STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED (904) Ms. Diane Godfrey (407)

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1 STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED A. PROJECT IDENTIFICATION 1. Applicant/CON Action Number The Nemours Foundation/CON # Centurion Parkway North Jacksonville, Florida Authorized Representative: David J. Bailey, MD, MBA (904) Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital/CON # East Rollins Street Orlando, Florida Authorized Representatives: Ms. Marla Silliman Ms. Diane Godfrey (407) Service District Pediatric Cardiac Catheterization Service Planning Area IV which includes District 7 (Orange, Osceola, Brevard, and Seminole Counties) and District 9 (Indian River, Martin, Okeechobee, Palm Beach, and St. Lucie Counties). B. PUBLIC HEARING A public hearing was not held or requested. However, letters of support were received by the Agency.

2 CON Action Numbers: The Nemours Foundation (CON #10078): The applicant submitted 10 unduplicated letters of support with its application. All were signed, nine had a June 2010 signature date (one was not dated), seven were from physicians and three were from parents of children treated by Nemours physicians 1. Of the seven physician support letters, three practice and hold senior medical staff positions at Nemours Alfred I. DuPont Hospital for Children, in Wilmington, Delaware, two practice in District 7 (Pediatric Cardiac Catheterization Service Planning Area IV), one practices in District 1 (Pediatric Cardiac Catheterization Service Planning Area I) and one has an academic role at the University of Central Florida. Two of these physicians practice at Nemours Children s Clinic-Orlando and one practices at Nemours Children s Clinic-Pensacola. These physicians indicate that to transfer a patient to another area for advanced cardiac services creates an inability to provide patient and family centered care and that project approval would promote a more comprehensive service model. They do not indicate the number of patients they have referred for inpatient pediatric cardiac care. Deborah German, MD, Dean, University of Central Florida College of Medicine states that her medical school is partnering with Nemours 2. William Blanchard, MD, FAAP, FACC, FAHA states that for the last five years he has been the chair of the Florida Department of Health s Division of Childrens Medical Services Cardiac Advisory Council and that he supports the project. Three support letters were from family members that had children under Nemours care. These letters indicate that Nemours provides quality care and state support for the project. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): The applicant submitted 48 unduplicated letters of support with its application. Of these, 47 were signed, 46 had a June 2010 signature date (two were not dated), 39 were from physicians and nine were from non-physicians 3. These letters are described below. 1 CON Application #10078, Attachment F-Letters of Support. These support letters are identical to those submitted with concurrent and companion CON Application # Dr. German provided a similarly worded letter for Florida Hospital s CON Application # CON Application #10079, Appendices B, D, E, F, H, and J. These letters are identical to those submitted with CON Application #

3 CON Action Numbers: and Of the 39 Florida physician support letters, 32 of these physicians (with four having a primary academic/research role) practice in District 7 (Pediatric Cardiac Catheterization Service Planning Area IV), five practice in District 4 (Pediatric Cardiac Catheterization Service Planning Area II) and two practice in District 6 (Pediatric Cardiac Catheterization Service Planning Area III). The majority of letters address the quality of care offered at Florida Hospital and indicate that continuity of care will improve should the project be approved. Most indicate that project approval will allow children to be treated locally and their parents to avoid travel to an unfamiliar area. Several physicians indicate that referral to existing pediatric open heart surgery providers creates disruption and fragmentation of care and additional stress and burden on patients families. Deborah German, MD, Dean, University of Central Florida (UCF) College of Medicine states that her medical school is partnering with Florida Hospital 4. Joseph Portoghese, MD, Chief Academic Officer, Florida Hospital Graduate Medical Education Program states that Florida Hospital has affiliation as a primary teaching site with the UCF College of Medicine and the Florida State University College of Medicine. Dr. Portoghese also states that project approval would help support training the next generation of physicians. Four support letters were from Chief Executive Officers of Florida Hospital affiliate hospitals in Districts 3, 4 and 6. These CEOs state that their hospitals refer seriously ill pediatric patients to Florida Hospital and project approval would enhance services within the Florida Hospital network. Two letters were from parents whose children had pediatric cardiovascular services in Tampa. Michael Aubin, Administrator, St. Joseph s Children s Hospital (District 6, Pediatric Cardiac Catheterization Service Planning Area III) states that he is aware of Florida Hospital s strong and longstanding commitment to the pediatric population of the Orlando area, including those in need of cardiology services. He states that Florida Hospital brings both the expertise of a high volume cardiac surgery program and a dedicated pediatric team to the proposal. He attributes St. Joseph s Hospital s pediatric cardiac surgery success to Dr. James Quintessenza 5 and notes that Dr. Quintessenza will be working with Florida Hospital to help them 4 This physician provided a similarly worded letter of support for the co-batched applicant, CON Application # James Quintessenza, MD, Cardiac Surgical Associates, Congenital Heart Institute of Florida, is one of the 39 Florida physicians who included a letter of support for this project. 3

4 CON Action Numbers: reach the same volume and quality outcomes. Mr. Aubin states that he believes there is sufficient volume to support quality programs at St. Joseph s and Florida Hospital, should the project be approved. Mr. Aubin emphasizes that pediatric cardiologists and cardiac surgeons follow patients with congenital defects throughout their life and when these patients need surgery, they are treated by pediatric cardiovascular surgeons. C. PROJECT SUMMARY The Nemours Foundation (CON #10078) (also referred to as Nemours or Nemours Children s Hospital) proposes to establish a pediatric cardiac catheterization program at Nemours Children s Hospital, located in District 7, Orange County, Pediatric Cardiac Catheterization Service Planning Area IV, which includes both Districts 7 and 9. The applicant filed CON #10080 concurrently with this application for the establishment of a pediatric open heart surgery program. Nemours currently operates a children s hospital in Wilmington, Delaware and four children s specialty outpatient centers. Three of the outpatient centers are located in Jacksonville, Orlando and Pensacola. Nemours Children s Hospital is expected to be operational in 2012 and will be a 95-bed facility with a bed complement of 82 acute care, five Level II NICU and eight Level III NICU beds. The applicant indicates that the cardiac catheterization (CON #10078) and pediatric open heart (CON #10080) programs will be operational by the third quarter of Nemours expects to perform 250 pediatric cardiac catheterizations during year two ending September 30, It is unclear how the applicant would implement the program with the proposed start date because section (2)(a) Florida Statutes, requires that a CON terminate 18 months after issuance. Rule 59C (2) (a) 2. Florida Administrative Code (F.A.C.), requires that a CON holder for renovation of an existing structure must, by the date of termination of the CON, be deemed to have commenced construction and the project be under continuous construction which must be maintained per Rule 59C (2) (a) 3. a. F.A.C. The applicant s Schedule 10 indicates a period of two years from September 30, 2012 (the date the facility is licensed) to the initiation of service (project start date) of October 1,

