COBB HOSPITAL, INC. d/b/a WELLSTAR COBB HOSPITAL et al.
GEORGIA DEPARTMENT OF COMMUNITY HEALTH et al.
GOBEIL, J., COOMER and HODGES, JJ.
March 2016, Emory University d/b/a Emory University Hospital
Smyrna ("EUHS") filed an application with the
Georgia Department of Community Health ("DCH") for
a new certificate of need ("CON") to undertake
improvements and renovations totaling approximately $33.8
million at the former Emory-Adventist Hospital. Cobb
Hospital, Inc. d/b/a Wellstar Cobb Hospital and Kennestone
Hospital, Inc., d/b/a Wellstar Kennestone Hospital
(collectively, "Wellstar") objected to EUHS'
application, arguing that the application "seeks to
develop a new hospital" rather than reopening and
renovating the former Emory-Adventist Hospital. The DCH
granted EUHS' application and awarded it a new CON for
the proposed improvements and renovations. Wellstar appealed
to the Certificate of Need Appeal Panel (OCGA § 31-6-44)
("CON Appeal Panel"), and a panel hearing officer
affirmed the DCH's decision. Wellstar objected to the
panel hearing officer's judgment and appealed to the DCH
commissioner, arguing, in part, that the panel hearing
officer erroneously concluded that "[i]t is not the
function of the CON Appeal Panel to consider questions of CON
and licensure status. . . ." The DCH commissioner
affirmed the panel hearing officer's decision, and the
Superior Court of Cobb County denied Wellstar's petition
for judicial review.
appeal, we are asked to decide whether the CON Appeal Panel,
in an appeal from a decision by the DCH on a health care
facility's application for a new certificate of
need, has the authority to independently review the status of
the facility's existing certificate of
need. We conclude that the plain language of
OCGA § 31-6-44 and Ga. Comp. R. & Regs. r. 274-1-.09
precludes the CON Appeal Panel from reviewing the DCH's
initial determination regarding a health care facility's
existing CON status; rather, any such challenges to the
DCH's initial determination must be brought through a
different process. Because there is no dispute that
substantial evidence supported the panel hearing
officer's findings of fact and that the officer's
conclusions of law that EUHS was entitled to a new CON based
on those facts were sound, we affirm the superior court's
judgment denying Wellstar's petition for judicial review.
record reveals that Smyrna Hospital, Inc., an 88-bed
community hospital, opened on South Cobb Drive in Smyrna in
1974. Adventist Health System acquired the hospital in 1976.
In 1995, Emory Healthcare entered a joint venture agreement
with Adventist Health System and obtained a 35% share
ownership in the hospital; thereafter, the hospital was
renamed Emory-Adventist Hospital. Due to declining revenues,
Emory-Adventist ceased operations on October 31, 2014. In
April 2015, Emory University acquired sole ownership of the
hospital, which was renamed Emory University Hospital Smyrna
and reopened on October 20, 2015.
it first opened as Smyrna Hospital in 1974, the hospital had
never had a major improvement, renovation, or upgrade. As a
result, EUHS applied for a certificate of need in March 2016
in order to proceed with improvements and renovations
totaling approximately $33.8 million. Wellstar objected to
EUHS' application, arguing that the application
"seeks to develop a new hospital" rather than
reopening and renovating the former Emory-Adventist Hospital.
Although it listed eight reasons for its objection to
EUHS' application, Wellstar's primary argument was
that "[t]he CON authority of the former Emory-Adventist
Hospital has lapsed." As a result, Wellstar asserted
that EUHS never obtained CON authority to offer hospital
services and that EUHS' application "must be
reviewed as a new hospital requiring new CON
evaluation of EUHS' application, the DCH noted that EUHS
filed its application "to renovate and upgrade its
current hospital facility." In addition, the DCH
EUHS, formerly known as Emory Adventist Hospital (EAH),
closed on October 31, 2014 and re-opened October 20, 2015,
according to Department records. In April 2015, Emory
University acquired full title to EAH, and renamed it EUHS.
As such, EUHS maintains an active CON status.
its review, the DCH granted EUHS' application and issued
EUHS a CON for the proposed improvements and renovations.
appealed the DCH's award to the CON Appeal Panel. In a
motion for summary adjudication, Wellstar argued, in part,
that the DCH erred in awarding a CON to EUHS "to
'renovate and upgrade' the former Emory-Adventist
Hospital . . . facility despite the fact that [EUHS] has no
CON authorization to operate a hospital there." As a
result, Wellstar asserted that EUHS "must obtain new CON
authority to operate a hospital[, ]" which applies more
extensive and rigorous guidelines. EUHS replied that the DCH
has the sole authority to determine whether an applicant
maintained a proper CON and, as a result, EUHS filed its own
motion for summary determination seeking to exclude any
evidence concerning the validity of EUHS' CON.
