18-000075CON Florida Hospital Waterman, Inc., D/B/A Florida Hospital Waterman vs. Munroe Hma Hospital, Llc And Marion Community Hospital, Inc. Status: Closed Recommended Order on Wednesday, February 6, 2019.

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.

In determining how to rule upon Marion Community and the Agency's exceptions and

whether to adopt the ALI's Recommended Order in whole or in part, the Agency must follow

Section 120.57(1)(!), Florida Statutes, which provides in pertinent part:

The agency may adopt the recommended order as the final order of the agency.

The agency in its final order may reject or modify the conclusions of law over

which it has substantive jurisdiction and interpretation of administrative rules

over which it has substantive jurisdiction. When rejecting or modifying such

conclusion of law or interpretation of administrative rule, the agency must state

with particularity its reasons for rejecting or modifying such conclusion of law or

interpretation of administrative rule and must make a finding that its substituted

conclusion of law or interpretation of administrative rule is as or more reasonable

than that which was rejected or modified. Rejection or modification of

conclusions of law may not form the basis for rejection or modification of

findings of fact. The agency may not reject or modify the findings of fact unless

the agency first determines from a review of the entire record, and states with

particularity in the order, that the findings of fact were not based upon competent

substantial evidence or that the proceedings on which the findings were based did

not comply with essential requirements oflaw ....

§ 120.57(1)(!), Fla. Stat. Additionally, "[t)he final order shall include an explicit ruling on each

exception, but an agency need not rule on an exception that does not clearly identify the disputed

portion of the recommended order by page number or paragraph, that does not identify the legal

basis for the exception, or that does not include appropriate and specific citations to the record."

§ 120.57(1 )(k), Fla. Stat. In accordance with these legal standards, the Agency makes the

following rulings on Marion Community and the Agency's exceptions:

Marion Community's Exceptions

In Exception 1, Marion Community takes exception to the last sentence of Paragraph 42

of the Recommended Order, arguing the finding contained therein is not based on competent,

substantial evidence. The findings of fact in Paragraph 42 of the Recommended Order are all

based on competent, substantial record evidence. See Transcript, Volume 3, Pages 348-349;

Transcript, Volume 4, Pages 520-523, 548; Transcript, Volume 5, Pages 679-686; AHCA

Exhibit I; Florida Hospital Waterman Exhibit I. Thus, the Agency is not at liberty to reject or

modify them. See § 120.57(1)(/), Fla. Stat.; Heifetz v. Department of Business Regulation, 475

So. 2d 1277, 1281 (Fla. 1st DCA 1985) (holding that an agency "may not reject the hearing

officer's finding [of fact] unless there is no competent, substantial evidence from which the

finding could reasonably be inferred"). Therefore, the Agency denies Exception I.

In Exception 2, Marion Community takes exception to Paragraph 53 of the

Recommended Order, arguing the ALJ did not balance this criteria in the Recommended Order.

However, Marion Community's argument does not constitute a valid basis for the Agency to

reject or modify the findings of fact in Paragraph 53 of the Recommended Order. Since the

findings of fact in Paragraph 53 of the Recommended Order are based on competent, substantial

record evidence (See Transcript, Volume 5, Pages 601-604), the Agency denies Exception 2.

See§ 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281.

In Exception 3, Marion Community takes exception to Paragraphs 112-115 of the

Recommended Order, arguing the paragraphs are unnecessary and that the ALJ did not conduct

an appropriate balancing of the relative merits of the applications based upon all applicable

criteria. The Agency disagrees. The Agency finds that the ALI's conclusions of law in these

paragraphs are reasonable. 1 Therefore, the Agency denies Exception 3.

Agency's Exceptions

In its First Exception, the Agency takes exception to Paragraphs 51, 52, 113, 124 and 125

ofthe Recommended Order, arguing the ALI's interpretation of rules 59C-1.008 and 59C-1.039,

Florida Administrative Code, are erroneous. Specifically, the Agency argues the ALJ erred by

approving more beds than the Fixed Need Pool concluded were needed. The Agency's argument

1 The Agency further addresses the conclusions of law in Paragraph 113 of the Recommended Order in its ruling on

the Agency's First Exception infra.

is in direct opposition to the holding in Balsam v. Department of Health and Rehabilitative

Services, 486 So. 2d 1341, (Fla. 1st DCA 1986), where the court held:

The bed-need formula is part of a rule having general statewide

application and should be viewed merely as the beginning point for

determining need. The formula is so broad in scope that it cannot

be treated as taking into consideration all the peculiar conditions

found in a particular area sought to be served by the applicant.

While the bed-need formula shifts the burden from HRS to the

applicant to show a need where none is shown by calculations

under the formula, HRS should not simply stand on these

calculations and abandon its responsibility to consider and weigh

the other criteria.

It would be impermissible for the Agency to conclusively presume that it can only approve the

exact number of beds detennined by the fixed need pool without weighing and balancing all the

relevant statutory and rule criteria. See, generally, Department of Health & Rehabilitative

Services v. Johnson and Johnson, 447 So. 2d 361 (Fla. 1st DCA 1984). Indeed, as the ALJ

concluded, the plain language of the rules indicates that the Agency need not adhere to the fixed

need pool calculation results when detennining whether to grant or deny a CON application. See

rules 59C-1.008(2)(d)3 and 59C-1.039(3)(d), Florida Administrative Code. Furthennore, as the

ALJ pointed out in Paragraph 126 of the Recommended Order, the Agency has, in the past,

approved more CMR beds than the fixed need pool calculations have shown were needed. The

Agency did not offer any rational explanation of why it should not do the same in this matter.

