STATE OF FLORIDA

AGENCY FOR HEALTH CARE ADMINISTRATION

KENDALL HEALTHCARE GROUP, LTD. d/ b/ a

KENDALL REGIONAL MEDICAL CENTER,

Petitioner,

V.

THE PUBLIC HEALTH TRUST OF MIAMI-DADECOUNTY, FLORIDA, d/ b/ a JACKSON HOSPITALWEST and STATE OF FLORIDA, AGENCY FOR

HEALTH CARE ADMINISTRATION,

Respondents.

VARIETY CHILDREN' S HOSPITAL d/b/ a NICKLAUSCHILDREN' S HOSPITAL,

Petitioner,

V.

THE PUBLIC HEALTH TRUST OF MIAMI-DADECOUNTY, FLORIDA d/ b/ a JACKSON HOSPITAL

WEST and STATE OF FLORIDA, AGENCY FORHEALTH CARE ADMINISTRATION,

Respondents.

7

AH0AlkGEPCY C L E R K

2018 APR 2b P 2: 10

CASE NO. 16- 0112CON

AHCA NO. 2015013287

RENDITION NO.: AHCA- - aa3S- FOF- CON

CASE NO. 16- 0113CON

AHCA NO. 2015013290

Filed April 26, 2018 3:57 PM Division of Administrative Hearings

CGH HOSPITAL, LTD. d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC. d/b/a HIALEAH HOSPITAL; and LIFEMARK HOSPITALS, INC. d/b/a PALMETTO GENERAL HOSPITAL,

Petitioners,

v.

THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST and STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondents.

----------------------------------~/ EAST FLORIDA-DMC, INC.,

Petitioner,

v.

STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION,

Respondent,

and

THE PUBLIC HEALTH TRUST OF MIAMI-DADE COUNTY, FLORIDA d/b/a JACKSON HOSPITAL WEST; CGH HOSPITAL, LTD. d/b/a CORAL GABLES HOSPITAL; TENET HIALEAH HEALTHSYSTEM, INC. d/b/a HIALEAH HOSPITAL; LIFEMARK HOSPITALS, INC. d/b/a PALMETTO GENERAL HOSPITAL; and VARIETY CHILDREN'S HOSPITAL d/b/a NICKLAUS CHILDREN'S HOSPITAL,

Intervenors. ____________________________________ /

2

CASE NO. 16-0114CON AHCA NO. 2015013292

CASE NO. 16-0115CON AHCA NO. 2016000043

FINAL ORDER

These cases were referred to the Division of Administrative Hearings (DOAH) where

they were consolidated and the assigned Administrative Law Judge (ALI), Robert S. Cohen,

conducted a formal administrative hearing. At issue in this proceeding is whether, on balance,

Certificate of Need ("CON") application number 10395 by the Public Health Trust of Miami-

Dade County, Florida d/b/a Jackson West Hospital ("JW") to build a 1 00-bed acute care hospital

in Miami-Dade County, Florida, AHCA District 11, and/or CON application number 10394 by

East Florida-DMC, Inc. ("DMC") to build an 80-bed acute care hospital in Miami-Dade County,

Florida, satisfy the applicable criteria and should be approved. The Recommended Order

entered on March 16, 201 7 is attached to this final order and incorporated herein by reference,

except where noted infra.

RULINGS ON EXCEPTIONS

JW, Tenet Hialeah Healthsystem, Inc. d/b/a Hialeah Hospital ("Tenet") and Variety

Children's Hospital d/b/a Nicklaus Children's Hospital ("NCH") all filed exceptions to the

Recommended Order, JW filed responses to Tenet and NCH's exceptions, Tenet filed a response

to JW's exceptions, and DMC and Kendall Healthcare Group, Ltd. d/b/a Kendall Regional

Medical Center ("KMRC") filed joint responses to JW's exceptions, Tenet's exceptions, and

NCH's exceptions.

In determining how to rule upon the parties' exceptions and whether to adopt the ALI's

Recommended Order in whole or in part, the Agency for Health Care Administration ("Agency"

or "AHCA") 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

3

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 )(f), 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(l)(k), Fla. Stat. In accordance with these legal standards, the Agency makes the

following rulings on the parties' exceptions:

JW's Exceptions

Before ruling on the specific exceptions, the Agency notes that JW raises potential

constitutional issues with the proceeding itself in several of its exceptions. Since there is no

express authority given to the Agency by section 120.57(1), Florida Statutes, to address and rule

on constitutional issues in administrative proceedings, the Agency will not address those

arguments in the rulings on JW's exceptions infra. See also Gulf Pines Memorial Park, Inc. v.

Oakland Memorial Park, Inc., 361 So. 2d 695 (Fla. 1978).

In Exception 1, JW takes exception to Paragraphs 13, 14, 15, 23, 29, 34, 40, 42, 45, 46,

47, 50, 51, 52, 64, 66, 68, 72, 96, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111,

133,163,166,170,181,183,184,187, 188,206,207,208,209,210,211,213,215,216and217

of the Recommended Order, arguing that the proceedings on which the findings of fact and

4

conclusions of law in these paragraphs are based did not comply with the essential requirements

of law because the ALJ improperly considered factors that are not part of the statutory review

criteria of a CON application for a general hospital. Specifically, JW alleges that these

paragraphs deal with the existing providers and applicants' quality of care, the applicants'

availability of resources to complete the proposals and the short and long tenn financial

feasibility of the proposals. The argument JW puts forth in Exception 1 is undermined by the

fact that JW clearly put these factors, including its financial viability, at issue by listing them as

reasons justifying the "need" for the health care facility being proposed (§ 408.035(1)(a), Fla.

Stat.) in its CON application. See JW Exhibit 2, p. 11. Thus, the ALJ correctly considered them

under the criterion of need, and did not depart from the essential requirements of law by doing

so. Additionally, the findings of fact in Paragraphs 13, 14, 15, 23, 29, 34, 40, 42, 45, 46, 47, 50,

51, 52, 64, 66, 68, 72, 96,100,101,102,103,104, 105,106,107, 108,109, 110, Ill, 133,163,

166, 170, 181, 183, 184, 187 and 188 of the Recommended are based on competent, substantial

record evidence. See Transcript, Volume 2, Pages 191, 240-243, 251-252 and 302-304;

Transcript, Volume 3, Pages 446, 503 and 504-505; Transcript, Volume 4, Pages 569 and 578-

579; Transcript, Volume 6, Page 979; Transcript, Volume II, Pages 1802 and 1865; Transcript,

Volume 12, Pages 1929-1930 and 1964-1966; Transcript Volume 13, Pages 2079, 2092 and

2107; Transcript, Volume 14, Pages 2254-2255,2256-2257,2281,2299-2300,2303,2307-2310,

2316-2320 and 2323; Transcript, Volume 15, Pages 2460-2461, 2472-2477, 2484-2485, 2492-

2493, 2495-2496 and 2505; Transcript, Volume 18, Pages 2853-2857, 2858-2867, 2871-2872,

2874-2875 and 2897; Transcript, Volume 21, Pages 3344-3345, 3378-3379, 3384-3387, 3395-

3396, 3438-3444 and 3447-3448; Transcript, Volume 23, Pages 3651-3652 and 3685-3686;

Transcript, Volume 25, Pages 3923-3945; Transcript, Volume 26, Page 4066; Transcript,

