STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED

STATE AGENCY ACTION REPORT ON APPLICATION FOR CERTIFICATE OF NEED A. PROJECT IDENTIFICATION 1. Applicant/CON Action Number Treasure Coast Behavioral Health, LLC/CON #10201 999 Ponce de Leon Boulevard, Suite 950 Coral Gables, Florida 33134 Authorized Representative: Ms. Patti Greenberg (305) 444-5007 2. Service District District 9 (Indian River, Martin, Okeechobee, Palm Beach, St. Lucie Counties) B. PUBLIC HEARING A public hearing was not held or requested regarding the proposed project. Letters of Support A total of 14 unduplicated letters of support (13 submitted through CON application #10201 and one received independently by the Agency), were submitted for the project. All letters were signed and dated during September 6 through September 30, 2013. Below is a brief summary of the comments in these letters. Mr. Mark E. Robitaille, President and CEO, Martin Health System, submitted a two-page letter stating there is critical need for additional health services in Martin County, where in 2012, we saw more than 1,400 mental health related patients in our EDs of which 882 were residents of Martin County. From our ED, we discharged 357 patients last year to inpatient mental health resources requiring transfer out of the County, of which 253 were Martin County Residents.

Mr. Robitaille cited page 41 of Martin Health System s July 2013 Community Health Needs Assessment report, stating mental health was the most frequent topic discussed by the community leaders because of the lack of mental health services and treatment facilities. Variations of a form letter were submitted by thirteen members of the health community, including 1 : Patricia Kramer, Regional Director, Substance Abuse & Mental Health Southeast Region, Department of Children and Families* Karin Kurtz, CEO, SandyPines Residential Treatment Center* Dr. Michael F. Gervasi, President and CEO, Florida Community Health Centers, Inc.* Ann Berner, CEO, Southeast Florida Behavioral Health Network* Mary Fields, COO and Executive Director, Volunteers in Medicine Clinic* Susan K. Buza, Executive Director, 211 Palm Beach/Treasure Coast Sabrina Barnes, Executive Director, Children s Home Society of Florida Jan Swink, ACSW, CEO, Family Preservation Services of Florida, Inc. Sean Boyle, Executive Director, Children s Services Council of St. Lucie County James Vojcsik, Executive Director, United Way of Martin County Jeffrey Shearer, ACSW, CAP, LCSW, Executive Director, Tykes & Teens Alicia B. Pajares, LCSW, Vice President, Legacy Behavioral Health Center, Inc. Kim Waser, President, Board of Directors, Martin County Interagency Coalition. Treasure Coast Behavioral Health, LLC places emphasis on the following letters of support: Because there are no such inpatient services in Martin County, all patients in need of inpatient treatment must leave their home county, which oftentimes also means leaving their support system -Patricia Kramer While SandyPines primarily works with children and adolescents, we are aware of the need for an inpatient mental health facility for adults in Martin County -Karin Kurtz 1 *Quotes from these letters are provided below. 2

I can attest to the imperative need for adult inpatient psychiatric services in Martin County. Seven acute care beds and 33 residential beds for adults with mental health needs will help the community and clients we see Currently there are limited adult mental health programs in the Treasure Coast and the only mental health service available in Martin County is outpatient therapy Michael Gervasi Even more troublesome is the fact that there is no Baker Act Receiving Facility within Martin County. Local law enforcement must leave the County to transport Baker Act patients to St. Lucie County or further -Ann Berner When patients need to be admitted for either acute or residential treatment, they must go to New Horizons in Fort Pierce or Port Saint Lucie Hospital in Port Saint Lucie -Mary Fields The applicant s form letters included the following themes: Attesting to the great demand for adult mental health services in Martin County, and specifically the need for both hospital and residential beds. Because there are no such inpatient services in Martin County, all patients in need of inpatient treatment must leave their home county. The absence of a Baker Act Receiving Facility within Martin County. Local law enforcement must leave the county to transport Baker Act patients. Universal Health Services (the applicant s corporate parent) SandyPines facility s longstanding history of providing behavioral health treatment to children and adolescents in Martin County. 2 C. PROJECT SUMMARY Treasure Coast Behavioral Health, LLC. (CON #10201), a subsidiary of Universal Health Services (UHS), proposes to establish a Class III specialty hospital of seven adult inpatient psychiatric beds in District 9, Martin County, Florida. In conjunction with the project, the facility will add 33 adult residential beds for behavioral health services. Treasure Coast Behavioral Health, LLC states the facility will provide a full continuum of inpatient, residential, partial hospitalization and outpatient adult psychiatric programs. 2 SandyPines was licensed as a residential treatment facility for children and adolescents effective June 15, 2010. The facility was previously licensed as a Class III children/adolescent psychiatric hospital and prior to that as a Class IV Intensive Residential Treatment Facility. 3

The applicant s parent, UHS, a nationwide provider of behavioral health services, currently operates one behavioral health facility in District 9: SandyPines Residential Treatment Center, serving children and adolescents ages 5-17 with a primary psychiatric diagnosis. In addition to the Agency s published need projections, the applicant summarizes three major factors that justify the project, as follows: Adult psychiatric residential, inpatient, and partial hospitalization, therapies are currently non-existent in Martin County. The existing UHS run behavioral health facility for children in Martin County plays an important role in health care delivery within District 9, which would be improved with the addition of adult psychiatric services. Treasure Coast Behavioral Health, LLC will offer a full continuum of inpatient, residential, intermediate (partial hospitalization program), and outpatient services in a single, centrally located facility. The proposed project involves a total cost of $11,173,001. The total project cost includes: land, building, equipment, project development, and financing and start-up costs. The project consists of 25,658 gross square feet (GSF) of new construction and a total construction cost of $4,485,600. The applicant proposes to condition the project as shown below. Treasure Coast Behavioral Health (TCBH) will become a designated Baker Act Receiving Facility upon licensure and certification. Upon licensure and certification Treasure Coast Behavioral will seek Joint Commission Accreditation. The applicant will provide at least 10 percent of its total hospital patient days (TAPD) to a combination of Medicaid HMO/charity care/self-pay by year two of operation and thereafter. TCBH will become an active participant in the Martin County Health Collaborative and will participate on any mental health subcommittees, beginning in year two of operations. 4

