State of Tennessee Health Services and Development Agency ......Further, VUMC serves as net hospital...

1

State of Tennessee Health Services and Development Agency Andrew Jackson Building, 9th Floor, 502 Deaderick Street, Nashville, TN 37243 www.tn.gov/hsda Phone: 615-741-2364 Fax: 615-741-9884

CERTIFICATE OF NEED APPLICATION

SECTION A: APPLICANT PROFILE

1. Name of Facility, Agency, or Institution Vanderbilt Rutherford Hospital ___________________________ Name A parcel of land at an unaddressed site on Veterans Parkway located southeast of the intersection of Veterans Parkway and S.R. 840 Street or Route Rutherford_________ County

Murfreesboro________________________ TN_________ 37128_____ City State Zip Code

Website address: www.vanderbilthealth.com__________________________________

Note: The facility’s name and address must be the name and address of the project and must be consistent with the Publication of Intent.

2. Contact Person Available for Responses to Questions

Ginna Felts_________________________________ Vice President_____ Name Title

Vanderbilt University Medical Center_____________ [email protected] Company Name Email address 3319 West End Avenue, Suite 920_____ Nashville TN 37203 Street or Route City State Zip Code

Employee_______________________ 615-936-6012___

Please answer all questions on 8½” X 11” white paper, clearly typed and spaced, single sided, in order and sequentially numbered. In answering, please type the question and the response. All questions must be answered. If an item does not apply, please indicate “N/A” (not applicable). Attach appropriate documentation as an Appendix at the end of the application and reference the applicable Item Number on the attachment, i.e., Attachment A.1, A.2, etc. The last page of the application should be a completed signed and notarized affidavit.

2

3. EXECUTIVE SUMMARY

A. Overview Please provide an overview not to exceed three pages in total explaining each numbered point.

1) Description

RESPONSE: This project is for the establishment of Vanderbilt Rutherford Hospital, a new, separately licensed, 48-bed community hospital in Murfreesboro, TN. The applicant is Vanderbilt University Medical Center d/b/a Vanderbilt Rutherford Hospital. Vanderbilt University Medical Center is a health system composed of the Vanderbilt University Adult Hospital, the Monroe Carell Jr. Children’s Hospital at Vanderbilt, and the Vanderbilt Psychiatric Hospital. These facilities operate under one hospital license as Vanderbilt University Medical Center (“VUMC”). VUMC also operates a community-based hospital in Lebanon, Vanderbilt Wilson County Hospital. VUMC offers an unusually broad range of important health services, including many services that are unique in the region:

• the only National Cancer Institute-designated Comprehensive Cancer Center for adults and children;

• the only Level I trauma center designated by the American College of Surgeons serving both adults and children;

• the only neonatal intensive care unit (NICU) with the highest Level IV state and national rating;

• the only dedicated burn center serving adult and children in Tennessee; and • the only center recognized by the National Association of Epilepsy Centers as the only

Level 4 Epilepsy Center for adults in Tennessee and one of only two Level 4 Epilepsy Centers for children in the state.

Vanderbilt University Adult Hospital and the Monroe Carell Jr. Children’s Hospital at Vanderbilt are recognized each year by U.S. News & World Report’s Best Hospitals rankings as national healthcare leaders, with 19 nationally ranked adult and pediatric specialties. Further, VUMC serves as a safety-net hospital for Middle Tennessee, Southern Kentucky, and Northern Alabama. VUMC annually provides more than $600 million in charity care and community benefits. VUMC is also a key provider in the TennCare program. In 2018 alone, VUMC provided $1.51 billion in medical care to TennCare patients.

VUMC is one of the nation’s leading academic medical centers and is one of the largest comprehensive research, teaching and patient care health systems in the Southeast. The most heavily-utilized quaternary, referral healthcare facility in the Mid-South, VUMC treats over 2.3 million patient visits per year in more than 150 locations, discharging 66,000 inpatients and performing 67,000 surgical operations. VUMC currently operates at or near capacity on a continuous basis – in February 2020, for instance, VUMC’s occupancy level was near 90%. The continuing growth in VUMC’s patient volumes presents challenges to the system’s physicians and staff as they treat Tennessee’s sickest and most vulnerable patient populations. VUMC has made substantial progress in its efforts to expand the facilities on its main campus to alleviate capacity constraints. It is nearing completion of two certificate of need projects – CN1406-021A and CN071-075AE – which include the expenditure of nearly $260 million to add hundreds of thousands of additional square feet and nearly 200 additional beds to both Vanderbilt Adult Hospital and the Monroe Carell Jr. Children’s Hospital at Vanderbilt. These new beds have been completed in phases, and as each phase has opened, it has quickly filled with patients. While VUMC continues to evaluate other reasonable expansion options on its main campus, VUMC has also opted to pursue decentralizing and dispersing its medical services into local communities, closer to patients’ homes. In August 2019, VUMC completed its purchase of the Vanderbilt Wilson

3

County Hospital in Lebanon, Tennessee, providing its financial support and bringing its model of care to that community. This application will create the Vanderbilt Rutherford Hospital in Murfreesboro. The proposal will establish a 48-bed community hospital near the intersection of Veterans Parkway and S.R. 840, approximately 8 miles from downtown Murfreesboro. This community hospital will include 26 adult medical/surgical beds, 4 intensive care beds, 6 pediatric beds, 6 obstetrical beds, 6 neonatal intensive care beds and 8 observation beds. It will also initiate both diagnostic and therapeutic cardiac catherization services. Vanderbilt Rutherford Hospital will be owned by VUMC but will operate under a separate license with an open medical staff. This project will help alleviate VUMC’s existing capacity issues by bringing Vanderbilt’s model of care closer to the patients in the service area who are already choosing VUMC for their medical needs. Despite patients having to travel significant distances, VUMC is the second largest provider of inpatient care to the residents of the proposed service area. In 2019, over 58,000 patients from the service area traveled to VUMC’s main campus for care. While some of these patients travel to access Vanderbilt’s tertiary level services, many choose to leave the service area and drive to VUMC for community-level medical services that can be provided at the proposed Vanderbilt Rutherford Hospital. The Vanderbilt Rutherford Hospital project is a natural extension of the broad range of medical services that Vanderbilt has introduced to the service area over the past decade. VUMC currently has more than 120 physicians and advanced practitioners providing care in the service area. Monroe Carell Jr. Children’s Hospital at Vanderbilt offers a variety of services across two locations in Murfreesboro, including clinic appointments for 12 different subspecialties, imaging, urgent and after-hours care and outpatient surgical capacity in ENT, gastroenterology, orthopedics, and urology. VUMC also offers a host of other local services including:

• Vanderbilt Heart Murfreesboro provides both general and interventional cardiology services, including diagnostic and therapeutic cardiac catheterizations;

• Vanderbilt Eye Institute Murfreesboro provides the full range of adult and pediatric ophthalmological and visual services;

• Vanderbilt Behavioral Health (Murfreesboro) provides outpatient mental health services; • Vanderbilt Maternal Fetal Center (Murfreesboro) and Vanderbilt Center for Women’s

Health (Smyrna) provide obstetrical and gynecological services to women and expectant mothers;

• Vanderbilt Surgical Weight Loss (Murfreesboro) offers bariatric surgery and general health and fitness education; and

• Vanderbilt Children’s After-Hours (Smyrna) and Vanderbilt Health Clinics (Murfreesboro, Smyrna, LaVergne) provide both physician and midlevel urgent care services.

The addition of this community hospital will support the clinical growth of VUMC and will allow patients currently seeking care at VUMC to access those services in their home community. Furthermore, Rutherford County is the fifth most populous county in Tennessee, and it is growing. At its current rate of growth, the population of Rutherford County will surpass that of Hamilton County (Chattanooga) in 2026. Currently, 42% of patients choose to bypass the existing providers in the service area to seek inpatient medical care elsewhere (chiefly in Nashville). Vanderbilt Rutherford Hospital will offer a new access point to the Vanderbilt system for patients in this fast-growing community while providing much needed capacity at the VUMC main campus.

2) Ownership structure;

RESPONSE: Vanderbilt Rutherford Hospital will be owned by Vanderbilt University Medical Center, a Tennessee nonprofit corporation, but it will be a separately licensed hospital.

3) Service area;

RESPONSE: The primary service area, referred to as the Rutherford Market, is comprised of Bedford, Cannon, Rutherford and Warren counties.

4

4) Existing similar service providers;

RESPONSE: The existing hospitals in the service area include Saint Thomas River Park, Saint Thomas Rutherford, Saint Thomas Stones River, Tennova Shelbyville and Tristar Stonecrest Medical Center. While these facilities currently provide inpatient care, in 2019, nearly 22,000 patients chose not to access these current local providers and out-migrated from the service area for their inpatient medical care. Vanderbilt Rutherford Hospital will be uniquely situated to provide telemedicine consults to the dozens of subspecialties currently available at VUMC’s main campus.

5) Project cost;

RESPONSE: The total project cost for Vanderbilt Rutherford Hospital is $134,344,227, with $71.6 million in total construction costs.

6) Funding;

RESPONSE: The funding for this project will be through operating funds and cash reserves.

7) Financial Feasibility including when the proposal will realize a positive financial margin; and

RESPONSE: The project will be funded by VUMC. As reflected in the Projected Data Chart, Vanderbilt Rutherford Hospital will achieve a positive financial margin in year 2 of operation following a gradual ramp-up in census during Year 1.

8) Staffing.

RESPONSE: VUMC has a robust recruiting and successful employee retention program. Through VUMC, Vanderbilt Rutherford Hospital will have the capabilities to recruit and staff the proposed project.

B. Rationale for Approval

A certificate of need can only be granted when a project is necessary to provide needed health care in the area to be served, can be economically accomplished and maintained, will provide health care that meets appropriate quality standards, and will contribute to the orderly development of adequate and effective health care in the service area.

Provide a brief description of how the project meets the criteria necessary for granting a CON using the data and information points provided in Section B of the application:

1) Need;

RESPONSE: VUMC treats over 2.3 million patient visits per year, discharging 66,000 inpatients and performing 67,000 surgical operations. VUMC continues to take all reasonable measures to expand and improve the efficiency and convenience of its downtown location – expending nearly $260 million in the past 5 years in renovations and expansion projects. Even as these new beds become available, however, VUMC continues to be full – operating at or near capacity on a regular basis.

While VUMC evaluates other reasonable expansion options on its main campus, appropriate health planning dictates also pursuing a strategy decentralizing VUMC’s medical services into local communities, closer to patients’ homes, and thus decompressing VUMC’s main campus. While the Rutherford Market has existing hospital providers, a substantial percentage of the service area, nearly 42% of inpatient encounters, currently leaves the region to receive care in Nashville. In FY19, VUMC treated more than 58,000 unique patients from this market at VUMC’s main campus, who endure significant travel burden to receive their care. The Vanderbilt Rutherford Hospital will greatly improve access for the patients from the Rutherford market who are already seeking care at VUMC’s main campus.

5

2) Economic Feasibility:

RESPONSE: The Vanderbilt Rutherford Hospital will be funded through cash reserves of VUMC and will reached positive profit margin in Year 2 of operation.

3) Appropriate Quality Standards; and the pro

RESPONSE: Vanderbilt University Adult Hospital and the Monroe Carell Jr. Children’s Hospital at Vanderbilt are recognized each year by U.S. News & World Report’s Best Hospitals rankings as national leaders, with 19 nationally ranked adult and pediatric specialties. Through a combination of physician circulation and advanced telemedicine, VUMC will bring its nationally recognized model of care to the service area. Vanderbilt Rutherford Hospital will meet all applicable quality of care standards, it will be licensed by the Department of Health, and it will also seek accreditation by the Joint Commission.

4) Orderly Development to adequate and effective health care.

RESPONSE: The Vanderbilt Rutherford Hospital will have a positive effect on the Rutherford Market, will assist in decompressing VUMC’s main campus, and will improve the healthcare delivery system as a whole. This project will help to alleviate VUMC’s existing capacity issues by bringing Vanderbilt’s model of care closer to the patients in the service area who are already choosing to access VUMC for their medical needs.

The impact of Vanderbilt Rutherford Hospital on existing community providers should be minimal. The need for the Vanderbilt Rutherford Hospital is based on patients who are currently obtaining hospital care in Nashville. To the extent that there is some minimal redirection of patients from existing community providers, any such volume losses will be quickly offset by the growing population in the community.

C. Consent Calendar Justification

If Consent Calendar is requested, please provide the rationale for an expedited review.

A request for Consent Calendar must be in the form of a written communication to the Agency’s Executive Director at the time the application is filed.

RESPONSE: Not applicable

6

4. PROJECT DETAILS

A.

Owner of the Facility, Agency or Institution

Vanderbilt University Medical Center______________ ___615-322-3454______ Name Phone Number 1121 Medical Center Drive __________________ __Davidson___________ Street or Route County _Nashville_______________________ __TN____ ____37232___________ City State Zip Code

B. Type of Ownership of Control (Check One)

A.

B.

C.

D.

E.

Sole Proprietorship

Partnership

Limited Partnership

Corporation (For Profit)

Corporation (Not-for-Profit)

________

________

________

________

_X______

F.

G.

H.

I.

Government (State of TN or Political Subdivision)

Joint Venture

Limited Liability Company

Other (Specify)_______

_______

_______

_______

_______

Attach a copy of the partnership agreement, or corporate charter and certificate of corporate existence. Please provide documentation of the active status of the entity from the Tennessee Secretary of State’s web-site at https://tnbear.tn.gov/ECommerce/FilingSearch.aspx.

RESPONSE: Please see Attachment A.4.A.

Describe the existing or proposed ownership structure of the applicant, including an ownership structure organizational chart. Explain the corporate structure and the manner in which all entities of the ownership structure relate to the applicant. As applicable, identify the members of the ownership entity and each member’s percentage of ownership, for those members with 5% ownership (direct or indirect) interest.

RESPONSE: VUMC is a not-for-profit corporation organized under the laws of the State of Tennessee. VUMC has no members, is board governed, and is a tax-exempt organization under section 501(c)3 of the Internal Revenue Code. Please see Attachment A.4.A.

5. Name of Management/Operating Entity (If Applicable)

______________________________________________________________________ Name _________________________________________________ ________________ Street or Route County __________________________________ __________ ________________ City State Zip Code Website address: __________________________________

For new facilities or existing facilities without a current management agreement, attach a copy of a draft management agreement that at least includes the anticipated scope of management services to be provided, the anticipated term of the agreement, and the anticipated management fee payment methodology and schedule. For facilities with existing management agreements, attach a copy of the fully executed final contract.

7

6A. Legal Interest in the Site

(Check the appropriate line and submit the following documentation)

The legal interest described below must be valid on the date of the Agency consideration

of the certificate of need application.

A. Ownership (Applicant or applicant’s parent company/owner) Submit a

copy of the title/deed.

B. Lease (Applicant or applicant’s parent company/owner) Attach a fully executed lease that includes the terms of the lease and the actual lease expense.

C. Option to Purchase

Attach a fully executed Option that includes the anticipated purchase price

D. Option to Lease

E. Other (Specify)

Check appropriate line above: For applicants or applicant’s parent company/owner that currently own the building/land for the project location, attach a copy of the title/deed. For applicants or applicant’s parent company/owner that currently lease the building/land for the project location, attach a copy of the fully executed lease agreement. For projects where the location of the project has not been secured, attach a fully executed document including Option to Purchase Agreement, Option to Lease Agreement, or other appropriate documentation. Option to Purchase Agreements must include anticipated purchase price. Lease/Option to Lease Agreements must include the actual/anticipated term of the agreement and actual/anticipated lease expense. The legal interests described herein must be valid on the date of the Agency’s consideration of the certificate of need application.

RESPONSE: Please see Attachment Section A-6A.

6B. Briefly describe the following and attach the requested documentation on an 8 ½” x 11” sheet of white paper, legibly labeling all requested information.

1) Plot Plan must include:

A. Size of site (in acres);

B. Location of structure on the site;

C. Location of the proposed construction/renovation; and

D. Names of streets, roads or highway that cross or border the site.

RESPONSE: Please see Attachment Section A-6B-1.

2) Floor Plan – If the facility has multiple floors, submit one page per floor. If more than one page is needed, label each page.

A. Patient care rooms (private or semi-private) B. Ancillary areas C. Equipment areas D. Other (specify)

8

RESPONSE: Please see Attachment Section A-6B-2.

3) Public Transportation Route - Describe the relationship of the site to public transportation routes, if any, and to any highway or major road developments in the area. Describe the accessibility of the proposed site to patients/clients.

RESPONSE: The proposed Vanderbilt Rutherford Hospital is conveniently located off of S.R. 840 with easy access to I-24 and I-840 which, in turn, connects to both I-40 and I-65. The City of Murfreesboro Transportation Department is responsible for the administration and operation of public transportation service (Rover) within the City of Murfreesboro. However, it does not currently operate near the proposed project.

9

7. Type of Institution (Check as appropriate--more than one response may apply) A.

B. C. D. E. F. G.

Hospital (Specify) _______ Ambulatory Surgical Treatment Center (ASTC), Multi-Specialty ASTC, Single Specialty Home Health Agency Hospice Mental Health Hospital Intellectual Disability Institutional Habilitation Facility ICF/IID

__X__ _____ _____ _____ _____ _____ _____

H. I. J. K. L. M.

Nursing Home Outpatient Diagnostic Center Rehabilitation Facility Residential Hospice Nonresidential Substitution-Based Treatment Center for Opiate Addiction Other (Specify)___________ _______________________

_____ _____ _____ _____ _____ _____

8. Purpose of Review (Check appropriate lines(s) – more than one response may apply)

A. Establish New Health Care X G. MRI Unit Increase Institution H. Satellite Emergency

B. Change in Bed Complement Department C. Initiation of Health Care I. Addition of ASTC Specialty

Service as Defined in TCA 68- J. Addition of Therapeutic 11-1607(4) Catheterization (Specify) Neonatal Intensive Care X Cardiac Catherization K. Other (Specify)_

D. Relocation and/or Replacement

E. Initiation of MRI F. Initiation of Pediatric MRI

9. Medicaid/TennCare, Medicare Participation

MCO Contracts [Check all that apply]

RESPONSE: Vanderbilt Rutherford Hospital intends to contract with all MCO providers. _X AmeriGroup X United Healthcare Community Plan X BlueCare X TennCare Select

Medicare Provider Number ___________________________________________

Medicaid Provider Number ___________________________________________

Certification Type ____________________________________________

If a new facility, will certification be sought for Medicare and/or Medicaid/TennCare? Medicare _X_Yes __No ___N/A Medicaid/TennCare _X_Yes __No ___N/A

10

10. A.

Bed Complement Data: Please indicate current and proposed distribution and certification of facility beds.

B. Describe the reasons for change in bed allocations and describe the impact the bed change will have on the

applicant facility’s existing services.

RESPONSE: Not applicable

C. Please identify all the applicant’s outstanding Certificate of Need projects that have a licensed bed change component. If applicable, complete chart below.

RESPONSE: See below for Vanderbilt University Medical Center.

CON Number(s) CON Expiration Date Total Licensed Beds Approved CN710-075 __________________

November 1, 2020 _______________

105 __________________

CN1406-021 ___________________

November 1, 2020 ______________

108 __________________

Current Licensed

Beds Staffed

Beds Proposed

*Beds Approved

**Beds Exempted

TOTAL Beds at Completion

1) Medical - - 26 - - 26 2) Surgical - - - - - - 3) ICU/CCU (includes PICU) - - 6 - - 6 4) Obstetrical - - 6 - - 6 5) NICU - - 6 - - 6 6) Pediatric - - 4 - - 4 7) Adult Psychiatric - - - - - - 8) Geriatric Psychiatric - - - - - - 9) Child/Adolescent Psychiatric - - - - - - 10) Rehabilitation - - - - - - 11) Adult Chemical Dependency - - - - - - 12) Child/Adolescent Chemical Dependency - - - - - - 13) Long-Term Care Hospital - - - - - - 14) Swing Beds - - - - - - 15) Nursing Home – SNF (Medicare only) - - - - - - 16) Nursing Home – NF (Medicaid only) - - - - - - 17) Nursing Home – SNF/NF (dually certified Medicare/Medicaid)

- - - - - -

18) Nursing Home – Licensed (non-certified) - - - - - - 19) ICF/IID - - - - - - 20) Residential Hospice - - - - - - TOTAL - - 48 - - 48

11

11. Home Health Care Organizations – Home Health Agency, Hospice Agency (excluding Residential Hospice), identify the following by checking all that apply: Not applicable

Existing Licensed County

Parent Office

County

Proposed Licensed County

Existing Licensed County

Parent Office

County

Proposed Licensed County

Anderson Lauderdale Bedford Lawrence Benton Lewis Bledsoe Lincoln Blount Loudon Bradley McMinn Campbell McNairy Cannon Macon Carroll Madison Carter Marion Cheatham Marshall Chester Maury Claiborne Meigs Clay Monroe Cocke Montgomery Coffee Moore Crockett Morgan Cumberland Obion Davidson Overton Decatur Perry DeKalb Pickett Dickson Polk Dyer Putnam Fayette Rhea Fentress Roane Franklin Robertson Gibson Rutherford Giles Scott Grainger Sequatchie Greene Sevier Grundy Shelby Hamblen Smith Hamilton Stewart Hancock Sullivan Hardeman Sumner Hardin Tipton Hawkins Trousdale Haywood Unicoi Henderson Union Henry Van Buren Hickman Warren Houston Washington Humphreys Wayne Jackson Weakley Jefferson White Johnson Williamson Knox Wilson Lake

12. Square Footage and Cost Per Square Footage Chart

* The Total Construction Cost should equal the Construction Cost reported on line A5 of the Project

Cost Chart.