5

Volume 28. Pages 4346-4347 and 4356-4372; Transcript, Volume 30, Pages 4636-4649;

Transcript, Volume 33, Pages 4927-4973; DMC Exhibits 1, 22, 24, 27, 161, 162, 163, 164 and

167; JW Exhibit 2; NCH Exhibits 2, 28, 41, 42 and 43; and Tenet Exhibits 15 and 19. Thus, the

Agency cannot 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"). Furthermore, the Agency finds that,

while it has substantive jurisdiction over the conclusions of law in Paragraphs 206, 207, 208,

209, 210, 211, 213, 215 and 216 of the Recommended Order because it is the state agency in

charge of administering Florida's CON law, it cannot substitute conclusions of law that are as or

more reasonable than those of the ALJ. Thus, the Agency denies Exception I as it pertains to

these paragraphs. Lastly, in regard to Paragraph 217 of the Recommended Order, the Agency

disagrees with the ALI's conclusion of law in the paragraph, but not for the reasons put forth by

JW in its exception. Instead, the Agency finds that Paragraph 217 of the Recommended Order

contains conclusions of law that are within the Agency's substantive jurisdiction because it is the

state agency charged with administering Florida's CON program, and that, based upon the

reasoning set forth in the ruling on Tenet's Exception Number One supra, which is hereby

incorporated by reference, it can substitute conclusions of law that are as or more reasonable than

those of the ALJ. Therefore, the Agency grants Exception 1 to the extent that it rejects

Paragraph 217 of the Recommended Order in toto.

InException2,JWtakesexceptiontoParagraphs 145,152,153,154,155,156,157,158,

159, 189, 190, 208 and 209 of the Recommended Order, arguing the proceedings on which the

findings of fact and conclusions of law in these paragraphs are based did not comply with the

6

essential requirements of law because the ALJ improperly considered additional criteria that is

outside the scope of the statutory review criteria for a general hospital CON application.

Specifically, JW alleges the ALI improperly considered payor mix projections and utilization

projections, and erroneously interpreted the requirements of section 408.037(2), Florida Statutes,

as it pertains to how a CON applicant should identify its proposed service area. First, the

Agency disagrees with JW's argument that the ALI improperly considered payor mix projections

and utilization projections because these factors were put forth by JW in its CON application as

reasons that justified a finding of "need" for the proposed health care facility, pursuant to section

408.035(l)(a), Florida Statutes. Thus, JW consented to these factors being examined by the ALI

under the category of need. Specifically, JW stated in its application that a new hospital was

needed because "the proposed project will serve a significant portion of patients who historically

have care access problems - the indigent and Medicaid populations," because "Jackson Health

System already serves residents of the defined 8-Zip Code Primary Service Area (PSA) and 4-

Zip Code Secondary Service Area (SSA)," and because "the proposed service area represents a

fragmented medical market capable of supporting its own community hospital without impact to

existing providers." See JW Exhibit 2, p. 11. Second, payor mix projections and utilization

projections may also be properly considered under the statutory review criteria of "[t]he

availability, accessibility, and extent of utilization of existing health care facilities and health

services in the service district of the applicant" (§ 408.035(l)(b), Fla. Stat.), "[t]he extent to

which the proposed services will enhance access to health care for residents of the service

district"(§ 408.035(1)(e), Fla. Stat.), "[t]he extent to which the proposal will foster competition

that promotes quality and cost-effectiveness"(§ 408.035(l)(g), Fla. Stat.), and "[t]he applicant's

past and proposed provision of health care services to Medicaid patients and the medically

7

indigent" (§ 408.035(1 )(i), Fla. Stat.). Thus, JW's argument that payor mix projections and

utilization projections are outside the scope of the CON review criteria for general hospitals is

erroneous. In regard to JW' s argument concerning the ALJ' s interpretation of section

408.037(2), Florida Statutes, as it pertains to how a CON applicant should identify its proposed

service area, the Agency finds that, while Paragraph 159 of the Recommended Order is actually

a conclusion of law within the Agency's substantive jurisdiction because it involves the

interpretation of section 408.037, Florida Statutes, which the Agency is in charge of

implementing, the Agency cannot substitute a conclusion of law that is as or more reasonable

than that of the ALJ. Additionally, the findings of fact in Paragraphs 145, 152, 153, 154, 155,

156, 157, 158, 159, 189 and 190 ofthe Recommended Order are based on competent, substantial

record evidence. See Transcript, Volume 19, Pages 3074-3075, 3078, 3080-3083, 3085-3093;

DMC Exhibits 1, 22 and 24; and JW Exhibit 2. Thus, the Agency is not at liberty to reject or

modify them. See § 120.57(1)(!), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Lastly, the Agency

finds that, while it has substantive jurisdiction over the conclusions of law in Paragraphs 208 and

209 of the Recommended Order because it is the state agency charged with implementing the

regulations of Florida's CON program, it cannot substitute conclusions of law that are as or more

reasonable than those of the ALJ. Therefore, for all the reasons set forth above, the Agency

denies Exception 2.

In Exception 3, JW takes exception to Paragraphs 13, 14, 15, 23, 29, 34, 40, 42, 45, 47,

50, 51, 52, 64, 66, 68, 72, 96, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 133,

163,166,168,170,181,183,184,187, 188,206,207,208,209,210,211,213,216and217of

the Recommended Order, arguing the proceedings on which the findings of fact and conclusions

of law in these paragraphs are based did not comply with the essential requirements of law

8

because the ALl's considered criteria outside the statutory review criteria for a general hospital

CON application. In regard to Paragraphs 13, 14, 15, 23, 29, 34, 40, 42, 45, 47, 50, 51, 52, 64,

66, 68, 72, 96,100,101,102,103,104,105,106,107,108,109,110,111,133,163,166,170,

181, 183, 184, 187, 188, 206, 207, 208, 209, 209, 210, 211, 213 and 216 ofthe Recommended

Order, the Agency denies Exception 3 based on the reasoning set forth in the ruling on JW's

Exception I supra, which is hereby incorporated by reference. In regard to Paragraph 168 of the

Recommended Order, the findings of fact in this paragraph fall under the statutory review

criteria of "[t]he availability, accessibility, and extent of utilization of existing health care

facilities and health services in the service district ofthe applicant"(§ 408.035(l)(b), Fla. Stat.).

Thus, the proceedings on which the findings of fact in these paragraphs are based did not depart

from the essential requirements oflaw. Furthermore, the findings of fact in Paragraph 168 of the

Recommended Order are based on competent, substantial evidence. See Transcript, Volume 15,

Pages 2505-2506. Thus, the Agency cannot disturb them. See § 120.57(1 )(!), Fla. Stat.; Heifetz,

475 So. 2d at 1281. Paragraph 217 of the Recommended Order has already been addressed by

the Agency in the ruling on JW's Exception I supra, which is hereby incorporated by reference.

Therefore, the Agency denies Exception 3.

In Exception 4, JW takes exception to Paragraph 145 of the Recommended Order,

arguing the proceedings on which the findings of fact in this paragraph are based did not comply

with the essential requirements of law because the ALl allowed DMC to use a utilization

projection that did not comply with the requirements of section 408.037(2), Florida Statutes.

Based on the reasoning set forth in the Agency's ruling on Exception 2 supra, which is hereby

incorporated by reference, the Agency denies Exception 4.

