. Waterman is also a

2507primary stroke c enter. It is not currently, and is not in the

2520process of becoming, a certified comprehensive stroke center.

2528Waterman is also not a designated trauma center.

25364 2 . Waterman operates a robust outpatient rehabilitation

2545unit, the Florida Hospital Waterman Reh abilitation Institute

2553(Institute). The Institute provides a wide variety of treatments

2562and unique specialty care such as physical therapy, hand therapy,

2572speech therapy, language therapy, pelvic rehabilitation,

2578neurological therapy, amputee rehabilitation, orthopedics , and

2584sports medicine. Waterman CMR patients will benefit from

2592WatermanÓs use of the skills, caregivers, and experience of the

2602Institute in operating its CMR unit. The Florida Hospital system

2612operates several successful CMR programs. Waterma n Ós CMR services

2622will have the benefit of assistance from the administrators and

2632clinicians from these sister facilities as it develops,

2640implements, and operates its CMR unit. These resources require

2649finding that Waterman will more quickly bring enhanced quality of

2659care to the District.

26634 3 . Waterman also operates a Home Care Agency. The agency

2675has provided home health care -- including physical, occupational,

2684and speech therapy services -- to residents of Lake County and the

2696surrounding areas since 197 7.

270144 . Waterman has several expansion projects underway. A

2710related organization is building a 120 - bed nursing home on the

2722Waterman campus. Waterman is also completing a $75 million

2731capital improvement project that will increase the size of its

2741emergency department and will add a patient tower for pediatrics

2751and womenÓs services. Waterman plans to house the proposed CMR

2761unit in the tower.

27654 5 . West Marion and Waterman are well - staffed , high - quality

2779hospitals, affiliated with high - quality health care syst ems. They

2790each provide their patients good care and are fully capable of

2801establishing and operating the CMR units for which they seek

2811certificate of need approval.

2815CON Regulation and Need

28194 6 . Every six months the Agency publishes projected numeric

2830need for CMR beds in each health care planning district. Florida

2841Administrative Code Rule 59C - 1.039 regulates establishment of new

2851CMR services and the addition or construction of new CMR beds.

2862The AgencyÓs rule provides that a determination of need for CMR

2873beds Ðshall not normally be madeÑ unless the ruleÓs numeric

2883methodology calculates one.

28864 7 . The rule establishes a simple formula for calculating

2897CMR bed need. The formula calculates the current utilization

2906ratio for CMR services in the district by div iding the number of

2919patient days reported for inpatient CMR beds and dividing it by

2930the district population for the same period. It then multiplies

2940the ratio times the projected population for the planning horizon,

2950five years into the future. The rule di vides that product by 365

2963times 85 percent. The rule specifies that 85 percent Ðequals the

2974desired average annual occupancy rate for [CMR] beds in the

2984district.Ñ

29854 8 . This operation calculates the gross number of beds

2996needed for the district. T he rule su btracts the licensed and

3008approved CMR beds in the district from that number . The resulting

3020number is the net number of beds needed. The rule does not

3032account for markets in which patients needing CMR services receive

3042similar , but not equivalent, less int ense services from providers

3052such as home health agencies, skilled nursing homes, or acute care

3063hospitals without designated CMR beds, due to limited access to

3073CMR beds. It also looks back , not forward. The need methodology

3084promotes competition and acces s when the use rate in a service

3096area falls below the statewide average use rate.

31044 9 . The need rule also provides that, regardless of whether

3116the formula shows need, Ðno additional [beds] shall normally be

3126approved unless the average annual occupancy rate of the beds in

3137the district was at least 80 percent for the 12 month period

3149ending six months prior to the beginning date of the quarter of

3161the publication of the Fixed Bed Need Pool.Ñ Fla. Admin. Code R.

317359C - 1.039(5)(d).

317650 . The AgencyÓs rule calculat ed a need for 12 new CMR beds

3190in District 3 for the January 2023 planning horizon. District 3

3201includes Alachua, Bradford, Citrus, Columbia, Dixie, Gilchrist,

3208Hamilton, Hernando, Lafayette, Lake, Levy, Marion, Putnam, Sumter,

3216Suwannee , and Union C ounties. The Agency had not published a need

3228for CMR beds in District 3 for many years. This is because

3240changes in CON regulation allowed existing providers to add beds

3250in ten - bed increments if they met a specific occupancy threshold.

3262In Ocala, HealthSouth Rehab ilitation Hospital (HealthSouth) did

3270this assiduously, effectively stifling what would otherwise have

3278been a natural progression of need pool determinations.

32865 1 . West Marion and Waterman agree that Ðnot normal

3297circumstancesÑ establish a need for at least 12 CMR beds in

3308addition to the 12 generated by the numeric need formula. This is

3320an unusual CON case in this way. There is not a party arguing

3333that either application should be denied or offering evidence to

3343support d enial . This includes the Agency , whi ch offers only

3355technical legal arguments against approving both applications.

3362Effectively , the Agency implicit ly concedes the need for both

3372programs.

337352. The AgencyÓs tacit concession that circumstances are not

3382normal in District 3 manifests in another w ay. T he Agency,

3394without comment or explanation, proposes approving a new 12 - bed

3405CMR unit. This is despite r ule 59C - 1.039(3)(c) , which states, ÐA

3418general hospital providing Comprehensive Medical Rehabilitation

3424Inpatient Services should normally have a min imum of 20

3434C omprehe n sive Medical Rehabilitation Inpatient beds.Ñ The

3443AgencyÓs proposed approval of a 12 - bed CMR unit confirms that

3455something is not normal in District 3 when it comes to CMR

3467services.

34685 3 . Rule 59C - 1.039(5)(f)3. grants priority considerati on to

3480an applicant that is a designated trauma center as defined in

3491Florida Administrative Code Rule 64J - 2.011. West Marion claims

3501entitlement to a preference for trauma centers based upon the fact

3512that all of the Ocala Health system facilities operate un der the

3524same license. The facts do not support the argument. Although

3534Marion CommunityÓs hospital license is for all Marion Community

3543facilities, the trauma designation is for the Ocala Regional

3552facility , not the West Marion facility .

35595 4 . A review of th e trauma center rule 64J - 2.011, including

3574an application that it incorporates by reference , makes clear that

3584the trauma center designation is for a facility not a system. For

3596instance, the Level II Trauma Center Application Manual (DH Form

36062043 - A, January 2010) requires the following facility - specific

3617information: Recovery/Post - Anesthesia Care Unit; Trauma

3624Resuscitation Area; helicopter landing site; an immediately

3631available adequately staffed operating room for trauma patients 24

3640hours a day; a second ad equately staffed operation room available

3651within 30 minutes after the primary operating room is occupied; a

3662post - anesthesia recovery area; airway control and ventilation

3671equipment in the operating room; invasive hemodynamic monitoring

3679equipment; and a frac ture table. It is inconceivable that a

3690trauma center could satisfy these requirements by having some of

3700the facilities, such as the primary operating room, in one

3710location and other facilities, such as the backup operating room

3720or helicopter landing site, in another.