** Cost per Square Foot is the construction cost divided by the square feet. Please do not include contingency costs.

Renovated New TotalPublic Lobbies 1st Floor 3563 3563Central Registration 1st Floor 1913 1913Admin/Business Off 1st Floor 6132 6132Human Resources 1st Floor 775 775Medical Records 1st Floor 3377 3377Medical/Surgical Unit 2nd Floor 13730 13730Observation Unit 1st Floor 5101 5101Women's Services/NICU 1st Floor 9111 9111Pediatric Unit 2nd Floor 4338 4338Intensive Care Unit 2nd Floor 4017 4017PACU 1st Floor 3658 3658Outpatient Services 1st Floor 7324 7324Surgical Services 1st Floor 9325 9325Central Sterile 1st Floor 2406 2406Diagnostic Imaging 1st Floor 7522 7522Interventional Imaging 1st Floor 3137 3137Emergency Department 1st Floor 9668 9668Rehabilitation Therapy 2nd Floor 865 865Respiratory Therapy 2nd Floor 1051 1051Laboratory 1st Floor 3108 3108Pharmacy 1st Floor 1418 1418Dietary Services 1st Floor 3696 3696Education 1st Floor 2163 2163Central Employee Facilities 1st Floor 564 564Material Management 1st Floor 2256 2256Environmental Services 1st Floor 1438 1438Plant Operations 1st Floor 1250 1250Powerhouse Remote/1st 6269 6269

Unit/Department GSF Sub-Total 119175 119175Other GSF Total 34680 34680

Total GSF 153855 153855*Total Cost

**Cost Per Square Foot

Below 1st

Quarti le Below 1st

Quarti le Below 1st

Quarti le

Between 1st

and 2nd

Quarti le

Between 1st

and 2nd

Quarti le

Between 1st

and 2nd

Quarti le

Between 2nd

and 3rd

Quarti le

Between 2nd

and 3rd

Quarti le

Between 2nd

and 3rd

Quarti le

Above 3rd

Quarti le Above 3rd

Quarti le Above 3rd

Quarti le

Proposed Final Square FootageUnit/Department

Existing Location

Existing SF

Temporary Location

Proposed Final Location

80,535,346.00$

Cost per Square Foot Is Within Which Range

(For quartile ranges, please refer to the Applicant’s Toolbox on

www.tn.gov/hsda)

523.45$

A. Describe the construction and renovation associated with the proposed project. If applicable, provide a description of the existing building, including age of the building and the use of space vacated due to the proposed project.

RESPONSE: The proposed project is the for construction of a 48-bed community hospital with 8 observation beds on a greenfield site in Murfreesboro.

13. MRI, PET, and/or Linear Accelerator

1. Describe the acquisition of any Magnetic Resonance Imaging (MRI) scanner that is adding a MRI scanner in counties with population less than 250,000 or initiation of pediatric MRI in counties with population greater than 250,000 and/or

RESPONSE: Not applicable. The population of Rutherford County exceeds 250,000 and the MRI will not serve pediatric patients.

2. Describe the acquisition of any Positron Emission Tomographer (PET) or Linear Accelerator if initiating the service by responding to the following:

RESPONSE: Not applicable.

A. Complete the chart below for acquired equipment.

Linear Accelerator

Mev Types: □ SRS □ IMRT □ IGRT □ Other C. By Purchase Total Cost*: □ By Lease Expected Useful Life (yrs)

(1) New □ Refurbished □ If not new, how old? (yrs)

MRI Breast □ Extremity Tesla: Magnet: □ Open □ Short Bore □ Other

By Purchase Total Cost*: □ By Lease Expected Useful Life (yrs)

New □ Refurbished □ If not new, how old? (yrs) PET PET only □ PET/CT □ PET/MRI

By Purchase Total Cost*: □ By Lease Expected Useful Life (yrs) New □ Refurbished □ If not new, how old? (yrs) * As defined by Agency Rule 0720-9-.01(4)(b)

B. In the case of equipment purchase, include a quote and/or proposal from an equipment vendor. In the case of equipment lease, provide a draft lease or contract that at least includes the term of the lease and the anticipated lease payments along with the fair market value of the equipment.

RESPONSE: Not applicable C. Compare lease cost of the equipment to its fair market value. Note: Per Agency Rule, the

higher cost must be identified in the project cost chart.


D. Schedule of Operations:


Location Days of Operation

(Sunday through Saturday)

Hours of Operation

(example: 8 am – 3 pm) Fixed Site (Applicant) Mobile Locations

(Applicant) (Name of Other Location) (Name of Other Location)

E. Identify the clinical applications to be provided that apply to the project.

RESPONSE: Not applicable. F. If the equipment has been approved by the FDA within the last five years provide

documentation of the same.


SECTION B: GENERAL CRITERIA FOR CERTIFICATE OF NEED In accordance with T.C.A. § 68-11-1609(b), “no Certificate of Need shall be granted unless the action proposed in the application for such Certificate is necessary to provide needed health care in the area to be served, can be economically accomplished and maintained, will provide health care that meets appropriate quality standards, and will contribute to the orderly development of health care.” In making determinations, the Agency uses as guidelines the goals, objectives, criteria, and standards provided in the State Health Plan.

Additional criteria for review are prescribed in Chapter 11 of the Agency’s Rules, Tennessee Rules and Regulations 01730-11.

The following questions are listed according to the four criteria: (1) Need, (2) Economic Feasibility, (3) Quality Standards, and (4) Contribution to the Orderly Development of Health Care. Please respond to each question and provide underlying assumptions, data sources, and methodologies when appropriate.

QUESTIONS NEED

The responses to this section of the application will help determine whether the project will provide needed health care facilities or services in the area to be served.

1. Provide a response to the applicable criteria and standards for the type of institution or service

requested. https://www.tn.gov/hsda/hsda-criteria-and-standards.html

RESPONSE: Please find responses to the following criteria and standards: Acute Care Bed Need, Construction of Health Care Institutions, Cardiac Catherization and Neonatal Intensive Care.

I. Acute Care Bed Need Criteria and Standards

1. Determination of Need: The following methodology should be used and the need for

hospital beds should be projected four years into the future from the current year.

RESPONSE: Please find the chart below provided by the Department of Health.

Saint Thomas Rutherford was approved for a 72-bed addition in October 2017. According to the HSDA report, this project is still outstanding as of February 21, 2020.

COUNTY CURRENTINPATIENT ADC NEED 2018 2020 2024 ADC-2020 NEED 2024 ADC-2020 NEED 2024 LICENSED STAFFED LICENSED STAFFED

DAYSBeford 4,187 12 19 11,533 11,814 12,358 12 20 12 21 60 49 -39 -28Cannon 4,091 11 19 1,634 1,644 1,658 11 19 11 19 60 36 -41 -17Rutherford 127,844 350 438 294,517 305,793 328,242 364 455 390 488 506 495 -18 -7Warren 11,785 32 46 18,783 18,848 18,941 32 46 33 46 125 38 -79 8

2018 SERVICE AREA POPULATION PROJECTED PROJECTED 2018 ACTUAL BEDS SHORTAGE/SURPLUS

a. New hospital beds can be approved in excess of the “need standard for a county”

if the following criteria are met:

i. All existing hospitals in the proposed service area have an occupancy level greater than or equal to 80 percent for the most recent Joint Annual Report. Occupancy should be based on the number of staffed beds for two consecutive years.

1. In order to provide adequate information for a comprehensive review,

the applicant should utilize data from the Joint Annual report to provide information on the total number of licensed and staffed beds in the proposed service area. Applicants should provide an explanation to justify any differences in staffed and licensed beds in the applicant’s facility or facilities. The agency board should take into consideration the ability of the applicant to staff existing unstaffed licensed beds prior to approving the application for additional beds. The following table should be utilized to demonstrate bed capacity for the most recent year.

RESPONSE: Please see the chart below.

Total Beds Facility County Total

Licensed Beds

Staffed beds set up and in

use on a typical day

Licensed beds not staffed

Licensed beds that could not be used

within 24-48 hours

Tennova Healthcare- Shelbyville

Bedford 60 49 0 0

Saint Thomas Stones River Hospital, LLC.

Cannon 60 36 0 0

Saint Thomas Rutherford Hospital

Rutherford 286 286 0 0

TriStar StoneCrest Medical Center

Rutherford 119 109 10 10

Trustpoint Hospital Rutherford 101 100 1 1 Saint Thomas River Park Hospital, LLC

Warren 125 38 0 0

Total Beds

882 686 41 41 Source: Joint Annual Report of Hospitals, 2018

ii. All outstanding CON projects for new acute care beds in the proposed service

area are licensed.

RESPONSE: Saint Thomas Rutherford was approved for a 72-bed addition in October 2017.

According to the HSDA report, this project is still outstanding as of February 21, 2020.

iii. The Health Services and Development Agency may give special

consideration to applications for additional acute care beds by an existing hospital that demonstrates (1) annual inpatient occupancy for the twelve (12)

months preceding the application of 80 percent or greater of licensed beds and (2) that the addition of beds without a certificate of need as authorized by statute will be inadequate to reduce the projected occupancy of the hospital’s acute care beds to less than 80 percent of licensed bed capacity.


b. In accordance with Tennessee Code Annotated 68-11-14607 (g), “no more frequently than one time every three years, a hospital, rehabilitation facility, or mental health hospital may increase its total number of licensed beds in any category by ten percent or less of its licensed capacity at any one campus over any period of one year for any services it purposes it is licensed to perform without obtaining a certificate of need”. These licensed beds that were added without a certificate of need should be considered as part of the determination of need formula by the agency.


i. Applicants should include information on any beds that have been

previously added utilizing this statute.

c. Applicants applying for acute care beds in service area counties where there is no hospital, and thus no bed occupancy rate numbers to provide for the need formula, should provide any relevant data that supports its claim that there is a need for acute care beds in the county or counties. Data may include, for example, the number of residents of the county or counties who over the previous 24 months have accessed acute care bed services in other counties.


2. Quality Considerations: Applicants should utilize Centers for Disease Control & Prevention’s

(CDC) National Healthcare Safety Network (NHSN) measures. Applicants must provide data from the most recent four quarters utilizing the baseline established by the NHSN within the dataset.

RESPONSE: The applicant is a new hospital and does not have operating history. VUMC is nationally recognized in 19 adult and pediatric specialties. VUMC will bring this model of care to the service area. Vanderbilt Rutherford Hospital will meet all applicable quality of care standards, it will be licensed by the Department of Health, and it will also seek accreditation by the Joint Commission.

Applicants should utilize the following table to demonstrate the quality of care provided at the existing facility.

RESPONSE: The applicant is a new hospital and does not have operating history.

Centers for Disease Control & Prevention’s (CDC) National Healthcare Safety Network (NHSN) Measures

Measure Source National Benchmark

Hospital Standardized

Infection Ratio (SIR)

Hospital Evaluation (above, at, or below

national benchmark)

Catheter associated urinary tract infection (CAUTI)

Hospital Compare: Complications & Deaths – Healthcare- associated infections

Standardized infection ratio (SIR) national benchmark

= 1.

Central line associated blood stream infection (CLABSI)



= 1.

Methicillin resistant staphylococcus aureus (MRSA)



= 1.

Clostridium

difficile (C.diff.)



= 1.

Surgical Site Infections (SSI)

SSI: Colon Hospital Compare: Complications & Deaths – Healthcare- associated infections

Standardized infection ratio (SIR) national benchmark = 1.

SSI: Hospital Standardized

Hysterectomy Compare: infection ratio (SIR)

Complications national benchmark & Deaths – = 1. Healthcare- associated infections

National Average Tennessee Hospital Average Percentage

Healthcare Hospital work influenza Compare: vaccinations Timely &

Effective Care – Preventive Care

19

Applicants should provide the above metrics and any improvement plans that are in place to improve the hospital’s performance on these metrics.


In addition to the above metrics, the applicant should list, or briefly summarize, any significant quality accreditations, certifications, or recognitions that might be appropriate for Agency consideration (i.e. Joint Commission, TDH/BLHCF survey results, CMS standing, and/or clinical quality awards).


The above metrics should serve as a guide for the Agency to better understand the quality of care that is provided by the applicant at the existing facility. National and state averages serve as an indicator by which the board may evaluate the applicant.


Note: In the event quality data is unavailable for an applicant’s existing facility, the applicant should provide data from a comparable, existing facility owned by the applicant. If no comparable data is available, the absence of such information should not disadvantage the applicant over another with available quality data.

3. Establishment of Service Area: The geographic service area shall be reasonable and based on an

optimal balance between population density and service proximity of the applicant.

RESPONSE: The service area is an appropriate catchment area from which a community hospital, like Vanderbilt Rutherford Hospital, can be expected to draw its patients. Vanderbilt Rutherford Hospital will be conveniently located off the interchange of S.R. 840 and Veteran’s Parkway, two miles from the S.R. 840 interchange with I-24. It is reasonable to assume that the vast majority of patients currently traveling to VUMC for their community-level healthcare will instead choose to access this new facility.

4. Relationship to Existing Similar Services in the Area: The proposal shall discuss what similar services are available in the service area and the trends in occupancy and utilization of those services. This discussion shall include the likely impact of the proposed increase in acute care beds on existing providers in the proposed service area and shall include how the applicant’s services may differ from these existing services. The agency should consider if the approval of additional beds in the service area will result in unnecessary, costly duplication of services. This is applicable to all service areas, rural and others. The following tables should be utilized to demonstrate existing services in the proposed service area.

20

Facility County 2018 Patient Days Licensed Occupancy % Change in Patient

Licensed Beds

2016 2017 2018 2016 2017 20118 Days 2016-2018

Tennova Healthcare-Shelbyville

Bedford 60 4,850 4,695 4,209 22% 21% 19% -13%

Saint Thomas Stones River Hospital

Cannon 60 5,208 4,524 4,413 24% 21% 20% -15%


Rutherford 286 76,003 78,960 77,747 73% 76% 74% 2%

TriStar Stonecrest Medical Center

Rutherford 119 18,773 19,156 19,819 43% 44% 46% 6%

TrustPoint Hospital

Rutherford 101 30,915 32,336 32,157 84% 88% 87% 4%

Saint Thomas River Park Hospital

Warren 125 11,582 12,388 11,890 25% 27% 26% 3%

Total 882 155,580 158,737 156,623 48% 49% 49% 1%

Facility County 2018 Patient Days Staffed Occupancy %

Change in Patient

Staffed Beds

2016 2017 2018 2016 2017 20118 Days 2016-2018


Bedford 49 4,850 4,695 4,209 27% 26% 24% -13%


Cannon 36 5,208 4,524 4,413 40% 34% 34% -15%


Rutherford 286 76,003 78,960 77,747 73% 76% 74% 2%


Rutherford 109 18,773 19,156 19,819 47% 48% 50% 6%

TrustPoint Hospital

Rutherford 100 30,915 32,336 32,157 85% 89% 88% 4%


Warren 38 11,582 12,388 11,890 84% 89% 86% 3%

Total 686 155,580 158,737 156,623 62% 63% 63% 1%

Source: Joint Annual Report of Hospitals, 2018

21

5. Services to High-Need and Underserved Populations: Special consideration shall be given to applicants providing services fulfilling the unique needs and requirements of certain high-need populations, including uninsured, low-income, and underserved geographic regions, as well as other underserved population groups.

RESPONSE: Vanderbilt Rutherford Hospital will provide care to all patients regardless of sex, race, ethnicity or income. The proposed facility will also provide care to uninsured and low-income populations as well as TennCare.

6. Relationship to Existing Applicable Plans; Underserved Area and Population: The proposal’s relationship to

underserved geographic areas and underserved population groups shall be a significant consideration.

RESPONSE: The applicant is unaware of any existing applicable plan to which the project relates, but as noted above, the proposed hospital will serve all patients, including low-income and uninsured populations.

7. Access: The applicant must demonstrate an ability and willingness to serve equally all of the service area

in which it seeks certification. In addition to the factors set forth in HSDA Rule 0720-11-.01(1) (listing factors concerning need on which an application may be evaluated), the HSDA may choose to give special consideration to an applicant that is able to show that there is a limited access in the proposed service area.

RESPONSE: The hospital will contract with all TennCare MCOs and the hospital will serve all patients regardless of ability to pay. The project will improve access to care for those patients who are currently traveling to Nashville for services.

8. Adequate Staffing: An applicant shall document a plan demonstrating the intent and ability to recruit, hire,

train, assess competencies of, supervise, and retain the appropriate numbers of qualified personnel to provide the services described in the application and that such personnel are available in the proposed service area. RESPONSE: Vanderbilt Rutherford Hospital will be supported by working closely and being aligned with the VUMC main campus for staffing and recruitment of clinical and non-clinical staff as needed.

9. Assurance of Resources: The applicant shall document that it will provide the resources necessary to

properly support the applicable level of services. Included in such documentation shall be a letter of support from the applicant’s governing board of directors, Chief Executive Officer, or Chief Financial Officer documenting the full commitment of the applicant to develop and maintain the facility resources, equipment, and staffing to provide the appropriate services. The applicant shall also document the financial costs of maintaining these resources and its ability to sustain them.

RESPONSE: Please see Attachment B. Economic Feasibility.2.F regarding VUMC’s commitment to resources for Vanderbilt Rutherford Hospital.

10. Data Requirements: Applicants shall agree to provide the Department of Health and/or the Health

Services and Development Agency with all reasonably requested information and statistical data related to the operation and provision of services and to report that data in the time and format requested. As a standard practice, existing data reporting streams will be relied upon and adapted over time to collect all needed information.

22

RESPONSE: Vanderbilt Rutherford Hospital commits to providing to the Department of Health and/or the Health Services and Development Agency all reasonably requested information and statistical data.

11. Quality Control and Monitoring: The applicant shall identify and document its existing or proposed plan for

data reporting, quality improvement, and outcome and process monitoring system.

RESPONSE: Vanderbilt Rutherford Hospital will participate in data reporting, quality improvement and outcomes monitoring consistent with VUMC standards.

12. Licensure and Quality Considerations: Any existing applicant for this CON service category shall be in compliance with the appropriate rules of the TDH. The applicant shall also demonstrate its accreditation status with the Joint Commission or other applicable accrediting agency.

RESPONSE: The applicant will be a new hospital and does not have an operating history. 13. Community Linkage Plan: The applicant shall describe its participation, if any, in a community linkage plan,

including its relationships with appropriate health care system providers/services and working agreements with other related community services assuring continuity of care.

RESPONSE: The proposed hospital will complement and be an extension of the many clinical services VUMC already has in the Rutherford Market. Continuity of care is assured because patients served at Vanderbilt Rutherford Hospital who need tertiary or quaternary level services will be seamlessly transferred to VUMC. In addition, VUMC has dedicated physician liaison and community relations staffs that perform outreach and collaboration with local providers and health services. As a safety net hospital, VUMC assures access to all patients, regardless of their ability to pay. VUMC intends to bring this continuity of care to the Vanderbilt Rutherford Hospital and will work extensively with existing providers and the overall community to educate them regarding VUMC’s provision of services.

II. CONSTRUCTION, RENOVATION, EXPANSION, AND REPLACEMENT OF

HEALTH CARE INSTITUTIONS CRITERIA

I . An y project that includes the addition o f beds, services, or medical equipment will be reviewed under the standards for those specific activities.

RESPONSE: The project will develop the Vanderbilt Rutherford Hospital in Murfreesboro, Tennessee. The proposal includes a 48-bed community hospital located near the intersection of Veterans Parkway and S.R. 840. This community hospital will include 26 adult medical/surgical beds, 4 intensive care beds, 6 pediatric beds, 6 obstetrical beds, 6 neonatal intensive care beds and 8 observation beds and it will also initiate both diagnostic and therapeutic cardiac catherization services. Vanderbilt Rutherford Hospital will be owned by Vanderbilt University Medical Center (VUMC) but will operate under a separate license with an open medical staff.

2. For relocation or replacement of an existing licensed health care institution :

a. The applicant should provide plans which include costs for both renovation and

relocation, demonstrating the strengths and weaknesses of each alternat ive.

b. The applicant should demonstrate that there is an acceptable existing or projected future demand for the proposed project.

23


3. For renovation or expansions of an existing licensed health care institution:

a. The applicant should demonstrate that there is an acceptable existing demand for the

proposed project.

b. The applicant should demonstrate that the existing physical plant's condition warrants major renovation or expansion.


Cardiac Catherization Services Criteria and Standards

Applicants proposing to provide any type of cardiac catheterization services must meet the following minimum standards:

1. Compliance with Standards: The Division of Health Planning is working with stakeholders to develop

a framework for greater accountability to these Standards and Criteria. Applicants should indicate whether they intend to collaborate with the Division and other stakeholders on this matter.

RESPONSE: Yes, Vanderbilt Rutherford Hospital will fully collaborate with the Division of Health Planning and other appropriate stakeholders to develop a framework for greater accountability to the Standards and Criteria.

2. Facility Accreditation: If the applicant is not required by law to be licensed by the Department of Health,

the applicant should provide documentation that the facility is fully accredited or will pursue accreditation by the Joint Commission or another appropriate accrediting authority recognized by the Centers for Medicare and Medicaid Services (CMS).

RESPONSE: Yes, Vanderbilt Rutherford Hospital will be licensed by the Department of Health and it will also seek accreditation by the Joint Commission.

3. Emergency Transfer Plan: Applicants for cardiac catheterization services located in a facility without open heart surgery capability should provide a formalized written protocol for immediate and efficient transfer of patients to a nearby open heart surgical facility (within 60 minutes) that is reviewed/tested on a regular (quarterly) basis.

RESPONSE: Vanderbilt Rutherford Hospital will have a formalized written emergency transfer protocol with VUMC to which patients can be transported within 60 minutes.

4. Quality Control and Monitoring: Applicants should docu ment a plan to monitor the quality of its cardiac

catheterization program, including, but not limited to, program outcomes and efficiency. In addition, the applicant should agree to cooperate with quality enhancement efforts sponsored or endorsed by the State of Tennessee, which may be developed per Policy Recommendation 2.