9

In Exception 5, JW takes exception to Paragraphs 3, 24, 25, 29, 34, 40, 41, 42, 72, 96,

100,102,103,104,105,106,107,108,109,110,111,133,163,174,175,176,177,178,179,

180, 181, 183, 186, 187, 188, 206, 207, 208, 209, 210, 211, 213, 216 and 217 of the

Recommended Order, arguing the proceedings on which the findings of fact and conclusions of

law are based did not comply with the essential requirements of law because the ALJ

impermissibly considered the financial feasibility of the proposals. The Agency denies

Exception 5 as it pertains to Paragraphs 29, 34, 40, 42, 72, 96, 100, 102, 103, 104, 105, 106, 107,

108, 109, 110, Ill, 133, 163, 181, 183, 187, 188, 206, 207, 208, 209, 210, 211, 213 and 216 of

the Recommended Order based on the reasoning set forth in the Agency's ruling on JW's

Exception 1 supra, which is hereby incorporated by referenced. Paragraph 217 of the

Recommended Order has already been addressed by the Agency in the ruling on JW' s Exception

1 supra, which is hereby incorporated by reference. In regard to Paragraphs 3, 24, 25, 41, 174,

175, I76, I77, I78, I79, 180 and 186 of the Recommended Order, the issues addressed in the

findings of fact in these paragraphs fall under the statutory review criteria of "[t]he availability,

accessibility, and extent of utilization of existing health care facilities and health services in the

service district of the applicant" (§ 408.035( I )(b), Fla. Stat.), "[t]he extent to which the proposed

services will enhance access to health care for residents of the service district" ( § 408.035(1 )(e),

Fla. Stat.), "[t]he extent to which the proposal will foster competition that promotes quality and

cost-effectiveness" (§ 408.035(l)(g), Fla. Stat.), and "[t]he applicant's past and proposed

provision of health care services to Medicaid patients and the medically indigent" (§

408.035(l)(i), Fla. Stat.). Thus, the proceedings on which the findings of fact in these

paragraphs are based did not depart from the essential requirements of law because the ALJ

correctly addressed the issues in these paragraphs under the statutory review criteria.

10

Furthermore, the findings of fact in Paragraphs 3, 24, 25, 41, 174, 175, 176, 177, 178, 179, 180

and 186 of the Recommended Order are based on competent, substantial evidence. See

Transcript, Volume 1, Pages 88-89 and 1 04; Transcript, Volume 2, Pages 240-243 and 246;

Transcript, Volume 18, Pages 2872-2878, 2880-2881 and 2884-2886; Transcript, Volume 21,

Pages 3384-3385 and 3442-3443; Transcript, Volume 23, Pages 3678-3680; Transcript, Volume

27, Pages 4198-4200; DMC Exhibits 1, 24, 27 and 167; and Tenet Exhibit 5. Thus, the Agency

cannot reject or modify them. See § 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281.

Therefore, for all these reasons, the Agency denies Exception 5.

In Exception 6, JW takes exception to Paragraphs 3, 29, 42, 105, 111, 181, 183, 187, 188,

206, 211, 213 and 216 of the Recommended Order, arguing the proceedings on which the

findings of fact and conclusions of law are based did not comply with the essential requirements

of law because it alleges the ALJ had a bias against JW since it is a tax-funded hospital system.

The Agency denies Exception 6 as it pertains to Paragraphs 29, 42, 105, 111, 181, 183, 187, 188,

206,211,213 and 216 based on the reasoning set forth in the Agency's ruling on JW's Exception

1 supra, which is hereby incorporated by reference. The Agency denies Exception 6 as it

pertains to Paragraph 3 of the Recommended Order based on the reasoning set forth in the

Agency's ruling on JW's Exception 5 supra, which is hereby incorporated by reference.

In Exception 7, JW takes exception to Paragraphs 13, 14, 15, 23, 40, 45, 47, 50, 51, 52,

66, 68 and 71 of the Recommended Order, arguing the proceedings on which the findings of

facts in these paragraphs are based did not comply with the essential requirements of law

because the ALJ impermissibly considered JW's and DMC's ability to provide quality of care

and their history of providing quality of care. The Agency denies Exception 7 as it pertains to

Paragraphs 13, 14, 15, 23, 40, 45, 47, 50, 51, 52,66 and 68 ofthe Recommended Order based on

II

the reasoning set forth in the Agency's ruling on JW's Exception 3 supra, which is hereby

incorporated by reference. In regard to Paragraph 71 of the Recommended Order, JW's

argument fails because the findings of fact in that paragraph do nothing more than provide

background information on an existing provider in District 11. Additionally, the findings of fact

in Paragraph 71 of the Recommended Order are based on competent, substantial record

evidence. See Transcript, Volume 14, Pages 2311-2312. Thus, the Agency cannot disturb them.

See§ 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. For these reasons, the Agency denies

Exception 7 as it pertains to Paragraph 71 of the Recommended Order.

In Exception 8, JW takes exception to Paragraphs 64, 68, 99, 101, 133 and 166 of the

Recommended Order, arguing the proceedings on which the findings of fact in these paragraphs

are based did not comply with the essential requirements of law because the ALJ impermissibly

considered the costs and methods of construction of both proposals. The Agency denies

Exception 8 as it pertains to Paragraph 133 of the Recommended Order based on the reasoning

set forth in the Agency's ruling on Exception 1 supra, which is hereby incorporated by reference.

The Agency denies Exception 8 as it pertains to Paragraphs 64, 68, 101 and 166 of the

Recommended Order based on the reasoning set forth in the Agency's ruling on JW's Exception

3 supra, which is hereby incorporated by reference. In regard to Paragraph 99 of the

Recommended Order, JW's argument fails because the findings of fact in this paragraph have

absolutely nothing to do with either applicant's costs and methods of construction. Instead, they

concern hospital use rates. Furthennore, the findings of fact in Paragraph 99 of the

Recommended Order are based on competent, substantial record evidence. See Transcript,

Volume 3, Page 513; Transcript, Volume 8, Page 1303; Transcript, Volume 23, Page 3730;

DMC Exhibit 1; and JW Exhibit 2. Thus, the Agency is not permitted to reject or modify them.

12

See§ 120.57(1){!), Fla. Stat.; Heifetz, 475 So. 2d at 1281. For these reasons, the Agency denies

Exception 8 as it pertains to Paragraph 99 of the Recommended Order.

In Exception 9, JW takes exception to Paragraphs 12, 22, 46, I 02 and 163 of the

Recommended Order, arguing the proceedings on which the findings of fact in these paragraphs

are based did not comply with the essential requirements of law because the ALJ impermissibly

considered the needs of research and educational facilities, which are not part of the statutory

review criteria for general hospital CON applications. The Agency denies Exception 9 as it

pertains to Paragraphs 46 and 163 of the Recommended Order based on the reasoning set forth in

the Agency's ruling on JW's Exception I supra, which is hereby incorporated by reference. The

Agency denies Exception 9 as it pertains to Paragraph 102 of the Recommended Order based on

the reasoning set forth in the ruling on JW' s Exception 3 supra, which is hereby incorporated by

reference. In regard to Paragraphs 12 and 22 of the Recommended Order, JW's argument is

erroneous because the findings of fact in these paragraphs do nothing more than provide

background information on existing providers in District 11. Furthermore, the findings of fact in

these paragraphs are based on competent, substantial record evidence. See Transcript, Volume

14, Pages 2298-2299 and 2306-2307; and Transcript, Volume 21, Pages 3382-3383. Thus, the

Agency is not at liberty to reject or modify them. See§ 120.57(1)(/), Fla. Stat.; Heifetz, 475 So.

