Shands Jacksonville Medical Center, Inc. v. State, Department of Health

123 So. 3d 86, 2013 WL 4859092
CourtDistrict Court of Appeal of Florida
DecidedSeptember 12, 2013
DocketNos. 1D12-2998, 1D12-3451, 1D12-3453
StatusPublished
Cited by2 cases

This text of 123 So. 3d 86 (Shands Jacksonville Medical Center, Inc. v. State, Department of Health) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shands Jacksonville Medical Center, Inc. v. State, Department of Health, 123 So. 3d 86, 2013 WL 4859092 (Fla. Ct. App. 2013).

Opinion

WOLF, J.

The above-styled cases are consolidated for purposes of this opinion. Appellants are all hospitals with existing trauma centers that petitioned for formal administrative hearings to contest the Department of Health’s (DOH) granting of provisional licenses to nearby hospitals, appellees, to operate new trauma centers. In case 1D12-2998, Shands Jacksonville Medical v. Orange Park Medical Center and State of Florida, Department of Health, appellant Shands Jacksonville Medical (Shands) challenged a provisional license granted to Orange Park Medical Center (Orange Park). In 1D12-3451, Florida Health Sciences Center, Inc., d/b/a Tampa General Hospital, and Bayfront Medical Center, Inc. v. State of Florida, Department of Health and HCA Health Services of Florida, Inc., d/b/a Regional Medical Center Bayonet Point and HCA Health Services of Florida, Inc., d/b/a Blake Medical Center, appellants Bayfront Medical Center (Bayfront) and Tampa General Hospital (Tampa General) challenged provisional licenses granted to appellees Regional Medical Center Bayonet Point (Bayonet Point) and Blake Medical Center (Blake). In 1D12-3453,St Joseph’s Hospital, Inc., d/b/a St. Joseph’s Hospital v. State of Florida, Department of Health, et al., appellant St. Joseph’s Hospital (St.Joseph’s) also challenged the provisional license for Bayonet Point. These petitions were all consolidated below and dismissed by DOH for lack of standing.

We determine that DOH erred in dismissing the challenges for lack of standing because the substantial interests of the existing trauma care centers are within the zone of interest protected by the trauma care statutes, which require DOH to consider the impact that new trauma centers will have on existing trauma centers. We also find the intent to issue a provisional license is a proposed final agency action that existing trauma centers have a right to challenge. See Save Our Creeks v. State of Fla. Fish & Wildlife Conservation Comm’n, 112 So.3d 128 (Fla. 1st DCA 2013).

As noted above, each of the appellants, hospitals with existing trauma centers, alleged in their petitions that their substantial interests were being affected by DOH’s decision to grant provisional trauma center licenses to the applicants. In particular, they realleged the factual findings of an administrative law judge in a rule challenge they previously filed against DOH. In that prior proceeding, appellants challenged rule 64J-2.010 of the Florida Administrative Code, which regulated the apportionment of trauma centers across the state.

After a formal hearing on the rule challenge, the ALJ in that case determined [88]*88that appellants’ rights would be substantially affected if appellees’ trauma center applications — which were pending at that time — were granted pursuant to the rule. See Bayfront Med. Ctr., Inc., et al. v. Dep’t of Health, Case No. 11-2602RX (Fla.2011) (final order), available at http://doah.state. fl.us/ROS/2011/11002602.pdf [hereinafter Rule Challenge Final Order], The ALJ found “because of the intensity of resources that must be devoted to a trauma center, hospitals generally lose money in their operation.” Id. at 41. Specifically, the ALJ found in 2010, appellant Tampa General’s trauma center had a net loss of $15.7 million; Bayfront’s trauma center lost $8 million; Shands’ trauma center lost $2.7 million; and St. Joseph’s trauma center lost $8.8 million. Id. The ALJ found if appellees’ applications for new trauma centers were granted, these losses would increase. Id. at 45. DOH protocol requires that trauma patients be taken to the closest trauma center. Thus, the ALJ found the new trauma centers would divert patients and revenue away from the existing centers. The ALJ found appellant Bayfront would lose approximately 400 trauma patients a year, which would reduce its profit margins by at least $2.3 million annually. Id. Tampa General would lose 120 patients and over $1 million annually, and St. Joseph’s would lose between 149 to 307 patients annually. Id. Additionally, though appellee Orange Park was not a party to the rule challenge, the ALJ found that if Orange Park’s pending application were approved, Shands would lose 25 percent of its patients and it would lose an additional $6-7 million, for a total of $10 million annually. Id. at 46.

In addition to financial loss, the ALJ found the new trauma centers would cause non-economic injury. The ALJ explained that trauma centers were required to have numerous different kinds of physicians and specialists on call at all times. The ALJ found that “the approval of new trauma centers in relatively close proximity to existing centers will result in increased competition for scarce surgical subspecialists.” Id. at 46. Specifically, the ALJ found the new trauma centers were “likely to increase the difficulty and escalate the cost of ensuring adequate on-call specialty physician coverage for the [appellants’] hospitals and to adversely affect their ability to retain highly skilled nurses, technicians, and other trauma program staff.” Id. at 46-47. Thus, the ALJ concluded appellants demonstrated injury in fact under the Agrico1 test because the approval of the new trauma centers would “result in an immediate reduction in trauma patient volume as well as increased staffing challenges.” Id. at 50.

In this case, appellees do not contest that appellants will suffer these injuries. However, they argue these injuries are economic in nature and, therefore, insufficient unless the injuries are within the zone of interest protected by statute. Thus, whether or not these injuries are protected by the zone of interest of the relevant trauma center statutes is the crucial issue here.

i. Legislative History and Rule 6IJ — 2.010

The legislative history of the trauma care statutes is outlined in a report prepared by DOH which was directed by the 1998 appropriations bill. Fla. Dep’t of Health, Trauma System Report “Timely Access to Trauma Care” (1999). This report was submitted in this case by appellants below. The report explained that in the early 1980’s, the Legislature passed trauma care legislation that permitted the establishment of trauma care centers by [89]*89application; however, “there was not a system approach to trauma care.” Id. at 3. In the mid-1980’s there were thirty-three trauma centers in Florida; however, by 1988, there were only twelve. The report stated the cause of this drop was “the cost of providing trauma care and competition for scarce resources.” Id. From 1987 to 1990, multiple studies were conducted, and a proposal was generated for the state to subsidize trauma centers.

The report noted that in 1990, the Legislature passed comprehensive legislation to regulate and partially subsidize trauma centers. Id. at 4; see also Ch. 90-284, Laws of Fla. In what was later codified as section 395.402, the Legislature created nineteen trauma service areas in the state; each service area would have at least one trauma center, with not more than forty-four centers statewide. See Ch. 90-284, § 5, Laws of Fla.; § 395.033, Fla. Stat. (1991) (renumbered as § 395.402 by ch. 92-289, Laws of Fla.). A related statute, later codified as section 395.4025, directed DOH’s predecessor to establish an “approximate number of state-sponsored trauma centers needed to ensure reasonable access to high quality services” within each trauma service area. See Ch.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Florida Health Sciences Center, Inc. v. State, Department of Health
128 So. 3d 975 (District Court of Appeal of Florida, 2013)
Shands Teaching Hospital & Clinics, Inc. v. State, Department of Health
124 So. 3d 280 (District Court of Appeal of Florida, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
123 So. 3d 86, 2013 WL 4859092, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shands-jacksonville-medical-center-inc-v-state-department-of-health-fladistctapp-2013.