5 CON Action Numbers: and Specific to pediatric cardiac catheterization, Nemours states the center point of the project will be a hybrid catheterization lab that allows catheterization procedures and certain cardiac surgeries to be performed simultaneously in one location. A focus of these pediatric cardiac services is to shift from invasive open heart procedures to less invasive hybrid procedures. The applicant proposes the following conditions: Nemours Children s Hospital will include its pediatric cardiac catheterization program in the hospital-wide condition that Nemours accepted on its approved hospital (CON #9979), Level II NICU (CON #9978), and Level III NICU (CON #9980) projects for a minimum of 54 percent of patient days to be provided to patients covered by Medicaid or charity. The services described in CON #10078 will not be implemented until two years following the opening of Nemours Children s Hospital. As part of the implementation of CON #10078, Nemours Children s Hospital will offer preventive cardiology services including screening, education and research particularly as it relates to the link between childhood obesity and cardiac disease. These conditions are identical to those proposed in concurrent and companion CON Application # The total project cost is estimated at $3,944,360. These total project costs include 2,261 gross square feet (GSF) of renovated space at a cost of $583,725, with no new construction. Total project costs include: building, equipment, project development and start-up costs. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079) (also referred to as Adventist or Florida Hospital-Orlando) proposes to establish a pediatric cardiac catheterization program at the main campus of Florida Hospital-Orlando, located in District 7, Orange County, Pediatric Cardiac Catheterization Service Planning Area IV, which includes both Districts 7 and 9. The applicant filed CON #10081 concurrently with this application for the establishment of a pediatric open heart surgery program. Florida Hospital-Orlando is a 1,067-bed not-for-profit general hospital, licensed for 917 acute care beds, 59 adult psychiatric beds, 10 comprehensive medical rehabilitation beds, 28 Level II NICU beds and 53 Level III NICU beds. Florida Hospital-Orlando also operates adult and pediatric kidney transplantation programs, an adult liver transplantation program, adult and pediatric bone marrow 5

6 CON Action Numbers: transplantation programs, and an adult pancreas transplantation program. Florida Hospital has two CON approved adult transplantation programs heart (CON #10026) and lung (CON #10028). Florida Hospital-Orlando also has a Level II Adult Cardiology program and is a Primary Stroke Center. In 2010, Florida Hospital became a statutory teaching hospital. This project and the concurrently submitted CON Application #10081 are expected to be operational by June 1, Florida Hospital expects to perform 174 pediatric cardiac catheterizations in year two ending May 31, The applicant proposes the following conditions: Develop comprehensive pediatric and adult congenital heart disease (CHD) program to include integrated care for the adult population and consultation and collaboration between adult and pediatric specialists to improve outcomes for CHD patients. Promote research, public education and awareness of congenital heart disease for both pediatric and adult populations through participation in the national congenital heart disease registry (as cited in the Congenital Heart Futures Act by the United States Congress included in CON Application #10081-Attachment C). The applicant commits to a minimum of 40 percent of pediatric congenital heart disease patient days for a combination of Medicaid, Medicaid HMO and uncompensated care. Sponsor a biannual congenital heart disease symposium in Orlando to provide ongoing educational opportunities for physicians, nurses and other health care professionals dealing with the congenital heart disease population. The congenital heart disease program will include a state-of-the-art hybrid endovascular operating room and a dedicated congenital heart inpatient unit at Florida Hospital-Orlando. These conditions are identical to those proposed in concurrent and companion CON Application # The total project cost is estimated at $10,000. Total project cost is the project development cost 6. 6 CON Application #10079 references the costs as those in concurrent and companion application CON Application #

7 CON Action Numbers: and D. REVIEW PROCEDURE The evaluation process is structured by the certificate of need review criteria found in Section , Florida Statutes. These criteria form the basis for the goals of the review process. The goals represent desirable outcomes to be attained by successful applicants who demonstrate an overall compliance with the criteria. Analysis of an applicant's capability to undertake the proposed project successfully is conducted by assessing the responses provided in the application, and independent information gathered by the reviewer. Applications are analyzed to identify strengths and weaknesses in each proposal. If more than one application is submitted for the same type of project in the same district (subdistrict), applications are comparatively reviewed to determine which applicant best meet the review criteria. Section 59C-1.010(3)(b), Florida Administrative Code allows no application amendment information subsequent to the application being deemed complete. The burden of proof to entitlement of a certificate rests with the applicant. As such, the applicant is responsible for the representations in the application. This is attested to as part of the application in the Certification of the Applicant. As part of the fact-finding, the consultant, Steve Love analyzed the application in its entirety with consultation from the financial analyst Felton Bradley, who evaluated the financial data, and Architect Scott Waltz, who reviewed the architectural and schematic drawings. E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA The following indicate the level of conformity of the proposed project with the criteria and application content requirements found in Florida Statutes, sections , and ; applicable rules of the State of Florida, Chapter 59C-1 and 59C-2, Florida Administrative Code. 7