37265 5 . This does not, however, mean that the presence of a

3739trauma center in the district is not relevant to considering the

3750need for CMRauma center patients have a greater and more

3760frequent need for CMR services than general acute care pati ents.

3771CON Applications

37735 6 . The Agency maintains that the applications did not

3784present a Ðnot normal circumstancesÑ theory and that, therefore,

3793the parties cannot advance the theory at this point. The

3803applications, however, did.

38065 7 . The applications of W est Marion and Waterman sought

3818approval relying upon arguments specific to their service areas

3827and facilities , as well as relying on the calculated need. The

3838arguments amount to claims that their projects should be approved

3848because of Ðnot normal circumst ances.Ñ In the context of the

3859application review and of this proceeding, each applicant had to

3869advance two theories. The first is why it should be selected to

3881satisfy the numeric need. The second is why, regardless of

3891calculated need, Ðnot normal circum stancesÑ call for approval of

3901the applicantÓs proposal. The facts and reasoning supporting each

3910argument are congruent if not identical. Consequently, there was

3919no need to label application assertions in the applications or

3929evidence at hearing as applyin g to one theory or the other.

39415 8 . West MarionÓs CON application sought to fill the

395212 - bed numeric need. It also relied upon Ðnot normal

3963circumstances Ñ for approval of its proposed 12 - bed unit.

39745 9 . West MarionÓs application discusses the unavailabil ity

3984of CMR beds at HealthSouth, the countyÓs only CMR provider. It

3995reviews the fact that HealthSouth has operated at or near capacity

4006since opening, despite two ten - bed additions. Then West Marion

4017concludes, on page 18 of the application, ÐThis chronic

4026u navailability of inpatient beds at HealthSouth creates a severe

4036accessibility problem for the growing population of Marion County,

4045and constitutes a not normal circumstance. Ñ (WM Ex. 1, p. 22) 4/

4058(emphasis add ed).

406160 . Another part of West MarionÓs appli cation discussing the

4072unavailability of beds at HealthSouth makes a similar assertion.

4081Page 52 of West MarionÓs application (WM Ex. 1, p. 55) states,

4093ÐThe chronic shortage of CMR beds in Marion County, especially

4103given the location at ORMC of a Level II t rauma center serving the

4117residents of TSA 6 (Marion, Citrus and Hernando counties), is a

4128not normal circumstance. Ñ (emphasis add ed).

413561 . The same page of the application states that the

4146consistently high utilization of HealthSouth creates significant

4153diff iculty obtaining suitable CMR services for patients discharged

4162from Ocala HealthÓs trauma program.

41676 2 . West MarionÓs application repeatedly notes that its

4177approval will not adversely affect existing providers or the

4186proposed Waterman CMR unit.

41906 3 . Wate rmanÓs CON application sought to fill the 12 - bed

4204need calculated by the Agency. It also relied upon Ðnot normal

4215circumstances Ñ for approval of its proposed 12 - bed unit. The

4227statement on page 6 of the application (W H Ex. 1, p. 118) is

4241explicit. Ð[Waterma nÓs] proposal has been developed to respond to

4251the published numerical need for additional CMR services in

4260District 3, as well as health planning factors that exist even in

4272the absence of numerical need. The need for a CMR unit at

4284[Waterman] is based on a lack of accessible CMR services for

4295residents of Lake County that is evidenced by the following

4305facts . Ñ (emphasis add ed) . A list of seven factors follows ,

4318including that the Lake County population aged 65 or older is

4329increasing faster than the d istrictÓ s and the fact that approval

4341of beds for Waterman would not adversely affect existing

4350providers.

43516 4 . Page 30 of WatermanÓs application (W H Ex. 1, p. 142)

4365repeats the assertion of Ðnot normal circumstances.Ñ It states,

4374Ð[Waterman] has developed this pro posal in response to the

4384published need for additional CMR beds in the District, as well as

4396facility and market - specific factors that clearly show the beds

4407should be located within Lake County and at [Waterman]. Ñ

4417(emphasis adde d) . WatermanÓs application continues the theme on

4427page 37 (Waterman Ex. 1, p. 149) asserting, Ðthere is a barrier to

4440accessibility of inpatient rehabilitation services for residents

4447of Lake County and those who are discharged from [Waterman] . Ñ

44596 5 . West Marion committed to a minimum of seven percent of

4472its annual discharges being a combination of Medicaid, Medicaid

4481HMO, and self - pay/other (including charity) patients. This

4490commitment is consistent with its financial projections that show

44998.89 percent of its first - year revenue/charge s attributed to

4510services for that population. It will enhance access to CMR

4520services.

45216 6 . Waterman made no commitment to serve these populations.

4532WatermanÓs first - year financial projections show 5.3 percent of

4542revenue/charges attributed to services for that population.

4549CMR Services and District 3

45546 7 . CMR services are provided to patients discharged from an

4566acute care hospital after treatment for an ailment or event that

4577requires substantial rehabilitation before the patient resumes

4584normal daily activiti es. For example, patients with complex

4593nursing or medical management needs or conditions such as spinal

4603cord injury, amputation, multiple sclerosis, hip fracture, brain

4611injury, and neurological disorders need CMR services. Fla. Admin.

4620Code R. 59C - 1.039(2 )(d). Patients recovering from an acute

4631episode such as a severe trauma injury or stroke and patients

4642recovering from complex orthopedic joint replacement surgeries

4649such as bilateral joint replacements and patients with a high body

4660mass index (BMI) recove ring from joint replacements also need CMR

4671services.

46726 8 . The continuum of care for physical rehabilitation

4682services comprises a range of levels, depending primarily on

4691patient condition/goals, medical management requirements, and the

4698ability to participat e in therapy. Patients can receive physical

4708rehabilitation in an acute rehabilitation unit inside a hospital

4717or freestanding facility (a CMR u nit), a skilled nursing facility,

4728through a home health agency, or in an outpatient setting. CMR

4739units, which ar e at issue in this case, provide the most intense

4752level of rehabilitation.

47556 9 . Determinations of whether a CMR admission is necessary

4766depend on whether the medical record demonstrates a reasonable

4775expectation that certain criteria are met at the time of a dmission

4787to a CMR unit. The criteria include : (1) requiring active and

4799continuing intervention of multiple therapy disciplines ( Physical

4807Therapy, Occupational Therapy, Speech - Language Pathology, or

4815prosthetics/orthotics ) , at least one of which must be PT or OT;

4827(2) requiring an intensive rehabilitation therapy program of three

4836hours of therapy per day at least five days per week; (3) having

4849an ability to actively participate in, and benefit significantly

4858from, an intensive rehabilitation therapy program; (4) requiring

4866supervision by a rehabilitation physician, with face - to - face

4877evaluations at least three days per week; and (5) requiring an

4888intensive and coordinated interdisciplinary team approach to the

4896delivery of rehabilitative care.