RESPONSE: Vanderbilt Rutherford Hospital will monitor the quality of its cardiac catheterization program including outcomes and efficiency in collaboration with VUMC main campus. Vanderbilt Rutherford Hospital will also cooperate with the quality enhancement efforts sponsored or endorsed by the State of Tennessee.

5. Data Requirements: Applicants should agree to provide the Department of Health and/or the Health Services

24

and Development Agency with all reasonably requested information and statistical data related to the operation and provision of services and to report that data in the time and format requested. As a standard of practice, existing data reporting streams will be relied upon and adapted over time to collect all needed information.

RESPONSE: Vanderbilt Rutherford Hospital commits to providing to the Department of Health and/or the Health Services and Development Agency all reasonably requested information and statistical data.

6. Cli nical and Physical Environment Guidelines: Applicants should agree to d ocument ongoing

compliance with the latest clinical guidelines of the American College of Cardiology/Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document on Cardiac Catheterization Laboratory Standards (ACC Guidelines). As of the adoption of these Standard s and Criteria, the latest version (2001) may be found online at: http://www.ace.org/qual ityand science/clinical/consensus/ angiograph y/dirIndex.htm. Where providers are not in compliance, they should maintain appropriate documentation stating the reasons for noncompliance and the steps the provider is taking to ensure quality. These guidelines incl u de, but are not limited to, physical facility requirements, staffing, training, quality assurance, patient safety, screening patients for appropriate settings, and linkages with supporting emergency services.

RESPONSE: Vanderbilt Rutherford Hospital agrees to document compliance with the latest clinical guidelines of the American College of Cardiology / Society for Cardiac Angiography and Interventions Clinical Expert Consensus Document of Cardiac Catherization Laboratory Standards (ACC Guidelines).

7. Staffing Recruitment and Retention: The applicant should generally describe how it intend s to maintain an adequate staff to operate the proposed service, including, but not limited to, any plans to partner with an existing provider for training and staff sharing.

RESPONSE: VUMC currently has a full-time cardiology practice, Vanderbilt Heart Murfreesboro, with four cardiologists and two advance practice nurse practitioners. In addition, a heart failure physician and nurse practitioner, an electrophysiologist and a lipid nurse practitioner rotate through the Vanderbilt Heart Murfreesboro clinic, weekly. These cardiologists will staff the cardiac catheterization lab, while being supported by advance practice providers in Vanderbilt Heart Murfreesboro. In addition, Vanderbilt Rutherford Hospital will coordinate with the VUMC main campus for staffing and recruitment of additional providers as needed. Certain VUMC staff may be rotated between VUMC’s main campus and Vanderbilt Rutherford Hospital, maintaining continuity and collaboration of cardiac catheterization services within the VUMC system.

8. Definition of Need for New Services: A need likely exists for new or additional cardiac catheterization

services in a proposed service area if the average current utilization for all existing and approved providers is equal to or greater than 70% of capacity (i.e., 70% of 2000 cases) for the proposed service area.

RESPONSE: As noted in the chart below, there are three cardiac catheterization labs in the service area – two at Saint Thomas Rutherford and one at Tristar Stonecrest. According to its Joint Annual Report, Saint Thomas Rutherford performed 2,781 cardiac catheterization cases in 2018 which was at 70% occupancy. Tristar Stonecrest was 46% capacity but is located 14 miles away from the proposed hospital and serves a patient population that is different than the patients who will be served by the project. The planning for the cardiac catheterization lab is based on a combination of patients served by the cardiologists at Vanderbilt Heart Murfreesboro and patients who otherwise would receive cardiac catheterization at VUMC. As a result, it is reasonable to project utilization of this project is 448 in year 1 and 621 in year 2.

25

Facility County Cath Labs

Cases % Utilization

% Change

in Cases

2016 2017 2018 2016 2017 2018 2016-2018


Rutherford 2 2,409 2,523 2,781 60% 63% 70% 15%


Rutherford 1 627 665 878 31% 33% 44% 40%

Total 3 3,036 3,188 3,659 51% 53% 61% 21% Source: Joint Annual Report of Hospitals, 2018

9. Proposed Service Areas with No Existing Service: I n proposed service areas where no existing cardiac catheterization service exists, the applicant must show the data and methodology used to estimate the need and demand for the service. Projected need and demand will be measured for applicants proposing to provide services to residents of those areas as follows:

Need. The projected need for a service will be demonstrated through need-based epidemiological evidence of the incidence and prevalence of conditions for which diagnostic and/or therapeutic catheterization is appropriate within the proposed service area.

Demand. The projected demand for the service shall be determined by the following formula:

A. Multiply the age group-specific historical state utilization rate by the number of residents in each age category for each county included in the proposed service area to produce the projected demand for each age category;

B. Add each age group's projected demand to determine the total projected demand for cardiac catheterization procedures for the entire proposed service area.


10. Access: In light of Rule 0720-4-.01(1), which lists the factors concerning need on which an application

may be evaluated, the HSDA may decide to give special consideration to an applicant:

a. Who is offering the service in a medically u nderserved area as designated by the United States Heal th Resources and Services Administration;

b. Who documents that the service area population experiences a prevalence, i ncidence and/or mortality

from heart and cardiovascular diseases or other clinical conditi ons applicable to cardiac catheterization services that is substantially higher than the State of Tennessee average;

c. Who is a "safety net hospital" as defined by the Bureau of TennCare Essential Access Hospital

payment program; or d. Who provides a written commitment of intent ion to contract with at least one TennCare MCO and,

if providing adult services, to participate in the Medicare program

26

RESPONSE: While Vanderbilt Rutherford Hospital will be separately licensed, it will be an affiliate of VUMC, which is a “safety net hospital.” Vanderbilt Rutherford Hospital intends to contract with TennCare MCOs.

Specific Standards and Criteria for the Provision of Diagnostic Cardiac Catheterization Services Only

If an applicant does not intend to provide therapeutic cardiac catheterization services, the HSDA should place a condition on the resulting CON limiting the applicant to providing diagnostic cardiac catheterization services only. Applicants proposing to provide only d iagnostic cardiac catheterization services should meet the following minimum standards:

RESPONSE: Vanderbilt Rutherford Hospital intends to perform both diagnostic and therapeutic cardiac catheterizations.

11. Minimum Volume Standard: Such applicants should demonstrate that the proposed service utilization

will be a minimum of 300 d iagnostic cardiac catheterization cases per year by its third year of operation. Annual volume shall be measured based upon a two-year average which shall begin at the conclusion of the applicant's first year of operation. If the applicant is proposing services in a rural area where the HSDA determines that access to d iagnostic cardiac catheterization services has been limited, and if the applicant is pursuing a partnership with a tertiary facility to share and train staff, the Agency may determine that a minimum volume of 200 cases per year is acceptable. Only cases including d iagnostic cardiac catheterization procedures as defined by these Standards and Criteria may count towards meeting this minimum volume standard.

RESPONSE: As indicated above, the volume projections for this project will be 448 in year 1 and 621 in year 2.

12. High Risk/Unstable Patients: Such applicants should (a) delineate the steps, based on the ACC Guidelines,

that will be taken to ensure that high-risk or u nstable patients are not catheterized in the facility, and (b) certify that therapeutic cardiac catheterization services will not be performed i n the facility unless and until the applicant has received Certificate of Need approval to provide therapeutic cardiac catheterization services.

RESPONSE: Similar to how the Vanderbilt Heart Murfreesboro interventionalists triage patients currently, Vanderbilt Rutherford Hospital will ensure that the high risk or unstable patients are not catharized at Vanderbilt Rutherford Hospital. Moreover, Vanderbilt Rutherford Hospital will maintain an emergency transfer protocol with VUMC to provide tertiary level care should a patient require it.

13. Minimum Physician Requirements to Initiate a New Service: The initiation of a new diagnostic cardiac

catheterization program should require at least one cardiologist who performed an average of 75 diagnostic cardiac catheterization procedures over the most recent five- y e a r period. All participating cardiologists in the proposed program should be board certified or board eligible in cardiology and any relevant cardiac subspecial ties.

RESPONSE: The Vanderbilt Heart Murfreesboro cardiologists performed 694 diagnostic cardiac catheterizations total. Dr. Ahamd Abu-Halimah and Dr. David Dantzler, both board-certified interventional cardiologists with Vanderbilt Heart Murfreesboro, have averaged 330 and 243 diagnostic cardiac catheterizations, respectively, over the most recent five-year period.

27

Specific Standards and Criteria for the Provision of Therapeutic Cardiac Catheterization Services

Applicants proposing to provide therapeutic cardiac catheterization services must meet the following minimum standards:

14. Minimum Volume Standard: Such applicants should demonstrate that the proposed service utilization

will be a minimum of 400 diagnostic and/or therapeutic cardiac catheterization cases per year by its third year of operation. At least 75 of these cases per year should include a therapeutic cardiac catheterization procedure. Annual volume shall be measured based upon a two- year average which shall begin at the conclusion of the applicant's first year of operation. Only cases including diagnostic and therapeutic cardiac catheterization procedures as defined by these Standards and Criteria shall count towards meeting this minimum volume standard.

RESPONSE: Vanderbilt Rutherford Hospital projects performing 631 cardiac catheterizations by its third year of operation, 278 of which will be therapeutic cardiac catheterizations.

15. Open Heart Surgery Availability: Acute care facilities proposing to offer adult therapeutic cardiac

catheterization services shall not be required to maintain an on-site open heart surgery program. Applicants without on-site open heart surgery should follow the most recent American College of Cardiology/American Heart Association/Society for Cardiac Angiography and Interventions Practice Guideline Update for Percutaneous Coronary Intervention (ACC/AHA/SCAI Guidelines). As of the adoption of these Standards and Criteria, the latest version of this document (2007) may be found on line at: http://circ.aha journals.org/cgi/reprint/CIRCULATIONAHA.l07.185159

Therapeutic procedures should not be performed in freestandi ng cardiac catheterization laboratories, whether fixed or mobile. Mobile units may, however, perform therapeutic procedures provided the mobile unit is located on a hospital campus and the hospital has on-site open heart surgery. In addition, hospitals approved to perform therapeutic cardiac catheterizations without on-site open heart surgery backup may temporarily perform these procedures in a mobile laboratory on the hospital's campus dur ing construction impacting the fixed laboratories.

RESPONSE: Vanderbilt Rutherford Hospital will maintain an emergency transfer protocol with VUMC to provide tertiary level care should a patient require it.

16. Minimum Physician Requirements to Initiate a New Service: The i nitiation of a new therapeutic cardiac

catheterization program shou ld requi re at least two cardiologists with at least one cardiologist having performed an average of 75 therapeutic procedures over the most recent five-year period. All participating cardiologists in the proposed program should be board certified or board eligible in cardiology and any relevant cardiac subspecialties.

RESPONSE: VUMC currently has a full-time cardiology practice, Vanderbilt Heart Murfreesboro, with four full-time cardiologists. These cardiologists will staff the cardiac catheterization lab, while being supported by advance practice providers in Vanderbilt Heart Murfreesboro. Each of these cardiologists are board-certified in either cardiology or interventional cardiology. Dr. Ahamd Abu-Halimah, a board-certified interventional cardiologist with Vanderbilt Heart Murfreesboro, has averaged 113 therapeutic cardiac catheterizations over the most recent five-year period.

17. Staff and Service Availability: Ideally, therapeutic services should be ava ilable on an emergency

basis 24 hours per d ay, 7 d ays per week through a staff call schedule (24/7 emergency coverage). In addition, all laboratory staff should be available within 30 mi nutes of the activation of the laboratory. If the applicant will not be able to immediately provide 24/7 emergency coverage, the applicant should present a plan for reaching 24/7 emergency coverage with in three years of initiating the service or present a signed transfer agreement with another facility capable of treating transferred patients in a cardiac catheterization laboratory on a 24/7 basis within 90 minutes of the patient's arrival at the

28

originating emergency department.

RESPONSE: There are currently four cardiologists and two advance practice nurse practitioners at Vanderbilt Heart Murfreesboro. These Vanderbilt Heart Murfreesboro cardiologists will staff the cardiac catheterization lab and provide 24/7 care. In addition, the proposed cardiac catheterization services provided at Vanderbilt Rutherford Hospital will be supported by working closely and being aligned with the VUMC main campus for staffing and recruitment of additional staff and providers as needed.

18. Expansion of Services to Include Therapeutic Cardiac Catheterization: An applicant proposing the

establishment of therapeutic cardiac catheterization services, who is already an existing provider of diagnostic catheterization services, shou ld demonstrate that its diagnostic cardiac catheterization unit has been utilized for an average minim um of 300 cases per year for the two most recent years as reflected in the data supplied to and/or verified by the Department of Health.


III. Specific Standards and Criteria for the Provision of Pediatric Cardiac Catheterization Services

Applicants proposing to provide ped iatric cardiac catheterization services should meet the following minimum standards:

19. Minimu m Volume Standard: Such applicants should demonstrate that the proposed service utilization

will be a mi nimum of I 00 cases per year by its third year of operation. Annual volume shall be measured based upon a two-year average which shall begin at the conclusion of the applicant's first year of operation. Only cases that include diagnostic and therapeutic cardiac catheterization procedures as defined by these Standards and Criteria shall count towards meeting this minimum volume standard.

RESPONSE: Not applicable. Vanderbilt Rutherford Hospital does not intend to perform pediatric cardiac catheterization services at this time.

20. Minimum Physician Requirements to Initiate a New Service: The initiation of a new pediatric cardiac

catheterization program shou ld require at least two cardiologists with at least one cardiologist havi ng performed an average of 50 pediatric cardiac catheterization procedures over the most recent five year peri od. Pediatric cardiac catheterization procedures should be performed only by board certified or board eligible physicians specializing in pediatric cardiac care.


21. Open Heart Surgery Availability: Such applicants should offer full pediatric cardiac medical and cardiac

surgical capabilities, including pediatric open heart surgery.


IV. Neonatal Intensive Care Unit Criteria and Standards

1. Determination of Need: The need for neonatal nursery services is based upon data obtained from

Tennessee Department of Health Office of Vital Records in order to determine the total number of live births which occurred within the designated service area. The need shall be based upon the current year’s population projected for three years forward. The total number of neonatal intensive and intermediate care beds shall not exceed nine beds per 1,000 live births per year in a defined neonatal service

29

area. These estimates represent gross bed need and shall be adjusted by subtracting the existing applicable staffed beds including certified beds in outstanding CONs operating in the area as counted by TDH in the Joint Annual Report (JAR).

RESPONSE: The chart below provides the Tennessee Department of Health’s current projection of live births in the service area. Based on these data, it is projected that there is a need of 53 beds in the service area. As a result, there is a need for 29 additional neonatal beds in the Rutherford Market.

Demographic Variable/Geographic

Area

Department of Health/Health Statistics

Tota

l Num

ber o

f Li

ve B

irths

- Ye

ar

2018

Rat

e of

Liv

e Bi

rths

Per T

arge

t Po

pula

tion

Ye

ar 2

018

*Tar

get

Popu

latio

n-Pr

ojec

ted

Year

20

24

Tota

l Num

ber o

f Li

ve B

irths

Pr

ojec

ted

Year

20

24

Bed

Nee

d ba

sed

9 be

ds p

er 1

,000

liv

e bi

rths

Bedford 679 7.35% 9,837 723 7 Cannon 173 7.04% 2,339 165 1 Rutherford 4,146 5.61% 80,878 4,539 41 Warren 460 6.29% 7,155 450 4 Service Area Total 5,458 5.88% 100,209 5,876 53

2. Minimum Bed Standard: A single Level II neonatal special care unit shall contain a minimum of 10 beds.

A single Level III neonatal special care unit shall contain a minimum of 15 beds. These numbers are considered to be the minimum ones necessary to support economical operation of these services. An adjustment in the number of beds may be justified due to geographic remoteness.

RESPONSE: Monroe Carell Jr. Children’s Hospital at Vanderbilt (MCJCHV) is a Level IV NICU and regional perinatal center that provides highly specialized, family-centered care for at risk babies. MCJCHV’s Level IV designation reflects its exceptional capabilities and expertise in treating the most complex problems facing neonates. Vanderbilt Rutherford Hospital will be staffed by similarly trained neonatology physicians and nurses who will adopt the policies of MCJCHV and apply its substantial experience to bring a similar quality of care to this service area. The size of the proposed NICU is right-sized to meet the needs of the NICU discharges that are currently out-migrating from the service area to seek care at MCJCHV and other Davidson County hospitals and the unit will be an economically viable component of the Vanderbilt Rutherford Hospital.

3. Establishment of Service Area: The geographic service area shall be reasonable and based on an optimal balance between population density and service proximity of the applicant.

RESPONSE: The service area is consistent with the service area defined in the application. 4. Access: The applicant must demonstrate an ability and willingness to serve equally all of the service

area in which it seeks certification. In addition to the factors set forth in HSDA Rule 0720-11-.01(1) (listing factors concerning need on which an application may be evaluated), the HSDA may choose to give special consideration to an applicant that is able to show that there is a limited access in the proposed service area. RESPONSE: The hospital will contract with all TennCare MCOs and the hospital will serve all patients regardless of ability to pay. The project will improve access to care for those patients who are currently traveling to Nashville for services.

30

5. Orderly Development of Applicant’s Neonatal Nursery Services: The applicant shall document the

number of Level II, Level III, and Level IV cases that have been referred out of the hospital during the most recent three- y e a r period of available data.

RESPONSE: MCJCHV discharged 230 babies in FY19 at the MJCHV NICU on main campus that could be appropriately cared for in a community-based NICU. This application assumes that the substantial majority of these families will seek care closer to home at this Level II NICU.

6. Occupancy Rate Consideration: The Agency may take into account the following suggested occupancy

rates of existing facilities in the service area. The occupancy rates of an existing facility shall be 80 percent or greater in the preceding 12 months to justify expansion. The overall utilization of existing providers in the service area shall be 80 percent or greater for the approval of a new facility in a service area.


Facility County Staffed Beds Patient Days Staffed Occupancy % Change in

Patient Days 2016-2018 2016 2017 2018 2016 2017 2018

Saint Thomas Rutherford Rutherford 16 3,845 4,137 3,899 66% 71% 67% 1%

TriStar Stonecrest Rutherford 8 1,009 737 1,154 35% 25% 40% 14%

Total 24 4,854 4,874 5,053 55% 56% 58% 4%

Source: Joint Annual Report of Hospitals, 2018

7. Assurance of Resources: The applicant shall document that it will provide the resources necessary

to properly support the applicable level of neonatal nursery services. These resources shall align with those set forth by the Tennessee Perinatal Care System Guidelines for Regionalization, Hospital Care Levels, Staffing and Facilities. Included in such documentation shall be a letter of support from the applicant’s governing board of directors documenting the full commitment of the applicant to develop and maintain the facility resources, equipment, and staffing to provide a full continuum of neonatal nursery services. The applicant shall also document the financial costs of maintaining these resources and its ability to sustain them to ensure quality treatment of patients in the neonatal nursery services continuum of care.

RESPONSE: MCJCHV is a leader in Neonatology in the country and is the only Level IV NICU in the middle Tennessee area. This Level II nursery will meet the requirements outlined in the Perinatal Guidelines for Regionalization by working in close collaboration with the MCJCHV main campus. Furthermore, Vanderbilt Rutherford Hospital and VUMC commit to providing all necessary staffing and resources necessary to safely and successfully operate the unit.

8. Perinatal Advisory Committee. The Department of Health will consult with the Perinatal Advisory

Committee regarding applications.

RESPONSE: Vanderbilt Rutherford Hospital commits to consulting with the Perinatal Advisory Committee, as necessary, regarding any applications.

9. Adequate Staffing: An applicant shall document a plan demonstrating the intent and ability to recruit,

hire, train, assess competencies of, supervise, and retain the appropriate numbers of qualified personnel

31

to provide the services described in the application and that such personnel are available in the proposed service area. The applicant shall comply with the staffing guidelines and qualifications set forth by the Tennessee Perinatal Care System Guidelines for Regionalization, Hospital Care Levels, Staffing and Facilities. RESPONSE: As the region’s only Level IV NICU and regional perinatal center, MCJCHV provides training to neonatologists and neonatology nurses who go on to work in other NICUs nationwide. MCJCHV’s Level IV designation reflects its exceptional capabilities and expertise in treating the most complex problems facing neonates. Vanderbilt Rutherford Hospital will be staffed by similarly trained neonatology physicians and nurses who will adopt the policies of MCJCHV and apply its substantial experience to bring a similar quality of care to this service area. Furthermore, Vanderbilt Rutherford Hospital and VUMC commit to providing all necessary staffing and resources necessary to safely and successfully operate the unit and to comply with the requirements of the Perinatal Guidelines for Regionalization.

10. Staff and Service Availability for Emergent Cases: The applicant shall document the capability to access

the neonatologist rapidly for emergency cases 24 hours per day, seven days per week, 365 days per year.

RESPONSE: Vanderbilt Rutherford Hospital will be staffed by trained neonatology physicians and nurses. Vanderbilt Rutherford Hospital and VUMC commit to providing all necessary staffing and resources necessary to safely and successfully operate the unit.

11. Education: The applicant shall provide details of its plan to educate physicians, other professional and

technical staff, and parents. This plan shall be performed in accordance with the education guidelines set forth by Tennessee Perinatal Care System Guidelines for Regionalization, Hospital Care Levels, Staffing and Facilities.

RESPONSE: The applicant is very familiar with, and adheres to, the educational guidelines in the TPCSG at MCJCHV. The proposed NICU will likewise adhere to the guidelines.