8 CON Action Numbers: Fixed Need Pool a. Does the project proposed respond to need as published by a fixed need pool? Or does the project proposed seek beds or services in excess of the fixed need pool? Rule 59C-1.008(2), Florida Administrative Code. In Volume 36, Number 13, dated April 2, 2010 of the Florida Administrative Weekly, a fixed need pool of zero was published for additional pediatric cardiac catheterization programs in Service Planning Area IV for the July 2012 planning horizon. As of April 2, 2010, Service Planning Area IV had one operational and one CON approved pediatric cardiac catheterization program. The operational program is located at Arnold Palmer Medical Center in Orlando (District 7). St. Mary s Medical Center in West Palm Beach (District 9) has the approved (CON #10054) program. The applicants are applying for pediatric cardiac catheterization programs in the absence of published need, with both proposing not normal circumstances exist to support approval of their projects. b. In addition to the published zero fixed need pool, Ch. 59C-1.032, Florida Administrative Code, outlines the criteria currently in effect for evaluating applications for pediatric cardiac catheterization programs and standards which cardiac catheterization programs must follow: 1. Pediatric cardiac catheterization programs shall be established on a regional basis. A new pediatric cardiac catheterization program shall not normally be approved unless the number of live births in the service planning area, minus the number of existing and approved programs multiplied by 30,000, is at or exceeds 30,000. Service Planning Area IV consists of Districts 7 and 9. The following table shows the number of live births by county in Districts 7 and 9. 8

9 CON Action Numbers: and Total Resident Live Births by County CY 2008 Rates per 1,000 County # Live Births Population Brevard 5, Indian River 1, Martin 1, Okeechobee Orange 16, Osceola 4, Palm Beach 15, St. Lucie 3, Seminole 4, Total 52, Source: Florida Department of Health, Office of Vital Statistics Annual Report As shown above, the number of live births in Service Planning Area IV in 2008, according to the Florida Department of Health s Office of Vital Statistics Annual Report 2008, was 52,518. Service Area IV has one licensed and one CON approved pediatric cardiac catheterization program. Therefore, 37,482 additional live births would be required to meet the need threshold in Rule 59C (8)(e) F.A.C. 2. Programs catheterizing pediatric patients only shall project a minimum service volume of 150 cardiac catheterizations per year within two years of the initial operation of the program. Programs serving both adult and pediatric patients shall project a program volume of 350 cardiac catheterizations per year. The Nemours Foundation (CON #10078): The applicant s pediatric cardiac catheterization program is expected to be operational by the third quarter of Nemours expects to perform 250 pediatric cardiac catheterizations in year two ending September 30, Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital projects that it will perform 174 pediatric cardiac catheterizations in year two ending May 31, Actual inpatient and outpatient migration from one service planning area to another shall be considered in the review of certificate of need applications. Agency data does not provide insight into patient origin for cardiac catheterization services; therefore, the applicants discuss patient origin in terms of pediatric open heart surgery cases. The table below represents use rates by District 7 (Brevard, Orange, Osceola 9

10 CON Action Numbers: and Seminole Counties) pediatric open heart surgery cases for CY 2009, which demonstrates that 41 of 91 (approximately percent) District 7 residents out-migrated to other service areas to obtain needed surgery 7. Hospital of Treatment for District 7 Resident CY 2009 Pediatric Open Heart Surgery Cases Facility Service Area District 7 Patients Miami Children s Hospital V 1 Arnold Palmer Medical Center IV 50 All Children s Hospital III 13 St. Joseph s Hospital III 27 Total 91 Source: Florida Center for Health Information and Policy Analysis. As shown above, Arnold Palmer Medical Center provided 50 pediatric open heart surgery procedures to District 7 residents during CY Therefore, the Agency affirms there is outmigration in this scenario for CY 2009, indicating that applicable pediatric services were not available or accessible for 41 of 91 (approximately percent) of applicable patients in the area for the period. c. Special and Not Normal Circumstances The Nemours Foundation (CON #10078) contends that the following not normal circumstances exist to support project approval: Florida has no pediatric open heart surgery or cardiac cath program that is part of an integrated delivery system such as Nemours that employs an electronic health record (EHR). Nemours will develop a cardiac team that only cares for children with cardiac diagnosis and as such will not be floated to other hospital floors or departments. Nemours will offer an integrated model of care that is not currently available for applicable pediatric patients in the Orlando area. The applicant compares its integrated (Nemours system) care to Arnold Palmer Hospital s (the existing provider). Arnold Palmer has community based cardiologists but employs surgeons from Miami Children s Hospital. 7 The Agency utilizes DRGs and , in its 2009 discharge data run, to attain these totals. 10

11 CON Action Numbers: and Nemours will provide care to patients with complex, often co-morbid conditions, typically in need of cardiac services. The applicant states that the Nemours model has the cardiac team participate in the noncardiac medical care of any patient with underlying cardiac diagnosis. Nemours will provide a cardiology fellowship training program (within the seven fellowship programs conditioned to in CON #9979, the original 82-bed acute care project). Nemours will bring new opportunities for research in pediatric cardiology as it relates to the linkage between childhood obesity and cardiac conditions. The applicant states its cardiologists will bring this research, outreach, screening, and teaching initiative to the Orlando and north Florida service area. Nemours indicates that its regional network of clinics located in Pensacola, Jacksonville and Orlando will operate in partnership for the appropriate referral to the project. Nemours contends that its project will reduce outmigration of applicable pediatric patients from the Orlando area. Nemours states that medically complex and chronically ill children, particularly pediatric patients with cardiac disease, are among the most medically complex of all pediatric patients, often with co-morbidities that require integrated medical management. Nemours believes it is best suited to accommodate this need in the area. Childhood obesity is also highlighted as a major factor that contributes to early death and early onset of disease. Nemours states its intent to aggressively address childhood obesity through the project (CON Application #10078, page #25, Figure 1 and Figure 2). The applicant shows a positive correlation between childhood overweight, prehypertension and stage I and stage II hypertension. The applicant also indicates a majority of pediatric cardiac patients in Florida from July 2008 through December 2009 were under the age of five years (CON Application #10078, page #30, Exhibit 1 and 2). Nemours describes statewide pediatric open heart and pediatric cardiac cath trends during CY using differing DRGs (CON Application #10078, pages and Exhibits 5-16). Nemours provides a table (Exhibit 21, CON #10078 application, page 109) which indicates that during CY 2009, its Jacksonville clinic provided 132,903 visits, Orlando 41,532 visits and Pensacola 35,467 visits. The applicant indicates that the Pensacola clinic has the only pediatric cardiologists in Service Area 1 and had 5,202 cardiology clinic visits and 7,982 cardiac testing visits in The applicant indicates that its need analysis considers existing referral patterns but does not provide the number of its patients that have had pediatric open heart surgery or that it referred to open heart surgery providers during