490070 . Family support and involvement play a vital part in the

4912rehabilitation process. Family members are also part of the care -

4923giver team. Additionally, positive attitudes and reinforcement

4930from family members can inspire the patient and help her adapt to

4942new physical challe nges or limits. Finally, family members are

4952able to assist staff in motivating the patient and maintaining

4962communication between the patient and the rehabilitation team.

497071 avel distance plays a significant role in an eligible

4980CMR patientÓs decision t o enter a CMR unit. Elderly patients

4991and/or their families often do not choose to travel far from their

5003home even though the patient needs the CMR services, because

5013travel places an unreasonable burden on patient s and their

5023famil ies .

50267 2 . CMR facilities f ocus on speech, physical, and

5037occupational therapies. A CMR facility provides intensive therapy

5045on a frequent, consistent basis. This helps patients recover more

5055quickly than they would in another setting.

50627 3 . The F ederal Center for Medicare and Medic aid Services

5075( Ð CMS Ñ ) establishes the requirements for CMR facilities, which are

5088designated b y CMS as Ð inpat ient rehabilitation facilities.Ñ CMR

5099facilities are also sometimes referred to as acute rehabilitation

5108facilities.

51097 4 . HealthSouth is the only CMR provider in Marion County in

5122District 3. Lake County does not have a CMR provider. There was

5134a CMR unit located at Leesburg Regional Hospital North in Lake

5145County until July 1, 2016. That facility closed. The CMR beds

5156from the Leesburg facility were tr ansferred to The Villages, which

5167is located in Sumter County. The evidence is insufficient to

5177establish the reason for this.

51827 5 . HealthSouth is the closest CMR provider to West Marion

5194and Ocala Health. It is a stand - alone CMR facility in Ocala. The

5208fac ility has been authorized to add ten more beds. The record is

5221silent on when the beds will be added. HealthSouth opened in 2011

5233with 40 beds and has grown to 60 beds in ten - bed increments.

5247Since 2012, HealthSouth has maintained an occupancy rate of

525690 percent or higher. Despite its incremental growth, HealthSouth

5265has not had sufficient available beds to meet the needs of

5276patients from Ocala Health and West Marion or the district in

5287general.

52887 6 . District 3Ós CMR occupancy rate is 86.5 percent. This

5300is the highest rate for any district and is above the 85 percent

5313that Agency rule establishes as the desired occupancy rate.

53227 7 . All clinicians and experts in this case agree that

5334rehabilitation services at skilled nursing facilities, long - term

5343acute care hospitals, and home with home health care are not

5354acceptable alternatives to CMR. They also agree that patient

5363outcomes in those settings are not as good , since th o se settings

5376simply do not provide the same level of care as a CMR unit.

5389Access Problems

53917 8 . There is no legal mandate requiring a licensed facility

5403to accept CMR patients. A CMR facility may refuse any patient

5414that it wishes. This means that HealthSouth can cherry - pick

5425patients based on the most desirable payor source, leaving

5434patients with less desirable payment providers, such as Medicaid,

5443without access to CMR services. HealthSouth has demonstrated a

5452preference for certain pay o rs (including Medicare - eligible

5462patients, patients with commercial insurance including some Blue

5470Cross policies). It typically does not accept Medicaid or charity

5480care patients. Ocala Health providers often do not even try to

5491refer a Medicaid or charity care patient to HealthSouth because,

5501based on experience, staff expects that HealthSouth will not admit

5511those pat ients.

551479 . HealthSouth frequently refuses to accept patients

5522discharged from Ocala Health who qualify for CMR services under

5532the CMS guidelines, including trauma, stroke , and complex

5540orthopedic joint replacement patients. A large number of the

5549patients t hat Ocala Health refer s to HealthSouth each month are

5561not accepted and are not able to receive CMR services that would

5573improve their outcomes.

55768 0 . HealthSouth Ó s admissions practices leave many Ocala

5587Health patients needing CMR services without access to t hem. This

5598vitiates consideration of HealthSouth as a reason to not add CMR

5609beds in Marion County and District 3.

561681 . There is a large unmet need for additional CMR beds to

5629serve Ocala Health p atients and other district residents.

56388 2 . Some patients rejec ted by HealthSouth are admitted to

5650skilled nursing facilities in Marion County. For patients needing

5659CMR services, those facilities, although they provide some

5667rehabilitative care, are not the correct solution. For example,

5676treatment of the large vessel stroke patients, which Ocala

5685Health Ó s comprehensive stroke center will serve, at a skilled

5696nursing facility is not appropriate. Similarly, a skilled nursing

5705facility would not meet the CMR needs other higher acuity

5715patients , like bilateral transplant pati ents, the multidiscipline,

5723intensive three hours a day therapy that a CMR facility provides.

57348 3 . A skilled nursing facility provides rehabilitat ion

5744services for approximately one to one and a half hours daily.

5755This can result in a longer recovery time fo r high acuity

5767patients. A skilled nursing facility is geared more toward

5776patients with a simple hip fracture. Patients with more complex

5786issues like bilateral joint replacements and spinal cord injuries

5795need more.

57978 4 . In a CMR facility, the patient sees a physician every

5810day. In a skilled nursing facility, a patient usually sees a

5821phy sician once a month. A skilled nursing facility is not optimal

5833for higher acuity acute patients. However, due to the utilization

5843and admission practices of HealthSouth, p atients who need CMR

5853services are often treated in skilled nursing facilities. This

5862unusual circumstance causes the CMR need formula to under -

5872calculate District 3Ós need for CMR beds since the se skilled

5883nursing patients are not taken into consideration, w hereas they

5893would be if they were being treated in a CMR unit, as they should

5907be.

59088 5 . HealthSouth admission practices, consistently high

5916occupancy rates, and delays in responding to referrals result in

5926many patients who are ready for discharge with a phys ician order

5938for CMR services, languishing in acute care beds at Ocala Regional

5949or West Marion for longer lengths of stay or forc e the patients to

5963travel to a CMR facility further from the patient's home and

5974support system.

59768 6 . These problems can negativel y affect patient outcomes

5987because the sooner patients star t ambulating and leave an acute

5998care facility, the less chance they have of suffering

6007complications.

60088 7 . When a patient cannot gain admission into a CMR facility

6021and remains in an acute care bed, the patient is not receiving the

6034needed CMR services ordered by the physician. This can cause a

6045decline in their ability to benefit from therapy or an avoidably

6056prolonged recovery.

60588 8 . Because many of District 3 patients are elderly, their

6070stay in a CM R facility, if and when they are admitted, ends up

6084being longer than it would have been if they were more promptly

6096placed.

60978 9 . Younger patients also suffer from the lack of timely

6109access to CMR. For example, a younger patient suffering from

6119paralysis who has to remain in the hospital would benefit from

6130approval of both application s because the patient will receive

6140more therapy and opportunities for family support. While the

6149hospital provides rehabilitative therapies in the acute care

6157hospital setting, th ose services are provided at bedside and are

6168limited in time and intensity compared to what a patient would

6179receive in a CMR unit.