2d at 1281. For these reasons, the Agency denies Exception 9 as it pertains to Paragraphs 12 and

22 of the Recommended Order.

In Exception I 0, JW takes exception to Paragraphs 75, 76, 77, 213, 214 and 215 of the

Recommended Order, arguing the findings of fact and conclusions of law in these paragraphs are

a mischaracterization of the Agency's rationale for preliminarily approving JW's CON

application. The Agency denies Exception 10 as it pertains to Paragraphs 213, 214 and 215 of

13

the Recommended Order based on the reasoning set forth in the ruling on JW's Exception 1,

which is hereby incorporated by reference. In regard to Paragraphs 75, 76 and 77 of the

Recommended Order, JW does not allege a valid basis for the Agency to reject or modify the

findings of fact contained within those paragraphs. Furthennore, the findings of fact in

Paragraphs 75, 76 and 77 of the Recommended Order are based on competent, substantial

evidence. See Transcript, Volume 15, Pages 2493-2495; Transcript, Volume 34, Pages 5117,

5122-5123, 5126-5127, 5130-5131, 5134-5135, 5142-5143 and 5146-5147; and AHCA Exhibit

I. Thus, the Agency is prohibited from rejecting or modifying them. See § 120.57(1 )(!), Fla.

Stat.; Heifetz, 475 So. 2d at 1281. For these reasons, the Agency denies Exception 10 as it

pertains to Paragraphs 75, 76 and 77 ofthe Recommended Order.

In Exception 11, JW takes exception to Paragraphs 62, 63, 84, 102, 114, 115, 137, 146,

147, 148, 149, 152, 153, 154, 155, 156, 157, 158, 159, 160, 163, 165, 166, 168, 169, 170, 172

and 210 of the Recommended Order, arguing the ALJ conducted an improper analysis of JW's

service area definition, utilization projection and adverse impact projections. The Agency denies

Exception 11 as it pertains to Paragraphs 102, 163, 166, 170 and 210 of the Recommended Order

based on the reasoning set forth in the Agency's ruling on JW's Exception I supra, which is

hereby incorporated by reference. The Agency denies Exception 11 as it pertains to Paragraphs

152, 153, 154, 155, 156, 157, 158 and 159 based on the reasoning set forth in the Agency's

ruling on JW' s Exception 2 supra, which is hereby incorporated by reference. In regard to

Paragraphs 62, 63, 114, 115, 137, 146, 147, 148, 149, 160, 165, 168, 169 and 172 of the

Recommended Order, the findings of fact in these paragraphs are based on competent,

substantial evidence. See Transcript, Volume 2, Pages 162-164; Transcript, Volume 7, Pages

1194-1195; Transcript, Volume 10, Pages 1595, 1597-1599 and 1629; Transcript, Volume 15,

14

Pages 2450-2451, 2452-2457, 2465-2466. 2486-2488, 2499-2500, 2503-2504 and 2505-2506;

Transcript, Volume 19, Pages 3076-3077, 3080-3083 and 3100; Transcript, Volume 23, Page

3657; DMC Exhibits 1, 22 and 24; and JW Exhibit 2. Thus, the Agency cannot reject or modify

them. See§ 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies

Exception 11 as it pertains to Paragraphs 62, 63, 114, 115, 137, 146, 147, 148, 149, 159, 160,

165, 168, 169 and 172 of the Recommended Order. Paragraphs 84 and 165 of the

Recommended Order, while labeled as findings of fact, are actually conclusions of law within

the Agency's substantive jurisdiction because they pertain to whether the facts demonstrate the

need for a new hospital in District 11 pursuant to the statutory and rule criteria the Agency is

charged with implementing. The Agency does not agree with the ALI's conclusions of law in

these paragraphs, but not for the reasons JW put forth in Exception 11. 1 Therefore, the Agency

denies Exception 11 as it pertains to Paragraphs 84 and 165 of the Recommended Order.

In Exception 12, JW takes exception to Paragraphs 24, 41, 100, 128, 161, 173, 174, 175,

176, 177, 178, 179, 180 and 181 of the Recommended Order, arguing the findings of fact in

these paragraphs are not based on competent, substantial evidence and are contrary to the plain

language of section 408.035(1 )(g), Florida Statutes, as well as the Agency's policy and prior

DOAH decisions. The Agency denies Exception 12 as it pertains to Paragraphs 100 and 181 of

the Recommended Order based on the reasoning set forth in the Agency's ruling on JW's

Exception 1 supra, which is hereby incorporated by reference. The Agency denies Exception 12

as it pertains to Paragraphs 24, 41, 174, 175, 176, 177, 178, 179 and 180 based on the reasoning

set forth in the Agency's ruling on JW's Exception 5 supra, which is hereby incorporated by

reference. In regard to Paragraphs 128, 161 and 173 of the Recommended Order, none of these

1 The Agency addresses these paragraphs in its rulings on Tenet's Exception Number Two and Exception Number Three infra.

15

paragraphs runs contrary to section 408.035(1 )(g), Florida Statutes, and all are supported by

competent, substantial record evidence. See Transcript, Volume 15, Pages 2450-2452 and 2488;

Transcript, Volume 19, Pages 3035-3038; and DMC Exhibits 1 and 22. Thus, the Agency is

prohibited from rejecting or modifying them. See§ 120.57(1)(!), Fla. Stat.; Heifetz, 475 So. 2d

at 1281. Therefore, the Agency denies Exception 12 as it pertains to Paragraphs 128, 161 and

173 of the Recommended Order.

In Exception 13, JW takes exception to Paragraphs 100, 190 and 191 of the

Recommended Order, arguing the ALJ's conclusions of law in these paragraphs result from an

improper analysis of JW's and DMC's CON application conditions regarding the provision of

care for Medicaid and indigent patients. The Agency denies Exception 13 as it pertains to

Paragraph 100 based on the reasoning set forth in the ruling on JW' s Exception 1 supra, which is

hereby incorporated by reference. The Agency denies Exception 13 as it pertains to Paragraph

190 of the Recommended Order based on the reasoning set forth in the Agency's ruling on JW's

Exception 2 supra, which is hereby incorporated by reference. In regard to Paragraph 191 of the

Recommended Order, that paragraph contains findings of fact, not conclusions of law as JW

alleges, and the findings of fact are based on competent, substantial record evidence. See

Transcript, Volume 12, Pages 1942-1945. Thus, the Agency cannot reject or modify them. See

§ 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Exception

13 as it pertains to Paragraph 191 of the Recommended Order.

In Exception 14, JW takes exception to Paragraphs 205 and 213 of the Recommended

Order, arguing the conclusions of law in these paragraphs are unreasonable and ignore the

Agency's discretion to weigh and balance the statutory review criteria. The Agency denies

Exception 14 as it pertains to Paragraph 213 of the Recommended Order based on the reasoning

16

set forth in the Agency's ruling on JW's Exception 1 supra, which is hereby incorporated by

reference. In regard to Paragraph 205 ofthe Recommended Order, the ALl's conclusions oflaw

in that paragraph are based on the ALJ's weighing of the competent, substantial record evidence.

See Transcript, Volume 23, Pages 3682 and 3701. JW is, in essence, improperly asking the

Agency to re-weigh the record evidence to reach conclusions of law more favorable to it, which

the Agency cannot do. See Heifetz, 475 So. 2d at 1281. For this reason, the Agency denies

Exception 14 as it pertains to Paragraph 205 ofthe Recommended Order.