Thus, the Agency finds the conclusions of law reached by the ALJ in Paragraphs 51, 52, 113,

124 and 125 of the Recommended Order are reasonable, and that it cannot substitute conclusions

oflaw that are as or more reasonable. Therefore, the Agency denies its First Exception.

In its Second Exception, the Agency takes exception to Paragraph 116 of the

Recommended Order, arguing the conclusions of law in that paragraph are erroneous. Paragraph

116 of the Recommended Order is nothing more than a mere resuscitation of the Agency's legal

arguments made in its August 28, 2018 Memorandum of Law that was filed with DOAH in this

matter. Therefore, the Agency denies its Second Exception.

In its Third Exception, the Agency takes exception to Paragraphs 117-127 of the

Recommended Order, arguing the applicants' not nonnal circumstances arguments constituted

impermissible amendments to their respective applications. First, the Agency's argument

overlooks the AU's findings of fact in Paragraphs 56-66 of the Recommended Order, where the

ALJ expressly found both applicants raised "not normal" circumstances in their respective

applications and cited to the competent, substantial record evidence that supported these

findings. Second, the Agency is essentially re-arguing its First Exception, by stating again that it

cannot approve more beds than what the fixed need pool calculations arrived at. As the Agency

explained in the ruling on the Agency's First Exception supra (which is hereby incorporated by

reference), the Agency's argument is erroneous. Therefore, for all the reasons stated above, the

Agency denies its Third Exception.

In its Fourth Exception, the Agency takes exception to Paragraphs 123-126 of the

Recommended Order, arguing they set forth an erroneous legal interpretation of "not nonnal"

circumstances. While the Agency is correct that there is a difference between "special

circumstances" and "not normal" circumstances for purposes of CON 1aw 2 , the ALJ does not

make any conclusions of law confusing the two terms in these paragraphs. In addition, the

Agency finds that the ALJ's conclusions of law in these paragraphs are reasonable and should

not be rejected or modified. Therefore, the Agency denies its Fourth Exception.

2 The Hospice of the Florida Suncoast, Inc., et. a! v. Agency for Health Care Admin., 2008 WL 2259050 at

*7 ("Under the hospice need methodology, "special circumstances" are distinguishable from "not normal"

circumstances, in part, because the three "special circumstances'' are comprised of three delineated criteria rather

than generally referencing what has been characterized as '"free form" need arguments. Also, "not normal''

FINDINGS OF FACT

The Agency hereby adopts the findings of fact set forth in the Recommended Order.

CONCLUSIONS OF LAW

The Agency hereby adopts the conclusions of law set forth in the Recommended Order.

ORDER

Based upon the foregoing, both Marion Community's CON Application No. 10499 and

Waterman's CON Application No. 10496 are hereby granted. The parties shall govern

themselves accordingly.

DONE and ORDERED this _lLday of , 2019, in Tallahassee, Florida.

AGENCY FOR HEALTH CARE ADMINISTRATION

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO

A JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A

NOTICE OF APPEAL WITH THE AGENCY CLERK OF AHCA, AND A SECOND COPY

ALONG WITH THE FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT

COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY

MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW

PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA

APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF

RENDITION OF THE ORDER TO BE REVIEWED.

circumstances may be presented when the Agency's numeric fixed need pool calculation produces a positive

numeric need.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Final Order has

been furnished by the method indicated to the persons named below on this

G.-:..___:__:,- c=-=/.'--,. __ , 2019.

cy Clerk

Agency for Health Care Administration

2727 Mahan Drive, MS #3

Tallahassee, Florida 32308-5403

[phone]

COPIES FURNISHED TO:

Honorable John D. C. Newton II

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(via electronic filing)

Stephen A. Ecenia, Esquire

Craig D. Miller, Esquire

J. Stephen Menton, Esquire

David M. Maloney

Rutledge Ecenia, P .A.

119 South Monroe Street, Suite 202

Tallahassee, Florida 32301

(via electronic mail to [e-mail],

[e-mail], [e-mail],

and [e-mail])

Richard J. Saliba, Esquire

Lindsey L. Miller-Hailey, Esquire

Kevin M. Marker, Esquire

Assistant General Counsels

(via electronic mail to [e-mail],

[e-mail], and [e-mail])

Stephen K. Boone, Esquire

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

I 00 I A venida Del Circo

Post Office Box 1596

Venice, Florida 34284

(via electronic mail to [e-mail])

Mia L. McKown, Esquire

Tiffany A. Roddenberry, Esquire

Holland & Knight, LLP

315 South Calhoun Street, Suite 600

Tallahassee, Florida 32301

(via electronic mail to [e-mail], and

[e-mail])

Marisol Fitch

Certificate ofNeed Unit

(via electronic mail to [e-mail])

Jan Mills

Facilities Intake Unit

(via electronic mail to [e-mail])