Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

UHS of Anchor v. Georgia Department of Community Health

Court of Appeals of Georgia, Third Division

June 25, 2019

UHS OF ANCHOR, L.P. d/b/a SOUTHERN CRESCENT BEHAVIORAL HEALTH SYSTEM
v.
GEORGIA DEPARTMENT OF COMMUNITY HEALTH et al.

          DILLARD, C. J., GOBEIL and HODGES, JJ.

          DILLARD, CHIEF JUDGE.

         In this discretionary appeal, UHS of Anchor, L.P. d/b/a Southern Crescent Behavioral Health System ("Southern Crescent") appeals from the trial court's order denying a petition for judicial review. In doing so, the trial court affirmed a final agency decision of the Georgia Department of Community Health in favor of Premier Health Care Investments, LLC d/b/a Flint River Hospital ("Flint River"). Southern Crescent argues that the trial court erred in denying the petition for review when the Department's decision (1) does not follow its rules and is inconsistent with the plain language of various Georgia statutes; and (2) departs from longstanding departmental precedent and practice, making the decision arbitrary and capricious, and violating Southern Crescent's constitutional rights. For the reasons set forth infra, we reverse.

         On April 21, 2016, Lake Bridge Behavior Health System ("Lake Bridge"), a sister facility to Southern Crescent, sent the Department correspondence expressing concern that Flint River in Montezuma, Georgia, was providing "potentially unauthorized psychiatric and/or substance abuse inpatient care" by "operating beyond its Certificate of Need . . . authorization" limit as to the number of beds available for providing such care. According to the letter and its attached exhibits, Flint River was only authorized to operate 12 psychiatric/substance-abuse beds but was instead operating 30 psychiatric beds and nine substance-abuse beds. As a result, Lake Bridge requested that the Department investigate and issue a cease-and-desist letter to prevent Flint River from operating beyond the authorization within its Certificate of Need ("CON").

         The Department subsequently launched an investigation and, on July 27, 2016, issued a cease-and-desist letter, detailing its conclusion that Flint River was "operating its adult psychiatric and/or substance abuse inpatient program beyond the scope of its CON authorization by operating more than twelve (12) adult acute care psychiatric/substance abuse inpatient beds." Specifically, the Department concluded that Flint River expanded its psychiatric/substance-abuse services without first obtaining the necessary authorization to do so. Thus, the Department ordered Flint River to cease and desist from offering services beyond the 12 CON-authorized beds.

         Flint River appealed from the Department's issuance of the cease-and-desist letter, which was then reviewed by a hearing officer at a proceeding on June 13, 2017.[1] And during that hearing, Flint River admitted that despite receiving CON approval in 2010 to operate 12 psychiatric inpatient beds, it had-since 2014-used more than 12 beds for the treatment of psychiatric/substance-abuse patients. Nevertheless, Flint River argued that the CON law allowed it to "flex" its short-stay hospital beds for use with its psychiatric-inpatient program and "shift beds between approved categories, so long as it does not exceed its total CON-approved bed capacity."

         The hearing officer considered the parties' arguments and the relevant rules and laws, and then concluded that "a provider may not shift or 'flex' beds." The officer also determined that Flint River (1) never gave the appropriate Department division notice that it was operating beyond its 12-bed CON authorization for psychiatric/substance-abuse treatment, and (2) failed to comply with a Department rule allowing it to obtain a determination as to whether a proposed action required CON approval. The officer also contrasted Flint River's operations from those of other hospitals it claimed had been permitted to "flex" their approved beds. Thus, the hearing officer affirmed the Department's issuance of the cease-and-desist letter.