In Exception 15, JW takes exception to Paragraphs 65, 66, 67, 68, 69, 71, 78, 84 and 203

of the Recommended Order, arguing the ALJ impermissibly allowed DMC to amend its CON

application. The Agency denies Exception 15 as it pertains to Paragraphs 66 and 68 of the

Recommended Order based on the reasoning set forth in the Agency's ruling on JW' s Exception

1 supra, which is hereby incorporated by reference. The denies Exception 15 as it pertains to

Paragraph 71 based on the reasoning set forth in the Agency's ruling on JW's Exception 7,

which is hereby incorporated by reference. The Agency denies Exception 15 as it pertains to

Paragraph 84 of the Recommended Order based on the reasoning set forth in the ruling on JW' s

Exception 11 supra, which is hereby incorporated by reference. In regard to Paragraphs 65, 67

and 69 of the Recommended Order, the Agency finds no evidentiary support for JW's allegation

that KRMC impermissibly amended its CON application. Instead, JW is attempting to twist the

competent, substantial record evidence to support its allegation by making unreasonable

inferences from it. These paragraphs make no indication that DMC amended its CON

application. Instead, they reflect one of the assertions of need that DMC made in its CON

application. See DMC Exhibit 1. Therefore, the Agency denies Exception 15 as it pertains to

Paragraphs 65, 67 and 69 of the Recommended Order. In regard to Paragraphs 78 (which

17

contains conclusions of law and not findings of fact, as labeled by the ALJ) and 203 of the

Recommended Order, the Agency does not agree with the ALl's conclusions of law in these

paragraphs, but not for the reasons JW put forth in Exception 15. In regard to Paragraph 78 of

the Recommended Order, the Agency hereby incorporates the reasoning set forth in the ruling on

Tenet's Exception Number Two infra. In regard to Paragraph 203 of the Recommended Order,

the Agency finds that the conclusions of law in that paragraph are within its substantive

jurisdiction because they involve the detennination of need for a new facility pursuant to section

408.035, Florida Statutes; and the Agency can substitute conclusions of law that are as or more

reasonable than those of the ALJ, based on the reasoning set forth in the rulings on Tenet's

Exception Number One and Exception Number Two infra, which are hereby incorporated by

reference. Therefore, the Agency grants Exception 15 as it pertains to Paragraphs 78 and 203 of

the Recommended Order, adopts and incorporates the modifications to Paragraph 78 of the

Recommended Order that it made in ruling on Tenet's Exception Number Two infra, and rejects

Paragraph 203 of the Recommended Order in toto.

In Exception 16, JW takes exception to Paragraphs 73, 85, 93, 112, 113, 118, 119, 120,

121, 122, 123, 126, 127, 128, 132, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145,

147, 159, 162, 164, 165, 166, 167, 168, 170, 189, 190,201,202,203,211,212 and 217 ofthe

Recommended Order, arguing DMC's utilization projections and adverse impact analysis did not

comply with the requirements of section 408.037(2), Florida Statutes. First, the Agency denies

Exception 16 as it pertains to Paragraphs 137, 145, 147, 159, 165, 166, 168, 170, 189, 190 and

211 of the Recommended Order based on the reasoning set forth in its rulings on JW' s

Exceptions 1, 2, 3, 4 and 11 supra, which are hereby incorporated by reference. Second, the

findings offact in Paragraphs 85, 93, 112, 113, 118, 119, 120, 121, 122, 123, 126, 127, 128, 132,

18

134,135,136,138,139,140,141,142,143,144,162, 164and 167oftheRecommendedOrder

are all based on competent, substantial record evidence. See Transcript, Volume 4, Pages 674

and 686; Transcript, Volume 7, Pages 1103 and 1153-1154; Transcript, Volume 11, Pages 1863-

1865; Transcript, Volume 13, Pages 2079 and 2106-21 07; Transcript, Volume 14, Pages 2256-

2257; Transcript, Volume 15, Pages 2459, 2473-2475 and 2496-2504; Transcript, Volume 19,

Pages 3035-3038, 3043-3050, 3064-3067, 3068-3075 and 3098-3099; Transcript, Volume 21,

Pages 3342-3344; AHCA Exhibit I; and DMC Exhibits 1, 22, 24, 161, 162, 163 and 164. Thus,

the Agency is not at liberty to reject or modify them. See § 120.57(1 )(I), Fla. Stat.; Heifetz, 475

So. 2d at 1281. Third, in regard to Paragraphs 73 (which contains conclusions oflaw and not

findings of fact, as labeled by the ALJ), 20 I, 202 and 212 of the Recommended Order, the

Agency does not agree with the ALJ' s conclusions of law in these paragraphs, but not for the

reasons JW put forth in Exception 16. Instead, the Agency will address Paragraph 73 of the

Recommended Order its ruling on Tenet's Exception 1 infra. The Agency has already addressed

Paragraph 203 of the Recommended Order in its ruling on JW's Exception 15 supra, which is

hereby incorporated by reference, and Paragraph 217 of the Recommended Order in its ruling on

JW's Exception 1 supra, which is hereby incorporated by reference. For all these reasons, the

Agency denies Exception 16.

In Exception 17, JW takes exception to Paragraphs 102 and 163 of the Recommended

Order, arguing the findings of fact in these paragraphs are not based on competent, substantial

evidence. Based on the reasoning set forth in the Agency's ruling on JW's Exception I supra,

which is hereby incorporated by reference, along with the fact that JW's argument is not a valid

reason for the Agency to reject findings of fact under section 120.57(1)(1), Florida Statutes, the

Agency hereby denies Exception 17.

19

In Exception 18, JW takes exception to Paragraphs 62, 99, 101 and 168 of the

Recommended Order, arguing the findings of fact in these paragraphs conflict with each other

and therefore must be rejected by the Agency. For the reasons set forth in the Agency's rulings

on JW' s Exceptions 1, 8 and 11 supra, which are hereby incorporated by reference, and also

because JW's argument is not a valid reason for the Agency to reject findings of fact under

section 120.57(1)(1), the Agency hereby denies Exception 18.

In Exception 19, JW takes exception to Paragraphs 50, 62 and 168 of the Recommended

Order, arguing the findings of fact in these paragraphs conflict with each other, are not based on

competent, substantial evidence, and deal with criteria that is not part of the statutory review

criteria for general hospital CON applications. For the reasons set forth in the Agency's rulings

on JW' s Exceptions I, 3 and 11 supra, which are hereby incorporated by reference, along with

the fact that an alleged "conflict" between findings of fact is not a valid reason for the Agency to

reject findings of fact under section 120.57(1 )(!),the Agency hereby denies Exception 19.

In Exception 20, JW takes exception to Paragraphs 50, 62, 64, 65, 99, 101, 166 and 168

of the Recommended Order, arguing the findings of fact in these paragraphs are contradictory

and thus do not comply with the essential requirements of law. Based on the reasoning set forth

in the Agency's rulings on JW's Exceptions 1, 3, 8, 11 and 15 supra, hereby incorporated by

reference, and because an alleged "contradiction" between findings of fact is not a valid reason

for the Agency to reject findings of fact under section 120.57(1 ){!), Florida Statutes, the Agency

hereby denies Exception 20.