12 CON Action Numbers: The applicant anticipates drawing applicable pediatric patients from a large area of northern and central Florida, Pediatric Cardiac Catheterization Program Service Areas I and II and counties surrounding Orlando. After Pediatric Cardiac Catheterization Program Service Areas I and II, the applicant anticipates capturing applicable pediatric patients from the following six counties: Brevard, Indian River, Orange, Osceola and Seminole (Pediatric Cardiac Catheterization Program Service Planning Area IV) and Polk (Pediatric Cardiac Catheterization Program Service Planning Area III). The applicant does not anticipate capturing applicable pediatric patients from the following counties: St. Lucie, Martin or Palm Beach (Pediatric Cardiac Catheterization Program Service Planning Area IV). This is largely due to the recently approved but not yet operational program at St. Mary s Medical Center in Palm Beach County. The applicant notes and the Agency confirms that outmigration 8 exists from Service Planning Area IV, primarily to Service Planning Area III. The applicant believes that as a new provider of applicable pediatric services, the outmigration trend could reverse, due largely to what the applicant describes as its unique model of care. The applicant expects to perform 180 pediatric cardiac catheterization procedures in year one (ending September 30, 2015), 250 procedures in year two and 298 procedures in year three. The applicant reaches these totals by estimating a 2.5 percent statewide ratio of pediatric cardiac catheterization procedures to pediatric open heart surgery procedures. In assessing how to capture applicable DRGs to account for pediatric cardiac catheterization and pediatric open heart surgery cases, the applicant uses the following APR-DRGs: , 167, 583 and 630. Nemours indicates that it considers its APR-DRGs to most accurately reflect open heart procedures but these actually undercount the total procedures reported to the Agency by existing providers. The applicant also counts patients up to age 20 as pediatric, whereas for pediatric cardiac catheterization and pediatric open heart purposes, the Agency counts patients under age 15. Per the applicant, section (6), Florida Statutes justifies counting patients into adulthood for the 8 Ibid. 12

13 CON Action Numbers: and purposes of determining need. Nemours indicates that from July 2008 through June 2009, Arnold Palmer Medical Center discharged 79 of the 154 or 51.3 percent of the pediatric open heart surgery patients in the applicant s expected (Orlando area) catchment counties of Brevard, Indian River, Orange, Osceola, Polk and Seminole (CON Application #10078, page #115, Exhibit 26). Similarly, the Agency confirms that for the 12-month period ending December 31, 2009, Arnold Palmer discharged 50 of the 91 District 7 residents who sought pediatric open heart surgery. Therefore, the Agency and the applicant agree there is outmigration for this service, primarily to St. Joseph s Hospital (Hillsborough County) and All Children s Hospital (Pinellas County). These facilities are located in Pediatric Cardiac Catheterization Program Service Planning Area III. As previously stated, the applicant includes Pediatric Open Heart Program Service Planning Areas I and II, District 7 and Indian River and Polk Counties in its proposed service area. Nemours presents a detailed discussion of population trends based on live births for CY 2008 and the female population aged residing in each of the portions of its proposed service area. This results in projected 102,962 live births, 1,603,018 female population age 15-44, and a 2,205,482 pediatric population in The applicant estimates 108,665 live births, 1,692,067 female population age and a 2,420,934 pediatric population in These result in annual compound growth rates of 1.08 percent (births), 1.09 percent (females 15-44) and 1.88 percent (pediatric population), per the applicant. Nemours indicates that its projected market share is based on the need for continuity of care for the sickest patients, existing referral patterns in the northern half of Florida, proximity to NCH s campus in Orlando, presence of Nemours-affiliated physicians, especially pediatric cardiologists and the uniqueness of NCH s programs and services. The applicant contends many of its patients will choose to remain in the Nemours system because it offers seamless specialty care through its EHR. The following table shows the applicant s projections for its open heart cases at NCH. 13

14 CON Action Numbers: Nemours Children's Hospital Open Heart Surgery Program Projected Admissions Actual Projected Year 1 Projected Year 2 Projected Year 3 Nemours Service Sub-Areas July 08 - June 09 ending ending ending Service Area I (Districts 1 & 2) 2008 Service Area Fertility Rate per 1,000 Female pop ) Female Population Age Years 283, , , ,129 Projected Births 18,338 18,856 18,937 19,017 Service Area Use Rate for Pediatric OHS (per 1,000 live births) Projected Pediatric Open Heart Surgery Cases Nemours Children's Hospital Projected Market Share 15.0% 25.0% 30.0% Projected NCH OHS Cases from Service Area Service Area II (Districts 3 & 4) 2008 Service Area Fertility Rate per 1,000 Female pop ) Female Population Age Years 672, , , ,662 Projected Births 42,077 46,453 47,067 47,689 Service Area Use Rate for Pediatric OHS (per 1,000 live births) Projected Pediatric Open Heart Surgery Cases Nemours Children Hospital Projected Market Share 12.0% 16.0% 20.0% Projected NCH OHS Cases from Service Area Service Area III (District 7 plus Indian River & Polk Counties) 2008 Service Area Fertility Rate per 1,000 Female pop ) Female Population Age Years 605, , , ,592 Projected Births 39,879 43,356 43,849 44,349 Service Area Use Rate for Pediatric OHS (per 1,000 live births) Projected Pediatric Open Heart Surgery Cases Nemours Children Hospital Projected Market Share 20.0% 26.5% 30.0% Projected NCH OHS Cases from Service Area Service Area Cases at NCH In-Migration (at 10%) Total OHS Cases at Nemours Children's Hospital Source: CON Application #10078, page 124. Nemours contends that NCH will draw patients from the southeastern United States and Central America and that is reasonable to assume that its in-migration will be more than the projected 10 percent. Nemours indicates that its cardiac catheterization projections are based on a projected ratio of 2.5 catheterizations to one open heart surgery procedure. The applicant s projected pediatric cardiac catheterization cases are provided in the table below. Nemours Children s Hospital-Orlando Projected Cardiac Catheterization Cases Years One Three Ending September 30, Projected Pediatric Open Heart Cases Projected Cardiac Catheterizations Source: CON Application #10078, page #125, Exhibit