D. REVIEW PROCEDURE The evaluation process is structured by the certificate of need review criteria found in Section 408.035, Florida Statutes; and applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code. 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 evaluating the responses and data 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, applications are comparatively reviewed to determine which applicant(s) best meets the review criteria. Rule 59C-1.010(3)(b), Florida Administrative Code, prohibits any amendments once an application has been 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, Jessica Hand analyzed the application in its entirety with consultation from the financial analyst, Derron Hillman, who evaluated the financial data and Said Baniahmad of the Office of Plans and Construction, who reviewed the application for conformance with the architectural criteria. E. CONFORMITY OF PROJECT WITH REVIEW CRITERIA The following indicate the level of conformity of the proposed project with the review criteria and application content requirements found in Sections 408.035, and 408.037; applicable rules of the State of Florida, Chapters 59C-1 and 59C-2, Florida Administrative Code. 1. 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? Rules 59C-1.008(2) and 59C-1.040(4) Florida Administrative Code. 5

In Volume 39, Number 140, dated July 19, 2013 of the Florida Administrative Register, a fixed need pool of seven adult inpatient psychiatric beds was published for District 9 for the January 2019 planning horizon. The applicant s project is in response to published need. Treasure Coast Behavioral Health, LLC proposes to establish a Class III specialty hospital with seven adult inpatient psychiatric beds in District 9, Martin County, Florida. Additionally, 33 adult residential beds will be developed in conjunction with this project. The applicant discusses need for adult psychiatric beds in Martin County based on service area, availability, accessibility, market dynamics, and historic and current bed utilization. Service Area District 9 includes Martin, Palm Beach, St. Lucie, Okeechobee, and Indian River Counties, of which Palm Beach County is the most populous, followed by St. Lucie and Martin Counties. TCBH states Martin County comprises 7.8 percent of all District 9 residents, and 9.4 percent of persons age 65 and older. By the second year of operations (2017) the applicant expects a 6.6 percent increase from the 2013 adult population in Martin County (from 131,090 to 132,880). The applicant submits the following three charts to demonstrate these findings: District 9 Adult Population Estimates by Age Cohort For CY 2013 Populations by Age Group Percent of Total County 18-64 65+ 18+ 18-64 65+ 18+ Indian River 77,811 39,614 117,425 6.8 8.8 7.4 Martin 82,769 41,942 124,711 7.2 9.4 7.8 Okeechobee 24,054 7,056 31,110 2.1 1.6 2.0 Palm Beach 785,972 300,698 1,086,670 68.8 67.1 68.3 St. Lucie 172,131 59,152 231,283 15.1 13.2 14.5 District 9 1,142,737 448,462 1,591,199 100.0 100.0 100.0 Source: CON application #10201, page 11. July 1, 2013 population estimate from Florida Population Estimates 2010-2025 published February 2012. 6

District 9 Forecasted Adult Population by Age Cohort Calendar Years 2016 and 2017 CY 2016 CY 2017 County 18-64 65+ 18+ 18-64 65+ 18+ Indian River 81,894 43,424 125,318 82,521 44,956 127,477 Martin 85,744 45,346 131,090 86,167 46,713 132,880 Okeechobee 25,097 7,557 32,654 25,273 7,704 32,977 Palm Beach 814,440 324,330 1,138,770 820,136 333,271 1,153,407 St. Lucie 189,813 66,780 256,593 193,827 69,607 263,434 District 9 1,196,988 487,437 1,684,425 1,207,924 502,251 1,710,175 Source: CON application #10201, page 11. July 1, 2016 and 2017 from Florida Population Estimates 2010-2025 published February 2012. District 9 Adult Population Growth 2013 to 2017 County 18-64 65+ 18+ Indian River 6.1% 13.5% 8.6% Martin 4.1% 11.4% 6.6% Okeechobee 5.1% 9.2% 6.0% Palm Beach 4.3% 10.8% 6.1% St. Lucie 12.6% 17.7% 13.9% District 9 5.7% 12.0% 7.5% Source: CON application #10201, page 12. The applicant anticipates growth in all five District 9 counties for the next four years, with Martin County population percent increases exceeding those of Palm Beach and Okeechobee Counties. Currently, two District 9 counties lack licensed adult psychiatric beds: Martin and Okeechobee Counties. Of these two counties, Martin has four times the population and 100k more adult residents than Okeechobee, which the applicant states as evidence of greater need for inpatient behavioral health services in Martin County. Because Martin County lacks adult inpatient psychiatric services, residents requiring these services must travel to neighboring counties. There are nine total facilities in District 9 with adult psychiatric beds. The map below demonstrates the locations of the six most utilized facilities by Martin County residents: 7

District 9 Adult Psychiatric Facilities Utilized by Martin County Residents Source: Microsoft MapPoint 2013 8

