MARYLAND HEALTH CARE COMMISSION

Craig Tanio, M.D.

CHAIR

Ben Steffen

EXECUTIVE DIRECTOR

MARYLAND HEALTH CARE COMMISSION

4160 PATTERSON AVENUE ? BALTIMORE, MARYLAND 21215 TELEPHONE: 410-764-3460 FAX: 410-358-1236

MEMORANDUM

TO:

FROM: RE: DATE:

Commissioners, Maryland Health Care Commission

Anne Arundel Medical Center University of Maryland Baltimore Washington Medical Center

Anne Arundel County Health Department Dimensions Health Corporation d/b/a Prince George's Hospital Center LifeBridge Health, Inc. MedStar Union Memorial Hospital MedStar Washington Hospital Center Anne Arundel County

Craig P. Tanio, M.D. Chair/Reviewer

Recommended Decision Baltimore Upper Shore Cardiac Surgery Review Docket Nos.: 15-02-2360 and 15-02-2361

December 30, 2016

Enclosed is my Recommended Decision in the comparative review of two Certificate of Need applications proposing the introduction of cardiac surgery services in the Baltimore/Upper Shore health planning region established in COMAR 10.24.17 for regulatory oversight of cardiac surgery services. Having considered the applications, comments on the applications, responses to comments, and additional information in the record of this review, I recommend that the application of Anne Arundel Medical Center, Inc. ("AAMC") for a Certificate of Need to introduce cardiac surgery services be APPROVED with conditions. I also recommend that the application of the University of Maryland Baltimore Washington Medical Center, Inc. ("BWMC") to introduce cardiac surgery services be DENIED.

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Commissioners Applicants, Interested Parties, and Participating Entity December 30, 2016 Page 2

I recommend that, if the Commission adopts my Recommended Decision as its decision, the following conditions be placed on the Certificate of Need issued to Anne Arundel Medical Center:

1. If the cardiac surgery program at AAMC fails to achieve a volume of at least 200 open heart surgery cases in its second year of operation, AAMC will fully cooperate with MHCC's required evaluation of closure of the program, under COMAR 10.24.17.04B(1)(b);

2. The Johns Hopkins Hospital will not approach the Health Services Cost Review Commission to request an increase in global budgeted revenue that has as any part of its basis, the lost revenue generated by cardiac surgery services that have shifted to Anne Arundel Medical Center; and

3. Anne Arundel Medical Center will not approach the Health Services Cost Review Commission to request an increase in global budgeted revenue that has, as any part of its basis, the objective of obtaining additional revenue from the provision of cardiac surgery services.

I recommend that Anne Arundel Medical Center's application to establish cardiac surgery services be approved because it has the highest potential for establishment of a lower charge cardiac surgery program that will also be high performing. AAMC is the larger of the two applicant hospitals and has a larger service area base than BWMC from which to draw patients. Geographically, AAMC is better positioned than BWMC to draw from the two urban areas in which all but two of the programs serving Maryland residents are currently located: Baltimore City and County, with five programs; and Washington, D.C. and its two contiguous Maryland suburban jurisdictions, Montgomery and Prince George's Counties, with six programs. Anne Arundel Medical Center is also better positioned to have the greatest impact on reducing travel time for cardiac surgery services, given the access it affords to the population of Maryland's Eastern Shore in the mid-Shore jurisdictions of Caroline, Kent, Queen Anne's, and Talbot Counties, and also to the population of northern Calvert County.

I recommend that only one new cardiac surgery program be created at this time. Each of the proposed programs has potential for reducing the charges paid by patients and payers for cardiac surgery services and each applicant hospital, working in collaboration with its partner hospital or system affiliate, could develop a safe and clinically competent program. AAMC has entered into a collaborative relationship with Johns Hopkins Medicine and the cardiac surgery program at The Johns Hopkins Hospital in Baltimore to develop its proposed cardiac surgery program. BWMC has proposed development of its program in collaboration with the cardiac surgery program at the University of Maryland Medical Center in Baltimore and the University of Maryland Medical System, of which it is a member hospital.