15 CON Action Numbers: and Nemours indicates that its projections are conservative because of the undercount created by use of its APR-DRGs, which it contends is a subset of the total pediatric open heart patients reported by existing providers. 9 The use rate is 43 percent higher when the total volume of reported open heart surgery patients is considered, according to the applicant. Nemours applies this statewide use rate of per thousand population to its 2009 service area population of 2,126,517 and arrives at 507 patients. Applying this use rate to the service area s 2016 age 20 and under population of 2,420,934 results in 578 patients for an incremental demand of 70 cases. Therefore, the applicant estimates incremental demand will offset a substantial portion of Nemours total projected case volume resulting in minimal impact on existing providers. Nemours has an extremely large geographic service area but its projections may be obtainable should all assumptions hold. The lack of data about referrals from the applicant s existing network makes their assumptions difficult to assess. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079) contends that not normal circumstances exist to support project approval. Florida Hospital states that project approval is needed: to enhance the transition of care and integration of care for adult congenital heart patients, to complete the continuum of care for congenital heart disease patients, to decrease out-migration from Florida Hospital s service area, to serve as an extension and regionalization of care by surgeons and interventionalists of the Congenital Heart Institute of Florida (CHIF) who currently care for service area patients in Tampa; and the existing outmigration represents a sufficient base to support a program that will not adversely impact existing programs. The applicant also indicates that the transition of applicable pediatric patients into adult cardiovascular programs is essential considering that the pediatric cardiovascular population is now surviving into adulthood with lifelong cardiovascular illness. Florida Hospital contends that project approval would lead to an unbroken and unfragmented continuum of care within the Florida Hospital system which would have 9 The applicant compares the APR-DRG volume of 838 for the 12 months ending June 30, 2009 to the local health council reported procedures count of 1,198, which results in 360 or 30 percent difference to support this contention (CON Application #10078, page 95). 15

16 CON Action Numbers: unborn, neonate, childhood and adult cardiac specialist synergies. The special challenges of the outmigration of this population would be reduced because patients already being served by specialists at Florida Hospital and the CHIF physician group would have a continuum of care closer to home than the current out-migration to the Tampa area. St. Joseph s Hospital, the facility in 2009 that received the most outmigration by this population supports the project. Also, as a statutory teaching hospital, Florida Hospital has operational and on-going continuing education opportunities for physicians, nurses and other healthcare professionals. Further, Florida Hospital states a continuing interest in treating the whole person body, mind and spirit. In this framework, Florida Hospital maintains an accredited clinical pastoral education program. The applicant discusses the rapid growth of pediatric open surgery since the Agency s rule inception in 1990 to Pediatric open heart surgery admissions have increased from 545 in 1990 to 1,284 in 2008 or by almost five percent (4.9 percent) annually over the past 18 years. Live births have increased from 199,146 in 1990 to 231,235 in 2008 increasing by less than one percent (0.8 percent) annually. This demonstrates an increased use rate from 2.74 per thousand births in 1990 to 5.55 pediatric open heart surgery (OHS) admissions per thousand in Florida Hospital indicates that its service area will consist of District 7, and four additional counties (Flagler, Highlands, Lake, and Volusia) where the applicant has facilities. Florida Hospital applies the 5.55 OHS use rate per thousand live births to support its contention that there is sufficient volume among Florida Hospital facilities and other geographically proximate hospitals that refer neonates to Florida Hospital to warrant project approval. The applicant indicates that it utilizes a ratio of two pediatric cardiac catheterizations to one pediatric open heart surgery case. The following table is presented to support this. 16

17 CON Action Numbers: and Florida Hospital 2009 Potential Pediatric OHS Cases Hospital Calendar 2009 Florida Hospital deliveries by selected FH locations Florida Hospital (Orlando) 2,605 Florida Hospital Deland 991 Florida Hospital Waterman 791 Florida Hospital Heartland 978 Winter Park Memorial Hospital 2,327 Florida Hospital Memorial Medical Center 1,207 Florida Hospital Altamonte 1,080 Florida Hospital Celebration 1,603 Total Florida Hospital deliveries 11,582 *Total Referral Hospital Deliveries 6,700 Florida Hospital & Referral Hospital Deliveries 18, Florida pediatric OHS use rate/per 1,000 live births 5.55 Projected Florida Hospital & Referral Hospital OHS cases 101 Projected Florida Hospital & Referral Hospital Cardiac Caths 202 Source: CON Application #10079, page 26 from AHCA inpatient data base, MS-DRGs , & DRGs Notes: Projections are stated to represent mothers and to not include multiple births. *These referral hospitals are hospitals that are geographically proximate to, and refer high risk mothers & neonates to Florida Hospital. Florida Hospital also addresses the 2009 outmigration pattern of pediatric patients served by partner cardiovascular physicians of CHIF (which operates in Tampa and Orlando). According to Florida Hospital, this physician group served 44 of 53 applicable patients (83 percent) in the Tampa area who had migrated from the four Pediatric Open Heart Surgery Program Service Planning Area IV counties of Brevard, Orange, Osceola and Seminole. The CHIF physician group is stated to have served 18 of 19 applicable patients (95 percent) who migrated from Flagler, Lake and Volusia (Pediatric Open Heart Surgery Program Service Planning Area II) and Highlands (Pediatric Open Heart Surgery Program Service Planning Area III) to the Tampa area for treatment. Florida Hospital suggests a need for at least three pediatric open heart surgery and at least three pediatric cardiac catheterization programs in Pediatric Service Area IV. The applicant reaches this conclusion by revising the need methodology criteria from 30,000 to 15,000 live births (CON Application #10079, page #31, Table 6). This is based on the applicant s data showing the use rate has increased from 2.74 per thousand in 1990 to 5.55 per thousand in 2008 and its contention that this should be applied to modify the criteria from 30,000 to 15,000 live births. The applicant also contends that as early as 2000, data indicated that adult patients exceeded the number of pediatric congenital heart patients, approximately one third of District 7 s congenital heart disease patients out-migrated to Tampa for open heart surgery in CY 2009, the live birth threshold (30,000) is based on 1990 health care delivery, and the utilization of pediatric open heart surgery is not correctly defined or 17