12. Community Linkage Plan: The applicant shall describe its participation, if any, in a community linkage plan,

including its relationships with appropriate health care system providers/services and working agreements with other related community services assuring continuity of care. The applicant is encouraged to include primary prevention initiatives in the community linkage plan that would address risk factors leading to the increased likelihood of NICU usage. RESPONSE: VUMC has established a strong relationship with community providers in the service area. Vanderbilt Rutherford Hospital will work extensively with existing providers and the overall community to educate them regarding the services at the new hospital. Vanderbilt Rutherford Hospital will extend VUMC’s mission as a safety net hospital, assuring access to all patients, regardless to their ability to pay. Vanderbilt Rutherford Hospital will be part of VUMC’s support of the March of Dimes, a local and national organization with the goal of decreasing premature births. Vanderbilt Rutherford Hospital will provide prenatal classes to all expecting parents in which parents are taught newborn infant basics, breast feeding basics, and newborn expectations.

13. Data Requirements: Applicants shall agree to provide the Department of Health and/or the Health

Services and Development Agency with all reasonably requested information and statistical data related to the operation and provision of services and to report that data in the time and format requested. As a standard practice, existing data reporting streams will be relied upon and adapted over time to collect all needed information. RESPONSE: Vanderbilt Rutherford Hospital and VUMC commit to providing the Department of Health and/or the Health Services and Development Agency with all reasonably requested information and statistical date related to the operation and provision of these NICU services.

32

14. Quality Control and Monitoring: The applicant shall identify and document its existing or proposed plan for data reporting, quality improvement, and outcome and process monitoring system. RESPONSE: This applicant strongly agrees with collaborating on quality improvements and outcome reporting. Vanderbilt Rutherford Hospital will monitor safe sleep, skin to skin initiation within 5 minutes of birth, breastfeeding upon initiation and discharge. These metrics will be monitored and audited every month. Additionally, the Performance, Management and Improvement department will audit newborn nursery and NICU through an established process. The PMI group will also submit quality data to national organizations such as the Vermont Oxford Network, Children’s Hospital Association, and others, on outcomes such as safe sleep, CLABSI, other neonatal indicators

15. Tennessee Initiative for Perinatal Quality Care (TIPQC): The applicant is encouraged to include a

description of its plan to participate in the TIPQC.

RESPONSE: This applicant will participate in TIPQC. VUMC is an established participant in TIPQC with both the newborn nursery and NICU. Vanderbilt Rutherford Hospital will participate in antibiotic stewardship, golden hour (first hour of baby’s birth), safe sleep and many other initiatives. Additionally, VUMC has partnered with TIPQC to monitor and establish best practices for neonatal abstinence syndrome and this participation will be extended to Vanderbilt Rutherford Hospital.

NEED (cont’d)

2. Describe how this project relates to existing facilities or services operated by the applicant including

previously approved Certificate of Need projects and future long-range development plans. RESPONSE: VUMC has taken all reasonable efforts to expand the physical plant on its main campus. It is nearing completion of two certificate of need projects – CN1406-021A and CN071-075AE – which include the expenditure of nearly $260 million to add hundreds of thousands of additional square feet and nearly 200 additional beds to VUMC. It is far more cost-efficient to create hospital capacity closer to where patients live as compared to further expansion of VUMC’s main campus. More importantly, it will be more convenient for patients to obtain care closer to where they live. VUMC has made the reasoned decision to pursue decentralizing and dispersing its medical services into local communities, closer to patients’ homes. This application will develop the community hospital in Murfreesboro. The Vanderbilt Rutherford Hospital will enhance VUMC’s ability to concentrate on patients who need tertiary or quaternary care at its main campus by bringing Vanderbilt’s model of community-level care closer to patients in the service area who are already choosing to access VUMC for their medical needs.

3. Identify the proposed service area and provide justification for its reasonableness. Submit a county level map for the Tennessee portion of the service area using the map on the following page, clearly marked and shaded to reflect the service area as it relates to meeting the requirements for CON criteria and standards that may apply to the project. Please include a discussion of the inclusion of counties in the border states, if applicable. Attachment Section B-Need-3. RESPONSE: The service area is an appropriate catchment area from which a community hospital, like Vanderbilt Rutherford Hospital, can be expected to draw its patients. Vanderbilt Rutherford Hospital will be conveniently located off the interchange of S.R. 840 and Veteran’s Parkway, two miles from the S.R. 840 interchange with I-24. It is reasonable to assume that the vast majority of patients currently traveling to VUMC for their community-level healthcare will instead choose to access this new facility. Please see Attachment B.Need.3.

Complete the following utilization tables for each county in the service area, if applicable:

33

Service Area Counties FY19 % of total

discharges FY24 % of total

discharges Bedford 3,453 13% 3,543 13% Cannon 1,055 4% 1,057 4% Rutherford 17,966 70% 19,093 71% Warren 3,215 13% 3,068 12% Total 25,689 100% 26,761 100%

4. A. 1) Describe the demographics of the population to be served by the proposal.

2) Provide the following data for each county in the service area using current and projected population data from the Department of Health (https://www.tn.gov/content/tn/health/health-program-areas/statistics/health-data/con.html), the most recent enrollee data from the Division of TennCare (https://www.tn.gov/tenncare/information-statistics/enrollment-data.html ), and US Census Bureau demographic information (: http://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml ),.

TennCare Enrollment Data: https://www.tn.gov/tenncare/information-statistics/enrollment-data.html

Census Bureau Fact Finder: http://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml

* Target Population is population that project will primarily serve. For example, nursing home, home health agency, hospice agency projects typically primarily serve the Age 65+ population; projects for child and adolescent psychiatric services will serve the Population Ages 0-17. Projected Year is defined in select service-specific criteria and standards. If Projected Year is not defined, default should be four years from current year, e.g., if Current Year is 2019, then default Projected Year is 2023.

Be sure to identify the target population, e.g., Age 65+, the current year and projected year being used.

RESPONSE: Please see the demographic chart below.

B. Describe the special needs of the service area population, including health disparities, the accessibility to consumers, particularly the elderly, women, racial and ethnic minorities, TennCare or Medicaid recipients, and low-income groups. Document how the business plans of the facility will take into consideration the special needs of the service area population.

34

RESPONSE: Vanderbilt Rutherford Hospital will provide services to all irrespective of gender, race, ethnicity or income. Vanderbilt Rutherford Hospital intends to participate in MCOs that serve the region. Consistent with VUMC, Vanderbilt Rutherford Hospital will provide services to all patients regardless of ability to pay. Vanderbilt Rutherford Hospital will make services more accessible for service are residents who currently travel to Nashville for services at VUMC.

5. Describe the existing and approved but unimplemented services of similar healthcare providers in the service area. Include utilization and/or occupancy trends for each of the most recent three years of data available for this type of project. List each provider and its utilization and/or occupancy individually. Inpatient bed projects must include the following data: Admissions or discharges, patient days, average length of stay, and occupancy. Other projects should use the most appropriate measures, e.g., cases, procedures, visits, admissions, etc. This doesn’t apply to projects that are solely relocating a service.

RESPONSE: Please see the chart below for the Rutherford Market.

Facility County 2018 Patient Days

Licensed Beds

2016 2017 2018


Bedford 60 4,850 4,695 4,209


Cannon 60 5,208 4,524 4,413


Rutherford 286 76,003 78,960 77,747


Rutherford 119 18,773 19,156 19,819

TrustPoint Hospital

Rutherford 101 30,915 32,336 32,157


Warren 125 11,582 12,388 11,890

Total 882 155,580 158,737 156,623 Source: Joint Annual Report of Hospitals, 2018

6. Provide applicable utilization and/or occupancy statistics for your institution services for each of the past three years and the projected annual utilization for each of the two years following completion of the project. Additionally, provide the details regarding the methodology used to project utilization. The methodology must include detailed calculations or documentation from referral sources, and identification of all assumptions.


35

Baseline FY2019

FY2024 (Projected

Year 1)*

FY2025 (Projected

Year 2)

Annual Growth Rate

FY2019 to FY2024

Annual Growth Rate

FY2024 to FY2025

Community-level VUMC Inpatient Discharges from the identified Service Area (Assumed 85% redirection )

2,271 1,851 2,394 0.9% 0.8%

Community-level Inpatient Discharges from the identified Service Area for other Davidson County Acute Care Facilities (Assumed 15% redirection)

618 504 651 0.9% 0.8%

The projections for utilization at based on the methodology as follows: • Discharges from the service area at VUMC were analyzed to determine the number of

inpatients with conditions that can be appropriately treated at a community facility. It is assumed that 85% of those patients will elect to access inpatient services at Vanderbilt Rutherford Hospital.

• Discharges from the service area at Nashville hospitals other than VUMC were analyzed to determine the number of inpatients with conditions that can be appropriately treated at a community facility. It is assumed that 15% of those patients will elect to access inpatient services at Vanderbilt Rutherford Hospital.

• An annual growth rate of 0.9% was applied to inpatient discharges as described above; the annual growth rate is based on historical growth rates.

• A ramp up is assumed for year 1.

ECONOMIC FEASIBILITY The responses to this section of the application will help determine whether the project can be economically accomplished and maintained.

1. Project Cost Chart Instructions

A. All projects should have a project cost of at least $15,000 (the minimum CON Filing Fee) (See Application Instructions for Filing Fee)

B. The cost of any lease (building, land, and/or equipment) should be based on fair market value

or the total amount of the lease payments over the initial term of the lease, whichever is greater. Note: This applies to all equipment leases including by procedure or “per click” arrangements. The methodology used to determine the total lease cost for a "per click" arrangement must include, at a minimum, the projected procedures, the "per click" rate and the term of the lease.

C. The cost for fixed and moveable equipment includes, but is not necessarily limited to, maintenance agreements covering the expected useful life of the equipment; federal, state, and local taxes and other government assessments; and installation charges, excluding capital expenditures for physical plant renovation or in-wall shielding, which should be included under construction costs or incorporated in a facility lease.

D. The Total Construction Cost reported on line 5 should equal the Total Cost reported on the Square Footage Chart.

E. For projects that include new construction, modification, and/or renovation — documentation must be provided from a licensed architect or construction professional that support the estimated

36

construction costs. Provide a letter that includes the following:

1) A general description of the project;

2) An estimate of the cost to construct the project;

3) A description of the status of the site’s suitability for the proposed project; and

4) Attesting the physical environment will conform to applicable federal standards, manufacturer’s specifications and licensing agencies’ requirements including the AIA Guidelines for Design and Construction of Hospital and Health Care Facilities or comparable document in current use by the licensing authority.

RESPONSE: The Project Cost Chart has been completed as required. Please see Attachment B.Economic Feasibility.1.E.

37

PROJECT COST CHART

A. Construction and equipment acquired by purchase:

1. Architectural and Engineering Fees $6,431,767__

2. Legal, Administrative (Excluding CON Filing Fee), Consultant Fees

$150,000___

3. Acquisition of Site $3,398,408 _

4. Preparation of Site $8,887,645__

5. Total Construction Costs $71,647,701_

6. Contingency Fund $8,053,535__

7. Fixed Equipment $19,187,944

8. Moveable Equipment (List all equipment over $50,000 as separate attachments)

$15,699,227

9. Other (Specify) Fees, Signage $793,000____

B. Acquisition by gift, donation, or lease:

1. Facility (inclusive of building and land) $___________

2. Building only $___________

3. Land only $___________

4. Equipment (Specify) ___________ $___________

5. Other (Specify) ____________ $___________

C. Financing Costs and Fees:

1. Interim Financing $___________

2. Underwriting Costs $___________

3. Reserve for One Year’s Debt Service $___________

4. Other (Specify) ___________________________ $___________

D. Estimated Project Cost (A+B+C)

$134,249,227__

E. CON Filing Fee $_95,000__

F. Total Estimated Project Cost

(D+E) TOTAL

$134,344,227

Moveable equipment over $50,000 is listed in Attachment B.Economic Feasibility.1.Project Cost Chart.A.8.

38

2. Identify the funding source(s) for this project.

Check the applicable item(s) below and briefly summarize how the project will be financed. (Documentation for the type of funding MUST be inserted at the end of the application, in the correct alpha/numeric order and identified as Attachment Section B-Economic Feasibility-2.)

A. Commercial loan – Letter from lending institution or guarantor stating favorable initial contact,

proposed loan amount, expected interest rates, anticipated term of the loan, and any restrictions or conditions;

B. Tax-exempt bonds – Copy of preliminary resolution or a letter from the issuing authority stating favorable initial contact and a conditional agreement from an underwriter or investment banker to proceed with the issuance;

C. General obligation bonds – Copy of resolution from issuing authority or minutes from the appropriate meeting;

D. Grants – Notification of intent form for grant application or notice of grant award;

X E. Cash Reserves – Appropriate documentation from Chief Financial Officer of the organization providing the funding for the project and audited financial statements of the organization; and/or

F. Other – Identify and document funding from all other sources.

RESPONSE: See attachment B.EconomicFeasibility.2.F

3. Complete Historical Data Charts on the following two pages—Do not modify the Charts provided or submit Chart substitutions!

Historical Data Chart(s) provide revenue and expense information for the last three (3) years for which complete data is available. The “Project Only Chart” provides information for the services being presented in the proposed project while the “Total Facility Chart” provides information for the entire facility. Complete both, if applicable.

Note that “Management Fees to Affiliates” should include management fees paid by agreement to the parent company, another subsidiary of the parent company, or a third party with common ownership as the applicant entity. “Management Fees to Non-Affiliates” should include any management fees paid by agreement to third party entities not having common ownership with the applicant.

RESPONSE: The proposed project is to create a new separately licensed hospital and the Historical Data Chart information does not exist.

39

HISTORICAL DATA CHART □ Total □ Project Only

Give information for the last three (3) years for which complete data are available for the facility or agency. The fiscal year begins in (Month).

A. Utilization Data Specify Unit of Measure

B. Revenue from Services to Patients

Year_ Year_ Year

1. Inpatient Services $ $ $ 2. Outpatient Services 3. Emergency Services 4. Other Operating Revenue (Specify)_

Gross Operating Revenue $ $ $

C. Deductions from Gross Operating Revenue 1. Contractual Adjustments $ $ $

2. Provision for Charity Care 3. Provisions for Bad Debt

Total Deductions $ $ $

NET OPERATING REVENUE $ $ $

D. Operating Expenses 1. Salaries and Wages

a. Direct Patient Care b. Non-Patient Care

2. Physician’s Salaries and Wages 3. Supplies 4. Rent

a. Paid to Affiliates b. Paid to Non-Affiliates

5. Management Fees: a. Paid to Affiliates b. Paid to Non-Affiliates

6. Other Operating Expenses (D6) Total Operating Expenses $ $ $

E. Earnings Before Interest, Taxes and Depreciation $ $ $

F. Non-Operating Expenses 1. Taxes $ $ $ 2. Depreciation 3. Interest 4. Other Non-Operating Expenses

Total Non-Operating Expenses $ $ $

NET INCOME (LOSS) $ $ $

40

NET INCOME (LOSS) $ $ $

G. Other Deductions

1. Annual Principal Debt Repayment $ $ $

2. Annual Capital Expenditure Total Other Deductions $ $ $

NET BALANCE $ $ $

DEPRECIATION $ $ $

FREE CASH FLOW (Net Balance + Depreciation) $ $ $

□ Project Facility

□ Total Only

HISTORICAL DATA CHART-OTHER EXPENSES

*Total other expenses should equal Line D.6. In the Historical Data Chart

OTHER OPERATING EXPENSES CATEGORIES Year Yea (D6)

r Year

1. Professional Services Contract $ $ $

2. Contract Labor

3. Imaging Interpretation Fees

4.

5.

6.

7. *Total Other Expenses $ $ $

41

4. Complete Projected Data Charts on the following two pages – Do not modify the Charts provided or submit Chart substitutions!

The Projected Data Chart requests information for the two years following the completion of the proposed services that apply to the project. Please complete two Projected Data Charts. One Projected Data Chart should reflect revenue and expense projections for the Proposal Only (i.e., if the application is for additional beds, include anticipated revenue from the proposed beds only, not from all beds in the facility). The second Chart should reflect information for the total facility. Only complete one chart if it suffices.

Note that “Management Fees to Affiliates” should include management fees paid by agreement to the parent company, another subsidiary of the parent company, or a third party with common ownership as the applicant entity. “Management Fees to Non-Affiliates” should include any management fees paid by agreement to third party entities not having common ownership with the applicant.

42

PROJECTED DATA CHART □ Total Facility X Project Only

Give information for the two (2) years following the completion of this proposal. The fiscal year begins in July

Year FY2024 FY2025

A. Utilization DataSpecify Unit of Measure: Adjusted Discharges 5,921 7,997

B. Revenue from Services to Patients1. Inpatient Services 140,447,692$ 189,134,471$ 2. Outpatient Services 131,400,114 183,680,017 3. Emergency Services 80,970,909 123,435,451 4. Other Operating Revenue (Specify): N/A - -

Gross Operating Revenue 352,818,715$ 496,249,939$

C. Deductions from Gross Operating Revenue1. Contractual Adjustments 273,208,340$ 387,125,820$ 2. Provision for Charity Care 11,825,390 16,647,676 3. Provisions for Bad Debt 1,818,225 2,555,843

Total Deductions 286,851,955$ 406,329,339$

NET OPERATING REVENUE 65,966,760$ 89,920,600$

D. Operating Expenses1. Salaries and Wages

a. Direct Patient Care 25,154,613$ 32,774,947$ b. Non-Patient Care 4,574,154 5,340,866

2. Physician's Salaries and Wages - - 3. Supplies 12,813,187 17,719,247 4. Rent

a. Paid to Affiliates - - b. Paid to Non-Affiliates - -

5. Management Feesa. Paid to Affiliates - - b. Paid to Non-Affiliates - -

6. Other Operating Expenses (D6) 19,437,932 21,013,087 Total Operating Expenses 61,979,886$ 76,848,147$

E. Earnings Before Interest, Taxes and Depreciation 3,986,874$ 13,072,453$

F. Non-Operating Expenses1. Taxes -$ -$ 2. Depreciation 7,145,552 7,402,468 3. Interest - - 4. Other Non-Operating Expenses - -

Total Non-Operating Expenses 7,145,552$ 7,402,468$

NET INCOME (LOSS) (3,158,678)$ 5,669,985$

G. Other Deductions1. Estimated Annual Principal Debt Repayment -$ -$ 2. Annual Capital Expenditures 1,319,335 1,798,412

Total Other Deductions 1,319,335$ 1,798,412$ NET BALANCE (4,478,013)$ 3,871,573$

DEPRECIATION 7,145,552 7,402,468 FREE CASH FLOW (Net Balance + Depreciation) 2,667,539$ 11,274,041$

Projected Data Chart

43

5. A. Please identify the project’s average gross charge, average deduction from operating revenue, and average net charge using information from the Projected Data Charts for Year 1 and Year 2 of the proposed project. Complete Project Only Chart and Total Facility Chart, if applicable.

RESPONSE: Please see chart below.

OTHER OPERATING EXPENSE CATEGORIES Year FY2024 FY2025(D6)

1. Facility and Equipment 4,470,724$ 4,833,010$ 2. Referred Lab Fee 3,498,828 3,782,356 3. Consulting Management 2,721,310 2,941,832 4. Professional Liability Insurance 1,943,793 2,101,309 5. Fees 1,360,655 1,470,916 6. Telephone 971,897 1,050,654 7. School Credit 777,517 840,523 8. Food Purchases 777,517 840,523 9. Laundry / Linen 583,138 630,393 10. Custodial Services 388,759 420,262 11. Licenses / Fees 388,759 420,262 12. Other Miscellaneous 1,555,035 1,681,047

Total Other Expenses 19,437,932$ 21,013,087$

Projected Data Chart - Other Expenses

44

B. Provide the proposed charges for the project and discuss any adjustment to current charges that will result from the implementation of the proposal. Additionally, describe the anticipated revenue from the project and the impact on existing patient charges.

RESPONSE: Vanderbilt Rutherford Hospital will adopt the same charge structure as VUMC and no adjustment in charges are anticipated as a result of the project. Charges are based on FY2019 VUMC charges for identified community hospital-level patients.

C. Compare the proposed charges to those of similar facilities in the service area/adjoining service areas, or to proposed charges of projects recently approved by the Health Services and Development Agency. If applicable, compare the proposed charges of the project to the current Medicare allowable fee schedule by common procedure terminology (CPT) code(s).

RESPONSE: The gross inpatient DRG charges for the top 10 DRGs projected at Vanderbilt Rutherford Hospital are provided in the following table and compared to the existing facilities in the Rutherford Market (deidentified to comply with THA policy.)

Project Only ChartPrevious Year to Most Recent Year

Most Recent Year

Year OneFY2024

Year TwoFY2025

% Change (Current Year to Year 2)

N/A N/A 59,588$ 62,055$ N/A

N/A N/A 48,447$ 50,810$ N/A

N/A N/A 11,141$ 11,244$ N/A

Total Facility Chart - Not ApplicablePrevious Year to Most Recent Year

Most Recent Year

Year OneFY2024

Year TwoFY2025


Gross Charge (Gross Operating Revenue / Utilization Data)

Deduction from Revenue (Total Deductions/Utilization Data)

Average Net Charge (Net Operating Revenue/Utilization Data)

Deduction from Revenue (Total Deductions/Adjusted Discharges)

Average Net Charge (Net Operating Revenue/Adjusted Discharges)

Gross Charge (Gross Operating Revenue/Adjusted Discharges)

45

The gross charges at Vanderbilt Rutherford Hospital for the most frequent DRGs fall within a reasonable range of the charges at existing service area providers. The following chart providers a comparison between the Vanderbilt Rutherford Hospital projected charges for the top 10 inpatient DRGs and the Medicare Allowable fee schedule for those DRGs.

6. A. Discuss how projected utilization rates will be sufficient to support financial performance.

1) Noting when the project’s financial breakeven is expected, and

2) Demonstrating the availability of sufficient cash flow until financial viability is achieved.