I note that I considered the market feasibility and the impact of two new programs being developed at the same time. However, a new cardiac surgery program is required by COMAR 10.24.17, the Cardiac Surgery Chapter of the State Health Plan, to achieve a required minimum volume of open heart surgery cases. The approval of two new cardiac surgery programs at the

Commissioners Applicants, Interested Parties, and Participating Entity December 30, 2016 Page 3

same time could risk the creation of two low volume, underperforming programs that could require ongoing corrective actions by the Commission, possibly leading to closure of one or both programs.. I concluded that the most prudent approach is to recommend approval of only the stronger application, that of Anne Arundel Medical Center.

REVIEW SCHEDULE AND FURTHER PROCEEDINGS

This matter will be placed on the agenda of a meeting of the Maryland Health Care Commission on January 26, 2017, beginning at 1:00 p.m., at 4160 Patterson Avenue in Baltimore. The Commission will issue a final decision based on the record of the proceeding.

As provided in COMAR 10.24.01.09B, each applicant and interested party may submit written exceptions to the enclosed Recommended Decision. Written exceptions and argument must identify specifically those findings or conclusions to which exception is taken, citing the portions of the record on which each exception is based. Each applicant and interested party must submit 20 copies of its written exceptions. Copies of exceptions and responses to exceptions must be emailed to all parties by the due date and time, but the required copies may be filed with the Commission by noon on the next business day.

I note that, because a participating entity does not have a right of judicial appeal, Commission regulations do not grant a participating entity the right to file exceptions to a Recommended Decision. I want to point out that a participating may, in accordance with COMAR 10.24.01.09C, request that the Chair of the Commission permit it to make an oral presentation to the MHCC before action is taken on an application for Certificate of Need. If Anne Arundel County desires to speak before the Commission takes action on my Recommended Decision, it should make such a request and file comments regarding the Recommended Decision by the deadline for the filing of exceptions.

Oral argument on the exceptions during the hearing before the Commission is limited to ten minutes per applicant and ten minutes per interested party, unless extended by the Chair of the Commission or the Chair's designated presiding officer. The schedule for the submission of exceptions and responses is as follows:

Submission of exceptions

January 11, 2017 No later than 4:00 pm

Submission of responses

January 19, 2017 No later than 4:00 pm

Exceptions hearing

January 26, 2017 1:00 pm

IN THE MATTER OF

*

BEFORE THE

*

BALTIMORE/UPPER SHORE *

MARYLAND HEALTH

*

CARDIAC SURGERY REVIEW *

CARE COMMISSION

*

Anne Arundel Medical Center *

Docket No. 15-02-2360

*

*

University of Maryland

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Baltimore Washington Medical *

Center

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Docket No. 15-02-2361

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* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Reviewer's Recommended Decision

January 26, 2017 (Released December 30, 2016)

TABLE OF CONTENTS

PAGE

I. INTRODUCTION.........................................................................................................1

A. The Applicants ..........................................................................................................1 B. The Projects...............................................................................................................1 C. Recommended Decision............................................................................................2

II. PROCEDURAL HISTORY.........................................................................................3

A. Record of the Review................................................................................................3 B. Interested Parties in the Review ................................................................................5 C. Participating Entity in the Review ............................................................................6 D. Community Comments .............................................................................................6

III. BACKGROUND ...........................................................................................................7

A. Delivery of Cardiac Surgery Services ......................................................................7 B. Population of the Baltimore/Upper Shore Region ..................................................12

IV. REVIEW AND ANALYSIS .......................................................................................12

A. COMAR 10.24.01.08G(3)(a)-THE STATE HEALTH PLAN...........................13

COMAR 10.24.17 ? Specialized Health Care Services - Cardiac Surgery and Percutaneous Coronary Intervention Services ...........................................13

.04 Commission Program Policies .................................................................13 A. Consideration of New Programs.................................................................13

(1) Cardiac Surgery ....................................................................................13

.05 Certificate of Need Review Standards for Cardiac Surgery Programs .......................................................................................................... 14 A. Cardiac Surgery Standards...........................................................................15

(1) Minimum Volume Standard ................................................................15 (2) Impact...................................................................................................32 (3) Quality..................................................................................................42 (4) Cost Effectiveness ...............................................................................52 (5) Access...................................................................................................62 (6) Need .....................................................................................................69 (7) Financial Feasibility ............................................................................76 (8) Preference in Comparative Reviews ....................................................96

B. COMAR 10.24.01.08G(3)(b)-NEED ....................................................................96

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