18 CON Action Numbers: identified in the Agency rule and has been inconsistently reported by existing providers. However, local health council data reports the number of procedures reported by the facility; whereas, the Agency s inpatient data base is the discharge DRG which may not reflect a primary cardiovascular diagnosis. As previously stated, Florida Hospital s projected service area includes District 7 and Flagler, Highlands, Lake, and Volusia Counties. The applicant indicates that the service area pediatric (under age 15) population is projected to increase by 9.3 percent from 639,515 in July 2010 to 699,224 in July The service area s 718,416 female population age is projected to increase by 7.4 percent from 668,659 in July 2010 to 718,416 in The applicant indicates that service area live births are projected at the five-year average of 63.5 live births experienced during CY 2004 through Florida indicates that that the projected 718,416 female population with the 63.5 per thousand birth rate will result in 45,636 live births and an estimated 490 projected pediatric cardiac catheterization procedures by Florida Hospital s table 16 indicates that during CY 2009, District 7 residents accounted for 136 pediatric open heart surgery procedures and the CHIF cardiovascular surgeon group performed 44 of these. Flagler, Highlands, Lake, and Volusia county residents accounted for 47 procedures with CHIF performing 18 of these. The applicant indicates that its need projections are based on: Ninety percent of CHIF patients residing in the service area will receive care at Florida Hospital instead of traveling to Tampa. Total service area pediatric open heart admissions will increase consistent with the projected increase in service area deliveries. Florida Hospital will capture 15 percent of other service area cases in year one and 20 percent (actually computes to 18 percent) in year two. Patients residing outside the defined service area will represent five percent of total admissions. The following table shows Florida Hospital projections during the first three years of operation ending May 31, 2012 through May 31,

19 CON Action Numbers: and Florida Hospital Pediatric Open Heart Surgery & Cardiac Catheterization Program CON #10079 Projected Admissions 19 CHIF Other Subtotal 2009 Service Area Volume Projected Year One - Ending May 31, 2012 Projected Service Area Volume Percent Florida Hospital 90% 15% In- Migration Open Heart Total Total Year One Projected Year Two - Ending May 31, 2013 Projected Service Area Volume Percent Florida Hospital 90% 18% Total Year Two Projected Year Three - Ending May 31, 2014 Projected Service Area Volume Percent Florida Hospital 90% 25% Total Year Three Source: CON Application #10079, page 61. Florida Hospital s projections appear to be reasonable. 2. Agency Rule Preferences Does the project respond to preferences stated in Agency rules? See Chapter 59C of the Florida Administrative Code. Chapter 59C of the Florida Administrative Code does not contain preferences relative to pediatric cardiac catheterization programs. However, the rule does contain standards the Agency utilizes in assessing an applicant s ability to provide quality care. References to adult cardiac catheterization programs have been deleted. a. Scope of Service Ch. 59C-1.032(3), Florida Administrative Code. (1) Each cardiac catheterization program shall be capable of providing immediate endocardiac catheter pacemaking in cases of cardiac arrest, and pressure recording for monitoring and to evaluate valvular disease, or heart failure. Applicants for cardiac catheterization programs shall document the manner in which they will meet this requirement. The Nemours Foundation (CON #10078): Nemours proposes its services will include but not be limited to temporary pacemakers, Swan Ganz catheters, pressure recording, stent insertion, administration of intracoronary thrombolytics, electrophysiology Cath. Total

20 CON Action Numbers: studies and other innovative techniques as alternatives to open heart surgery for patients deemed appropriate for these procedures. The applicant asserts that its program will have the capability of providing all of the services described above. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079) proposes to provide a full range of pediatric services, including but not limited to immediate endocardiac catheter pacemaking and pressure recording for monitoring. The applicant states that a new state of the art hybrid endovascular operating room will open in 2012 with capabilities for catheterization, echocardiography and surgery and will also be used for pediatric cardiac catheterization and dedicated pediatric electrophysiology procedures. Florida Hospital s pediatric cardiac catheterization and electrophysiology program will be led by pediatric cardiologists who are members of CHIF. (2) A range of non-invasive cardiac or circulatory diagnostic services must be available within the health care facility itself, including: (a) (b) (c) (d) (e) Hematology studies or coagulation studies; Electrocardiography; Chest x-ray; Blood gas studies; and Clinical pathology studies and blood chemistry analysis. The Nemours Foundation (CON #10078): Nemours proposes to offer each of these studies upon the opening of its facility in Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital states that it provides all the studies and services listed above. The applicant also includes current Agency clinical laboratory licensure, accreditation and a list of Florida Hospital sister facilities affiliated with Florida Blood Centers, Inc. (CON Application #10079, Appendix K). 20

21 CON Action Numbers: and (3) At a minimum a cardiac catheterization program shall include: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) A special procedure x-ray room; A film storage and darkroom for proper processing of films: X-ray equipment with the capability in cineangiocardiography, or equipment with similar capabilities; An image intensifier; An automatic injector; A diagnostic x-ray examination table for special procedures; An electrocardiograph; A blood gas analyzer; A multi-channel polygraph; and Emergency equipment including but not limited to a temporary pacemaker unit with catheters, ventilitory assistance devices, and a DC defibrillator. The Nemours Foundation/CON #10078: Nemours proposes that it will equip its cardiac catheterization service to include all of the equipment set forth under this standard. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital states that as a leading provider of cardiovascular services, it already has the items listed above. b. Service Accessibility Ch. 59C-1.032(4), Florida Administrative Code. (1) Hours of Operation. Every cardiac catheterization program shall have the capability of rapid mobilization of the study team within 30 minutes for emergency procedures 24 hours a day, seven days a week. Applicants for new cardiac catheterization programs shall document the manner in which they will meet this requirement. The Nemours Foundation (CON #10078): Nemours indicates the proposed cardiac catheterization and open heart surgery programs will be available for elective cases at a minimum of eight hours a day/five days per week and that the programs will have on-call policies to enable rapid mobilization of the cardiac cath, surgical and medical support teams for emergency cases as needed. Emergency call coverage is stated to be available 24 hours per day/seven days per week and Nemours will mobilize the surgical and medical support teams as required. 21