         Thereafter, the Office of the Commissioner for the Department conducted a review of the hearing officer's decision at Flint River's request. The Department found that because Flint River had (1) prior CON approval to offer beds for adult psychiatric/substance-abuse treatment, (2) "reconfigured" the use of other existing beds for such treatment but did "not exceed its licensed evaluated bed capacity," and (3) costs associated with the reconfiguration that "were under the capital expenditure threshold," its actions "did not trigger prior CON review and approval."[2]

         In doing so, the Department reasoned as follows:

Since the Department determined that [Flint River's] bed reconfiguration was accomplished within the meaning of [OCGA] § 31-6-2 (14) and [OCGA] § 31-6-40[, ] the Department disagrees with the [h]earing [o]fficer's . . . [c]onclusion . . . [which] mischaracterizes "expansion" to simply mean the addition of beds. The analysis requires a more detailed examination of the subsections addressing "Applicability" and "Definitions" contained in both Ga. Comp. R. & Regs. r. 111-2-2-.20 and 111-2-2-.26, respectively, which are not addressed in the [hearing officer's] [f]inal [o]rder. Such a mischaracterization is misleading and limiting in view of the Department's treatment of reconfigurations[.] Therefore, the Department's analysis is more reasonable than that of the [h]earing [o]fficer. . . . Proposed bed reconfigurations that satisfy the conditions set forth above may not always require prior CON review and approval.

         It is from this final decision by the Department's Office of the Commissioner that Southern Crescent filed its petition for judicial review, under OCGA § 50-13-19, [3]in the Superior Court of Fulton County on January 19, 2018. Southern Crescent argued that the Department erred by overturning the two prior agency reviews of the issue. But following a hearing, the trial court denied Southern Crescent's petition, affirming the Department's decision. We subsequently granted Southern Crescent's application for a discretionary appeal, which follows.

         Under Georgia's Administrative Procedure Act, [4] parties aggrieved by an agency's final decision are entitled to judicial review in superior court.[5] The review "shall be conducted by the court without a jury and shall be confined to the record";[6]and the court "shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact"[7] and "may affirm the decision of the agency or remand the case for further proceedings."[8] The reviewing court may reverse or modify the agency's decision if

substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) [i]n violation of constitutional or statutory provisions; (2) [i]n excess of the statutory authority of the agency; (3) [m]ade upon unlawful procedure; (4) [a]ffected by other error of law; (5) [c]learly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) [a]rbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.[9]

         Upon further discretionary appeal to this Court, our duty is not to review whether the record supports the trial court's decision but to determine whether "the record supports the final decision of the administrative agency."[10] In this regard, agency findings of fact are reviewed to determine if they are supported by any evidence, while an agency's conclusions of law are reviewed de novo.[11]

         With these guiding principles in mind, we will now address Southern Crescent's contentions that the trial court erred in denying the petition for review when the Department's final decision (1) does not follow its rules and is inconsistent with the plain language of various Georgia statutes, and (2) departs from longstanding departmental precedent, making the decision arbitrary and capricious, and violating Southern Crescent's constitutional rights.

         1. In two separate enumerations of error, Southern Crescent argues that the superior court erred in denying the petition for review when the Department's final decision does not follow Department Rule 111-2-2-.26 and is inconsistent with the plain language of various Georgia statutes.[12]

         When construing statutes, agency rules, and regulations, we employ the rules of statutory construction and look to the plain language of the relevant text to determine its meaning.[13] In doing so, we must construe the statute, rule, or regulation "according to its own terms, to give words their plain and ordinary meaning, and to avoid a construction that makes some language mere surplusage."[14] Still, even if words are apparently plain in meaning, they "must not be read in isolation and instead, must be read in the context of the [statute, rule, or] regulation as a whole."[15]Additionally, judicial deference is-for the time being- "to be afforded the agency's interpretation of statutes it is charged with enforcing or administering and the agency's interpretation of rules and regulations it has enacted to fulfill the function given it by the legislative branch."[16] With these canons of construction in mind, we turn now to the relevant Certificate-of-Need authority.

         (a) The Relevant Certificate-of-Need Statutes, Rules, and Regulations.

         (i) What is a Certificate of Need?