In Exception 21, JW takes exception to Paragraphs 58, 78, 79, 80, 81, 112, 114, 115, 116,

148, 164, 170 and 212 of the Recommended Order, arguing: 1) the findings of fact contradict

each other and are not supported by competent, substantial evidence; and 2) the conclusions of

20

law ignore the Agency's discretion to weigh and balance the statutory review criteria for CON

applications. InregardtothefindingsoffactinParagraphs78, 112,114,115,148, 164and I70

of the Recommended Order, the Agency denies Exception 21 based upon the reasoning set forth

in the Agency's rulings on JW's Exceptions I I, 15 and 16 supra, which are hereby incorporated

by reference. In regard to Paragraphs 58, 79, 80, 81 and I I 6 of the Recommended Order, the

findings of fact in these paragraphs are all based on competent, substantial record evidence. See

Transcript, Volume 2, Pages 159- I 60; Transcript, Volume 15, Pages 2435, 2440-2444 and 2457;

DMC Exhibits 1 and 24; and JW Exhibit 2. Thus, the Agency is prohibited from rejecting or

modifying them. See § I20.57(1)(l), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the

Agency denies Exception 2 I as it pertains to Paragraphs 58, 79, 80, 81 and 116 of the

Recommended Order. In regard to Paragraph 212 of the Recommended Order, the Agency does

not agree with the ALJ' s conclusions of law in this paragraph, but not for the reasons JW put

forth in Exception 21.2 Therefore, the Agency denies Exception 21 as it pertains to Paragraph

2 I 2 of the Recommended Order.

In Exception 22, JW takes exception to Paragraphs 84, 1 00, 116, 150 and I 5 I of the

Recommended Order, arguing they are really conclusions of law in which the ALJ improperly

substituted his interpretation of law in place of the Agency's interpretation. In regard to

Paragraphs 84, I 00 and I I 6 of the Recommended Order the Agency denies Exception 22 based

on the reasoning set forth in the Agency's rulings on JW's Exceptions 1, 11 and 21 supra, which

are hereby incorporated by reference. In regard to Paragraphs I 50 and 151 of the Recommended

Order, the Agency disagrees with JW's assertion that these paragraphs contain conclusions of

law. Instead, Paragraphs 150 and 151 of the Recommended Order contain findings of fact that

are supported by competent, substantial evidence. See Transcript, Volume 17, Pages 2828-2833;

2 The Agency addresses this paragraph in its ruling on Tenefs Exception Number Four infra.

21

and DMC Exhibit 24. Thus, the Agency is not at liberty to reject or modify them. See §

120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281. Therefore, the Agency denies Exception 22

as it pertains to Paragraphs 150 and 151 of the Recommended Order.

In Exception 23, JW takes exception to Paragraphs 215 and 216 of the Recommended

Order, arguing the ALJ's conclusion that the fact that DMC's parent company abandoned a prior

CON is not relevant to the consideration of its current CON application is erroneous and should

be rejected by the Agency. The Agency finds that, while it does have jurisdiction over the

conclusions of law in Paragraphs 215 and 216 of the Recommended Order, it cannot substitute

conclusions of law that are as or more reasonable than those of the ALI. Therefore, the Agency

denies Exception 23. However, the Agency notes that the ALJ's conclusions of law in

Paragraphs 215 and 216 of the Recommended Order are limited to the specific facts of this case,

and should not be construed to mean that abandonment of a prior CON could never be relevant

to the consideration of a subsequent CON application.

In Exception 24, JW takes exception to Paragraphs 84, 201, 202, 204, 212 and 217 of the

Recommended Order, arguing the Agency should disregard the conclusions of law in these

paragraphs as unreasonable. In regard to Paragraph 84 of the Recommended Order, the Agency

denies Exception 24 as it pertains to this paragraph based on the reasoning set forth in the

Agency's ruling on Exception 11 supra, which is hereby incorporated by reference. In regard to

Paragraph 204 of the Recommended Order, the Agency finds that, while it does have substantive

jurisdiction over the conclusions of law in Paragraph 204 of the Recommended Order since it is

the state agency in charge of administering Florida's CON program, it cannot substitute

conclusions oflaw that are as or more reasonable than those of the ALJ. Therefore, the Agency

denies Exception 24 as it pertains to Paragraph 204 of the Recommended Order. In regard to

22

Paragraphs 201, 202 and 212 of the Recommended Order, the Agency disagrees with the

conclusions of law in these paragraphs, but not for the reasons JW asserts in Exception 24.3

Therefore, the Agency denies Exception 24 as it pertains to Paragraphs 201, 202 and 212 of the

Recommended Order. Paragraph 217 of the Recommended Order has already been addressed by

the Agency in the ruling on JW's Exception 1 supra, which is hereby incorporated by reference.

Tenet's Exceptions

In Exception Number One, Tenet takes exception to the portion of Paragraph 73 of the

Recommended Order, wherein the ALJ found that "both applications met the statutory criteria

for approval." Tenet argues the finding of fact is not supported by any competent, substantial

evidence. First, the portion of Paragraph 73 of the Recommended Order that Tenet took

exception to is actually a conclusion of law within the Agency's substantive jurisdiction, not a

finding of fact. Second, based on a survey of cases4 involving hospital CON applications that

were submitted to the Agency after the 2008 changes to the review criteria in section 408.035,

Florida Statutes, the ALJ erred in concluding that both applications met the statutory criteria for

approval because neither application demonstrated the need for a new hospital in District 11.

In Memorial Healthcare Group, Inc. d/b/a Memorial Hospital Jacksonville v. Agency for

Health Care Admin. and Shands Jacksonville Medical Center, Inc., Case No. 12-0429CON

(DOAH Dec. 7, 20 12; AHCA Apr. 10, 2013 ), Memorial Hospital Jacksonville submitted a CON

application for a new 1 00-bed acute care hospital in Duval County, Florida, Subdistrict 4-1. The

evidence in the Memorial Hospital Jacksonville case demonstrated that a new hospital was not

3 The Agency addresses these paragraphs in its rulings on Tenet's Exception Number Three and Exception Number Four, and NCH's Exception 3 infra.

4 The Agency did not discuss the case of South Broward Hospital District d/b/a Memorial Healthcare System v. Agency for Health Care Admin., Case Nos. 15-0129CON and 15-0130CON (DOAH Apr. I, 2016; AHCA May 17, 2016), which was also decided subsequent to the 2008 amendments to section 408.035, Florida Statutes, in its ruling

23

warranted because the service area had several existing providers within a reasonable distance of

the applicant's proposed location (Recommended Order at Pages 6-7 and 9), the proposed

service area was relatively small in population size (Recommended Order at Page 24), there was

underutilization of the existing beds in the service area (Recommended Order at Page 21 ), there

were no major geographic barriers that prevented residents of the proposed service area from

accessing existing services (Recommended Order at Pages 29-32), there were no barriers to

emergency services (Recommended Order at Pages 32-35), and no evidence that Medicaid and

indigent patients from the proposed service area were unable to access existing services

(Recommended Order at Pages 36-39). Thus, the Agency entered a final order denying

Memorial Hospital Jacksonville's CON application.