Availability and Accessibility As of July 19, 2013, District 9 had 364 licensed and 30 approved adult psychiatric beds. District 9 s 364 licensed beds averaged 75.33 percent occupancy during the 12-month period ending December 31, 2012 3. Nine hospitals in three counties-palm Beach, St. Lucie, and Indian River account for all psychiatric beds in District 9. Of these nine hospitals, only two are freestanding specialty psychiatric hospitals: The Jerome Golden Center For Behavioral Health, Inc. and Port Saint Lucie Hospital. The applicant submits the following table to demonstrate current adult psychiatric bed distribution in District 9: District 9 Existing Adult Psychiatric Hospital Providers Provider County Licensed Beds 2012 Patient Days Occupancy Rate Indian River Medical Center Indian River 34 8,380 67.34% West Palm Hospital Palm Beach 61 19,222 86.10% Delray Medical Center Palm Beach 48 8,944 60.35% JFK Medical Center Palm Beach 31 6,785 59.80% The Jerome Golden Center For Behavioral Health, Inc. Palm Beach 44 10,504 65.23% St. Mary s Medical Center Palm Beach 40 10,804 73.80% Lawnwood Regional Med Center & Heart Institute St. Lucie 24 7,188 81.83% Port Saint Lucie Hospital St. Lucie 60* 20,064 91.37% St. Lucie Medical Center St. Lucie 22 6,400 79.48% District 9 364 98,291 75.33% Source: CON application #10201, page 14. Note: *This facility has District 9 s approved but not licensed 30 adult psychiatric beds that were approved October 22, 2008 through exemption #E0800006. The facility has renewed its licensed several times since, the last being June 2012 and to date (October 24, 2013) has not filed an application to add these beds. The average annual occupancy rate in 2012 for District 9 was 75.33 percent. The applicant states that because genders and some diagnoses cannot be co-mingled, it is likely that Port Saint Lucie Hospital, the largest of the freestanding hospitals, with 91.37 percent occupancy during CY 2012, operates at maximum capacity. Additionally, the applicant notes this facility has yet to implement a 30-bed adult psychiatric addition approved five years ago by the Agency. Treasure Coast Behavioral Health notes that adult inpatient psychiatric occupancy rates at the two acute care facilities with adult psychiatric beds nearest Martin County (Lawnwood Regional at 81.83 percent and St. Lucie Medical Center at 79.48 percent) exceed the district average. The largest unit in District 9, West Palm Hospital, is an acute care facility with 61 adult psychiatric beds and an occupancy rate of 86.10 percent in CY 2012. The applicant states that as population increases, so will occupancy rates in these facilities. 3 Florida Hospital Bed Need Projections and Service Utilization By District published July 19, 2013. 9

The following chart was submitted by the applicant comparing adult psychiatric inpatient beds per 1,000 population by District 9 counties, District 9, and statewide. District 9 Adult Inpatient Psychiatric Beds per 1,000 Population Martin 0.0 Okeechobee 0.0 Palm Beach 0.21 District 9 0.23 Florida 0.24 Indian River 0.29 St. Lucie 0.46 Source: CON Application #10201, page 15. Indian River and St. Lucie Counties both exceed District 9 and the state s beds per thousand population ratios. TCBH states the proposed seven inpatient beds would elevate Martin County s non-existent beds to 0.06 per 1,000 adult population, netting a positive effect on adult residents in the county and beyond in need of acute inpatient psychiatric services. Along with these seven beds, the applicant will establish a 33-bed adult residential treatment program for lesser acute inpatient needs, a partial hospitalization program and outpatient services. Market Dynamics Treasure Coast Behavioral Health, LLC discusses the four levels of behavioral health care (inpatient, residential, partial hospitalization programming, and outpatient), of which only outpatient is currently available in Martin County. With the addition of the proposed seven-bed project, all four levels of care will be available in this area. The applicant notes that Department of Children and Families (DCF) separates Palm Beach County from the other four District 9 counties, forming two separate DCF Circuits. DCF Circuit 19 includes Martin, Okeechobee, St. Lucie, and Indian River Counties, and has only one public provider of comprehensive mental health and substance abuse services and no private providers. By comparison, Palm Beach County DCF Circuit 15 has five public and two private Baker Act receiving facilities. New Horizons of the Treasure Coast, located in St. Lucie County, is the single DCF Circuit 19 non-profit community provider of comprehensive mental health and substance abuse services for adults and children, and is not eligible for Medicare/Medicaid HMO reimbursement. Per the applicant, New Horizon of the Treasure Coast s 2010-2011 Annual Report indicates the program served 11,158 patients in the 2010 to 2011 10

year, of which 16 percent were Martin County residents. 4 Outpatient services are provided within Martin County at New Horizon s office in Stuart, Florida. New Horizons of the Treasure Coast, Inc. s annual report documenting these statements was stated by the applicant to be included in the supporting materials. They were not found in the application. The applicant provides an overview of the utilization patterns by Martin County residents at District 9 adult psychiatric bed facilities: Port St. Lucie Hospital, located in St. Lucie County, is a 75-bed inpatient mental health facility, with a 2012 occupancy rate of 91 percent. The facility had a total of 955 MDC 19 discharges in CY 2012, of which 27.3 percent were Martin County residents. As previously noted, Port St. Lucie Hospital was approved five years ago by the Agency to add 30 adult psychiatric beds to its license, an addition that has yet to occur. St. Lucie Medical Center, a 229-bed acute care hospital has 22 adult psychiatric beds that reported almost 80 percent occupancy in CY 2012, and 236 or one in every four of the facility s psychiatric patients were residents of Martin County. Lawnwood Regional Medical Center, a 370-bed acute care hospital in Fort Pierce, St. Lucie County, has a 24-bed adult psychiatric unit that reported 82 percent average occupancy during CY 2012. Lawnwood Regional reported that 53 or 5.5 percent of the facility s 960 total adult psychiatric discharges in CY 2012 were residents of Martin County. In aggregate, Port St. Lucie Hospital, St. Lucie Medical Center and Lawnwood Regional Medical Center treated 76.4 percent of all Martin County adult psychiatric resident discharges, with a collective occupancy rate of 87 percent during CY 2012. West Palm Hospital, owned and operated by Hospital Corporation of America (HCA), is a 245-bed acute care hospital with 61 adult inpatient psychiatric beds that averaged 86.1 percent occupancy in CY 2012. Sixty two or 1.6 percent of the facility s total MDC 19 discharges were Martin County residents. 4 New Horizons of the Treasure Coast, Inc. s Fiscal Year 2010-2011 was October 1, 2010 through September 30, 2011, per the organization s budget data presented to the Indian River County Board of County Commissioners on April 21, 2011. Source: http://www.ircgov.com/departments/budget/2011-12/non-departmental-requests.pdf. 11