         Georgia law provides that the Department is "authorized to administer the certificate of need program established under this chapter" and, likewise, must "provide, by rule, for procedures to administer its functions until otherwise provided by the [Board of Community Health]."[17] Thus, the General Assembly further provided that one of the Department's functions is to "adopt, promulgate, and implement rules and regulations sufficient to administer the provisions of this chapter including the certificate of need program"[18] and "define, by rule, the form, content, schedules, and procedures for submission of applications for certificates of need and periodic reports."[19] Additionally, the Department is bestowed by law with the power to

establish, by rule, need methodologies for new institutional health services and health facilities. In developing such need methodologies, the department shall, at a minimum, consider the demographic characteristics of the population, the health status of the population, service use patterns, standards and trends, financial and geographic accessibility, and market economics.[20]

         To that end, "Certificate of Need" is defined by both statute and rule to mean "an official determination by the Department, evidenced by certification issued pursuant to an application, that the action proposed in the application satisfies and complies with the criteria contained in the Statute and Rules promulgated pursuant thereto."[21] And the purpose of the CON program and its evaluation process, under both statute and Department Rule, is to ensure that (1) adequate health care services and facilities are developed "in an orderly and economical manner," (2) such services and facilities are available to all Georgia citizens, and (3) only health-care services found to be in the public interest will be provided.[22] In this regard, two of the five goals of the evaluation process are to "[e]nsure compatibility of health care services with the needs of various areas and populations of Georgia"[23] and "[p]revent unnecessary duplication or services."[24]

         (ii) When is a Certificate of Need Required?

         Both statutory authority and the Department's rules provide separate delineations for when a CON must be obtained, and this lies at the heart of the parties' dispute.

         Under OCGA § 31-6-40, after July 1, 2008, a certificate of need is required for (1) "any new institutional health service," which is defined to include, inter alia, "construction, development, or other establishment of a new health care facility;"[25](2) "[a]ny increase in the bed capacity of a health care facility except as provided in Code Section 31-6-47;"[26] and (3) "[c]linical health services which are offered in or through a health care facility, which were not offered on a regular basis in or through such health care facility within the 12 month period prior to the time such services would be offered."[27]

         Moreover, under the Department's Rules, separate rules specify that a CON is required for 17 different types of programs, services, and facilities, [28] with these individual rules providing unique, detailed standards and definitions applicable to each.[29] But here, we are concerned with Rule 111-2-2-.26, which provides that a CON is required "prior to the establishment of a new or the expansion of an existing acute care adult psychiatric and/or substance abuse inpatient program."[30] And Rule 111-2-2-.26 goes on to define an "acute care psychiatric and/or substance abuse inpatient program" as

a psychiatric or substance abuse program . . . that provides acute and/or emergency stabilization and other treatment for acute episodes. An acute care program provides medically oriented evaluation, diagnosis, stabilization, and short-term treatment using individual and/or group therapies as well as other treatment activities. Two acute care programs are defined: adult psychiatric and/or substance abuse and pediatric psychiatric and/or substance abuse.[31]

         And "psychiatric and/or substance abuse inpatient program" is defined as "an organized entity with a specific plan and intent to serve a special population via designated staff in designated beds in a licensed hospital," which "provides services on a 24-hour, seven days per week basis."[32] The definition goes on to explain that the characteristics of such a program include "a clear, distinct plan which includes admission policies and criteria, treatment protocol, etc.; and . . . appropriately trained personnel for the age and disability group to be served by the program; and . . . all of the beds in a program are designated for patients in that specific program."[33]Additionally, "expansion" is defined as "the addition of beds to an existing CON-authorized or grandfathered psychiatric and/or substance abuse inpatient program."[34] And "new" is defined as, inter alia, "a psychiatric and/or substance abuse inpatient program that has not offered a similar program in the prior twelve months."[35]

         (iii) How is a Certificate of Need Obtained, and What Does the Department Consider?