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

Jupiter Medical Center, Inc. d/b/a Jupiter Medical Center v. Florida Regional Medical Center and

Agency for Health Care Admin., Case Nos. 12-0428CON and 12-0496CON (DOAH Apr. 30,

2013; AHCA Jun. 6, 2013), Florida Regional Medical Center submitted a CON application for a

new 80-bed acute care hospital in Palm Beach County, Florida, Subdistrict 9-4. The evidence in

the Columbia Hospital case demonstrated that a new hospital was not warranted because there

was low population growth in the proposed service area (Recommended Order at Page 20), there

was underutilization of the existing acute-care beds in the subdistrict (Recommended Order at

Page 21 ), there would be no increase in geographic or programmatic access to health care

services because the proposed location of the new facility was only a few miles from existing

facilities (Recommended Order at Page 28), and there would be a substantial adverse impact to

existing providers because the applicant's proposed service area completely overlapped that of

on Tenet's Exception Number One because it is not relevant to the case at hand since it involved a CON application for a replacement hospital, which would not result in any new providers being added to a district.

24

the existing providers (Recommended Order at Pages 35-39). Thus, the Agency entered a final

order denying Florida Regional Medical Center's CON application.

In Lee Memorial Health System v. Agency for Health Care Admin., Case Nos. 13-

2508CON and 13-2558CON (DOAH Mar. 28, 2014; AHCA Apr. 24, 2014), Lee Memorial

Health System submitted a CON application for a new 80-bed acute care hospital in Lee County,

Florida, AHCA District 8. The evidence in the Lee Memorial case demonstrated that a new

hospital was not warranted because the proposed service area was relatively small in population

size (Recommended Order at Page 19), there was underutilization of the existing acute care beds

in the district (Recommended Order at Page 26), there would be no increase in geographic or

programmatic access to health care services because the proposed location of the new facility

was only a few miles from existing facilities (Recommended Order at Pages 30-42), and no

enhanced access for Medicaid and indigent patients of the proposed service area (Recommended

Order at Pages 42-44). Thus, the Agency entered a final order denying Lee Memorial Health

System's CON application.

The case at hand is very similar to those of Memorial Hospital Jacksonville, Columbia

Hospital and Lee Memorial. The city of Doral has a relatively small population (Recommended

Order at Paragraph 96). The existing beds in District II are underutilized with an overall

occupancy rate of roughly 53% (See Transcript, Volume 23, Page 3660; Tenet Exhibit 5). And,

there was no competent, substantial record evidence that the "geographic barriers to access"

alleged by both JW and DMC prevented residents of the proposed service area from accessing

existing providers (See,~' Transcript, Volume 17, Pages 2753-2759). In sum, if the Agency

were to grant either applicant a CON, it would be departing from prior Agency precedent without

any rational explanation. Thus, the Agency finds that it has substantive jurisdiction over the

25

conclusion of law in Paragraph 73 of the Recommended Order because it is the state agency in

charge of administering Florida's CON program, and that it can substitute conclusions of law

that are as or more reasonable than those of the ALI. Therefore, the Agency grants Exception

Number One and modifies Paragraph 73 of the Recommended Order as follows:

73. Although 00-thneither of the applications met the statutory criteria for approval, the Agency preliminarily approved JW's CON application and denied DMC's Application.

In Exception Number Two, Tenet takes exception to Paragraphs 78 and 84 of the

Recommended Order, as well as the last sentence of Paragraph 97 of the Recommended Order,

arguing the findings of fact in these paragraphs are not based on competent, substantial evidence

and that the conclusion of there being need for a new hospital "is unfounded and cannot stand."

Paragraphs 78, 84 and 97 of the Recommended Order are a mixture of findings of fact and

conclusions of law regarding the need for a new facility in District 11. As it stated in the

reasoning set forth on Tenet's Exception Number One supra, the Agency finds that the facts of

this case do not demonstrate a need for a new hospital in District 11 in light of the cases of

Memorial Hospital Jacksonville, Columbia Hospital and Lee Memorial, which are prior Agency

precedent and pertinent to this matter. There is no competent, substantial record evidence that

the alleged "geographic barriers to access" prevented residents ofthe proposed service area from

accessing existing providers. See,~' Transcript, Volume 17, Pages 2753-2759. Additionally,

the population size and growth of Doral is not significant enough to justify the need for a new

hospital. See, ~' Transcript, Volume 17, Page 2759. Furthermore, granting DMC's

application in order to decompress KRMC is not warranted because KRMC currently has excess

capacity and is in the process of expanding its facility. See,~' Transcript, Volume 17, Pages

2771-2774. In sum, there is no competent, substantial record evidence to support the ALI's

26

findings that DMC's application should be granted due to geographic barriers to access, Doral's

dense and growing population, and the need to decompress KRMC. Thus, to the extent these

paragraphs contain findings of fact, the Agency finds that the findings of fact are not supported

by competent, substantial record evidence. To the extent these paragraphs contain conclusions

of law concerning the need for a new facility in District 11, the Agency finds that it has

substantive jurisdiction over the conclusions of law in these paragraphs because it is the state

agency in charge of administering Florida's CON program, and that it can substitute conclusions

of law that are as or more reasonable than those of the ALJ. Therefore, the Agency grants

Exception Number Two, rejects Paragraph 84 of the Recommended Order in toto, and modifies

Paragraphs 78, and 97 of the Recommended Order as follows:

78. Generally, applicants are responsible for demonstrating need for new acute care hospitals. DMC did not established that geographic features surrounding Doral create access barriers for the residents of the area. Doral is a densely populated community that is grmving quickly and lacks a readily accessible hospital. KRMC is a grmving tertiary facility that cannot expand to meet its future demands, and DMC will help decompress KRMC's acute care load so it can focus on its tertiary service lines. 97. Although there is not a hospital in Doral itself, there are a number of hospitals nearby. PGH and Palm Springs Hospital are just north of Doral. KRMC is just south of Doral. Hialeah is northeast of Doral. CGH, Westchester General Hospital and NCH are southeast of Doral. JHS and all of the facilities in and around JHS's main campus are east of Doral. Ho'Never, as described in paragraphs 82 84 above, there are perceived, and based upon patient flmv and utilization, actual geographic barriers to many of these facilities.

In Exception Number Three, Tenet takes exception to the ALJ's statement in Paragraph

165 of the Recommended Order that "need has been demonstrated," and the conclusions of law

in Paragraph 201 ofthe Recommended Order. Tenet argues that the record of this case does not

support the ALJ' s ultimate finding or conclusion that need exists. The portion of Paragraph 165

27

of the Recommended Order to which Tenet takes exception is a conclusion of law. The Agency

finds that it is a conclusion of law within the Agency's substantive jurisdiction because it

involves an interpretation of section 408.035, which the Agency is charged with implementing.

Paragraph 201 of the Recommended Order is also a conclusion of law within the Agency's

substantive jurisdiction because it too involves an interpretation of section 408.035, which the

Agency is charged with implementing. Based on the reasoning set forth in the ruling on Tenet's

Exception Number One supra, the Agency finds that it can substitute conclusions of law that are

as or more reasonable than those of the ALJ. Therefore, the Agency grants Exception Number

Three and modifies Paragraphs 165 and 201 ofthe Recommended Order as follows:

165. Tenet's and NHC's objections to the proposals are twofold: there is no need for a hospital, and if DMC or JW is built, it will adversely impact their respective facilities. However, because need has not been demonstrated, it makes no difference that Tenet and NCH have a relatively low market share in the service area, and DMC will not materially impact those market shares, especially when compared with the adverse impact that approval of JW would have. 201. When reviewing the evidence presented, in totality, by the parties at the final hearing, it is evident that there is a cleamo need in acute care District 11 for an acute care hospital to serve the City of Doral and the surrounding area. § 408.035(1 )(a), Fla. Stat. Further, DMC demonstrated that, on balance, it best satisfies the statutory criteria and v1arrants approval of its application over that ofJ\V.