Per the applicant, the remaining five District 9 hospitals with licensed adult psychiatric beds are too geographically distant to provide service to statistically significant numbers of Martin County residents. Additionally, seven of the nine hospitals in the district are Baker Act receiving facilities. TCBH has conditioned approval of this application on the provision it will become a private Baker Act receiving facility for adults, the first in Martin County. Martin Health System Martin Health System is the only acute care hospital provider in Martin County, and has two campuses, Martin Hospital South (100 acute care beds) and Martin Medical Center (239 acute care and five Level II NICU beds), a total of 344 beds, none of which are adult psychiatric. The applicant submits the following chart demonstrating discharge rates for adults with psychiatric diagnoses from Martin Health System: Martin Health System (MHS) Utilization Ages 18+ Calendar Year 2012 MHS MDC 19 Inpatient Discharges 37 MHS ED Visits w/mental Illness Diagnosis 1,436 Martin County Residents 882 MHS Transfers from ED to Psych Hospitals 357 Martin County Residents 253 Source: CON application #10201, pages 18-19. Because transfers to New Horizons of the Treasure Coast are not reported, the exact number of patients transferred there from Martin County emergency departments is unknown. Historical Service Area Utilization The applicant states that in CY 2012, 720 Martin County adults were discharged with a mental disorder diagnosis, of which 689 were discharged from a hospital with licensed acute psychiatric hospital beds, an 11 percent increase in psychiatric discharges from the prior year. While 100 percent of the 689 Martin County residents discharged from hospitals with licensed psychiatric beds left their home county for treatment, five percent left the district altogether. 12

Martin County Psychiatric (MDC 19) Adult Discharges Calendar Year 2012 Martin County Resident discharges Ages 18-64 65+ Total Total Discharges From Any Hospital 576 144 720 Discharges from Licensed Psychiatric Providers 565 124 689 Discharges from District 9 Psych Hospitals 532 122 654 Source: CON application #10201, page 20. Note: Agency hospital discharge data for CY 2012 indicates that Martin Health System hospitals treated 27 of the 31 Martin County resident MDC 19 discharges from hospitals without inpatient psychiatric beds. Per the applicant, District 9 psychiatric discharges increased for residents from all counties except Okeechobee, as shown below: District 9 Resident Utilization (MDC 19) Adults Discharged From Psychiatric Hospital Providers Calendar Years 2010 through 2012 % Change, County CY 2010 CY 2011 CY 2012 2010-2012 Indian River 1,197 1,276 1,349 12.7% Martin 636 622 689 8.3% Okeechobee 134 151 131 (2.2)% Palm Beach 8,355 8,903 9,182 9.9% St. Lucie 1,578 1,761 1,925 22.0% District 9 11,900 12,713 13,276 11.6% Source: CON application #10201, page 21. As evidence of suppressed accessibility and availability of psychiatric services to Martin County residents, the applicant submits the following table, demonstrating District 9 psychiatric discharges and discharges as a percent of the total district: District 9 Adult Resident Utilization (MDC 19) Calendar Year 2012 Discharges Percent of Total Discharges County Ages 18-64 Ages 65+ Total 18+ Ages 18-64 Ages 65+ Total 18+ Indian River 1,227 122 1,349 10.6 7.3 10.2 Martin 565 124 689 4.9 7.4 5.2 Okeechobee 114 17 131 1.0 1.0 1.0 Palm Beach 8,023 1,159 9182 69.2 69.2 69.2 St. Lucie 1,671 254 1,925 14.4 15.2 14.5 District 9 11,600 1,676 13,276 100.0 100.0 100.0 Source: CON application #10201, page 21. While 7.2 percent (82,769/1,142,737 as of July 1, 2012) of District 9 residents ages 18-64 reside in Martin County, they account for only 4.9 percent of psychiatric cases in this age cohort. Similarly, Martin County s 41,942 residents age 65 and over represent 9.4 percent of District 9 s (448,462) age 65+ population, but just 7.4 percent of District 9 s total residents age 65 and over psychiatric discharges. 13