Provide copies of the balance sheet and income statement from the most recent reporting period of the institution and the most recent audited financial statements with accompanying notes, if applicable. For all projects, provide financial information for the corporation, partnership, or principal parties that will be a source of funding for the project. Copies must be inserted at the end of the application, in the correct alpha- numeric order and labeled as Attachment Section B-Economic Feasibility-6A

RESPONSE: The project utilization assumes an opening of Vanderbilt Rutherford Hospital in the second half of 2023, a ramp up of utilization in 2024, and reaching full projected utilization in 2025 – the second year of operation. The project will achieve a positive return during this second year of

DRG Definition VRH Hospital A Hospital B Hospital C Hospital D Hospital E101 SEIZURES W/O MCC 28,542$ 34,416$ --- 27,513$ 34,964$ ---189 PULMONARY EDEMA & RESPIRATORY FAILURE 44,468$ 45,304$ 33,891$ 33,147$ 28,561$ 22,604$ 203 BRONCHITIS & ASTHMA W/O CC/MCC 13,279$ 27,769$ 31,829$ 15,290$ --- ---392 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 26,134$ 31,377$ 22,603$ 21,242$ 22,544$ 24,234$ 470 MAJOR HIP AND KNEE JOINT REPLACEMENT 77,653$ 69,850$ 101,995$ 61,446$ 68,345$ ---787 CESAREAN SECTION W/O STERILIZATION W CC 29,595$ 24,209$ --- 28,761$ 33,728$ ---794 NEONATE W OTHER SIGNIFICANT PROBLEMS 13,002$ 7,052$ --- 7,362$ 5,003$ ---795 NORMAL NEWBORN 6,928$ 4,949$ --- 4,861$ 3,338$ ---807 VAGINAL DELIVERY W/O STERILIZATION/D&C W/O CC/MCC 14,679$ 17,844$ --- 22,060$ 20,906$ ---871 SEPTICEMIA OR SEVERE SEPSIS W/O MV >96 HOURS W MCC 80,035$ 60,855$ 41,874$ 50,489$ 36,123$ 24,324$

Source: Tennessee Hospital Association

Charge Comparison for Top 10 Inpatient DRGs - FY2019

DRG Definition VRHMedicare Allowable

101 SEIZURES W/O MCC 28,542$ 8,720$ 189 PULMONARY EDEMA & RESPIRATORY FAILURE 44,468$ 12,006$ 203 BRONCHITIS & ASTHMA W/O CC/MCC 13,279$ 6,852$ 392 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 26,134$ 7,521$ 470 MAJOR HIP AND KNEE JOINT REPLACEMENT 77,653$ 19,440$ 787 CESAREAN SECTION W/O STERILIZATION W CC 29,595$ 10,325$ 794 NEONATE W OTHER SIGNIFICANT PROBLEMS 13,002$ 13,667$ 795 NORMAL NEWBORN 6,928$ 1,850$ 807 VAGINAL DELIVERY W/O STERILIZATION/D&C W/O CC/MCC 14,679$ 6,190$ 871 SEPTICEMIA OR SEVERE SEPSIS W/O MV >96 HOURS W MCC 80,035$ 18,432$

Source: Tennessee Hospital Association

Charge Comparison for Top 10 Inpatient DRGs to Medicare Allowable

46

operation. Please see Attachment B.EconomicFeasibility.6A which provides the current audited financial statements of VUMC and demonstrates the cash reserves available to support Vanderbilt Rutherford Hospital.

B. Net Operating Margin Ratio: The Net Operating Margin Radio demonstrates how much revenue is left

over after all the variable or operating costs have been paid. The formula for this ratio is: (Earnings before interest, Taxes, and Depreciation/Net Operating Revenue).

Utilizing information from the Historical and Projected Data Charts please report the net operating margin ratio trends in the following tables. Complete Project Only Chart and Total Facility Chart, if applicable.

RESPONSE: Please see completed chart below.

C. Capitalization Ratio (Long-term debt to capitalization) – Measures the proportion of debt financing in a business’s permanent (Long-term) financing mix. This ratio best measures a business’s true capital structure because it is not affected by short-term financing decisions. The formula for this ratio is: (Long-term debt/(Long-term debt+Total Equity (Net assets)) x 100).

For the entity (applicant and/or parent company) that is funding the proposed project please provide the capitalization ratio using the most recent year available from the funding entity’s audited balance sheet, if applicable. The Capitalization Ratios are not expected from outside the company lenders that provide funding. This question is applicable to all applications regardless of whether or not the project is being partially or totally funded by debt financing.

RESPOSNE: VUMC’s capitalization ratio for the twelve months ended June 30, 2019 is 55.38%.

7. Discuss the project’s participation in state and federal revenue programs, including a description of the extent

to which Medicare, TennCare/Medicaid and medically indigent patients will be served by the project. Report the estimated gross operating revenue dollar amount and percentage of projected gross operating revenue anticipated by payor classification for the first year of the project by completing the table below. Complete Project Only Chart and Total Facility Chart, if applicable.

Project Only Chart2nd Previous Year to Most Recent Year

1st Previous Year to Most Recent Year Most Recent

Projected Year 1 FY2024

Projected FY2025

N/A N/A N/A 6.0% 14.5%

Total Facility Chart - Not Applicable2nd Previous Year to Most Recent Year

1st Previous Year to Most Recent Year Most Recent


Projected FY2025

N/A N/A N/A N/A N/A

Net Operating Margin Ratio

Net Operating Margin Ratio

47

*Needs to match Gross Operating Revenue Year One on Projected Data Chart

8. Provide the projected staffing for the project in Year 1 and compare to the current staffing for the most recent 12-

month period, as appropriate. This can be reported using full-time equivalent (FTEs) positions for these positions. Identify projected salary amounts by position classifications and compare the clinical staff salaries to prevailing wage patterns in the proposed service area as published by the Department of Labor & Workforce Development and/or other documented sources, such as the US Department of Labor. Wage data pertaining to healthcare professions can be found at the following link: https://www.bls.gov/oes/current/oes_tn.htm.

Projected Gross Operating Revenue

As a % of total

$ 89,853,636 25% 58,795,040 17% 168,182,877 48% 20,685,816 6%

15,301,346 4%

$ 352,818,715 100% 11,825,390


As a % of total

N/A N/AN/A N/AN/A N/AN/A N/AN/A N/AN/A N/AN/A

Applicant's Projected Payor Mix, Year 1Total Facility Chart - Not Applicable

Payor Source

Medicare/Medicare Managed CareTennCare/MedicaidCommercial/Other Managed Care

Commercial/Other Managed CareSelf-PayOther (Worker's Compensation, Other Governmental, Third-Party Liability) Total*

Self-PayOther (Specify) Total*Charity Care

Charity Care

Payor Source

Medicare/Medicare Managed CareTennCare/Medicaid

Applicant's Projected Payor Mix, Year 1Project Only Chart

48

9. What alternatives to this project were considered? Discuss the advantages and disadvantages of each, including but not limited to:

A. The availability of less costly, more effective and/or more efficient methods of providing the benefits intended

by the project. If development of such alternatives is not practicable, justify why not, including reasons as to why they were rejected. RESPONSE: VUMC continuously evaluates the possibility of expansion options at its main campus. However, all identified options involve substantial expense and require significant disruption of the operations at VUMC’s main campus. Rutherford County is the third highest contributor to VUMC’s current volumes – behind only Davidson and Williamson counties. The Vanderbilt Rutherford Hospital is a natural extension of the broad range of medical services that Vanderbilt has already introduced to the Rutherford Market over the past decade and because it is a large source of inpatient volume, it is a logical and effective location to construct a new community hospital that will offload volume from VUMC’s main campus.

B. Document that consideration has been given to alternatives to new construction, e.g., modernization or

sharing arrangements.

RESPONSE: Due to the necessary size and square footage required for the appropriately-sized Vanderbilt Rutherford Hospital, new construction is the most practical and efficient manner of construction.

QUALITY STANDARDS

1. Per PC 1043, Acts of 2016, any receiving a CON after July 1, 2016 must report annually using forms prescribed by the Agency concerning continued need and appropriate quality measures Please verify that annual reporting will occur.

RESPONSE: Vanderbilt Rutherford Hospital commits to providing the Health Services and Development Agency with the requested information annually.

2. Quality-The proposal shall provide health care that meets appropriate quality standards. Please address

each of the following questions:

Existing FTEs Projected FTEsAverage Wage

(Contractual Rate)

Area Wide/Statewide Average Wage

N/A 128.2 $ 30.05 $ 30.08 N/A 10.9 $ 23.49 $ 19.84 N/A 85.3 $ 24.76 $ 23.97 N/A 74.7 $ 32.36 N/A

N/A 299.1 $ 28.88 N/A

N/A 6.0 $ 107.84 N/A N/A 78.4 $ 23.64 N/A N/A 7.0 $ 30.33 N/A N/A 91.4 $ 29.68 N/A N/A 390.50 $ 29.04 N/A N/A - - N/A 390.50 $ 29.04 N/A

C. Contractual StaffTotal Staff (A+B+C)

Total Employees (A+B)

Position Classification

A. Direct Patient Care Positions

ManagementClerical

Facilities and MaintenanceTotal Non-Patient Care Positions

RNsLPNs

OtherTotal Direct Patient Care Positions

B. Non-Patient Care Positions

Techs

49

A. Does the applicant commit to the following?

1) Maintaining the staffing comparable to the staffing chart presented in its CON application;

RESPONSE: Vanderbilt Rutherford Hospital plans to maintain staffing comparable to the staffing chart presented in its CON application and appropriate for a community hospital.

2) Obtaining and maintaining all applicable state licenses in good standing;

RESPONSE: Vanderbilt Rutherford Hospital will obtain and applicable state licenses and maintain them in good standing.

3) Obtain and maintaining TennCare and Medicare certification(s), if participation in such programs was

indicated in the application;

RESPONSE: Vanderbilt Rutherford Hospital will obtain and maintain TennCare and Medicare certifications necessary to provide the level of care described in the application for this community hospital.

4) For an existing healthcare institution applying for a CON - Has it maintained substantial compliance with

applicable federal and state regulation for the three years prior to the CON application. In the event of non-compliance, the nature of non-compliance and corrective action should be discussed to include any of the following: suspension of admissions, civil monetary penalties, notice of 23-day or 90-day termination proceedings from Medicare/Medicaid/TennCare, revocation/denial of accreditation, or other similar actions and what measures the applicant has or will put into place to avoid similar findings in the future.


5) For an existing healthcare institution applying for a CON - Has the entity been decertified within the prior three years? If yes, please explain in detail. (This provision shall not apply if a new, unrelated owner applies for a CON related to a previously decertified facility)


B. Respond to all of the following and for such occurrences, identify, explain and provide documentation:

1) Has any of the following:

a. Any person(s) or entity with more than 5% ownership (direct or indirect) in the applicant (to

include any entity in the chain of ownership for applicant);

b. Any entity in which any person(s) or entity with more than 5% ownership (direct or indirect) in the applicant (to include any entity in the chain of ownership for applicant) has an ownership interest of more than 5%; and/or

c. Any physician or other provider of health care, or administrator employed by any entity in which

any person(s) or entity with more than 5% ownership in the applicant (to include any entity in the chain of ownership for applicant) has an ownership interest of more than 5%.

RESPONSE: No.

2) Been subjected to any of the following:

a. Final Order or Judgment in a state licensure action;

50

b. Criminal fines in cases involving a Federal or State health care offense;

c. Civil monetary penalties in cases involving a Federal or State health care offense;

d. Administrative monetary penalties in cases involving a Federal or State health care offense;

e. Agreement to pay civil or administrative monetary penalties to the federal government or any state in cases involving claims related to the provision of health care items and services; and/or

f. Suspension or termination of participation in Medicare or Medicaid/TennCare programs.

g. Is presently subject of/to an investigation, regulatory action, or party in any civil or criminal action of which you are aware.

h. Is presently subject to a corporate integrity agreement.

RESPONSE: No.

C. Does the applicant plan, within 2 years of implementation of the project, to participate in self-assessment

and external assessment against nationally available benchmark data to accurately assess its level of performance in relation to established standards and to implement ways to continuously improve? Note: Existing licensed, accredited and/or certified providers are encouraged to describe their process for same.

RESPONSE: Through collaboration with VUMC, Vanderbilt Rutherford Hospital will meet all quality control measures outlined in VUMC’s Quality Strategic Plan as well as external assessments through the Joint Commission, Medicare and other forms of licensure/ accrediting review.

Please complete the chart below on accreditation, certification, and licensure plans.

1) If the applicant does not plan to participate in these type of assessments, explain why since quality healthcare must be demonstrated.

Credential Agency Status (Active or Will Apply)

Licensure

• Health □ Intellectual and Developmental Disabilities □ Mental Health and Substance Abuse Services

Certification

• Medicare • Medicaid/TennCare □ Other_

Accreditation Joint Commission

2) Based upon what was checked/completed in above table, will the applicant accept a condition placed on the certificate of need relating to obtaining/maintaining license, certification, and/or accreditation?

RESPONSE: Yes, Vanderbilt Rutherford Hospital will maintain appropriate license, certification, and/ or accreditation.

D. The following list of quality measures are service specific. Please indicate which standards you will be

addressing in the annual Continuing Need and Quality Measure report if the project is approved.

51

• For Cardiac Catheterization projects:

a. Documenting a plan to monitor the quality of its cardiac catheterization program, including but not

limited to, program outcomes and efficiencies; and b. Describing how the applicant will agree to cooperate with quality enhancement efforts sponsored

or endorsed by the State of Tennessee; and c. Describing how cardiology staff will be maintaining:

d. Adult Program: 75 cases annually averaged over the previous 5 years;

e. Pediatric Program: 50 cases annually averaged over the previous 5 years.

For Open Heart projects: f. Describing how the applicant will staff and maintain the number of who will perform the volume of

cases consistent with the State Health Plan (annual average of the previous 2 years), and maintain this volume in the future;

g. Describing how at least a surgeon will be recruited and retained (at least one shall have 5 years

experience); h. Describing how the applicant will participate in a data reporting, quality improvement, outcome

monitoring, and external assessment system that benchmarks outcomes based on national norms (demonstrated active participation in the STS National Database is expected and shall be considered evidence of meeting this standard).

For Comprehensive Inpatient Rehabilitation Services projects: Retaining or recruiting a physiatrist?

For Home Health projects: Documenting the existing or proposed plan for quality data reporting, quality improvement, and an outcome and process monitoring system.

For Hospice projects: Documenting the existing or proposed plan for quality data reporting, quality improvement, and an outcome and process monitoring system.

For Megavoltage Radiation Therapy projects: Describing or demonstrating how the staffing and quality assurance requirements will be met of the American Society of Therapeutic Radiation and Oncology (ASTRO), the American College of Radiology (ACR), the American College of Radiation Oncology (ACRO), National Cancer Institute (NCI), or a similar accrediting authority.

• For Neonatal Intensive Care Unit projects: Documenting the existing or proposed plan for data reporting, quality improvement, and outcome and process monitoring systems; document the intention and ability to comply with the staffing guidelines and qualifications set forth by the Tennessee Perinatal Care System Guidelines for Regionalization, Hospital Care Levels, Staffing and Facilities; and participating in the Tennessee Initiative for Perinatal Quality Care (TIPQC).

For Ambulatory Surgical Treatment Center projects: Estimating the number of physicians by specialty expected to utilize the facility, developing criteria to be used by the facility in extending surgical and anesthesia privileges to medical personnel, and documenting the availability of appropriate and qualified staff that will provide ancillary support services, whether on- or off-site?

52

For Nursing Home projects: Documenting the existing or proposed plan for data reporting, quality improvement, and outcome and process monitoring systems, including in particular details on its Quality Assurance and Performance Improvement program.

For Inpatient Psychiatric projects:

• Describing or demonstrating appropriate accommodations for: • Seclusion/restraint of patients who present management problems and children who need quiet space,

proper sleeping and bathing arrangements for all patients); • Proper sleeping and bathing arrangements; • Adequate staffing (i.e. that each unit will be staffed with at least two direct patient care staff, one of which

shall be a nurse, at all times); • A staffing plan that will lead to quality care of the patient population served by the project. • An existing or proposed plan for data reporting, quality improvement, and outcome and process

monitoring systems; and • If other psychiatric facilities are owned or administered, providing information on satisfactory surveys and

quality improvement programs at those facilities. • Involuntary admissions if identified in CON criteria and standard review

For Freestanding Emergency Department projects: Demonstrating that it will be accredited with the Joint Commission or other applicable accrediting agency, subject to the same accrediting standards as the licensed hospital with which it is associated.

For Organ Transplant projects: Describing how the applicant will achieve and maintain institutional membership in the national Organ Procurement and Transportation Network (OPTN), currently operating as the United Network for Organ Sharing (UNOS), within one year of program initiation. Describing how the applicant shall comply with CMS regulations set forth by 42 CFR Parts 405, 482, and 498, Medicare Program; Hospital Conditions of Participation: Requirements for Approval and Re-Approval of Transplant Centers To Perform Organ Transplants.

For Relocation and/or Replacement of Health Care Institution projects: Describing how facility and/or services specific measures will be met.

CONTRIBUTION TO THE ORDERLY DEVELOPMENT OF HEALTH CARE

The responses to this section of the application helps determine whether the project will contribute to the orderly development of healthcare within the service area.

1. List all existing health care providers (i.e., hospitals, nursing homes, home care organizations, etc.), managed care organizations, alliances, and/or networks with which the applicant currently has or plans to have contractual and/or working relationships, that may directly or indirectly apply to the project, such as, transfer agreements, contractual agreements for health services.

RESPONSE: Please see Attachment Contribution to the Orderly Development of Healthcare.

2. Describe the effects of competition and/or duplication of the proposal on the health care system, including the

impact to consumers and existing providers in the service area. Discuss any instances of competition and/or duplication arising from your proposal including a description of the effect the proposal will have on the utilization rates of existing providers in the service area of the project.

A. Positive Effects

53

RESPONSE: The Vanderbilt Rutherford Hospital will have a positive effect on the Rutherford Market community, will assist in decompressing VUMC’s main campus, and will improve the healthcare delivery system as a whole. This project will help to alleviate VUMC’s existing capacity issues by bringing Vanderbilt’s model of care closer to the patients in the service area who are already choosing to access VUMC for their medical needs. Despite patients having to travel significant distances, VUMC is the second largest provider of inpatient care to the proposed service area. In 2019, over 58,000 patients from the service area traveled to VUMC’s main campus for care. While some of these patients travel to access Vanderbilt’s tertiary level services, many of these patients choose to leave the service area and drive to Nashville to access VUMC for community-level medical services that can be provided at the proposed Vanderbilt Rutherford Hospital. The Vanderbilt Rutherford Hospital project is a natural extension of the broad range of medical services that Vanderbilt has introduced to the Rutherford Market over the past decade. VUMC currently has more than 120 physicians and advanced practitioners providing care in the service area. The addition of this community hospital will support the clinical growth of VUMC and will allow patients currently seeking care at VUMC to access this care in the community. Finally, the Vanderbilt Rutherford Hospital will provide a conveniently accessible full-service community hospital on the growing western side of I-24 in Rutherford County. The addition of this community hospital will significantly improve access to care, especially for those patients who are otherwise traveling to Nashville.

B. Negative Effects RESPONSE: The impact of Vanderbilt Rutherford Hospital on existing community providers should be minimal. The need for the Vanderbilt Rutherford Hospital is based on patients who are currently obtaining hospital care in Nashville. Patients in the Rutherford Market already have established physician relationships and referral patterns with existing providers. For those patients who are choosing to stay within the service area for their care, they will likely continue to access their physicians and preferred hospitals. But for the 42% of service area patients who are leaving the Rutherford Market, the Vanderbilt Rutherford Hospital will provide a new option to receive their care closer to their homes. Furthermore, Rutherford County is the fifth most populous county in Tennessee, and it is growing. At its current rate of growth, the population of Rutherford County will surpass that of Hamilton County (Chattanooga) in 2026. To the extent that there is some minimal redirection of patients from existing community providers, any such volume losses will be quickly offset by the growing population in the community.

3. A. Discuss the availability of and accessibility to human resources required by the proposal, including

clinical leadership and adequate professional staff, as per the State of Tennessee licensing requirements, CMS, and/or accrediting agencies requirements, such as the Joint Commission and Commission on Accreditation of Rehabilitation Facilities.

RESPONSE: VUMC provides a dynamic recruitment and retention program for employees. As one of the largest employers, VUMC actively searches for the most qualified candidates and seeks to place them in positions that lead to high job satisfaction and successful care. Vanderbilt Rutherford Hospital’s affiliation with VUMC assures the availability of staff.

B. Document the category of license/certification that is applicable to the project and why. These include,

without limitation, regulations concerning clinical leadership, physician supervision, quality assurance policies and programs, utilization review policies and programs, record keeping, clinical staffing requirements, and staff education.

54

RESPONSE: Vanderbilt Rutherford Hospital will rely on the experience and expertise of Vanderbilt University Medical Center in developing and implementing credentialing, quality assurance, and staff education.

Credentialing

The Provider Support Services department will credential all providers who will admit patients to Vanderbilt Rutherford Hospital or who will attend to patients at Vanderbilt Rutherford Hospital. Documents will be verified from the primary source and include medical or professional licenses, DEA status (if applicable), malpractice insurance and claims history, appropriate schooling, board certification and faculty status. Once all documents have been verified, they will be presented to the Credentials Committee for review and recommendation to the Vanderbilt Rutherford Hospital Medical Board. The Vanderbilt Rutherford Hospital Medical Board will then recommend approval to the Vanderbilt Rutherford Hospital governing board which will make the final decision.

Quality Assurance

Vanderbilt Rutherford Hospital will operate under a Strategic Quality Plan that reflects the mission to achieve the best outcomes by providing the highest quality and safest care for every patient, every time through the committed efforts of every Vanderbilt Rutherford Hospital team member. We will pursue delivery of care that is safe, patient centered, effective, efficient, timely and equitable.