22 CON Action Numbers: Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital indicates the project s call program will be designed to assure a maximum waiting period of two hours. Florida Hospital reports an on-call process 24 hours a day with staff paid two hours for every eight hours on call. Call response time for pediatric catheterization will be 30 minutes, as it is for adult cardiac catheterization services. (2) Underserved Population Groups. Applicants for a cardiac catheterization program shall indicate the projected number of medically indigent and Medicaid patients to be served annually. Applicants shall indicate their past provision of health services to medically indigent and Medicaid patients. The Nemours Foundation (CON #10078): The applicant proposes to condition CON approval on providing a minimum of 54 percent of its patient days to charity and Medicaid patients. In year two of operations, Nemours expects 56.6 percent of its pediatric open heart and cardiac catheterization cases to be Medicaid and Medicaid HMO and 3.6 percent self-pay/other. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): The applicant proposes to condition CON approval on providing a minimum of 40 percent of pediatric congenital heart disease patient days to Medicaid, Medicaid HMO and uncompensated care. In year two of operations, Adventist expects 58 percent of the facility s combined pediatric open heart and cardiac catheterization patient days will be Medicaid and Medicaid HMO and 2.0 percent will be self-pay. c. Service Quality Ch. 59C-1.032(5), Florida Administrative Code. (1) Accreditation. Any health care facility providing inpatient catheterization only, or inpatient and outpatient cardiac catheterization, or angioplasty, must be fully accredited by the Joint Commission for special care units, or be accredited by the American Osteopathic Association. The Nemours Foundation (CON #10078): Nemours reports it will be accredited by the Joint Commission as soon as it is eligible following opening and that accreditation will be in place by the time that the cardiac catheterization program is implemented. 22

23 CON Action Numbers: and Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital provides documentation (CON Application #10079, Attachment N) of its March 28, 2009 accreditation by the Joint Commission. (2) Availability of Health Personnel. Any applicant proposing to establish a cardiac catheterization program must document that adequate numbers of properly trained personnel will be available. At a minimum, a team involved in cardiac catheterization consists of a physician, one nurse, and one or more technicians. An applicant for a new cardiac catheterization program shall document that the following staff are available: (a) A program director, board-certified or board-eligible in internal medicine, or radiology with subspecialty training in cardiology or cardiovascular radiology; the program director for programs performing pediatric cardiac catheterization shall be board-eligible or boardcertified by the Sub-Board of Pediatric Cardiology of the American Board of Pediatrics or the American Osteopathic Association in the area of pediatric cardiology. The Nemours Foundation (CON #10078): Nemours reports it will recruit a program director who is board-certified in internal medicine with subspecialty training in cardiology and who will be board-eligible or board-certified by the Sub- Board of Pediatric Cardiology of the American Board of Pediatrics. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital reports that Jorge McCormack, MD, Clinical Associate Professor at the University of South Florida and a chief executive officer of Pediatric Cardiology Associates in St. Petersburg (a CHIF practice) will serve as program director 10. Alfred Asante- Korang, MD is a board-certified pediatric cardiologist and a member of CHIF s Pediatric Cardiology Associates 11. Dr. McCormack, Dr. Asante-Korang and other CHIF pediatric cardiologists will provide the medical leadership and oversight for the proposed program. 10 Dr. McCormack s curriculum vitae is provided by the applicant (CON Application #10078, Appendix, O). 11 Dr. Asante-Korang s letter of support is included in the application (ibid). 23

24 CON Action Numbers: (b) A physician, board-certified or board-eligible in cardiology, radiology, or with specialized training in cardiac catheterization and angiographic techniques who will perform the examination. The Nemours Foundation (CON #10078): Nemours states it will employ at least one physician who is board-certified or board-eligible in cardiology and with specialized training in pediatric cardiac catheterization and angiographic techniques who will perform the examination. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital states pediatric cardiac catheterizations will be performed by one of the board-certified pediatric cardiologists from CHIF, such as Dr. Jorge McCormack, Dr. Albert Asante-Korang, or other qualified CHIF physicians. According to Florida Hospital, these physicians mostly perform pediatric cardiac catheterizations at St. Joseph's Hospital in Tampa and All Children's Hospital in St. Petersburg and are the physicians that provide the majority of pediatric cardiac catheterizations for service area residents who leave the Florida Hospital service area for care. (c) (d) (e) (f) (g) (h) Support staff, specially trained in critical care of cardiac patients, with a knowledge of cardiovascular medication and an understanding of catheterization and angiographic equipment; Support staff, highly skilled in conventional radiographic techniques and angiographic principles, knowledgeable in every aspect of catheterization and angiographic instrumentation, with a thorough knowledge of the anatomy and physiology of the circulatory system; Support staff for patient observation, handling blood samples and performing blood gas evaluation calculations; Support staff for monitoring physiologic data and alerting the physician of any changes; Support staff to perform systematic tests and routine maintenance on cardiac catheterization equipment, who must be available immediately in the event of equipment failure during a procedure; Support staff trained in photographic processing and in the operation of automatic processors used for both sheet and cine film. 24