panel hearing officer first noted that Wellstar raised
"[its] arguments in the wrong forum." In fact, the
panel hearing officer found that "[i]t is not the
function of the CON Appeal Panel to consider questions of CON
and licensure status. . . ." The panel hearing officer
observed that the Attorney General's Office had the sole
authority to oversee Emory Healthcare's purchase of
Emory-Adventist under the Hospital Acquisition Act (OCGA
§ 31-7-400 et seq.) and that the DCH had the
sole authority to ascertain the validity of EUHS' CON to
operate a health care facility.See OCGA § 31-6-21. As a
result, the panel hearing officer granted EUHS' motion to
exclude "Wellstar's arguments respecting CON status,
Attorney General Review, and licensure status from the scope
of the hearing in that the Hearing Officer does not have the
authority to decide these questions."
an evidentiary hearing, the panel hearing officer affirmed
the DCH's decision granting EUHS' application and
issuing the CON. Wellstar objected to the panel hearing
officer's decision and appealed the decision to the DCH
commissioner, who affirmed the panel hearing officer's
then petitioned for judicial review of the commissioner's
decision in the Superior Court of Cobb County. The superior
court denied judicial review of the Commissioner's
decision,  and we granted Wellstar's
application for discretionary appeal. This appeal followed.
First, Wellstar contends that the CON Appeal Panel hearing
officer erroneously concluded that he "lacked authority
to independently decide if [EUHS] is a CON-authorized
hospital." For the following reasons, we find no error.
Certificate of Need Requirement.
Georgia law, "any new institutional health service [is]
required to obtain a certificate of need. . . ." OCGA
§ 31-6-40 (a). "The CON program, which is
administered by [the] DCH, establishes a system of mandatory
review requiring that, before new institutional health
services and facilities can be developed, the developer must
apply for and receive a CON from the DCH. OCGA §§
31-6-1; 31-6-40 (a), (b)." (Citation and punctuation
omitted.) Kennestone Hosp. v. Dept. of Community
Health, 346 Ga.App. 70 (815 S.E.2d 266) (2018).
The legislature cedes this authority to the [DCH] because
the public is better served by having experts in the
complexities of health care planning make these decisions.
The issues are complicated, and the applicable laws, rules,
regulations, and precedents require much study, especially
for a decision-maker who is not already familiar with them.
Dept. of Community Health v. Gwinnett County Hosp.
Sys., 262 Ga.App. 879, 881-882 (586 S.E.2d 762) (2003).
Pursuant to OCGA § 31-6-42 (a), the DCH "shall
issue a certificate of need to each applicant whose
application is consistent with [the considerations set forth
in OCGA § 31-6-42] and such rules deemed applicable to a
project." To that end, "[t]he DCH reviews CON
applications and issues decisions granting or denying a CON
under statutory considerations in OCGA § 31-6-42 and
under general and specific review considerations in rules and
regulations promulgated by the DCH as set forth in Ga. Comp.
R. & Regs. [r.] 111-2-1-.01 and 111-2-2-.01 through
111-2-2-.43." ASMC, LLC v. Northside Hosp.,
Inc., 344 Ga.App. 576, 577 (810 S.E.2d 663) (2018).
to this case, a certificate of need is required for:
"(1) [t]he construction, development, or other
establishment of a new health care facility; [and] (2) [a]ny
expenditure by or on behalf of a health care facility in
excess of $2.5 million which, under generally accepted
accounting principles consistently applied, is a capital
expenditure. . . ." OCGA §§ 31-6-40 (a) (1),
(2). A CON application for a capital expenditure is reviewed
only under the DCH's general review considerations, see
OCGA § 31-6-42 (a) and Ga. Comp. R. & Regs. r.
111-2-2-.09 (1),  while an application for construction or
development of a "new health care facility" is
reviewed under both general and service-specific requirements
and review considerations. See Ga. Comp. R. & Regs. r.
111-2-2-.11 (1) (a) (1), 111-2-2-.20 (1) (a), (3). Accord
Dept. of Community Health v. Northside Hosp., Inc.,
295 Ga. 446, 446-447, n. 4 (761 S.E.2d 74) (2014) ("more
stringent service-specific review considerations" apply
to applications for new CON for "ambulatory surgery
services"; if the additional services are "part of
a hospital" and do not increase the number of ambulatory
operating rooms, however, only general considerations need be
reviewed) (citing Ga. Comp. R. & Regs. r. 111-2-2-.40 (1)
(a) and (d)).
Scope of Review of the DCH's Certificate of Need
the DCH's initial decision granting or denying an
application for a new CON,
[a]ny applicant for a project [or] any competing health care
facility that has notified the [DCH] prior to its decision
that such facility is opposed to the application before the
[DCH] . . . who is aggrieved by a decision of the [DCH] shall
have the right to an initial administrative appeal hearing
before an appeal panel hearing officer or to intervene in
such hearing. . . .
OCGA § 31-6-44 (d). The CON Appeal Panel hearing
officer's role is defined in OCGA § 31-6-44 (f),