District 9 has a use rate of 8.5 psychiatric discharges per 1,000 population. The following table demonstrates county by county discharge rates to show Martin County remains below the district average: District 9 Resident Discharge Rate per 1,000 Population Calendar Year 2012 County Ages 18-64 Ages 65+ Age 18+ Indian River 16.1 3.2 11.7 Martin 6.9 3.0 5.6 Okeechobee 4.8 2.5 4.3 Palm Beach 10.3 3.9 8.6 St. Lucie 10.1 4.4 8.6 District 9 10.3 3.8 8.5 Florida 9.1 4.8 8.1 Source: CON application #10201, page 22. District 9 overall had the fifth highest adult psychiatric discharge use rate of the 11 Health Planning Districts statewide. Martin County ranks 37 th out of 67 state counties, and when compared by age cohort, ranks 31 st in discharge use rate per 1,000 populations ages 18-64, and 51 st for ages 65 and over. As further evidence of the suppressed use rates in Martin County, the applicant compares Martin County discharge use rates to those of the entire district, noting the age s 18-64 use rate is 33 percent lower in Martin County (6.9) than the district (10.3). The applicant restates Martin County discharges to demonstrate that if Martin County residents had equal access to adult psychiatric services as the average for the district, the number of adult psychiatric discharges in Martin County would have been 997 (an increase of 308 discharges). The table below demonstrates these findings: Restated Martin County Discharges Based on District 9 Discharge Use Rate per 1,000 Population Calendar Year 2012 County Ages 18-64 Ages 65+ Age 18+ Martin County Actual Cases 565 124 689 Martin County Population (2012) 81,612 41,086 122,698 District 9 Discharge Use Rate 10.3 3.8 -- Restated Martin County Cases 841 156 997 Difference, Restated vs Actual 274 32 308 Source: CON application #10201, page 23. Per the applicant, of the 689 actual Martin County residents who sought psychiatric treatment in hospitals with licensed psychiatric beds in CY 2012, nearly 80 percent were admitted at one of three St. Lucie hospitals, and another 15 percent at other District 9 providers, with approximately five percent seeking treatment outside District 9. The table below summarizes these findings: 14

Martin County Adult Resident Psychiatric (MDC 19) Discharges by Facility Calendar Year 2012 Provider County Cases Percent of Total Cumulative Percent Port Saint Lucie Hospital St. Lucie 261 37.9% 37.9% St. Lucie Medical Center St. Lucie 236 34.3% 72.1% Lawnwood Regional Medical Center & Heart Institute St. Lucie 53 7.7% 79.8% West Palm Hospital Palm Beach 62 9.0% 88.8% St. Mary s Medical Center Palm Beach 24 3.5% 92.3% Three Other D9 Facilities Indian River/Palm Beach 17 2.5% 94.8% District 9 Facility Total 653 94.8% -- Other Florida Hospitals 36 5.2% 100.0% Total 689 100.0% -- Source: CON application #10201, page 24. The applicant also discusses the Agency s inpatient and emergency room data tapes, stating that in 2012 there were 1,172 Martin County residents presenting with a mental disorder diagnosis at Florida hospital emergency departments and 182 were coded as being discharged to a psychiatric hospital. TCBH concludes that of the 182 discharges to psychiatric hospitals; 132 patients were from Martin Health System emergency departments, demonstrating need for inpatient psychiatric services within Martin County. Forecasted Utilization The applicant anticipates an 8.5 percent increase in psychiatric discharges in District 9 between CY 2012 (13,276 discharges) and year two of operations in 2017 (14,400 discharges). Forecasted discharge use rates by age cohort and county for 2016 and 2017 are shown below. District 9 Forecasted Psychiatric Discharges by Age Cohort Based on 2012 Actual Discharge Use Rates per 1,000 Population by County Calendar Years 2016 and 2017 CY 2016 CY 2017 County 18-64 65+ 18+ 18-64 65+ 18+ Indian River 1,318 137 1,455 1,328 142 1,470 Martin 594 137 730 597 141 738 Okeechobee 121 19 139 122 19 141 Palm Beach 8,423 1,277 9,700 8,482 1,312 9,795 St. Lucie 1,908 297 2,205 1,948 309 2,258 District 9 12,364 1,866 14,230 12,477 1,923 14,400 Source: CON application #10201 page 25. St. Lucie County is anticipated to have the highest growth in discharge use rates at 17.3 percent. As stated previously, adult inpatient psychiatric beds in this county have an annual occupancy rate of 87 percent. Palm Beach County will experience the greatest increase in actual volume, further limiting available resources for Martin County residents. The applicant anticipates a 7.1 percent increase in Martin County adult psychiatric cases between 2012 and 2017, which it 15

contends is a conservative estimate due to suppressed discharge use rates resulting from the lack of available psychiatric services within Martin County. District Growth in Psychiatric Discharges Based on 2012 Actual Discharge Use Rates per 1,000 Population by County Calendar Years 2012 and 2017 (Year Two) County CY 2012 CY 2017 Growth in Cases Percent Growth Indian River 1,349 1,470 121 9.0% Martin 689 738 49 7.1% Okeechobee 131 141 10 7.6% Palm Beach 9,182 9,795 613 6.7% St. Lucie 1,925 2,258 333 17.3% District 9 13,276 14,400 1,124 8.5% Source: CON application #10201 page 26. As previously discussed, the applicant presents Martin County discharge use rates on par with District 9 use rates which would result in an additional 338 discharges from Martin County: District Growth in Psychiatric Discharges Based on 2012 Actual Discharge Use Rates per 1000 Population by County With Martin County at District Wide Average Calendar Years 2012 and 2017 (Year Two) Growth in County CY 2012 CY 2017 Cases Percent Growth Martin 689 1,076 387 56.2% All Other District 9 Counties 12,587 13,664 1,077 8.6% District 9 13,276 14,740 1,464 11.0% Source: CON application #10201, page 26. Bed Need & TCBH Forecasted Utilization The applicant is responding to the fixed bed need for seven adult inpatient psychiatric beds in District 9 for the January 2019 planning horizon, published July 19, 2013 (see the table below). AHCA s District 9 Adult Inpatient Psychiatric Bed Need Projections January 2019 Planning Horizon Number of Adult Inpatient Days for 12 Month Period 98,291 Population, Ages 18+ for Preceding Year 1,561,668 Population, Ages 18+ for Planning Year 1,746,327 Projected Use Rate per 1,000 Population 62.93975 12-Month Occupancy Rate for District 75.33% Number of Licensed Beds 364 Number of Approved Beds 30 Gross Need 401 Adult Psychiatric Bed Need Unadjusted for Occupancy Threshold 7 Adult Psychiatric Bed Need Adjusted for Occupancy Threshold 7 Source: CON application #10201, page 27. The applicant applied the 2012 discharge use rate in Martin County to the 2017 forecasted Martin County populations by age cohort to show support for 22 adult psychiatric beds. 16