25 CON Action Numbers: and The Nemours Foundation (CON #10078): Nemours states that it will employ physicians and staff trained in each of the services listed above. The applicant also states it will utilize the staff at its Delaware facility to assist in training of cardiac catheterization staff. (See Section 4., c.-staffing [CON Application #10078] to account for planned FTEs as they relate to applicable program staff). Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital reports that as an existing adult open heart and adult cardiac catheterization provider, and Level I pediatric intensive care and Level III NICU provider, it already has physicians and staff trained in each of the services listed above. Pediatric cardiac catheterization support training will be provided at St. Joseph s Hospital in Tampa. (See Section 4., c.-staffing [CON Application #10079] to account for planned FTEs as they relate to applicable program staff). (i) A Medical Review Committee, which reviews medical invasive procedures such as endoscopy and cardiac catheterization. The Nemours Foundation (CON #10078): Nemours will establish a peer review committee and a procedure review committee. The committees will review medically invasive procedures for the continuous implementation of pediatric cardiac cath and pediatric open heart surgery programs. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital states a pediatric medical review committee will review medically invasive procedures. 25

26 CON Action Numbers: e. Coordination of Services 59C-1.032(6), Florida Administrative Code. (1) Cardiac Catheterization programs proposed in a facility not performing open heart surgery must submit a written protocol as part of their certificate of need application for the transfer of emergency patients to a hospital providing open heart surgery, which is within 30 minutes travel time by emergency vehicle under average travel conditions. (2) Cardiac catheterization programs which include the provision of coronary angioplasty, valvuloplasty, or ablation of intracardiac bypass tracts must be located within a hospital which also provides open heart surgery. (3) Pediatric cardiac catheterization programs must be located in a hospital in which pediatric open heart surgery is being performed. The Nemours Foundation (CON #10078): Nemours simultaneously submitted a concurrent and companion application for the establishment of a pediatric open heart surgery program (CON #10080). Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital simultaneously submitted a concurrent and companion application for the establishment of a pediatric open heart surgery program (CON #10081). f. Service Cost 59C-1.032(7), Florida Administrative Code. Cost data for cardiac catheterization programs, among similar institutions, shall be comparable when patient mix, cost accounting methods, labor market differences and other extenuating factors are taken into account. The Nemours Foundation (CON #10078): Nemours expects its cardiac catheterization and open heart surgery programs will be competitive with other existing providers in the area for the same types of patients when mix of patients, cost accounting methods, and market factors are considered. The applicant estimates the average charge per case for year one, beginning September 30, 2015, will be $42,742. Schedule 7A shows total patient revenue for the project of $21,454,877 for year three. Adventist Health System/Sunbelt Inc. d/b/a Florida Hospital (CON #10079): Florida Hospital states its pediatric cardiac catheterization services costs and charges have been developed based on the applicant s experience with similar cardiology surgery services, along with being reasonable and consistent with other Florida providers of pediatric open 26

27 CON Action Numbers: and heart and pediatric cardiac catheterization services. The applicant estimates an average charge per case for year one, ending May 31, 2013, to be $194,294 (pediatric open heart and pediatric cardiac cath combined). Schedule 7A shows total patient revenue for the project of $50,429,296 for year three. 4. Statutory Review Criteria a. Is need for the project evidenced by the availability, quality of care, accessibility and extent of utilization of existing health care facilities and health services in the applicant s service area? ss (1)(a) and (b), Florida Statutes. Arnold Palmer Medical Center, located in Orlando (District 7), is the only operational provider of pediatric cardiac catheterization services in Service Area IV. St. Mary s Medical Center in West Palm Beach (District 9) has CON #10054 approved to implement a program. The chart below demonstrates pediatric cardiac catheterization program utilization during calendar year 2009: Pediatric Cardiac Catheterization Program Utilization Data Calendar Year 2009 Facility by Service Area Total # Procedures Service Area 1 (Districts 1 & 2) No Providers 0 Service Area 2 (Districts 3 & 4) Shands Hospital at the University of Florida 144 Baptist Medical Center/Shands Jacksonville Medical Center 387 Service Area 3 (Districts 5,6 & 8) All Children s Hospital 329 St. Joseph s Hospital 489 Service Area 4 (Districts 7 & 9)* Arnold Palmer Medical Center 260 Service Area 5 (Districts 10 & 11) Memorial Regional Hospital 143 Jackson Memorial Hospital 494 Miami Children s Hospital 410 Total 2,656 Source: Florida Need Projections and Utilization for Cardiac Catheterization Heart Surgery Programs and Transplantation Programs for July 2012 Planning Horizon. 27

28 CON Action Numbers: The table below represents the historical utilization reported by Arnold Palmer Medical Center, Service Area IV s pediatric cardiac catherization provider for the periods specified. Pediatric Service Planning Area IV Cardiac Catheterization Procedures Calendar Years County Arnold Palmer Medical Center Orange Source: Agency for Health Care Administration Pediatric Cardiac Catheterization Program utilization data for years indicated. Agency data does not provide insight into patient origin for cardiac catheterization services; therefore, the applicants discuss patient origin in terms of pediatric open heart surgery cases. The table below represents use rates by District 7 (Brevard, Orange, Osceola and Seminole Counties) pediatric open heart surgery cases for CY 2009, which demonstrates that 41 of 91 District 7 residents out-migrated to other service areas to obtain needed surgery. Hospital of Treatment for District 7 Resident CY 2009 Pediatric Open Heart Surgery Cases Facility Service Area District 7 Patients Miami Children s Hospital V 1 Arnold Palmer Medical Center IV 50 All Children s Hospital III 13 St. Joseph s Hospital III 27 Total 91 Source: Florida Center for Health Information and Policy Analysis. As shown above, Arnold Palmer Medical Center provided 50 pediatric open heart surgery procedures to District 7 residents during CY Both co-batched applicants believe sufficient volume exists and a reduction in outmigration will have minimal to no material impact on the existing provider (Arnold Palmer Medical Center). The approval of either project will have some impact on Arnold Palmer. However, it appears that existing referral patterns promote the exodus of patients to other areas and approval of either applicant should improve access. Below is a map that depicts the Pediatric Cardiac Catheterization Program Service Planning Area IV existing and approved pediatric cardiac catheterization providers and the locations of the co-batched applicants proposed facilities. 28

29 CON Action Numbers: and MapPoint 2006 Although neither applicant demonstrates that patients needing this service were unable to obtain it, Agency data confirms notable outmigration of patients from Planning Area IV to Planning Area III. Therefore, access to these services would be improved by a project 29