Staff Education

Vanderbilt Rutherford Hospital will devote a variety of resources to the development of staff at all levels of the organization. Vanderbilt Rutherford Hospital will rely on VUMC’s Learning Center to provide comprehensive orientation and role specific training to help new staff become successful in their jobs.

C. Discuss the applicant’s participation in the training of students in the areas of medicine, nursing, social work, etc. (e.g., internships, residencies, etc.).

RESPONSE: VUMC is a major clinical training facility and supports medical students, nursing students, and Ph.D. students training in more than 100 different Vanderbilt-affiliated training programs. It is anticipated that Vanderbilt Rutherford Hospital will be a training site for a wide variety of health care professionals affiliated with the VUMC educational programs.

4. Outstanding Projects:

A. Complete the following chart by entering information for each applicable outstanding CON by applicant or

share common ownership; and *Annual Progress Reports – HSDA Rules require that an Annual Progress Report (APR) be submitted each year. The APR is due annually until the Final Project Report (FPR) is submitted (FPR is due within 90 ninety days of the completion and/or implementation of the project). Brief progress status updates are requested as needed. The project remains outstanding until the FPR is received.

B. Describe the current progress, and status of each applicable outstanding CON.

55

Outstanding Projects

CON Number Project Name Date Approved

*Annual Progress Report(s) Expiration Date Due Date Date Filed

CN710-075 Monroe Carell Jr. Children's Hospital at Vanderbilt

1/23/2008 3/1/2020 12/31/2019 November 1, 2020

CN1406-021 Vanderbilt University Hospitals

9/24/2014 11/1/19 10/30/2019 November 1, 2020

CN1705-016 Vanderbilt University Medical Center

8/23/2017 10/1/19 9/19/2019 October 1, 2020

CN1905-021 Vanderbilt Wilson County Hospital fka Tennova Healthcare – Lebanon

8/28/2019 TBD TBD October 1, 2022

CN1510-042 Tennova Healthcare Lebanon – McFarland Campus

1/27/2016 3/1/2020 2/21/2020 March 1, 2021

RESPONSE: Updates on VUMC outstanding CON projects:

CN0710-075 Construction is complete; VUMC is waiting for final invoices from contractors. CN1406-021 Construction is complete; VUMC is waiting for final invoices from contractors. CN1705-016 Construction is complete; VUMC is waiting for final invoices from contractors. CN1905-021 Project is under construction.

CN1510-042 Project is being reviewed given the recent acquisition of the hospital.

5. Equipment Registry – For the applicant and all entities in common ownership with the applicant.

A. Do you own, lease, operate, and/or contract with a mobile vendor for a Computed Tomography scanner (CT), Linear Accelerator, Magnetic Resonance Imaging (MRI), and/or Positron Emission Tomographer (PET)?

RESPONSE: No

B. If yes, have you submitted their registration to HSDA? If you have, what was the date of submission?

RESPONSE: March 27, 2020

C. If yes, have you submitted your utilization to Health Services and Development Agency? If you have, what

was the date of submission?

RESPONSE: March 27, 2020

56

SECTION C: STATE HEALTH PLAN QUESTIONS T.C.A. §68-11-1625 requires the Tennessee Department of Health’s Division of Health Planning to develop and annually update the State Health Plan (found at https://www.tn.gov/health/health-program- areas/health-planning/state-health-plan.html) The State Health Plan guides the State in the development of health care programs and policies and in the allocation of health care resources in the State, including the Certificate of Need program. The 5 Principles for Achieving Better Health are from the State Health Plan’s framework and inform the Certificate of Need program and its standards and criteria.

Discuss how the proposed project will relate to the 5 Principles for Achieving Better Health found in the State Health Plan.

1. The purpose of the State Health Plan is to improve the health of Tennesseans.

RESPONSE: This project will allow greater access and enable patients to receive care closer to home.

2. Every citizen should have reasonable access to health care.

RESPONSE: Vanderbilt Rutherford Hospital will serve all patients regardless of payer source or ability to pay, and Vanderbilt Rutherford Hospital will participate as contracted provider with all TennCare MCOs.

3. The state’s health care resources should be developed to address the needs of Tennesseans while encouraging

competitive markets, economic efficiencies and the continued development of the state’s health care system.

RESPONSE: Economic efficiencies will be achieved through treating patients closer to their homes.

4. Every citizen should have confidence that the quality of health care is continually monitored and standards are

adhered to by health care providers. RESPONSE: The proposed project will achieve high standards of quality through quality metrics and best practices. VUMC is actively engaged in many projects associated with quality and safety outcomes and is recognized as a national leader. The VUMC experience and expertise will be extended to Vanderbilt Rutherford Hospital.

5. The state should support the development, recruitment, and retention of a sufficient and quality health care

workforce.

RESPONSE: Vanderbilt Rutherford Hospital is committed to providing outstanding care, and thus, recruiting and retaining the best employee workforce. Through its affiliation with VUMC, Vanderbilt Rutherford Hospital will recruit, train and retain a wide variety of health care professionals.

PROOF OF PUBLICATION Attach the full page of the newspaper in which the notice of intent appeared with the mast and dateline intact or submit a publication affidavit from the newspaper that includes a copy of the publication as proof of the publication of the letter of intent.

Date LOI was Submitted: April 17, 2020 Date LOI was Published: April 19, 2020

57

NOTIFICATION REQUIREMENTS

1. T.C.A. §68-11-1607(c)(9)(A) states that “…Within ten (10) days of the filing of an application for a nonresidential substitution-based treatment center for opiate addiction with the agency, the applicant shall send a notice to the county mayor of the county in which the facility is proposed to be located, the state representative and senator representing the house district and senate district in which the facility is proposed to be located, and to the mayor of the municipality, if the facility is proposed to be located within the corporate boundaries of a municipality, by certified mail, return receipt requested, informing such officials that an application for a nonresidential substitution-based treatment center for opiate addiction has been filed with the agency by the applicant.”

2. T.C.A §68-11-1607(c)(9)(B) states that “… If an application involves a healthcare facility in which a county or

municipality is the lessor of the facility or real property on which it sits, then within ten (10) days of filing the application, the applicant shall notify the chief executive officer of the county or municipality of the filing, by certified mail, return receipt requested.”

Failure to provide the notifications described above within the required statutory timeframe will result in the voiding of the CON application. Please provide documentation of these notifications.

DEVELOPMENT SCHEDULE T.C.A. §68-11-1609(c) provides that a Certificate of Need is valid for a period not to exceed three (3) years (for hospital projects) or two (2) years (for all other projects) from the date of its issuance and after such time shall expire; provided, that the Agency may, in granting the Certificate of Need, allow longer periods of validity for Certificates of Need for good cause shown. Subsequent to granting the Certificate of Need, the Agency may extend a Certificate of Need for a period upon application and good cause shown, accompanied by a non-refundable reasonable filing fee, as prescribed by rule. A Certificate of Need which has been extended shall expire at the end of the extended time period. The decision whether to grant such an extension is within the sole discretion of the Agency, and is not subject to review, reconsideration, or appeal.

1. Complete the Project Completion Forecast Chart on the next page. If the project will be completed in

multiple phases, please identify the anticipated completion date for each phase.

2. If the CON is granted and the project cannot be completed within the standard completion time period (3 years for hospital projects and 2 years for all others), please document why an extended period should be approved and document the “good cause” for such an extension.

58

PROJECT COMPLETION FORECAST CHART

Assuming the Certificate of Need (CON) approval becomes the final HSDA action on the date listed in Item 1. below, indicate the number of days from the HSDA decision date to each phase of the completion forecast.

Phase

Days Required

Anticipated Date [Month/Year]

1. Initial HSDA decision date 8/2020

2. Architectural and engineering contract signed 60 10/2020

3. Construction documents approved by the Tennessee

Department of Health 240 4/2021

4. Construction contract signed - 4/2021

5. Building permit secured 330 7/2021

6. Site preparation completed 420 10/2021

7. Building construction commenced 510 1/2022

8. Construction 40% complete 720 8/2022

9. Construction 80% complete 900 2/2023

10. Construction 100% complete (approved for occupancy) 1050 7/2023

11. *Issuance of License 1080 8/2023

12. *Issuance of Service 1095 8/2023

13. Final Architectural Certification of Payment 1125 9/2023

14. Final Project Report Form submitted (Form HR0055) 1155 10/2023

*For projects that DO NOT involve construction or renovation, complete Items 11 & 12 only.

NOTE: If litigation occurs, the completion forecast will be adjusted at the time of the

final determination to reflect the actual issue date

April 28, 2020 Page 1

1. Section A, Executive Summary, Item 3.A., Overview

How many inpatient beds are licensed at VUMC? How many inpatient beds will be licensed after the completion of CN1406-021A and CN071-075AE? What is the target date for all outstanding but unimplemented beds to be licensed and operational? RESPONSE: VUMC has completed both CN1406-021 and CN071-075 and is licensed for 1,175 beds. Final project reports will be filed as soon as all invoices are received. Please complete the following chart from the location of the proposed project, Vanderbilt Rutherford Hospital (VRH). RESPONSE: Please see the completed chart below.

Hospital Distance from

VRH to: Estimated Travel Time from VRH to:

TriStar Stonecrest 12.1 miles 14-20 minutes St. Thomas Rutherford 6.2 miles 9-14 minutes St. Thomas Stones River 30.0 miles 30-45 minutes Tennova-Shelbyville 26.6 miles 26-40 minutes St. Thomas River Park 52.8 miles 55 minutes to 1 hour 15 minutes VUMC 31.3 miles 40 minutes to 1 hour 15 minutes

Source: Google Maps

2. Section A, Executive Summary, Item 6, Ownership

The Warranty Deed provided is from Lassie Crowder and Donald McDonald to Project Holding Company, LLC. There is no indication that Vanderbilt owns the property or has site control. Please provide this documentation. RESPONSE: Attached as 2.A.6 is a copy of the Operating Agreement for Project Holding Company, LLC which demonstrates that VUMC is the sole member of the LLC with 100% ownership.

3. Section A, Executive Summary, Item 6.B.2, Floor Plan Please discuss the mix of semi-private and private licensed hospital beds RESPONSE: Consistent with the FGI’s Guidelines for the Design and Construction of Hospitals, all beds at Vanderbilt Rutherford Hospital will be designed as single-patient rooms.


The bed chart on page 10 indicates 6 ICU beds and 4 pediatric beds; however, the floor plan identifies 4 ICU beds and 6 pediatric beds. Please explain RESPONSE: Please find the updated chart below.

Based upon the floor plan Vanderbilt Rutherford Hospital will have an emergency department. Please complete the following charts for emergency services. RESPONSE: Please find the completed chart below.

Current Licensed

Beds Staffed

Beds Proposed

*Beds Approved

**Beds Exempted

TOTAL Beds at Completion

1) Medical - - 26 - - 26 2) Surgical - - - - - - 3) ICU/CCU (includes PICU) - - 4 - - 4 4) Obstetrical - - 6 - - 6 5) NICU - - 6 - - 6 6) Pediatric - - 6 - - 6 7) Adult Psychiatric - - - - - - 8) Geriatric Psychiatric - - - - - - 9) Child/Adolescent Psychiatric - - - - - - 10) Rehabilitation - - - - - - 11) Adult Chemical Dependency - - - - - - 12) Child/Adolescent Chemical Dependency - - - - - - 13) Long-Term Care Hospital - - - - - - 14) Swing Beds - - - - - - 15) Nursing Home – SNF (Medicare only) - - - - - - 16) Nursing Home – NF (Medicaid only) - - - - - - 17) Nursing Home – SNF/NF (dually certified Medicare/Medicaid)

- - - - - -

18) Nursing Home – Licensed (non-certified) - - - - - - 19) ICF/IID - - - - - - 20) Residential Hospice - - - - - - TOTAL - - 48 - - 48


Vanderbilt Rutherford Hospital ED Proposed Room Configurations

Patient Care Areas other than Ancillary Services # Proposed ED Exam/Treatment Rooms:

Multipurpose 8 Gynecological 2

Holding/Secure/Psychiatric 1 Isolation 1

Orthopedic 0 Trauma 2

Total 14 Triage Stations 1 Decontamination Rooms/Stations 1

Useable SF 6,319 RESPONSE: Please find the completed chart below.

VUMC ED Visits Per Treatment Room

Emergency Department Design: A Practical Guide to Planning, American College of Emergency Physicians – Estimates for Emergency Department Areas and Beds

Facility/Standard 2019 Annual Visits

Dept. Gross Area Bed Quantities

Square Footage Bed Quantity Visits/Beds Area/Bed VUMC 114,662 53,970 gsf 121 947 446 gsf *ACEP Standard 115,000 71,250 gsf 95 1,211 750 gsf

RESPONSE: Please find the completed charts below. Please complete the following chart using Medicare Compare data:

Wait Times at Existing ED Facilities in the Proposed Service Area and VUMC


ED-2: Median Time from Admit Decision to Departure for ED Admitted Patients

Emergency Department

Timeframe ED Time/Score

Tennessee Average

National Average

St. Thomas Rutherford

7/1/2018 – 6/30/2019

92 Minutes 123 Minutes 138 Minutes

Stonecrest 7/1/2018 – 6/30/2019


St. Thomas Stones River

7/1/2018 – 6/30/2019


Tennova- Shelbyville

7/1/2018 – 6/30/2019


St. Thomas River Park

7/1/2018 – 6/30/2019


VUMC 7/1/2018 – 6/30/2019


Measure: OP-18 Median Time from ED Arrival to ED Departure for Discharged ED Patients



Tennessee Average

National Average


7/1/2018 – 6/30/2019


Stonecrest 7/1/2018 – 6/30/2019



7/1/2018 – 6/30/2019



7/1/2018 – 6/30/2019



7/1/2018 – 6/30/2019


VUMC 7/1/2018 – 6/30/2019



Measure: OP-22 ED Patient Left without Being Seen Emergency Department


Tennessee Average

National Average


1/1/2018 – 12/31/2018

3% 1% 2%

Stonecrest 1/1/2018 – 12/31/2018

1% 1% 2%


1/1/2018 – 12/31/2018

1% 1% 2%


1/1/2018 – 12/31/2018

1% 1% 2%


1/1/2018 – 12/31/2018

2% 1% 2%

VUMC 1/1/2018 – 12/31/2018

3% 1% 2%

Based on the floor plan, it appears that the hospital will have a surgical suite. Please present a discussion on the surgical suite to include number of operating rooms and procedure rooms, pre-op and post-op beds, other pertinent areas, and a description of any special purpose operating and/or procedure rooms. RESPONSE: The surgical suite and other related areas are broken into three parts: Surgery (including support), PACU, and Outpatient Services (including procedure rooms). They include the following quantities:

• Surgery Suite: 2 major operating rooms and 4 general operating rooms for a total of 6 operating rooms;

• PACU: 9 phase I recovery beds including 1 isolation in addition to 6 pre-op holding beds;

• Outpatient Services: 12 combined outpatient staging/phase II recovery beds (including 1 isolation) and two endoscopy procedure rooms.

Each of these specific areas contain the required support spaces such as nurse stations, clean and soiled utility, environmental services spaces, toilets, and storage space required by the FGI Guidelines.

4. Section A, Executive Summary, Item 12, Square Footage and Cost Per Square

Footage Chart

The construction cost listed here is different from the Project Cost. Please make the necessary corrections. If the construction costs remain above the 3rd quartile cost per square foot for comparable hospital construction projects from 2016-2018, please explain why.


RESPONSE: Correct, the $80,535,346 included in the chart includes the total construction costs of $71,647,701 plus the $8,887,645 for site preparation. The projected cost per square foot exceeds the 2016-2018 historical 3rd quartile cost per square foot for new construction by $96.76.

5. Section A, Executive Summary, Item 12.A

Please discuss in detail the layout of the proposed hospital. Please identify services by floor, how that decision was made, and the expected flow of services. Please also discuss expected outpatient services to be provided.

RESPONSE: The hospital is organized on two floors with the functions as follows:

• First Floor: Emergency Department; 8-bed Observation Unit; Imaging Services; Interventional Imaging Services; Outpatient Services; PACU; Surgical Suite; Sterile Processing; Public Areas; Registration; Health Information Management; Physician Support; Administration and Business Office; Dietary Services; Information Technology; Education; 6-bed Obstetrical unit; 6-bed Neonatal Intensive Care Unit; Laboratory Services (including body holding); Pharmacy Services; Materials Management; Environmental Services (including linen services and waste management); and Engineering and Maintenance Services.

• Second Floor: 26-bed medical/surgical unit with support; 4-bed

intensive care unit with support; 6-bed pediatric unit with support; rehabilitation therapy; and respiratory therapy.

The decision was made to organize services with traditional inpatient services on the second floor and with diagnostic, treatment, and support services on the first floor. This stacking of functions was devised to optimize patient flow, separate public circulation from patient circulation and organize related functions in proximity to each other For instance, the obstetrical unit and neonatal intensive care unit are located on the first floor due to proximity to the surgical suite (which will be utilized for cesarean section deliveries). The adjacency between the neonatal intensive care unit and obstetrical services allows for nursery support functions to be shared between the two areas. The emergency department is in proximity to imaging and surgery to provide support for patients needing to utilize those services. Surgery is located adjacent to central sterile and PACU, which both support the surgery suite.


The Vanderbilt Rutherford Hospital will likely provide the typical spectrum of community-hospital level outpatient services. VUMC currently has 120 physicians and advanced practitioners providing care in the service area. Vanderbilt Rutherford Hospital will support these providers by creating a convenient location to offer services such as radiology, outpatient catheterizations, endoscopy, gynecology, urology, and other similar services.

6. Section A, Executive Summary, Item 13

The applicant has indicated that pediatric MRI services will not be provided at the proposed hospital. Please discuss where pediatric inpatients and outpatients will go for MRI services. RESPONSE: At its October 24, 2018 meeting, the Health Services and Development Agency unanimously approved VUMC’s application to initiate pediatric MRI services at the Monroe Carrell Jr. Children’s Hospital Surgery and Clinics Murfreesboro campus on West Northfield Boulevard. In the event that a pediatric patient requires an MRI scan, the patient will be referred to the existing pediatric MRI located approximately 10 minutes away.

7. Section B, Need, Item 1, Service Specific Criteria (Acute Care Beds) 1.

Please acknowledge that the bed need statistics presented do not consider the 72 outstanding unimplemented beds at St. Thomas Rutherford. RESPONSE: As noted in the application below the chart, the chart provided by the Department of Health did not include the 72-bed addition for Saint Thomas Rutherford approved in October 2017.

Does the bed need include beds at Trustpoint Hospital? If yes, please describe the beds at this hospital. RESPONSE: Yes, the chart provided by the Department of Health included the beds at Trustpoint Hospital. While Trustpoint Hospital is licensed by the Department of Health, the beds are used for mental disease and psychological disorders and are not applicable to this project. As set forth in the below chart, if these specialized beds are removed, there will be a projected shortage of 93 staffed inpatient beds in Rutherford County by 2024. If/when the Saint Thomas Rutherford expansion is completed, and assuming Saint Thomas Rutherford chooses to staff all 75 beds, the shortage of staffed beds for Rutherford County will be 18 in 2024.

COUNTY CURRENTINPATIENT ADC NEED 2018 2020 2024 ADC-2020 NEED 2024 LICENSED STAFFED LICENSED STAFFED

DAYS

Beford 4,187 12 19 11,533 11,814 12,358 12 21 60 49 -39 -28Cannon 4,091 11 19 1,634 1,644 1,658 11 19 60 36 -41 -17Rutherford 127,844 350 438 294,517 305,793 328,242 390 488 405 395 83 93Warren 11,785 32 46 18,783 18,848 18,941 33 46 125 38 -79 8

2018 SHORTAGE/SURPLUSSERVICE AREA POPULATION PROJECTED 2018 ACTUAL BEDS


8. Section B, Need, Item 1, Service Specific Criteria (Acute Care Beds) 1.a.i.1.

This chart appears to have some calculation errors. Please submit a revised page. RESPONSE: Please find the corrected chart below.


Please address this criterion for VUMC RESPONSE: Please find the chart for VUMC provided below.

Facility CountyTotal Licensed

Beds

Staffed beds set up and in use on a

typical day


Licensed beds that could not be used within 24-48 hours

Tennova Healthcare- Shelbyville Bedford 60 49 0 0Saint Thomas Stones River Hospital, LLC. Cannon 60 36 0 0Saint Thomas Rutherford Hospital Rutherford 286 286 0 0TriStar StoneCrest Medical Center Rutherford 119 109 10 10Trustpoint Hospital Rutherford 101 100 1 1Saint Thomas River Park Hospital, LLC Warren 125 38 0 0Total Beds 751 618 11 11

Total Beds


Centers for Disease Control & Prevention’s (CDC) National Healthcare Safety Network (NHSN) Measures

Measure Source National Benchmark

Hospital Standardized

Infection Ratio (SIR)

Hospital Evaluation

(above, at, or below national

benchmark) Catheter associated urinary tract infection (CAUTI)



.930 No Different than National

Benchmark

Central line associated blood stream infection (CLABSI)



.584 Better than the National

Benchmark

Methicillin resistant staphylococcus aureus (MRSA)



1.172 No Different than National

Benchmark

Clostridium

difficile (C.diff.)



.660 Better than the National

Benchmark

Surgical Site Infections (SSI)

SSI: Colon Standardized infection ratio (SIR) national benchmark = 1.


Benchmark

SSI: Hysterectomy Standardized infection ratio (SIR) national benchmark = 1.


Benchmark



There appear to be calculation errors in these charts. Please address these discrepancies and submit revised charts. RESPONSE: Please see the corrected charts below.