In Exception Number Four, Tenet takes exception to Paragraph 212 of the Recommended

Order, arguing the AL.T' s conclusion that '"nearly every one of the statutory criteria weighs in

favor of the DMC application" is not supported by the record of this case and should be rejected.

The Agency agrees and finds that it has substantive jurisdiction over the conclusion of law in

Paragraph 212 of the Recommended Order because it is the state agency in charge of

administering Florida's CON program, and that it can substitute a conclusion of law that is as or

28

more reasonable than that of the ALJ. Therefore, the Agency grants Exception Number Four and

modifies Paragraph 212 of the Recommended Order as follows:

212. Overall, nearly every onenone of the statutory criteria weighs in favor of the DMC application.

In Exception Number Five, Tenet takes exception to the last sentence of Paragraph 190

and also Paragraph 191 of the Recommended Order, arguing the ALJ failed to recognize "that

there is legal significance to CON conditions." The Agency disagrees with Tenet's argument.

Furthermore, the findings of fact in Paragraphs 190 and 191 of the Recommended Order are

based on competent, substantial evidence. See Transcript, Volume 12, Pages 1942-1945;

Transcript, Volume 15, Pages 2495-2496; and DMC Exhibits 1 and 24. Thus, the Agency is not

allowed to reject or modify them. See § 120.57(1)(1), Fla. Stat.; Heifetz, 475 So. 2d at 1281.

Therefore, the Agency denies Exception Number Five.

NCH's Exceptions

In Exception 1, NCH takes exception to Paragraphs 78, 79, 80, 81, 82, 83 and 97 of the

Recommended Order, arguing the findings of fact in these paragraphs are not based on

competent, substantial evidence. In regard to Paragraphs 78 and 97 of the Recommended Order,

which contain a mixture of findings of fact and conclusions oflaw, the Agency grants Exception

1 based on the reasoning set forth in the ruling on Tenet's Exception Number Two supra, which

is hereby incorporated by reference, and adopts the resulting modifications it made to these

paragraphs in that ruling. In regard to Paragraphs 79, 80, 81, 82 and 83 ofthe Recommended

Order, the Agency denies Exception 1 because these paragraphs contain findings of fact that are

based on competent, substantial record evidence. See Transcript, Volume 15, Pages 2435, 2440-

2444 and 2457; and DMC Exhibits 1 and 24.

29

In Exception 2, NCH takes exception to Paragraph 84 of the Recommended Order,

arguing the findings of fact in this paragraph are not based on competent, substantial evidence.

Paragraph 84 of the Recommended Order is actually a conclusion of law within the Agency's

substantive jurisdiction because it concerns whether an applicant has demonstrated the need for a

new facility pursuant to section 408.035. The Agency finds that it has substantive jurisdiction

over the conclusion of law in Paragraph 84 of the Recommended Order because it is the state

agency in charge of implementing Florida's CON program, and that it can substitute a

conclusion of law that is as or more reasonable than that of the ALJ. Therefore, the Agency

f,Tfants Exception 2 and rejects Paragraph 84 of the Recommended Order in toto.

In Exception 3, NCH takes exception to Paragraphs 201 and 202 of the Recommended

Order, arguing that, contrary to the ALJ' s conclusions of law in these paragraphs, neither JW nor

DMC demonstrated that there was a need for a new hospital in the service area. Based on the

reasoning set forth in the ruling on Tenet's Exception Number One and Exception Number Three

supra, which are hereby incorporated by reference, the Agency agrees with NCH's argument.

Paragraphs 201 and 202 of the Recommended Order are conclusions of law within the Agency's

substantive jurisdiction because it is the state agency in charge of administering Florida's CON

program, and the Agency finds that it can substitute conclusions of law that are as or more

reasonable than those of the ALJ. Therefore, the Agency grants Exception 3, rejects Paragraph

202 in toto, and adopts and incorporates the modifications it made to Paragraph 201 of the

Recommended Order in the ruling on Tenet's Exception Number Three supra.

FINDINGS OF FACT

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

except where noted supra.

30

CONCLUSIONS OF LAW

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

except where noted supra.

ORDER

Based upon the foregoing, both JW's CON application no. 10395 and DMC's CON

application no. 10394 are hereby denied. The parties shall govern themselves accordingly.

DONE and ORDERED this 2b1J.day of____.A'-.Ljor-'--'rl-=-·/ ___ , 2018, in Tallahassee, Florida.

I

CRETARY TH 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.

31

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 ~ ~-f ----'-ztg-+-...... u....:..t-r~/ __ ,, 2o18.

COPIES FURNISHED TO:

Honorable Robert S. Cohen Chief Administrative Law Judge Division of Administrative Hearings (via electronic filing)

Geoffrey D. Smith, Esquire Susan C. Smith, Esquire Corinne T. Porcher, Esquire Smith & Associates 3301 Thomasville Road, Suite 201 Tallahassee, Florida 32303

RICHARD J. SHOOP, Agency Clerk Agency for Health Care Administration 2727 Mahan Drive, MS #3 Tallahassee, Florida 32308-5403 (850) 412-3630

(via electronic mail to geoff@smithlawtlh.com, susan@smithlawtlh.com and corinne@smithlawtlh.com)

Christopher C. Kokoruda, Esquire Laura E. Wade, Esquire Eugene Shy, Jr., Esquire Assistant County Attorneys Miami-Dade County Attorney 1611 Northwest 12111 Avenue West Wing, Suite 109 Miami, Florida 33136 (via electronic mail to kokorud@miamidade.gov, wade@miamidade.gov, and eshy@miamidade.gov)

32

Stephen A. Ecenia, Esquire R. David Prescott, Esquire Craig D. Miller, Esquire Rutledge Ecenia, P .A. 119 South Monroe Street, Suite 202 Tallahassee, Florida 32301 (via electronic mail to Steve@rutledge-ecenia.com, David@rutledge-ecenia.com, and CMiller@rutledge-ecenia.com)

Thomas F. Panza, Esquire Paul C. Buckley, Esquire Elizabeth L. Pedersen, Esquire Angelina Gonzalez, Esquire Panza, Maurer & Maynard, P .A. Coastal Tower 2400 East Commercial Boulevard, Suite 905 Fort Lauderdale, Florida 33308 (via electronic mail to tpanza@panzamaurer.com, pbuckley@panzamaurer.com, epederson@panzamaurer.com, and agonzalez@panzamaurer.com)

Michael J. Glazer, Esquire Steven M. Hogan, Esquire E. Dylan Rivers, Esquire Ausley McMullen Post Office Box 391 123 South Calhoun Street Tallahassee, Florida 32302 (via electronic mail to mglazer@ausley.com, drivers@ausley.com, shogan@ausley.com, and jmcvaney@ausley.com)

Richard J. Saliba, Esquire Kevin M. Marker, Esquire Assistant General Counsels (via electronic mail to Richard.Saliba@ahca.myflorida.com and Kevin.Marker@ahca.myflorida.com)

Marisol Fitch Certificate of Need Unit (via electronic mail to Marisol.Fitch@ahca.myflorida.com)

Jan Mills Facilities Intake Unit (via electronic mail to Janice.Mills@ahca.myflorida.com)

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