618490 . The difficulty and delays in transferring patients to

6194appropriate rehabilitation facilities cause Ocala Health hospital s

6202to have a length of stay that is greater by a day or a day and a

6219half than other trauma centers.

62249 1 . The lack of availability of access to CMR services and

6237the lack of timely access to CMR services negatively affects the

6248Marion Community hospitals and their patientsÓ access to necessary

6257services. When a patient is ready for discharge but has to remain

6269in an acute care bed due to lack of availability of CMR beds, the

6283availability of an acute care bed for a new acute care patient is

6296reduced. This can r e sult in the hospital going on Ðbypass,Ñ

6309meaning no new patients are taken in through the emergency room.

63209 2 . In District 3 during the 12 - month period ending

6333December 31, 2016, six facilities with 202 licensed CMR beds

6343served the entire district. The f acilities are UF Health Shands

6354Rehab Hospital, Seven Rivers Regional Medical Center (now closed),

6363HealthSouth Rehab ilitation Hospital of Spring Hill, Leesburg

6371Rehabilitation Hospital, The Villages Regional Hospital (The

6378Villages), and the HealthSouth facil ity . The District 3 beds are

6390located in Marion, Sumter, Hernando, and Alachua C ounties. None

6400are in Lake County.

64049 3 . These facilities experienced an 84.15 percent

6413utilization rate. This is only .85 percent less than the AgencyÓs

6424desired annual occupanc y rate and is nearly five percent greater

6435than the 80 - percent occupancy rate the AgencyÓs rule sets as a

6448trigger for approving additional beds. Fla. Admin. Code R. 59C -

64591.039(5)(d). This was the highest CMR occupancy rate in the

6469state. The statewide aver age CMR occupancy rate was 69.61

6479percent. These circumstances are not normal.

64859 4 . The portion of CMR discharges covered under traditional

6496Medicare or m anaged Medicare in District 3 is also significantly

6507higher than the state average. This is reasonable since 27.2

6517percent of District 3 Ó s population is 65 and older, while just

653020.1 percent of the statewide population is 65 or older.

65409 5 . In 2016, 74.1 percent of the statewide CMR discharges

6552were covered under traditional or managed Medicare. For

6560District 3 , the number was nearly 81 percent.

65689 6 . Lake County has no CMR services, even though it is the

6582second largest population center in the d istrict.

65909 7 . Waterman is located a significant distance from the CMR

6602providers in District 3. The closure and trans fer of beds from

6614Leesburg Regional Medical CenterÓs CMR unit to The Villages in

6624Sumter County increased the travel time to CMR services for

6634residents of the area. The Villages is still the closest CMR

6645provider to Waterman, but travel from Waterman to The Villages can

6656take 38 minutes to over an hour depending upon traffic and time of

6669year. All other CMR providers are over an hour away, limiting

6680access to CMR services.

66849 8 . ÐConversion rateÑ is the percentage of acute care

6695patients that are discharged to a CMR provider. Analysis of the

6706conversion rate of acute care patients discharged to CMR for both

6717Lake County and Waterman also indicates that the population Ós

6727access to CMR services is limited. The district and state

6737conversio n rate to CMR is approximatel y two percent. The 2016

6749rate for Hernando County was 4.1 percent. The rate for Marion

6760County of 2.6 percent was just over the district average. Lake

6771CountyÓs rate is 1.5 percent, and WatermanÓs is .4 percent. This

6782analysis demonstrates limited access t o CMR services for Lake

6792County residents and residents of WatermanÓs service area. The

6801record offers no other explanation.

68069 9 . The analysis of discharges to CMR beds confirms the

6818analysis. So does physician experience.

6823100 . Like Marion County, Lake Cou nty has a rapidly aging and

6836growing population . As a result, there are many Waterman service

6847area and Lake County residents who are appropriate for and could

6858benefit from CMR, but are not accessing these services due to

6869travel and distance constraints.

687310 1 . The demographic and utilization data presented in this

6884case demonstrate that there is a lack of accessible CMR services

6895for residents in District 3 generally, and in Marion County and

6906Lake County specifically. During the most recent reporting period

6915( 12 months ending on December 31, 2016), the average annual

6926District 3 occupancy rate for the 202 CMR beds was 84.15 percent.

6938Existing CMR services are clustered in just a few areas of this

695016 - county district.

695410 2 . Patients of both applicants suffer from limitations on

6965access to CMR services.

6969CONCLUSIONS OF LAW

697210 3 . The Division of Administrative Hearings has

6981jurisdiction over the parties and the subject matter of these

6991consolidated cases. §§ 120.569, 120.57(1), and 408.039, Fla.

6999Stat.

700010 4 . Each applica nt has standing to participate in this

7012proceeding. § 408.039(5)(c), Fla. Stat.

701710 5 . Sections 408.035, 408.037 , and 408.039 and Florida

7027Administrative Code Rules 59C - 1.008, 59C - 1.030, and 59C - 1.039

7040establish the governing review criteria and procedures. The award

7049of a CON must be based on a balanced consideration of the

7061applicable statutory and rule criteria. Balsam v. DepÓt of H ealth

7072and Rehab. Servs. , 486 So. 2d 1341 (Fla. 1st DCA 1986). The

7084appropriate weight to give each criterion is not fixed. It varies

7095based upon the facts of the case. See, e .g. , Morton F. Plant

7108Hosp. AssÓn, Inc. v. DepÓt of H ealth and Rehab. Servs. , 491 So. 2d

7122586, 589 (Fla. 1st DCA 1986) (quoting North Ridge Gen. Hosp., Inc.

7134v. NME Hosp., Inc. , 478 So. 2d 1138, 1139 (Fla. 1st D CA 1985));

7148Collier Med. Ctr., Inc. v. DepÓt of H ealth and Rehab. Servs. , 462

7161So. 2d 83, 84 (Fla. 1st DCA 1986).

716910 6 . A CON applicant must prove by a preponderance of the

7182evidence that its CON application should be approved. See , e.g. ,

7192Boca Raton Artifici al Kidney Ctr., Inc. v. DepÓt of H ealth and

7205Rehab. Servs. , 475 So. 2d 260, 263 (Fla. 1st DCA 1985);

7216§ 120.57(1)(j), Fla. Stat.

722010 7 . An administrative hearing involving disputed issues of

7230material fact is a de novo proceeding in which the Administrative

7241L aw Judge independently evaluates the evidence presented. Fla.

7250DepÓt of Transp. v. J.W.C. Co., Inc. , 396 So. 2d 778, 787 (Fla.

72631st DCA 1981); £ 120.57(1), Fla. Stat. The AgencyÓs preliminary

7273decision and its findings in the St ate Agency Action Report (SAA R)

7286are not entitled to a presumption of correctness.

7294Application Content

729610 8 . West Marion and Watermark satisfy the application

7306content requirements of section 408.037 a nd r ule 59C - 1.039.

7318Section 408.035(l)(b) - The availability, quality of

7325care, accessib ility, and extent of utilization of

7333existing health care facilities and health services in

7341the service district of the applicant.