11. Section B, Need, Item 1, Service Specific Criteria (Cardiac Catheterization) 8.

The table provided is incorrect. It should be based on the equivalency table on page 10 of the Criteria and Standards. Please make the necessary corrections and submit a revised table. RESPONSE: There are three cardiac catheterization labs in the service area – two at Saint Thomas Rutherford and one at Tristar Stonecrest. Based on their 2018 JARs, the weighted capacity for these labs is as follows:

2018 % Change in PatientLicensed

Beds 2016 2017 2018 2016 2017 20118 Days 2016-2018

Tennova Healthcare-Shelbyville Bedford 60 4,850 4,695 4,209 22% 21% 19% -13%Saint Thomas Stones River Hospital Cannon 60 5,208 4,524 4,413 24% 21% 20% -15%Saint Thomas Rutherford Hospital Rutherford 286 76,003 78,960 77,747 73% 76% 74% 2%TriStar Stonecrest Medical Center Rutherford 119 18,773 19,156 19,819 43% 44% 46% 6%TrustPoint Hospital Rutherford 101 30,915 32,336 32,157 84% 88% 87% 4%Saint Thomas River Park Hospital Warren 125 11,582 12,388 11,890 25% 27% 26% 3%Total 751 147,331 152,059 150,235 54% 55% 55% 2%

2018 % Change in PatientStaffed Beds 2016 2017 2018 2016 2017 2018 Days 2016-2018

Tennova Healthcare-Shelbyville Bedford 49 4,850 4,695 4,209 27% 26% 24% -13%Saint Thomas Stones River Hospital Cannon 36 5,208 4,524 4,413 40% 34% 34% -15%Saint Thomas Rutherford Hospital Rutherford 286 76,003 78,960 77,747 73% 76% 74% 2%TriStar Stonecrest Medical Center Rutherford 109 18,773 19,156 19,819 47% 48% 50% 6%TrustPoint Hospital Rutherford 100 30,915 32,336 32,157 85% 89% 88% 4%Saint Thomas River Park Hospital Warren 38 11,582 12,388 11,890 84% 89% 86% 3%Total 618 147,331 152,059 150,235 65% 67% 67% 2%

Facility CountyPatient Days Licensed Occupancy

Facility CountyPatient Days Staffed Occupancy

Saint Thomas Rutherford Hospital Rutherford 2 2148 437 590 308 254 308 6647.5 166%

TriStar Stonecrest Medical Center Rutherford 1 768 0 146 0 0 0 1060 53%

Therapeutic Peripheral

Vascular Cath

Diagnostic EP

Therapeutic EP

CapacityTotal Weighted Cases 2018

Facility County Cath Labs Diagnostic Cardiac Cath

Diagnostic Peripheral

Vascular Cath

Therapeutic Cardiac Cath


12. Section B, Need, Item 1, Service Specific Criteria (Cardiac Catheterization) 11-16

Please complete the following tables: RESPONSE: Please see the completed charts below. Dr. Dantzler completed his fellowship in Interventional Cardiology on June 30, 2015, and his first full year of private practice occurred in 2016.

VRH Projected Cardiac Catheterizations

Vanderbilt Heart Murfreesboro Cardiologist Historical Utilization-Diagnostic Caths.

Vanderbilt Heart Murfreesboro Cardiologist Historical Utilization-Therapeutic Caths.

Vanderbilt Heart Murfreesboro Cardiologist Historical Utilization-Total Caths.

Cardiologist 2015 Caths 2016 Caths 2017 Caths 2018 Caths 2019 Caths.Dr. Abu-Halimah 524 465 391 455 379Dr. Dantzler 121 405 363 365 297Dr. Kolli 117 65 59 46 77Dr. Manda 135 103 78 72 82Total 897 1038 891 938 835

Cardiologist 2015 Caths 2016 Caths 2017 Caths 2018 Caths 2019 CathsDr. Abu-Halimah 380 334 285 354 298Dr. Dantzler 82 313 301 282 238Dr. Kolli 116 64 59 46 76Dr. Manda 132 103 77 72 82Total 710 814 722 754 694

Cardiologist 2015 Caths 2016 Caths 2017 Caths 2018 Caths 2019 Caths.Dr. Abu-Halimah 144 131 106 101 81Dr. Dantzler 39 92 62 83 59Dr. Kolli 1 1 0 0 1Dr. Manda 3 0 1 0 0Total 187 224 169 184 141

Year 1 Diag. Caths. Year 1 Ther. Caths. Year 1 Tot. Caths Year 2 Diag. Caths. Year 2 Ther. Caths. Year 2 Tot. Caths Year 3 Diag. Caths. Year 3 Ther. Caths. Year 3 Tot. Caths251 197 448 348 273 621 353 278 631


13. Section B, Need, Item 1, Service Specific Criteria (NICU) 1

Your response to this item is noted. Please provide the following: • Calculations that lead to the percentages in the third column of the table. • What is the target population in the fourth column? • Since the need is to be projected three years forward from the current

year, shouldn’t the projected year be 2023? • Please explain how it was determined that there is a need for 29

additional beds

RESPONSE: The methodology and resulting calculations for the chart are as follows:

• Column 2 is the total number of live births for the identified counties in 2018 as provided by the Tennessee Department of Health.

• Column 3 is the rate of live births per “target population.” Target population is synonymous with “women of reproductive age,” conservatively defined as ages 15-44. The following chart provides the backup calculations for Column 3:

• Column 4 used 2024 as the target year because it is the projected first full year

of operation for the Vanderbilt Rutherford Hospital. The chart has been revised below based on 2023 population projections.

Tota

l Num

ber o

f Liv

e B

irths

Yea

r 201

8Ta

rget

Pop

ulat

ion

Age

s 15

-44

Yea

r 201

8R

ate

of L

ive

Birt

hs P

er

Targ

et P

opul

atio

n

Yea

r 201

8

Bedford 679 9,243 7.35%Cannon 173 2,458 7.04%Rutherford 4,146 73,879 5.61%Warren 460 7,319 6.29%Service Area Total 5,458 92,899 5.88%

Demographic Variable/Geographic Area



• The bed need was determined by NICU’s Service Specific Criteria No. 1 which

provides that “[t]he total number of neonatal intensive and intermediate care beds shall not exceed nine beds per 1,000 live births per year in a defined neonatal service area.” The projected total number of live births was divided by 1,000 and then multiplied by 9 to determine the target bed need. The calculations for both 2023 and 2024 are provided below:

• According to their respective 2018 JARs, Saint Thomas Rutherford currently staffs 16 NICU beds while TriStar Stonecrest staffs 8 NICU beds. As a result, there will be a need for an additional 28 NICU beds (52.18 – 24) by 2023 and 29 NICU beds by 2024.

Tota

l Num

ber o

f Liv

e B

irths

-

Yea

r 201

8R

ate

of L

ive

Birt

hs P

er T

arge

t P

opul

atio

n

Yea

r 201

8Ta

rget

Pop

ulat

ion-

Pro

ject

ed

Yea

r 202

3To

tal N

umbe

r of L

ive

Birt

hs

Pro

ject

ed Y

ear 2

023

Bedford 679 7.35% 9,737 715Cannon 173 7.04% 2,352 166Rutherford 4,146 5.61% 79,589 4,466Warren 460 6.29% 7,167 450Service Area Total 5,458 5.88% 98,845 5,798



Tota

l Num

ber o

f Liv

e B

irths

Pro

ject

ed Y

ear 2

023

NIC

U B

ed N

eed

9 B

eds

Per

1,0

00 L

ive

Birt

hsTo

tal N

umbe

r of L

ive

Birt

hs

Pro

ject

ed Y

ear 2

024

NIC

U B

ed N

eed

9 B

eds

Per

1,0

00 L

ive

Birt

hs

Bedford 715 6.44 723 6.50Cannon 166 1.49 165 1.48Rutherford 4,466 40.20 4,539 40.85Warren 450 4.05 450 4.05Service Area Total 5,798 52.18 5,876 52.88




14. Section B, Need, Item 1, Service Specific Criteria (NICU) 2

What will be the bed size of the NICU? RESPONSE: The size of the NICU will be 6 beds. The size of the NICU was determined by the NICU discharges that are currently out-migrating from the service area to seek care at VUMC and other Davidson County hospitals.

15. Section B, Need, Item 5

Please complete the following tables. RESPONSE: Please see the completed charts below based on the data extracted from the Joint Annual Reports.

Historical Emergency Department (ED) Utilization 2016-2018

Historical Inpatient Utilization w/o Observation Days 2016-2018

County Facility 2016 EDVisits

2017 EDVisits

2018 EDVisits

’16-’18 %Change

Bedford Tennova-Shelbyville 17,766 17,481 16,291 -8%Cannon St. Thomas Stones River 5,930 5,393 5,709 -4%Rutherford St. Thomas Rutherford 84,918 87,904 84,792 0%Rutherford TriStar Stonecrest 52,149 51,921 51,232 -2%Warren St. Thomas River Park 26,986 27,010 23,978 -11%TOTAL 187,749 189,709 182,002 -3%

County Facility2016 Patient Days

2017 Patient Days

2018 Patient Days

’16-’18 %Change ’16 % Occ. ’17 % Occ ’18 % Occ

Bedford Tennova-Shelbyville 4,850 4,695 4,209 -13% 22% 21% 19%Cannon St. Thomas Stones River 5,208 4,524 4,413 -15% 24% 21% 20%Rutherford St. Thomas Rutherford 76,003 78,960 77,747 2% 73% 76% 74%Rutherford TriStar Stonecrest 18,773 19,156 19,819 6% 47% 48% 46%Warren St. Thomas River Park 11,582 12,388 11,890 3% 25% 27% 26%TOTAL 116,416 119,723 118,078 1% 50% 51% 50%


Historical Inpatient Utilization with *Observation Days 2016-2018

*Include only observation days in licensed inpatient beds

Historical Surgical Suite Utilization

2016-2018

County Facility2016 Patient Days

2017 Patient Days

2018 Patient Days

’16-’18 %Change ’16 % Occ. ’17 % Occ ’18 % Occ

Bedford Tennova-Shelbyville 5,808 5,788 5,593 -4% 27% 26% 26%Cannon St. Thomas Stones River 5,474 4,801 4,676 -15% 25% 22% 21%Rutherford St. Thomas Rutherford 82,425 86,445 86,690 5% 79% 83% 83%Rutherford TriStar Stonecrest 23,435 23,689 24,584 5% 59% 60% 57%Warren St. Thomas River Park 13,523 13,514 13,584 0% 30% 30% 30%TOTAL 130,665 134,237 135,127 3% 56% 57% 57%

County Facility 2016 TotalCases

2017 TotalCases

2018 TotalCases

’16-’18 % Change

Bedford Tennova-Shelbyville 1,860 1,803 1,598 -14%Cannon St. Thomas Stones River 80 53 4 -95%Rutherford St. Thomas Rutherford 12,876 12,742 12,718 -1%Rutherford TriStar Stonecrest 6,970 7,951 8,893 28%Warren St. Thomas River Park 6,322 3,915 3,390 -46%TOTAL 28,108 26,464 26,603 -5%


Historical Cardiac Catheterization Utilization 2016-2018

Historical MRI Utilization 2016-2018

Using Department of Health HDDS data, please complete the following charts: RESPONSE: Please find the completed charts below from the Tennessee Hospital Association database. Because of the THA’s deidentification policy, information is provided for FY2017 except for inpatient admissions, which were derived from 2018 JARs. Department of Health HDDS information has been requested from the but was unavailable at the time of this submission.

VariableSt. Thomas Rutherford

TriStar Stonecrest

2016 Diagnostic Caths 2,011 608 2017 Diagnostic Caths 1,900 590 2018 Diagnostic Caths 2,148 768 2016-2018% Change 7% 26%2016 Therapeutic Caths 534 241 2017 Therapeutic Caths 449 207 2018 Therapeutic Caths 590 146 2016-2018% Change 10% -39%2016 Total Caths 2,545 849 2017 Total Caths 2,349 797 2018 Total Caths 2,738 914 2016-2018% Change 8% 8%

County Facility 2016 Total Scans 2017 Total Scans 2018 Total Scans ’16-’18 % ChangeBedford Tennova-Shelbyville 1,301 1,356 1,228 -6%Cannon St. Thomas Stones River 252 219 42 -83%Rutherford St. Thomas Rutherford 3,168 3,932 4,537 43%Rutherford TriStar Stonecrest 3,072 2,864 2,604 -15%Warren St. Thomas River Park 2,188 1,833 1,555 -29%TOTAL 9,981 10,204 9,966 0%



2017 Bedford County ED Market Share Visits %ShareSt. Thomas Rutherford 4348 16%Stonecrest 393 1%Tennova-Shelbyville 16278 59%VUMC 1101 4%Other Outmigration 5303 19%TOTAL 27423 100%

2017 Cannon County ED Market Share Visits %ShareSt. Thomas Rutherford 3077 35%Stonecrest 249 3%St. Thomas Stones River 4248 48%VUMC 283 3%Other Outmigration 946 11%TOTAL 8803 100%

2017 Rutherford County ED Market Share Visits %ShareSt. Thomas Rutherford 66161 53%Stonecrest 37994 31%VUMC 7068 6%Other Outmigration 12902 10%TOTAL 124125 100%

2017 Warren County ED Market Share Visits %ShareSt. Thomas Rutherford 1882 7%Stonecrest 84 0%St. Thomas River Park 21042 75%VUMC 636 2%Other Outmigration 4378 16%TOTAL 28022 100%

2017 4 County PSA ED Market Share Visits %ShareSt. Thomas Rutherford 75468 40%Stonecrest 38720 21%Tennova Shelbyville 16278 9%St. Thomas Stones River 4248 2%St. Thomas River Park 21042 11%VUMC 9088 5%Other Outmigration 23529 12%TOTAL 188373 100%


Inpatient Services

*Exclude Observation Days

2018 Bedford County IP Market Share *Patient Days %ShareSt. Thomas Rutherford 5722 22%Stonecrest 319 1%Tennova-Shelbyville 3297 12%VUMC 4132 16%Other Outmigration 13117 49%TOTAL 26587 100%

2018 Cannon County IP Market Share *Patient Days %ShareSt. Thomas Rutherford 3774 37%Stonecrest 138 1%St. Thomas Stones River 978 9%VUMC 1003 10%Other Outmigration 4421 43%TOTAL 10314 100%

2018 Rutherford County IP Market Share *Patient Days %ShareSt. Thomas Rutherford 47416 35%Stonecrest 14363 11%VUMC 19764 15%Other Outmigration 53196 39%TOTAL 134739 100%

2018 Warren County IP Market Share *Patient Days %ShareSt. Thomas Rutherford 4949 18%Stonecrest 93 0%St. Thomas River Park 7782 28%VUMC 2223 8%Other Outmigration 12424 45%TOTAL 27471 100%

2018 4 County PSA IP Market Share *Patient Days %ShareSt. Thomas Rutherford 61861 31%Stonecrest 14913 7%Tennova Shelbyville 3297 2%St. Thomas Stones River 978 0%St. Thomas River Park 7782 4%VUMC 27122 14%Other Outmigration 83158 42%TOTAL 199111 100%


Inpatient and Outpatient Surgeries (IOS)

2017 Bedford County IOS Market Share Cases %ShareSt. Thomas Rutherford 1479 21%Stonecrest 198 3%Tennova-Shelbyville 2181 31%VUMC 1430 21%Other Outmigration 1673 24%TOTAL 6961 100%

2017 Cannon County IOS Market Share Cases %ShareSt. Thomas Rutherford 780 41%Stonecrest 109 6%St. Thomas Stones River 183 10%VUMC 313 17%Other Outmigration 509 27%TOTAL 1894 100%

2017 Rutherford County IOS Market Share Cases %ShareSt. Thomas Rutherford 11934 33%Stonecrest 8061 22%VUMC 8015 22%Other Outmigration 7958 22%TOTAL 35968 100%

2017 Warren County IOS Market Share Cases %ShareSt. Thomas Rutherford 996 14%Stonecrest 75 1%St. Thomas River Park 3180 44%VUMC 822 11%Other Outmigration 2085 29%TOTAL 7158 100%

2017 4 County PSA IOS Market Share Cases %ShareSt. Thomas Rutherford 15189 29%Stonecrest 8443 16%Tennova Shelbyville 2181 4%St. Thomas Stones River 183 0%St. Thomas River Park 3180 6%VUMC 10580 20%Other Outmigration 12225 24%TOTAL 51981 100%


Diagnostic Cardiac Catheterization (DCC)

2017 Bedford County DCC Market Share Cases %ShareSt. Thomas Rutherford 220 40%Stonecrest 14 3%VUMC 138 25%Other Outmigration 184 33%TOTAL 556 100%

2017 Cannon County DCC Market Share Cases %ShareSt. Thomas Rutherford 96 41%Stonecrest 5 2%VUMC 23 10%Other Outmigration 109 47%TOTAL 233 100%

2017 Rutherford County DCC Market Share Cases %ShareSt. Thomas Rutherford 1249 44%Stonecrest 546 19%VUMC 426 15%Other Outmigration 612 22%TOTAL 2833 100%

2017 Warren County DCC Market Share Cases %ShareSt. Thomas Rutherford 193 29%Stonecrest 7 1%VUMC 36 5%Other Outmigration 424 64%TOTAL 660 100%

2017 4 County PSA DCC Market Share Cases %ShareSt. Thomas Rutherford 1758 41%Stonecrest 572 13%VUMC 623 15%Other Outmigration 1329 31%TOTAL 4282 100%


Therapeutic Cardiac Catheterization (TCC)

2017 Bedford County TCC Market Share Cases %ShareSt. Thomas Rutherford 37 34%Stonecrest 0 0%VUMC 35 32%Other Outmigration 36 33%TOTAL 108 100%

2017 Cannon County TCC Market Share Cases %ShareSt. Thomas Rutherford 12 27%Stonecrest 1 2%VUMC 5 11%Other Outmigration 27 60%TOTAL 45 100%

2017 Rutherford County TCC MarketShare Cases %Share

St. Thomas Rutherford 165 36%Stonecrest 84 18%VUMC 95 21%Other Outmigration 113 25%TOTAL 457 100%

2017 Warren County TCC Market Share Cases %ShareSt. Thomas Rutherford 28 27%Stonecrest 0 0%VUMC 10 10%Other Outmigration 66 63%TOTAL 104 100%

2017 4 County PSA TCC Market Share Cases %ShareSt. Thomas Rutherford 242 34%Stonecrest 85 12%VUMC 145 20%Other Outmigration 242 34%TOTAL 714 100%


Neonatal Intensive Care Services (NICU)

2017 Bedford County NICU Market Share Cases %ShareSt. Thomas Rutherford 63 26%Stonecrest 11 4%VUMC 47 19%Other Outmigration 124 51%TOTAL 245 100%

2017 Cannon County NICU Market Share Cases %ShareSt. Thomas Rutherford 37 63%Stonecrest 1 2%VUMC 7 12%Other Outmigration 14 24%TOTAL 59 100%

2017 Rutherford County NICU Market Share Cases %ShareSt. Thomas Rutherford 554 39%Stonecrest 281 20%VUMC 278 20%Other Outmigration 291 21%TOTAL 1404 100%

2017 Warren County NICU Market Share Cases %ShareSt. Thomas Rutherford 41 24%Stonecrest 0 0%VUMC 10 6%Other Outmigration 119 70%TOTAL 170 100%

2017 4 County PSA NICU Market Share Cases %ShareSt. Thomas Rutherford 695 37%Stonecrest 293 16%VUMC 342 18%Other Outmigration 548 29%TOTAL 1878 100%


16. Section B. Need, Item 6 Please complete the following tables RESPONSE: Please see the following table.

Vanderbilt Rutherford Projected Utilization by Service

RESPONSE: Please see the following table.

VUMC Historical and Projected Utilization by Service

Service Units FY2016 FY2017 FY2018 FY2019 FY2024 FY202519-'25 %Change

Inpatient Admissions 55,778 57,526 57,511 60,854 74,402 77,212 27%Inpatient Days 309,173 314,379 324,343 345,305 427,910 446,457 29%Surgical Cases 57,423 76,648 73,213 76,672 92,872 95,980 25%ED Visits 120,859 123,026 116,652 114,662 121,233 121,332 6%Diagnostic Cardiac Caths 8,329 7,982 5,669 5,009 5,775 5,920 18%Therapeutic Cardiac Caths 699 525 1,540 1,292 1,490 1,527 18%Total Cardiac Caths 9,028 8,507 7,209 6,301 7,265 7,447 18%NICU Admissions 1,433 1,498 1,455 1,389 1,454 1,469 6%NICU Patient Days 33,972 35,771 35,606 31,698 36,571 37,523 18%MRI Scans 32,632 35,083 34,316 34,304 39,553 40,541 18%

Service Units FY2024 FY2025 ’24-’25 % Change

Inpatient Admissions 2,357 3,048 29%Inpatient Days 9,472 12,249 29%Surgical Cases (OP Only) 2,050 2,707 32%ED Visits 15,299 22,426 47%Diagnostic Cardiac Caths 251 348 39%Therapeutic Cardiac Caths 197 273 39%Total Cardiac Caths 448 621 39%NICU Admissions 182 245 35%NICU Patient Days 914 1,230 35%MRI Scans 589 802 36%


17. Section B. Economic Feasibility Item 1. Project Cost Chart

The construction cost listed here is $71,647,701. The construction cost in the Square footage chart is $80,535,346. The construction cost in the Contractor’s Letter is $80,535,346. Please address this discrepancy. RESPONSE: The $80,535,346 stated in the contractor’s letter includes the total construction costs of $71,647,701 plus the $8,887,645 for site preparation.

18. Section B. Economic Feasibility Item 2. Funding

Vanderbilt CFO’s letter indicates that as of June 30, 2019, VUMC has $1,148 million in unrestricted cash and investments. VUMC’s financial statements indicate cash and investments of approximately $691 million. Please address this discrepancy.

RESPONSE: The $1,148 million includes $490 million in noncurrent investments but that are available within 4 days less $33 million in restricted cash.