Martin County Adult Psychiatric Bed Demand Calendar Year 2017 Martin County Ages 18-64 Ages 65+ Ages 18+ Discharges 597 141 738 Average Length of Stay 8.0 Patient Days 4,776 1,128 5,904 Average Daily Census 13.1 3.1 16.2 Bed Need @ 75% Occupancy 18 4 22 Existing & Approved Beds 0 0 0 Net Bed Need 18 4 22 Source: CON application #10201 page 26. Despite this estimate of 22 beds, the applicant is responding to Agency published need of seven beds, which the applicant anticipates will quickly experience stabilized occupancy. It is noted that the facility will be able to add beds by exemption if needed. TCBH expects to capture 33 percent of Martin County adult resident psychiatric discharges in the first two years of operations, with an additional 10 percent in-migration from neighboring counties, minimizing adverse impact on other District 9 providers. Treasure Coast Behavioral Health Seven-Bed Adult Inpatient Psychiatric Hospital Projected Discharges Calendar Years 2016 and 2017 TCBH Forecasted Cases 2016 Year One 2017 Year Two Martin County Residents 235 245 In-Migration (10%) 26 27 Total 261 272 Martin County Market Cases 730 738 TCBH Market Share 32.2% 33.2% Source: CON application #10201, page 28. Applying an eight-day length of stay, the applicant forecasted TCBH cases for year one and two of operations, showing an average daily census (ADC) between 5.7 and six patients with 85 percent occupancy by 2017 (see table below). Treasure Coast Behavioral Health Seven-Bed Adult Inpatient Psychiatric Hospital Projected Utilization Calendar Years 2016 and 2017 2016 Year One 17 2017 Year Two TCBH Cases 261 272 Average Length of Stay 8 8 Patient Days 2,091 2,172 Average Daily Census 5.7 6.0 Occupancy Rate 81.6% 85.0% Source: CON application #10201, page 28. TCBH anticipates Medicare or Medicare HMO patients will account for slightly more than half of all patient days, noting that as a new provider, the applicant must complete a Medicare Certification program lasting

approximately six months. By year two of operations, Medicaid is expected to account for seven percent of annual patient days, and another 2.5 percent of its patient days for charity care patients. Forecasted patient days by payor category are shown below. Treasure Coast Behavioral Health Projected Patient Days by Payor Calendar Years One and Two 2016 Year One 2017 Year Two Payor Category Medicare 547 1,086 Medicare HMO 77 152 Managed Care 1,128 674 Medicaid HMO 246 152 Self-Pay/Charity Care 93 108 Total 2,091 2,172 Source: CON application #10201, page 29. The applicant also includes forecasted utilization for the 33 residential treatment beds that will be developed in conjunction with this project (see below). Treasure Coast Behavioral Health Projected Utilization, 33 Residential Treatment Beds Calendar Years One and Two Payor Category 2016 Year One 2017 Year Two Commercial 248 365 Managed Care 3,915 5,754 Medicaid HMO 1,242 1,826 Self-Pay/Charity Care 807 1,187 Total 6,212 9,132 Occupancy Rate 51.4% 75.8% Source: CON application #10201, page 29. As shown above, the residential treatment beds will accept Medicaid and charity care patients. In combination with the seven-bed inpatient psychiatric program, the applicant states a complete spectrum of mental health services will be available to Martin County residents upon completion of the project. Impact on Existing Providers TCBH states that the proposed project will positively impact existing providers and residents of District 9 by improving access and availability of psychiatric services in Martin County. The applicant indicates this is supported by the occupancy rates at existing facilities with licensed psychiatric beds and that the addition of seven beds within Martin County will support the needs of a growing District 9 population. As previously stated, the applicant cites Martin County s projected adult (age 18 and over) population increase of 6.6 percent from 131,090 in CY 2013 to 132,880 in 2017 (the project s second year of operation). 18

Community Support For The Project The applicant discusses the Martin County Health Collaborative, established in 2009 for the purpose of improving the health of Martin County residents. Comprised of a 17-member steering committee and four subcommittees, the collaborative completed a health assessment in December 2010 and published a Community Health Improvement Plan for Martin County in September 2012, a copy of which is included in Volume 3, Tab 7 of the application. Treasure Coast Behavioral Health, LLC indicates that its project will address one of the plan s goals which is to improve access to, and awareness of, mental health services in Martin County. This will be accomplished by the facility s: Certification by Centers for Medicare and Medicaid Services (CMS) to become eligible for Medicare reimbursement Forecasted provision of nearly 12 percent of total annual patient days by year two of operations to the treatment of Medicaid HMO, self-pay, and charity care patients Contracting with all major insurance/managed care plans Conditioning approval of the application on the provision that TCBH become an active participant in the Martin County Health Collaborative and participate on any mental health committee by year two of operations. In conclusion, the applicant restates factors it contends demonstrate need for the project: Agency published need of seven adult psychiatric beds for District 9 General health planning principles including out-migration and occupancy level of closest providers Void of existing behavioral health inpatient beds, residential beds, crisis stabilization unit (CSU) beds, and any other adult mental health services in Martin County. 2. Agency Rule Criteria/Preferences a. Chapter 59C-1.040, Florida Administrative Code, contain factors to be considered in the review of Certificate of Need Applications for hospital inpatient general psychiatric services for adults. The applicant reviews the scope of the proposed project, discusses procedures that will be used to evaluate patients for admission to the proposed facility, and notes that every patient will have a principal mental health diagnosis. TCBH refers to the clinical admission criteria policies and procedures in place at UHS s Windmoor Healthcare of 19