734710 9 . Both applicants proved that there is a lack of

7359accessibility to CMR beds for patients from their respective

7368service are a due to Ðnot normal circumstances,Ñ including the

7379extremely high utilization rate of CMR beds in District 3 which

7390results in patients needing CMR services receiving some

7398rehabilitation services in skilled nursing units or at home with

7408the assistance of ho me health providers. Both, in fact, presented

7419persuasive evidence that discharges from each hospital alone would

7428generate most of the projected utilization for each applicantÓs

7437proposed unit.

7439Section 408.035(1)(e) - The extent to which the proposed

7448servi ces will enhance access to health care for

7457residents of the service district.

74621 10 . Rule 59C - 1.039(6) says that CMR services should be

7475available within a maximum ground travel time of two hours under

7486average travel conditions for at least 90 percent of th e

7497districtÓs population. Existing facilities satisfy this minimum

7504standard. The evidence proved, however, that existing CMR

7512facilities are not as a practical matter providing full

7521accessibility due to abnormally high utilization , selective

7528admission crit eria, patient resistan ce to travel , and travel

7538limitations on friends and family. West Marion and Waterman will

7548both enhance access to residents in their respective service

7557areas. There will be no adverse effect to either facility if both

7569CON a pplication s are approved. There is also no persuasive

7580evidence that approval of both applications would have an adverse

7590impact on existing providers in the district.

7597Section 408.035(l)(i) - The applicant's past and

7604proposed provisions of health care services to Med icaid

7613patients and the medically indigent.

76181 11 . Both applicants demonstrated that they provide services

7628to Medicaid patients and the medically indigent. West Marion,

7637however, offers to condition its CON on a requirement that Ð a

7649minimum of 7% of the pati ents in the CMR Unit would be some

7663combination of Medicaid, as well as self - pay. Ñ It also projects

7676serving more Medicaid and self - pay/charity patients than Waterman.

7686Thus, West Marion demonstrates a stronger commitment to serving

7695the Medicaid/ c harity c ar e population. Approval of its application

7707will substantially improve access to CMR services for Medicaid,

7716indigent, and self - pay patients.

7722Summary Comparison

772411 2 . The Findings of Fact establish that West Marion and

7736Waterman satisfy the criteria of the g overning statutes and rules.

7747Either could be approved for the 12 CMR beds for which the Agency

7760published a need. Waterman and West Marion both present sound

7770proposals .

777211 3 . The persuasive and essentially unrebutted evidence also

7782proves Ðnot normal circu mstancesÑ supporting approval of at least

779212 CMR beds in addition to the 12 for which the Agency calculated

7805a need. The applicants serve different market s. Approval of two

7816programs will not adversely affect either applicant. However, a

7825comparative revie w of the two proposals requires a conclusion

7835that , for two reasons , Waterman is the better choice to fill the

7847calculated need.

784911 4 . First, the access limitations faced by the patients

7860that Waterman serves are more severe than those faced by West

7871MarionÓ s patients. Consequently, Waterman will enhance health

7879care access to a gre ater extent than West Marion.

7889§ 408.035(1)(e) , Fla. Stat .

789411 5 . Second, the resources available to Waterman due to its

7906outpatient rehabilitation unit, the Florida Hospital Waterm an

7914Rehabilitation Institute, buttressed by the resources offered by

7922the Florida Hospital System are superior to those availabl e to

7933West Marion. § 408.035(1)(d), Fla. Stat. This is in no way,

7944however, a conclusion that West Marion does not have adequate

7954r esources to successfully open and operate its proposed CMR unit.

7965Approval of Two CONs

796911 6 . The Agency opposes approving either application on Ðnot

7980normal circumstancesÑ grounds. It is worth noting again that the

7990Agency did not present a factual case to support its argument,

8001only legal theories. The Agency offers three arguments to support

8011its position. The first is that the applicants did not seek

8022approval based upon Ðnot normal circumstances.Ñ The second is

8031that the applications did not comply with the requirements of r ule

804359C - 1.008(2)(d). The third is that seeking approval on a Ð not

8056normal circumstancesÑ theory in this proceeding amounts to an

8065impermissible amendment to the application. This argument

8072subsumes the first argument.

807611 7 . The record a nd the findings based upon it show that

8090both applicants incorporated a Ðnot normal circumstancesÑ theory

8098into their applications. For this reason, the impermissible

8106amendment argument fails. The Agency cites Community Hospice of

8115Northeast Florida, Inc. v . Agency for Health Care Administration ,

8125Case No. 10 - 1865CON (Fla. DOAH March 22, 2011; Fla. AHCA May 1,

81392011) to support its argument. The facts of that case differ from

8151the facts of this case. In Community Hospice , one of the

8162applicants, United Hospice of Florida, Inc., raised a new theory

8172for approval of its application. It argued that a second hospice

8183program should be approved, in addition to the one for which the

8195Agency had calculated a need, because of low utilization by

8205minorities and because the need projections showed a very large

8215number of new admissions to hospice programs.

822211 8 . The O rder explained why this was a new theory, a new

8237proposal, and, therefore, an impermissible amendment.

8243This change is so material that it amounts to

8252an impermissi ble amendment under Manor Care,

8259Inc. v. Department of Health and

8265Rehabilitative Services . The theory requires

8271a different analysis of all the information

8278provided in the applications, an analysis that

8285neither the applicants nor the Agency

8291conducted during the initial review. The

8297applications only provided information about

8302how to best fill the projected need for one

8311program. The applications contain no

8316information or analysis about what the effect

8323of approving two new programs would be on

8331existing provid ers. The applications contain

8337no information about what utilization each

8343program could expect if two programs are

8350approved or what the effect of that

8357utilization would be on the existing provider

8364and the other applicant. In short the new

8372theory materiall y changes the United proposal.

837911 9 . This case is different. There are no material

8390differences between the information and arguments that West Marion

8399and Waterman made in their applications and those presented in the

8410hearing. The applications provided i nformation specific to each

8419facility and to its patient population and service area to support

8430approval. The applications specifically said that approval of

8438programs at either or both facilities would not affect utilization

8448of the other proposed program o r existing providers. Comments in

8459the SAAR reveal that the Agency gleaned that the applicants relied

8470upon their institution - specific and market - specific need as well

8482as the calculated need.

8486120. Page 20 of the SAAR notes that WatermanÓs application

8496Ðdi scusses institution - specific need for CMR beds.Ñ Page 51 of

8508the SAAR observes that West Marion Ðanticipates additional bed

8517need to address availability and accessibility problems due to

8526overutilization.Ñ On the same page, the SAAR recognizes the

8535institut ion - specific and market - specific nature of West MarionÓs

8547proposal: ÐWMCH contends that the general shortage of CMR beds in

8558District 3, specifically Marion County, justifies approval of the

8567proposed program.Ñ

85691 21 . The same distinction applies to North Bro ward Hospital

8581District , d/b/a Broward Health Medical Center v. Agency for Health

8591Care Administration , Case No. 15 - 5549CON (Fla. DOAH May 4, 2016;

8603Fla. AHCA June 2, 2016), also relied upon by the Agency. The

8615applicant there proposed one kidney transplant p rogram in its

8625application and two at the hearing.