19. Section B. Economic Feasibility Item 4. Projected Data Chart

The applicant has indicated that the project will be paid from cash reserves. Please explain what is included in capital expenditures. RESPONSE: Annual Capital Expenditures disclosed in the Projected Data Chart of $1,319,335 and $1,798,412 in Years 1 and 2, respectively, do not include costs for hospital construction, site preparation, and original deployment of furniture, fixtures, and equipment to support the new hospital. Those capital costs will be paid from cash reserves. Rather, these disclosed capital expenditure amounts on the Projected Data Chart assume a level of capital necessary in the projected years to continue to invest in operations. This is primarily related to additional equipment and is estimated at 2.0% of annual Net Operating Revenue.

Are the fees for School Credit and Food Purchases; and the fees for Custodial Services and Licenses/Fees correct?

RESPONSE: Yes, the expenses are correct. The individual expense categories identified under Other Expenses are estimated based on their % of total Other Expenses at VUMC for hospital activity. The allocation method used rounded percentages and thus for some categories the allocation % is the same, resulting in the same dollar amount.


Please provide Projected Data Charts for Cardiac Catheterization Services and Neonatal Intensive Care Services. RESPONSE: Please see the Projected Data charts below.


Neonatal Intensive Care Services Projected Data Chart

Year FY2024 FY2025

A. Utilization DataSpecify Unit of Measure: Discharges 182 245

B. Revenue from Services to Patients1. Inpatient Services 11,107,539$ 15,605,507$ 2. Outpatient Services - - 3. Emergency Services - - 4. Other Operating Revenue (Specify): N/A - -


C. Deductions from Gross Operating Revenue1. Contractual Adjustments 6,768,995$ 9,609,386$ 2. Provision for Charity Care 388,764 546,193 3. Provisions for Bad Debt 55,538 78,028




a. Direct Patient Care 1,241,857$ 1,484,177$ b. Non-Patient Care 252,514 301,786

2. Physician's Salaries and Wages3. Supplies 310,463 427,348 4. Rent



6. Other Operating Expenses (D6) 618,977 662,237 Total Operating Expenses 2,423,811$ 2,875,548$

E. Earnings Before Interest, Taxes and Depreciation 1,470,431$ 2,496,352$

F. Non-Operating Expenses1. Taxes -$ -$ 2. Depreciation 125,047 129,543 3. Interest - - 4. Other Non-Operating Expenses - -

Total Non-Operating Expenses 125,047$ 129,543$

NET INCOME (LOSS) 1,345,384$ 2,366,809$

G. Other Deductions1. Estimated Annual Principal Debt Repayment -$ -$ 2. Annual Capital Expenditures 77,885 107,438

Total Other Deductions 77,885$ 107,438$ NET BALANCE 1,267,499$ 2,259,371$

DEPRECIATION 125,047 129,543 FREE CASH FLOW (Net Balance + Depreciation) 1,392,546$ 2,388,914$


1. Facility and Equipment 142,364$ 152,314$ 2. Services and Other 476,613 509,923

Total Other Expenses 618,977$ 662,237$



Cardiac Catheterization Services Projected Data Chart

Year FY2024 FY2025

A. Utilization DataSpecify Unit of Measure: Visits 448 621

B. Revenue from Services to Patients1. Inpatient Services -$ -$ 2. Outpatient Services 28,423,943 40,967,255 3. Emergency Services - - 4. Other Operating Revenue (Specify): N/A - -


C. Deductions from Gross Operating Revenue1. Contractual Adjustments 22,372,119$ 32,432,942$ 2. Provision for Charity Care 994,838 1,433,854 3. Provisions for Bad Debt 142,120 204,836




a. Direct Patient Care 488,850$ 628,901$ b. Non-Patient Care

2. Physician's Salaries and Wages - 3. Supplies 1,846,626 2,344,769 4. Rent



6. Other Operating Expenses (D6) 2,061,252 2,609,114 Total Operating Expenses 4,396,728$ 5,582,784$

E. Earnings Before Interest, Taxes and Depreciation 518,138$ 1,312,839$

F. Non-Operating Expenses1. Taxes -$ -$ 2. Depreciation 145,769 151,010 3. Interest - - 4. Other Non-Operating Expenses - -

Total Non-Operating Expenses 145,769$ 151,010$

NET INCOME (LOSS) 372,369$ 1,161,829$

G. Other Deductions1. Estimated Annual Principal Debt Repayment -$ -$ 2. Annual Capital Expenditures 98,297 137,912

Total Other Deductions 98,297$ 137,912$ NET BALANCE 274,072$ 1,023,917$

DEPRECIATION 145,769 151,010 FREE CASH FLOW (Net Balance + Depreciation) 419,841$ 1,174,927$


1. Facility and Equipment 474,087$ 600,095$ 2. Services and Other 1,587,164 2,009,018

Total Other Expenses 2,061,251$ 2,609,113$



20. Section B. Economic Feasibility Item 5. A. Charge Chart

Please provide Charge Charts for Cardiac Catheterization Services and Neonatal Intensive Care Services. RESPONSE: Please see the charts below. Neonatal Intensive Care Services

Cardiac Catherization Services

21. Section B. Economic Feasibility Item 6. B. Net Operating Margin Ratio Chart Please provide Net Operating Margin Ratio Charts for Cardiac Catheterization Services and Neonatal Intensive Care Services. RESPONSE: Please see below. Neonatal Intensive Care Services

Previous Year to Most Recent Year

Most Recent Year

Year OneFY2024

Year TwoFY2025


N/A N/A 63,446$ 65,970$ N/A

N/A N/A 52,476$ 54,866$ N/A

N/A N/A 10,971$ 11,104$ N/A

Gross Charge (Gross Operating Revenue/Visit)

Deduction from Revenue (Total Deductions/Visit)

Average Net Charge (Net Operating Revenue/Visit)

Previous Year to Most Recent Year

Most Recent Year

Year OneFY2024

Year TwoFY2025


N/A N/A 61,030$ 63,696$ N/A

N/A N/A 39,634$ 41,770$ N/A

N/A N/A 21,397$ 21,926$ N/A

Deduction from Revenue (Total Deductions/Discharges)

Average Net Charge (Net Operating Revenue/Discharge)

Gross Charge (Gross Operating Revenue/Discharge)

2nd Previous Year to

Most Recent Year

1st Previous Year to Most Recent Year

Most Recent


Projected FY2025

Net Operating Margin Ratio N/A N/A N/A 34.5% 44.1%



22. Section B. Economic Feasibility Item 7. Payor Mix Chart Please provide Payor Mix Charts for Cardiac Catheterization Services and Neonatal Intensive Care Services. RESPONSE: Please find the payor mix charts below. Neonatal Intensive Care Services


2nd Previous Year to Most Recent Year

1st Previous Year to Most Recent Year

Most Recent


Projected FY2025

N/A N/A N/A 7.6% 16.8%Net Operating Margin Ratio


As a % of total

$ 12,385,271 43% 1,616,615 6% 13,672,782 48% 174,946 1%

574,328 2%

$ 28,423,943 100% 994,838

Payor Source

Medicare/Medicare Managed CareTennCare/MedicaidCommercial/Other Managed CareSelf-PayOther (Worker's Compensation, Other Governmental, Third-Party Liability) Total*Charity Care


As a % of total

$ - 0% 1,837,428 16% 9,124,377 82% 70,704 1%

75,030 1%

$ 11,107,539 100% 388,764

Self-PayOther (Worker's Compensation, Other Governmental, Third-Party Liability)

Payor Source

Medicare/Medicare Managed CareTennCare/MedicaidCommercial/Other Managed Care

Total*Charity Care


23. Section B. Economic Feasibility, Item 8, Staffing

Please complete staffing tables for Cardiac Catheterization Services and Neonatal Intensive Care Services. RESPONSE: Please find the staffing tables below. Neonatal Intensive Care Services


Existing FTEs Projected FTEs

Average Wage

(Contractual Rate)

Area Wide/Statewide Average Wage

N/A 6 $ 30.05 $ 30.08 N/A N/A N/A N/AN/A 2 $ 24.76 $ 23.97 N/A N/A N/A N/A N/A 8 $ 28.29 N/A

A. Direct Patient Care Positions

Total Direct Patient Care Positions

RNsLPNs

TechsOther

Position Classification


Attachment 2.A.6 Operating Agreement for Project

Holding Company, LLC

OPERATING AGREEMENT of

PROJECT HOLDING COMPANY, LLC

This Operating Agreement (the "Agreement") of Project Holding Company, LLC (the "Company"), is entered into and shall be effective as of September 21,2016 (the "Effective Date"), by the undersigned members of the Company (the "Member(s)").

In consideration of the mutual promises made herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Organization and Purposes.

a. The Company is a limited liability company organized pursuant to the Tennessee Revised Limited Liability Company Act, as the same may be amended from time-totime (the "Act"). Articles of Organization of the Company were filed with the Tennessee Secretary of State on September 21,2016.

b. For so long as the Company is eligible to do so, the Company shall take such actions as are necessary to be classified as a Nonprofit Limited Liability Company as provided in the Tennessee Revised Nonprofit Limited Liability Company Act, as the same may be amended from time-to-time.

c. The purpose ofthe Company, and the nature of the business to be conducted and promoted by the Company, is to engage in any lawful act or activity for which a limited liability company may be formed under the Act.

2. Principal Business Office. The principal business office of the Company shall be located at such location as may hereafter be determined by the Members.

3. Member. The Members are the sole members (as such term is defined in the Act) of the Company. The name and the mailing address of each Member is set forth on Schedule 1 attached hereto.

4. Limited Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities ofthe Company, whether arising in contract, tort or otherwise~ shall be solely the debts, obligations and liabilities ofthe Company, and the Members shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company.

5. Capital Contributions. Each Member has contributed to the Company cash in the amount set forth opposite such Member's name on Schedule 1 attached hereto, and no other property. The Members are not required to make any additional capital contribution to the Company. However, the Members may at any time make additional capital contributions to the Company, in such amounts as are proportionate to their initial capital contributions to the Company. A Member's "Net Capital Contributions" shall be such Member's cumulative

300135199 v2

)

)

capital contributions to the Company reduced by the cumulative distributions to the Member from the Company. The Company shall have a total of one hundred (1 00) Member Units (the "Units"), to be held by the Members proportionate to their Net Capital Contributions.

6. Allocation of Profits and Losses. The Company's profits and losses shall be allocated among the Members in such amounts as are proportionate to their Units as of the conclusion of the period with respect to which such allocations are made.

7. Distributions. Distributions shall be made to the Members at the times and in the amounts determined by the Members. All distributions shall be made to the Members in such amounts as are proportionate to their Units as of the date of authorization of the distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to the Members on account of its interest in the Company if such distribution would violate Section 48-249-306 of the Act or other applicable law.

8. Management.

a. Pursuant to Section 48-249-401 ofthe Act, the management of the Company shall be vested in the Members, who shall have the power, authority, obligations, and duties of a member of a member-managed limited liability company as set forth in the Act. All documents, contracts, conveyances, and other instruments to be executed on behalf of the Company may be signed by only a single Member.

b. The Members may appoint from time to time one or more officers of Company (the "Officers") with such titles, powers, duties, compensation and other terms as the Members may determine to be necessary or appropriate. Any such Officers shall serve, subject to the provisions of this Agreement, until their respective successors are duly appointed and qualified. Any Officer may be removed by the Members at any time with or without cause; but such removal shall not itself affect the contractual rights, if any, of the officer so removed. The compensation of all Officers shall be fixed by the Members or as prescribed by this Agreement. The current Officers and their titles are as set forth on Schedule 2 attached hereto.

c. Unless otherwise provided herein, all decisions to be made by the members hereunder shall be made by a Majority in Interest of the Members. As used herein, a "Majority in Interest" ofthe Members shall be those Members who hold a majority ofthe Units as of the applicable time.

9. Exculpation and Indemnification. To the full extent permitted by applicable law, (a) the Members and the Officers shall not be liable to the Company or any other person or entity who has an interest in the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by the Members or the Officers on behalf of the Company, and (b) the Members and the Officers shall be indemnified by the Company for any loss, damage or claim incurred by the M~mbers or the Officers by reason of any act or omission performed or omitted by the Members or the Officers on behalf ofthe Company.

10. Other Business Ventures. The Members may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others. The Company shall not have any rights in or to such other

2

ventures or income or profits therefrom by virtue of this Agreement or a Member's status as a member ofthe Company.

11. Assignments. Without the prior consent of a Majority in Interest of the Members, a Member may not assign in whole or in part its membership interest in the Company. If a Member transfers all or part of its interest in the Company in a manner permitted by this Section 11, the transferee shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately prior to the transfer. If the Member transfers all of its interest in the Company in a manner permitted by this Section 11, then, immediately following the admission of the transferee as a member, the transferor Member shall cease to be a member of the Company.

12. Admission of Additional Members. One or more additional members of the Company may be admitted to the Company by the written consent of a Majority in Interest of the Members.

13. Dissolution.

a. The Company shall dissolve and its affairs shall be wound up upon the first to occur of the following: (i) the written consent of a Majority in Interest of the Members, or (ii) the close ofthe Company's business on the date specified in the Company's Articles of Organization as the latest date on which the Company is to dissolve.

b. The bankruptcy of a Member shall not cause the Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.

c. In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manri.er), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 48-249-620 of the Act.

14. Severability of Provisions. Each_ provision of this Agreement shall be considered separable, and if for any reason any provision or_ provisions hereiri are determined to be invalid, unenforceable or illegal.under any existing or future law, such invalidity, unemorceability or illegality shall not impair the operation of or affect those portions of this Agreement that are valid, enforceable and legal.

15. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State ofTeruiessee (without regard to conflict oflaws principles), all rights and remedies being governed by said laws.

16. Entire Agreement; Amendments. This Agreement is the entire agreement among the Members with respect to the subject matter hereof, and supersedes all prior discussions, negotiations, and agreements with respect to such subject matter, including without limitation

3

any prior operating agreement for the Company. This Agreement may be modified, altered, supplemented or amended only by the written consent of a Majority in Interest of the Members.

17. Sole Benefit ofMembers. The provisions of this Agreement are intended solely to benefit the Members and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor ofthe Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Members shall not have any duty or obligation to any creditor of the Company to make any contributions or payments to the Company. ·

[Signature Page Follows]

. 4

)

IN WITNESS WFIEREOF ,. the undersigned, intendirtg to be legally bound hereby, have duly executed this Agreement as of the Effective Date.

MEMBERS:

By: ______ ~-==r+---------Name: Title:

The undersigned hereby withdraws and resigns as Organizer of the Company, effective as of the Effective Date.

ORGANIZER:

Robert B. Womble

Signature Page to Operating Agreement 300135199 v2

Schedule 1

Members, Capital Contributions, and Units

Nam~.~nd Address Capital Contributions Units_ '·

Vanderbilt University Medical Center $100 100 c/o Office of Counsel 2525 West End A venue; Suite 700 Nashville, Tennessee 37203

Total $ 100 100

Schedule 1, Page 1 300135199 v2

Name

John Manning

Cecelia Moore

Michael Regier

Alaine Zachary

)

) ./

300135199 v2

Schedule 2

Officers

Schedule 2, Page 1

Title

President

Treasurer

Secretary

Asst Treasurer


1. Section A, Executive Summary, Item 6.B.2, Floor Plan

The charts using Medicare Compare Data identify different state and national averages for the selected hospitals. Please explain how that can be the case. RESPONSE: The “Tennessee Average” and “National Average” for emergency departments are benchmarked based on the total volume of visits seen at a particular ED. In other words, Medicare Compare Data provides different averages based on the relative busyness of an ED as set forth in the below chart:

St. Thomas Stones River and Tennova-Shelbyville are both “Low” volume emergency departments. St. Thomas River Park is a “Medium” volume ED. Stonecrest Medical Center is a “High” volume ED. Saint Thomas Rutherford and VUMC are both “Very High” volume EDs. Accordingly, the benchmark average for each facility will be different based on its relative emergency department volume.

2. Section A, Executive Summary, Item 12, Square Footage and Cost Per

Square Footage Chart

Please explain why the construction cost per square foot is $96.76 above the third quartile of previously approved hospital construction projects RESPONSE: The new construction cost per square footage is based on the 2016-2018 averages for new construction. According to the Engineering News-Record (ENR) and the Building Cost Index (BCI) data, however, the cost of construction has increased by 14% in 2020. Applying this 14% modifier would raise the third quartile to $486.43 per square foot. As construction for this project will not begin until 2021, it is also reasonable to apply a 3% inflation modifier resulting in a 2021 third quartile construction cost of $501.02.

Emergency Department Volume Total Visits Tennessee Average National AverageLow 0 - 19,999 60 Minutes 62 Minutes

Medium 20,000 - 39,999 87 Minutes 99 MinutesHigh 40,000 - 59,999 111 Minutes 120 Minutes

Very High 60,000+ 123 Minutes 138 Minutes

Emergency Department Volume Total Visits Tennessee Average National AverageLow 0 - 19,999 113 Minutes 113 Minutes

Medium 20,000 - 39,999 140 Minutes 141 MinutesHigh 40,000 - 59,999 171 Minutes 176 Minutes

Very High 60,000+ 159 Minutes 169 Minutes

ED-2: Median Time from Admit Decision to Departure for ED Admitted Patients

Measure: OP-18 Median Time from ED Arrival to ED Departure for Discharged ED Patients


The Vanderbilt Rutherford Hospital construction costs also include on-site and off-site development totaling $8.8 million. This includes substantial infrastructure improvements including the extension of the City of Murfreesboro’s utilities, sanitary and storm sewer, water and fiberoptic cable to the site and the costs of widening Blackman Road and the addition of a new connector road that expands Blackman Road to Veteran’s Parkway. If this $8.8 million were removed, the Vanderbilt Rutherford Hospital “bricks & mortar” construction costs would be in a reasonable range equivalent to the 2021 third quartile of $501.02.

3. Section B, Need, Item 1, Service Specific Criteria (Acute Care Beds) 1.a.i.1.

Please review the 5th and 6th column of this chart. When looking at Columns 3 and 4, these columns don’t add up. Please review and submit a revised page, if necessary.

RESPONSE: Please see the updated chart below based on the data reported in the 2018 Joint Annual Report. Please note the beds included in the chart below were confirmed, even though the Saint Thomas River Park Hospital does not add up.


Note of clarification. Trustpoint also has rehabilitation beds and medical detox beds. The outstanding St. Thomas Rutherford CON is to add 72 beds, not 75.

RESPONSE: Yes, it is also noted that Trustpoint has 100 staffed beds – 72 psychiatric, 18 rehabilitation and 10 medical detox. In evaluating the need for additional inpatient capacity in Rutherford County, however, it should be considered that Trustpoint does not treat obstetrical or pediatric patients, it does not operate an emergency department or have surgical capabilities, and it has one general practitioner on staff with the remaining physicians only treating behavior health issues. Correct, should Saint Thomas Rutherford choose to staff all 72 beds, the shortage of staffed beds for Rutherford County will be 21 in 2024.

Facility County Total Licensed Beds

Staffed beds set up and in use on a

typical day


Licensed beds that could not be used within 24-48 hours

Tennova Healthcare- Shelbyville Bedford 60 49 11 0Saint Thomas Stones River Hospital, LLC. Cannon 60 36 24 0Saint Thomas Rutherford Hospital Rutherford 286 286 0 0TriStar StoneCrest Medical Center Rutherford 119 109 10 10Trustpoint Hospital Rutherford 101 100 1 1Saint Thomas River Park Hospital, LLC Warren 125 38 15 0Total Beds 751 618 61 11

Total Beds


5. Section B. Need, Item 6

After reviewing the historical and projected volumes for VUMC, please explain how the Vanderbilt Rutherford Hospital will decompress volumes at VUMC. RESPONSE: VUMC currently operates at or near capacity on a continuous basis – in February 2020, for instance, VUMC’s occupancy level was near 90%. As set forth in its projected volumes chart, VUMC anticipates that its inpatient admissions, inpatient days, and surgical cases will continue to grow into 2025. Cardiac catheterizations and NICU admissions are also projected to increase. The continuing growth in VUMC’s patient volumes presents challenges to the system’s physicians and staff as they treat Tennessee’s sickest and most vulnerable patient populations. The Rutherford Market is a driver in the growth in volumes seen at VUMC’s main campus. Despite having to travel, in 2019, over 58,000 patients from the service area traveled to VUMC’s main campus for care. While some of these patients travel to access Vanderbilt’s tertiary level services, many choose to leave the service area and drive to VUMC for community-level medical services that can be provided at the proposed Vanderbilt Rutherford Hospital. By redirecting these existing VUMC patients to be treated at Vanderbilt Rutherford Hospital, multiple health planning goals are accomplished:

• Substantial drivetimes are reduced and convenience improved for Rutherford Market patients who will no longer be forced to travel to downtown Nashville for their preferred Vanderbilt providers;

• A new access point is created on the west side of I-24 in one of the most rapidly growing areas in Tennessee; and

• As the region’s only Level I trauma center and Level IV NICU, capacity can be freed at VUMC to focus on those patients needing the highest level of tertiary care.

6. Section B. Economic Feasibility Item 6. B. Net Operating Margin Ratio

Chart

The ratios presented here are not consistent with the data in the Projected Data Charts for both Cardiac Catheterization Services and Neonatal Intensive Care Services.

Please make the necessary corrections and submit revised charts.


RESPONSE: Please find the corrected Net Operating Margin Ratio Charts provided below.

Neonatal Intensive Care Services

Cardiac Catheterization Services

2nd Previous Year to Most

Recent Year

1st Previous Year to Most

Recent Year

Most Recent

Projected Year 1

FY2024

Projected FY2025


2nd Previous Year to Most

Recent Year

1st Previous Year to Most

Recent Year

Most Recent

Projected Year 1

FY2024

Projected FY2025


State of Tennessee Health Services and Development Agency ......Further, VUMC serves as net hospital...

Documents

Transcript of State of Tennessee Health Services and Development Agency ......Further, VUMC serves as net hospital...