Clearwater, a 120-bed (98 adult psychiatric and 22 adult substance beds) Class III specialty psychiatric hospital in Pinellas County, Florida. TCBH states that the same standards used for admission by Windmoor will be used for the proposed project. Windmoor s clinical admission policy is included in Volume 3, Tab 10 of CON application #10201. TCBH states the proposed project will be located in Martin County, serve only adults ages 18 and over, and will comply with all housing and design standards for psychiatric hospitals. Additionally, all required service standards will be provided, including: Emergency Screening Services Pharmacology Individual Therapy Family Therapy Family and Patient Education Activities Therapy Discharge Planning Referral Services. As stated previously, the applicant indicates that Martin County Health Collaborative s Martin County Community Health Improvement Plan, as well as the Florida Department of Children and Families Substance Abuse and Mental Health Services Plan 2011-2013 were utilized in designing the proposed project, in the absence of a Local Health Council Plan, which does not currently exist. 1. Rule 59C-1.040(4)(e) 3, Florida Administrative Code: In order to ensure access to hospital inpatient general psychiatric services for Medicaid-eligible and charity care adults, 40 percent of the gross bed need allocated to each district for hospital inpatient general psychiatric services for adults should be allocated to general hospitals. As stated previously, there are nine adult psychiatric hospital providers in District 9, of which seven are located in general medical/surgical hospitals. Upon completion of the proposed seven-bed project, 64.8 percent of all District 9 bed inventory will be allocated to general hospitals in compliance with this criteria. 5 5 This calculation includes the 30 adult psychiatric beds (Exemption #E0800006) approved October 22, 2008 for Port Saint Lucie Hospital. 20

District 9 Psychiatric Hospital Providers Provider County Licensed Beds Approved & Proposed Beds Indian River Medical Center Indian River 34 34 West Palm Hospital Palm Beach 61 61 Delray Medical Center Palm Beach 48 48 JFK Medical Center Palm Beach 31 31 St. Mary s Medical Center Palm Beach 40 40 Lawnwood Regional Medical Center & Heart Institute St. Lucie 24 24 St. Lucie Medical Center St. Lucie 22 22 General Hospitals, Percent of Total 71.4% 64.8% The Jerome Golden Center For Behavioral Health, Inc. Palm Beach 44 44 Port St. Lucie Hospital St. Lucie 60 90 Treasure Coast Behavioral Health Martin 0 7 Freestanding, Percent of Total 28.6% 35.2% District 9 Total Beds 364 401 Source: CON application #10201, page 50. 2. Rule 59C-1.040(4)(e) 4, Florida Administrative Code: Regardless of whether bed need is shown under the need formula, no additional hospital inpatient general psychiatric beds for adults shall normally be approved in a district unless the average annual occupancy rate of the licensed hospital inpatient general psychiatric beds for adults in the district equals or exceeds 75 percent for the 12-month period ending six months prior to the beginning date of the quarter of the publication of the fixed bed need pool. District 9 s adult inpatient psychiatric beds experienced 75.33 percent occupancy during the CY 2012 reporting period. b. Priority Considerations for hospital inpatient general psychiatric services (Rule 59C-1.040 (5) (i), Florida Administrative Code) (NOTE: All references to child/adolescent psychiatric services are deleted). In weighing and balancing statutory and rule review criteria, preference will be given to both competing and non-competing applicants who: 1. Provide Medicaid and charity care days as a percentage of their total patient days of total patient days provided by other hospitals in the district, as determined for the most recent calendar year prior to the year of the application for which data are available from the Health Care Board. The applicant s provision of Medicaid and charity care is shown in section E. 3. g. of this report. 21

2. Propose to serve the most seriously mentally ill patients to the extent that these patients can benefit from a hospitalbased organized inpatient treatment program. Per the applicant, the hospital will be equipped to serve the most seriously mentally ill patients, including suicidal patients, those with acute schizophrenia and patients with severe depression. TCBH will provide care targeted at those for whom outpatient care is not clinically appropriate, and provide referrals whenever possible to patients ineligible for admission to the inpatient program. 3. Propose to serve Medicaid-eligible persons. The applicant will serve Medicaid-eligible persons. TCBH proposes to condition project approval to provide at least 10 percent of the seven-bed facility s TAPDs to a combination of Medicaid HMO/charity care/self-pay by year two of operation and thereafter. 4. Propose to serve individuals without regard to their ability to pay. The applicant will provide care to financially and medically indigent patients as discussed in sections E. 2. b. 3. (above) and E. 2. e. 9. of this report. 5. Agree to be a designated public or private receiving facility. TCBH conditions approval of the application on becoming a private Baker Act receiving facility, the first of its kind located in Martin County. b. Minimum Size of Specialty Hospitals (Rule 59C-1.040(3)(e) Florida Administrative Code). A specialty hospital providing hospital inpatient general psychiatric services shall have a minimum total capacity of 40 beds. The minimum capacity of a specialty hospital providing hospital inpatient general psychiatric services may include beds used for hospital inpatient substance abuse services regulated under Rule 59C-1.041, Florida Administrative Code. The separately organized units for hospital inpatient general psychiatric services for adults in specialty hospitals shall have a minimum of 15 beds (Rule 59C-1.040(5), Florida Administrative Code). The applicant responds that the proposed facility, with a seven-bed adult psychiatric unit and 33-bed residential adult beds meet the intent of this criterion. 22