8631122 . West Marion and Waterman have done nothing similar in

8642this proceeding . Both seek to fill the calculated need. Both

8653also argue that institution - specific and county - specific factors

8664support granting them CMR beds. The same facts support both

8674theories. Neither applicant has amended its proposal.

8681123 . The Agency maintains that r ule 59C - 1.008(2)(d)

8692prohibits seeking approval of beds on Ðnot normal circumstancesÑ

8701grounds for a project seeking the same number of beds as the

8713number projected by the Agency. The rule does not say that. It

8725states:

8726(d) The Agency will follow these procedures

8733when awarding beds or services identified in a

8741Fixed Need Pool:

87441. Beds or services will be awarded based on

8753the a vailability of a qualified applicant and

8761proposed project which meets statutory review

8767criteria.

87682. In the absence of a qualified applicant

8776and a project which meets statutory review

8783criteria, the Agency may elect not to approve

8791any applications for beds or services.

87973. If a qualified applicant exists but the

8805proposed project exceeds the beds or services

8812identified in the Fixed Need Pool, the Agency

8820may award beds or services in excess of the

8829pool when warranted by special circumstances

8835as defined in th e applicable section of

8843Chapter 59C - 1, F.A.C., for the particular type

8852of bed or service.

885612 4 . The AgencyÓs theory is that it does not have authority

8869to approve the two applications here on the basis of Ðnot normal

8881circumstances,Ñ because neither applica tion is in excess of the

8892fixed need pool. The theory fails first because of the lack of a

8905factual premise. As discussed above , both applicants sought

8913approval on grounds other than the fixed need pool . This

8924necessarily means their proposed projects exce eded the fixed need

8934pool.

893512 5 . The theory fails second because under the theory if

8947either applicant sought 13 beds the Agency could approve the

8957application, but it cannot since each applicant sought 12. The

8967theory violates the common sense interpretati on principle.

8975Cf. Sch. Bd. v. Survivors Charter Schs., Inc. , 3 So. 3d 1220, 1235

8988(Fla. 2009) (Ð We are not required to abandon either our common

9000sense or principles of logic in statutory interpretation.Ñ) .

900912 6 . Third, the theory is contrary to previous Agency

9020decisions where the Agency has awarded multiple CONS based on not

9031normal circumstances, even though there was no publication of

9040need. See HealthSouth Reha b. Hosp . of Seminole Cty. LLC v. A gency

9054for Health Care Admin. , Case No. 12 - 0425CON ( Fla. AHC A May 11,

90692012)(adopting settlement agreement permitting a 50 - bed CMR

9078hospital based on not normal circumstances) 5/ ; Osceola Reg Ó l Hosp .

9091Inc. , d/b/a Osceola Reg Ól Med . Ctr . v. A g . for Health Care Admin. ,

9108Case No. 15 - 38 31 CON ( Fla. DOAH Mar . 22, 2016, Fla. A HCA

9125Apr. 14, 2016) (approving through settlement agreement two CONs for

9135CMR beds based on a showing of not normal circumstances) 6/ ; see

9147also Fla. Admin. Code R. 59C - 1.008(2)(d)3.

915512 7 . The Agency does not identify a f inal o rder or court

9170opinion establish ing the interpretation that it advocates. The

9179Agency does cite a number of cases expressing the principle of

9190deference to Agency interpretations. The adoption of Article XI,

9199section 5(e) to the Florida Constitution casts doubt on the

9209persuasiveness of th at argument. In any event, the AgencyÓs

9219interpretation of the rule is not reasonable or consistent with

9229other parts of the same rule.

9235RECOMMENDATION

9236Based on the foregoing Findings of Fact and Conclusions of

9246Law, it is RECOMMENDED that :

9252A. The Agency for Health Care Administration render a f inal

9263o rder granting Florida Hospital Waterman, Inc., d/b/a Florida

9272Hospital Waterman, a Certificate of Need to establish 12

9281Comprehensive Medical Rehabilitation Beds.

9285B. The Agency for Health Care Administration rende r a f inal

9297o rder granting Marion Community Hospital, Inc., d/b/a West Marion

9307Community Hospital and Ocala Regional Medical Center, a

9315Certificate of Need to establish 12 Comprehensive Medical

9323Rehabilitation Beds.

9325DONE AND ENTERED this 6 th day of February , 20 19 , in

9337Tallahassee, Leon County, Florida.

9341S

9342JOHN D. C. NEWTON, II

9347Administrative Law Judge

9350Division of Administrative Hearings

9354The DeSoto Building

93571230 Apalachee Parkway

9360Tallahassee, Florida 32399 - 3060

9365(850) 488 - 9675

9369Fax Filing (850) 921 - 6847

9375www.doah.state.fl.us

9376Filed with the Clerk of the

9382Division of Administrative Hearings

9386this 6 th day of February , 2019 .

9394ENDNOTES

93951/ All citations to Florida Statutes are to the 2018 codification

9406unless otherwise noted.

94092/ Munroe HMA Hospital applied for the 12 CMR beds also and

9421challenged its denial. But it has been dismissed from this

9431proceeding.

94323/ This is a reference to a geographic are a not a specific

9445location or facility although the record leaves the impression

9454that the r eference is to Jacksonville, Florida.

94624/ ÐWMÑ refers to West Marion Exhibits. ÐWHÑ refers to Waterman

9473Hospital exhibits.

94755/ See Case No. 12 - 0425CON, Petition for Formal Administrative

9486Hearing , filed January 12, 2012.

94916/ See Case No. 15 - 3831CON, Peti tion for Formal Administrative

9503Hearing , filed July 2, 2015.

9508COPIES FURNISHED:

9510Mia L. McKown, Esquire

9514Holland & Knight LLP

9518Suite 600

9520315 South Calhoun Street

9524Tallahassee, Florida 32301

9527(eServed)

9528Kevin Michael Marker, Esquire

9532Agency for Health Care Admi nistration

9538Mail Stop 7

95412727 Mahan Drive

9544Tallahassee, Florida 32308

9547(eServed)

9548Lindsey L. Miller - Hailey, Esquire

9554Agency for Health Care Administration

9559Mail Stop 7

95622727 Mahan Drive

9565Tallahassee, Florida 32308

9568(eServed)

9569Richard Joseph Saliba, Esquire

9573Agency for Health Care Administration

9578Fort Knox Building III, Mail Stop 7

95852727 Mahan Drive

9588Tallahassee, Florida 32308

9591(eServed)

9592Stephen A. Ecenia, Esquire

9596Rutledge Ecenia, P.A.

9599Suite 202

9601119 South Monroe Street

9605Tallahassee, Florida 32301

9608(eServed)

9609David Mark Maloney, Esquire

9613Rutledge Ecenia P.A.

9616Suite 202

9618119 South Monroe Street

9622Tallahassee, Florida 32301

9625(eServed)

9626Craig D. Miller, Esquire

9630Rutledge Ecenia, P.A.

9633Suite 202

9635119 South Monroe Street

9639Tallahassee, Florida 32301

9642(eServed)

9643J. Stephen Menton, Esqui re

9648Rutledge Ecenia, P.A.

9651Suite 202

9653119 South Monroe Street

9657Tallahassee, Florida 32301

9660(eServed)

9661Stephen K. Boone, Esquire

9665Boone, Boone, Boone, and Koda, P.A.

96711001 Avenida Del Circo

9675Post Office Box 1596

9679Venice, Florida 34284

9682(eServed)

9683Tiffany A. Roddenb erry, Esquire

9688Holland & Knight, LLP

9692Suite 600

9694315 South Calhoun Street

9698Tallahassee, Florida 32301

9701(eServed)

9702Richard J. Shoop , Agency Clerk

9707Agency for Health Care Administration

97122727 Mahan Drive, Mail Stop 3

9718Tallahassee, Florida 32308

9721(eServed)

9722Mary C. Mayhew , Secretary

9726Agency for Health Care Administration

97312727 Mahan Drive, Mail Stop 1

9737Tallahassee, Florida 32308

9740(eServed)

9741Stefan Grow , General Counsel

9745Agency for Health Care Administration

97502727 Mahan Drive, Mail Stop 3

9756Tallahassee, Florida 32308

9759(eSer ved)