c. Access Standard. Hospital inpatient general psychiatric services should be available within a maximum ground travel time of 45 minutes under average travel conditions for at least 90 percent of the district's total population (Rule 59C-1.040(6), Florida Administrative Code). The applicant states this condition has been met by existing facilities. However, Martin County represents a distinct medical market with a void in mental health services. d. Quality of Care. 1. Compliance with Agency Standards. Hospital inpatient general psychiatric services for adults shall comply with the Agency standards for program licensure. Applicants who include a statement in their certificate of need application that they will meet applicable Agency licensure standards are deemed to be in compliance with this provision (Rule 59C- 1.040(7)(a), Florida Administrative Code). TCBH states it will comply with Agency standards for program licensure. 2. Continuity. Providers of hospital inpatient general psychiatric services shall also provide outpatient services, either directly or through written agreements with community outpatient mental health programs, such as local psychiatrists, local psychologists, community mental health programs, or other local mental health outpatient programs (Rule 59C-1.040(7)(d), Florida Administrative Code). The applicant states intent to provide continuity when patients are discharged from the inpatient setting, with a referral network for outpatient services, partial hospitalization programming, residential facilities, CSUs, community mental health programs, local psychiatrists and psychologists. 3. Screening Program. All facilities providing hospital inpatient general psychiatric services shall have a screening program to assess the most appropriate treatment for the patient. Patients with a dual diagnosis of a psychiatric disorder shall be evaluated to determine the types of treatment needed, the appropriate treatment setting, and, if necessary, the appropriate sequence of treatment for the psychiatric and substance abuse disorders (Rule 59C-1.040(7)(e), Florida Administrative Code). 23

TCBH states that any individual presenting to the proposed facility will be screened for the appropriate level of care. The applicant states an emergency medical screening model used by Windmoor Healthcare will be adopted by TCBH, and provides a copy of Windmoor s triage and intake assessment policy in Volume 3, Tab 10 of the application. e. Services Description (Rule 59C-1.040(8), Florida Administrative Code). An applicant for hospital inpatient general psychiatric services shall provide a detailed program description in its certificate of need application including: 1. Age groups to be served. TCBH proposes to serve adult patients (age 18 and over) including geriatric patients (age 65 and over). 2. Specialty programs to be provided. The applicant indicates that it will provide a general psychiatric program that includes traditional medical and clinical therapies, as well as alternative programs such as relaxation, nutrition, movement, and spiritual support. Clinical services will provide crisis intervention, individual, group and family therapies, and discharge planning. Additionally, nursing services, pharmacology, activities therapy, discharge planning and referral services will be available to patients. 3. Proposed staffing, including the qualifications of the clinical director and a description of staffing appropriate for any specialty program. TCBH proposes the following staff and FTE counts, for years one and two of the seven-bed adult inpatient psychiatric program. 24

CON application #10201 Forecasted Full Time Equivalents Year One Ending 12/31/2016 and Year Two Ending 12/31/2017 Position Year One Year Two Administration Total FTEs Total FTEs CEO 0.31 0.23 CFO 0.15 0.12 Director of Nursing 0.31 0.23 Intake Director 0.56 0.47 Director of Marketing 0.50 0.50 Director of QA/Risk Management 0.31 0.23 Director of Human Resources 0.31 0.23 Assessment Counselor 0.56 0.47 Admissions Clerk 1.12 1.12 Business Office Manager 0.31 0.23 Biller/Collector 0.31 0.23 Utilization Review-RN 0.56 0.47 Receptionist/Switchboard 0.31 0.23 A/P/Payroll Clerk 0.31 0.23 Admin Assistant 0.31 0.23 Medical Records Director 0.56 0.47 Other: Training/Orientation 0.31 0.23 Physicians Unit/Program Director Contract Contract Nursing RN 5.80 5.80 Mental Health Tech 4.80 4.80 Dietary Dietary Supervisor 0.31 0.23 Cooks 0.31 0.23 Dietary Aides 0.31 0.23 Social Services Social Services Director (Therapists) 1.10 1.10 Therapists 0.0 0.00 Recreational Therapist 0.13 0.10 Housekeeping Housekeeping Supervision 0.18 0.18 Housekeepers 0.35 0.35 Laundry Contract Contract Plant Maintenance Maintenance Supervisor 0.18 0.18 Grand Total FTEs 20.5 19.16 Source: CON application #10201, Schedule 6A. 25

The applicant provides brief bibliographies of key UHS corporate management personnel and two UHS Florida hospital CEO s (including the CEO s resumes) in Volume 3, Tab 12 of the application. 4. Patient groups by primary diagnosis ICD-9 code that will be excluded from treatment. TCBH indicates that it will exclude patients with organic and dementia for which significant clinical intervention would not produce positive results, including: Those who are mentally retarded 6 without corresponding affective disturbances or thought disorder Those who require custodial care rather than active psychiatric treatment Involuntary admission involving charges for Capital Offenses (i.e. murder) and felony cases; or Those, whose organicity will, in the judgment of a psychiatrist, not progress with a course of inpatient care. 5. Therapeutic approaches to be used. TCBH s mission is to assist patients and residents in meeting their needs and goals. A clinical services team will provide assistance to patients through diverse coping methods including crisis interventions, group and family therapy, and discharge planning. TCBH discusses eight services the facility will offer including: Nursing Services Individual Therapy Family Therapy Family and Patient Education Pharmacology Activities Therapy Discharge Planning Referral Services. The applicant provides additional documentation of UHS programs in Volume 2, Tab 3 of the application. 6 The reviewer notes the term mentally retarded has been replaced with intellectually disabled per Rosa s Law, signed by President Obama, October 5, 2010. 26