9761NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

9767All parties have the right to submit written exceptions within

977715 days from the date of this Recommended Order. Any exceptions

9788to this Recommended Order should be filed with the agency that

9799will issue the Final Order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 03/12/2019
Proceedings: Marion Community Hospital, Inc. d/b/a West Marion Community Hospital and Ocala Regional Medical Center's Exceptions to the Recommended Order (filed in Case No. 18-000075CON).
PDF:
Date: 03/12/2019
Proceedings: Agency for Health Care Administration's Exceptions to the Recommended Order (filed in Case No. 18-000075CON).
PDF:
Date: 03/12/2019
Proceedings: Agency Final Order filed.
PDF:
Date: 03/11/2019
Proceedings: Agency Final Order
PDF:
Date: 02/06/2019
Proceedings: Recommended Order
PDF:
Date: 02/06/2019
Proceedings: Recommended Order (hearing held June 18-22 and 25, 2018). CASE CLOSED.
PDF:
Date: 02/06/2019
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
PDF:
Date: 01/29/2019
Proceedings: Marion Community Hospital, Inc.'s Composite Exhibit 12 filed.
PDF:
Date: 11/14/2018
Proceedings: Notice of Telephonic Status Conference (status conference set for November 27, 2018; 3:00 p.m.).
PDF:
Date: 08/28/2018
Proceedings: Florida Hospital Waterman, Inc.'s Memorandum of Law in Support of the Proposed Recommended Order filed.
PDF:
Date: 08/28/2018
Proceedings: Notice of Filing Proposed Recommended Order filed.
PDF:
Date: 08/28/2018
Proceedings: Agency Memorandum of Law Submitted Pursuant to Section 28-106.307 Uniform Rules of Procedure Agency Notice of Adoption of Waterman's Proposed Recommended Order filed.
PDF:
Date: 08/28/2018
Proceedings: Notice of Filing Proposed Recommended Order filed.
PDF:
Date: 08/27/2018
Proceedings: Marion Community Hospital, Inc. d/b/a West Marion Community Hospital and Ocala Regional Medical Center's Notice of Filing the Deposition Transcript of James Duke, M.D. filed.
PDF:
Date: 08/16/2018
Proceedings: Order Granting Extension of Time for PROs.
PDF:
Date: 08/16/2018
Proceedings: Order Granting Extension of Time for PROs.
PDF:
Date: 08/15/2018
Proceedings: Unopposed Motion to Extend the Deadline for Post-Hearing Submissions filed.
PDF:
Date: 07/18/2018
Proceedings: Marion Community Hospital, Inc. d/b/a West Marion Community Hospital's Report of Plan for Testimony of Cory Hewitt filed.
PDF:
Date: 07/09/2018
Proceedings: Notice of Filing Transcript.
PDF:
Date: 07/03/2018
Proceedings: Order Extending Time for Report on Post-hearing Testimony.
PDF:
Date: 07/03/2018
Proceedings: Order Granting Extension of Time for PROs.
PDF:
Date: 07/02/2018
Proceedings: Response to Order Advising ALJ of Testimony and Motion for Additional Time filed.
PDF:
Date: 06/29/2018
Proceedings: Unopposed Motion to Extend the Deadline for Post-hearing Submissions filed.
PDF:
Date: 06/25/2018
Proceedings: Post Hearing Order.
PDF:
Date: 06/15/2018
Proceedings: Joint Pre-hearing Stipulation filed.
PDF:
Date: 06/14/2018
Proceedings: Order Granting Extension of Time.
PDF:
Date: 06/13/2018
Proceedings: Motion for Extension of Time to File Joint Pre-hearing Stipulation filed.
PDF:
Date: 06/12/2018
Proceedings: Cross-Notice of Taking Depositions filed.
PDF:
Date: 06/12/2018
Proceedings: Notice of Taking Depositions and Amended Notice of Taking Deposition for Marisol Fitch filed.
PDF:
Date: 06/08/2018
Proceedings: Notice of Depositions filed.
PDF:
Date: 06/08/2018
Proceedings: Notice of Taking Depositions filed.
PDF:
Date: 06/04/2018
Proceedings: Order on Objection to Depositions and Extending Pre-hearing Stipulation Filing Date.
Date: 06/04/2018
Proceedings: CASE STATUS: Motion Hearing Held.
PDF:
Date: 06/04/2018
Proceedings: Notice of Telephonic Conference (conference set for June 4, 2018; 11:00 a.m.).
PDF:
Date: 06/04/2018
Proceedings: Agency for Health Care Administration's Objection to Untimely Notice of Depositions filed.
PDF:
Date: 06/01/2018
Proceedings: Notice of Deposition filed.
PDF:
Date: 05/16/2018
Proceedings: Amended Notice of Hearing (hearing set for June 18 through 22 and 25 through 27, 2018; 9:00 a.m.; Tallahassee, FL; amended as to Hearing Dates).
PDF:
Date: 05/10/2018
Proceedings: Response to Order Severing Case No. 18-0071, Closing File, Relinquishing Jurisdiction filed.
PDF:
Date: 05/03/2018
Proceedings: Order Severing Case No. 18-0071, Closing File, and Relinquishing Jurisdiction (filed in DOAH Case No. 18-0071).
PDF:
Date: 04/30/2018
Proceedings: Munroe Regional's Notice of Service of Answers and Objections to Florida Hospital Waterman's First Set of Interrogatories filed.
PDF:
Date: 04/30/2018
Proceedings: Munroe Regional's Responses to Florida Hospital Waterman's First Request for Production filed.
PDF:
Date: 04/25/2018
Proceedings: Order Denying Request for Leave to Reply of Marion Community Hospital, Inc., and Florida Hospital Waterman, Inc.
PDF:
Date: 04/24/2018
Proceedings: Munroe Regional's Notice of Additional Facts filed.
PDF:
Date: 04/24/2018
Proceedings: Stipulated Issues of Fact filed.
PDF:
Date: 04/24/2018
Proceedings: Florida Hospital Waterman, Inc.'s Responses to Second Request for Production of Documents by Munroe HMA Hospital, LLC filed.
PDF:
Date: 04/24/2018
Proceedings: Florida Hospital Waterman, Inc.'s Responses to First Request for Production of Documents by Munroe HMA Hospital, LLC filed.
PDF:
Date: 04/24/2018
Proceedings: Florida Hospital Waterman, Inc.'s Answers and Objections to Munroe Regional Medical Center's First Set of Interrogatories filed.
PDF:
Date: 04/18/2018
Proceedings: Munroe Regional's Response in Opposition to West Marion, Ocala Regional, and Florida Hospital Waterman Inc.'s Request for Leave to Reply filed.
PDF:
Date: 04/17/2018
Proceedings: Notice of Telephonic Status Conference (status conference set for April 20, 2018; 2:30 p.m.).
PDF:
Date: 04/16/2018
Proceedings: West Marion Community Hospital and Ocala Regional Medical Center Final Witness List filed.
PDF:
Date: 04/16/2018
Proceedings: Florida Hospital Waterman, Inc.'s Final Witness List filed.
PDF:
Date: 04/16/2018
Proceedings: Munroe Regional Medical Center's Final Witness List filed.
PDF:
Date: 04/16/2018
Proceedings: Notice of Telephonic Status Conference (status conference set for April 20, 2018; 2:30 p.m.).
PDF:
Date: 04/12/2018
Proceedings: West Marion, Ocala Regional, and Florida Hospital Waterman's Request for Leave to Reply filed.
PDF:
Date: 04/12/2018
Proceedings: Notice of Appearance (David Maloney) filed.
PDF:
Date: 04/06/2018
Proceedings: Munroe Regional's Response in Opposition to Florida Hospital Waterman Inc's Motion to Dismiss filed.
PDF:
Date: 03/30/2018
Proceedings: Florida Hospital Waterman, Inc.'s Motion to Dismiss filed.
PDF:
Date: 03/05/2018
Proceedings: Florida Hospital Waterman, Inc.'s Preliminary Witness List filed.
PDF:
Date: 03/05/2018
Proceedings: Munroe Regional Medical Center's Preliminary Witness List filed.
PDF:
Date: 03/02/2018
Proceedings: West Marion Community Hospital's First Request for Production of Documents to Florida Hospital Waterman filed.
PDF:
Date: 03/02/2018
Proceedings: West Marion Community Hospital's First Request for Production of Documents to Munroe Regional Medical Center filed.
PDF:
Date: 02/26/2018
Proceedings: West Marion Community Hospital and Ocala Regional Medical Center Preliminary Witness List filed.
PDF:
Date: 02/21/2018
Proceedings: Florida Hospital Waterman's Notice of Service of It's First Set of Interrogatories to Munroe HMA Hospital, LLC filed.
PDF:
Date: 02/21/2018
Proceedings: Florida Hospital Waterman's Notice of Service of It's First Set of Interrogatories to Marion Community Hospital d/b/a West Marion Community Hospital filed.
PDF:
Date: 02/21/2018
Proceedings: Florida Hospital Waterman, Inc., d/b/a Florida Hospital Waterman's First Request for Production to Munroe HMA Hospital, LLC filed.
PDF:
Date: 02/21/2018
Proceedings: Florida Hospital Waterman, Inc., d/b/a Florida Hospital Waterman's First Request for Production to Marion Community Hospital , Inc. d/b/a West Marion Community Hospital filed.
PDF:
Date: 02/16/2018
Proceedings: Munroe Regional Medical Center's Notice of Serving First Interrogatories to West Marion Community Hospital filed.
PDF:
Date: 02/16/2018
Proceedings: Munroe Regional Medical Center's Notice of Serving First Interrogatories to Florida Hospital Waterman filed.
PDF:
Date: 02/16/2018
Proceedings: Munroe Regional Medical Center's Second Request for Production of Documents to West Marion Community Hospital filed.
PDF:
Date: 02/16/2018
Proceedings: Munroe Regional Medical Center's First Request for Production of Documents to West Marion Community Hospital filed.
PDF:
Date: 02/16/2018
Proceedings: Munroe Regional Medical Center's Second Request for Production of Documents to Florida Hospital Waterman filed.
PDF:
Date: 02/16/2018
Proceedings: Munroe Regional Medical Center's First Request for Production of Documents to Florida Hospital Waterman filed.
PDF:
Date: 02/06/2018
Proceedings: Order of Pre-hearing Instructions.
PDF:
Date: 01/29/2018
Proceedings: Joint Notice of Filing Proposed Order of Pre-hearing Instructions filed.
PDF:
Date: 01/25/2018
Proceedings: The Agency for Health Care Administration's Preliminary and Final Witness List filed.
PDF:
Date: 01/18/2018
Proceedings: Notice of Retaining Court Reporter filed.
PDF:
Date: 01/18/2018
Proceedings: Notice of Appearance (Tiffany Roddenberry; filed in Case No. 18-000075CON).
PDF:
Date: 01/18/2018
Proceedings: Notice of Appearance (Mia Mckown; filed in Case No. 18-000075CON).
PDF:
Date: 01/18/2018
Proceedings: Notice of Appearance (Sabrina Dieguez) filed.
PDF:
Date: 01/18/2018
Proceedings: Order Requesting Proposed Order of Pre-Hearing Instructions.
PDF:
Date: 01/18/2018
Proceedings: Notice of Hearing (hearing set for June 18 through 22 and 25 through 29, 2018; 8:30 a.m.; Tallahassee, FL).
PDF:
Date: 01/11/2018
Proceedings: Order of Consolidation (DOAH Case Nos. 18-0068CON, 18-0071CON, and 18-0075CON)).
PDF:
Date: 01/11/2018
Proceedings: Joint Response to Initial Order filed.
PDF:
Date: 01/08/2018
Proceedings: Initial Order.
PDF:
Date: 01/05/2018
Proceedings: Decisions on Batched Applications filed.
PDF:
Date: 01/05/2018
Proceedings: Petition for Formal Administrative Proceeding filed.
PDF:
Date: 01/05/2018
Proceedings: Notice (of Agency referral) filed.

Case Information

Judge:
JOHN D. C. NEWTON, II
Date Filed:
01/05/2018
Date Assignment:
01/08/2018
Last Docket Entry:
03/12/2019
Location:
Tallahassee, Florida
District:
Northern
Agency:
Other
Suffix:
CON
 

Counsels

Related Florida Statute(s) (6):

Related Florida Rule(s) (2):