         A CON is obtained by filing an application with the Department. But prior to applying for a CON, applicants are required by both statute and rule to submit a "letter of intent" no more than 30 days prior to submitting the application.[36] Then, when applying for the CON, the applicant must include, inter alia, "a detailed and complete description of the proposed project"[37] and the project's "justification, including specific documentation of the need (utilizing the Department's data and methodology) that the population to be served has for the project[.]"[38] Should the Department discover that false information was intentionally provided in the application, the Department may revoke a CON.[39]

         During the application process, a petition may be amended within a certain period of time, with "amendment" defined as "a revision to the additional information or application as originally submitted . . . that constitutes a change in scope, physical location, cost, charge, service, or owner."[40] The rule on amendments provides that, among others, changes to an application that constitute an amendment are a "reduction or increase in the number of proposed beds or service units (e.g. operating rooms)"[41] and a "reduction or subtraction in the scope of the original application[.]"[42]

         As far as what the Department considers when assessing a CON application for an expanded acute care adult psychiatric and/or substance abuse inpatient program, the rules provide that such applications are subject to review "under the General Review Considerations of Rule 111-2-2-.09 and the service-specific review considerations of this Rule."[43]

         The general review considerations for CON applications are contained in both the aforementioned rule and in OCGA § 31-6-42.[44] And while this rule and statute largely contain identical language in delineating the general requirements, in many of its subsections, the rule expands upon and further explains or limits the criteria.[45] But among the general review considerations contained in both, the Department considers whether "the population residing in the area served, or to be served, by the new institutional health service has a need for such services."[46] The Department also considers whether

existing alternatives for providing services in the service area the same as the new institutional health service proposed are neither currently available, implemented, similarly utilized, nor capable of providing a less costly alternative, or no [CON] to provide such alternative services has been issued by the Department and is currently valid.[47]

         Additionally, the Department considers whether "[t]he proposed new institutional health service can obtain the necessary resources, including health care personnel and management personnel[, ]"[48] and whether "[t]he proposed new institutional health service is an underrepresented health service, as determined annually by the [D]epartment."[49]

         Although there is no corresponding statute, separate from the general considerations, Department Rule 111-2-2-.26 provides for the aforementioned service-specific review considerations for issuance of a CON for psychiatric and/or substance abuse programs.[50] And to that end, depending upon the specific circumstances surrounding the program, an application for an expanded program must provide documentation to show, in relevant part, (1) the need for the program in the planning area, [51] and (2) that the program will not adversely impact similar existing and CON-approved programs in the planning region.[52]

         (iv) What Does a Certificate of Need Include?

         When the Department reaches a decision on a CON application, it is required to provide the applicant with notice of that decision.[53] The Department's written findings of fact and its decision must specify which of the general considerationsvidentiary support for i and service-specific considerations, detailed supra, are applicable to the CON application.[54] The Department must also provide "its reasoning as to and ets evaluation of each such applicable consideration and rule."[55]

         When a CON is issued, the Department's rules provide that it must specify, but is not limited to, inter alia, "the scope of the project"[56] and "the services or units of services, which have been approved[.]"[57] Importantly, these rules explain that a CON "shall be valid only for the defined scope, physical location, cost, service area, and person named in the application as the applicant."[58]According to statute, a CON "shall be valid only for the defined scope, location, cost, service area, and person named in an application, . . . and as such scope, location, service area, cost, and person are approved by the department, unless such certificate of need owned by an existing health care facility is transferred to a person who acquires such existing facility."[59]

         (v) How are Certificates of Need Enforced?

         In order to enforce CONs, the Department's rules provide it with the right to "inspect and audit any facility, site, location, book, document, paper, files, or other record of the holder of the certificate of need . . . to monitor and evaluate the person's compliance with the terms of issuance of the certificate of need . . . ."[60] Furthermore, these rules provide the Department with authority "to make public or private investigations or examinations . . . to determine whether all provisions of" the statutes related to issuance of certificates of need have been violated.[61] And the Department may revoke a CON if it is determined, after a hearing, that the holder of a CON has, among other reasons, "[f]ailed to comply with any and all requirements or conditions of the Certificate[.]"[62]

         (b) The Department's Final Decision.

         In its final review, the Department disagreed with the hearing officer's interpretation that "the reconfiguration of . . . beds within existing licenced capacity . . . is governed by OCGA § 31-6-41 (a)," concluding instead that OCGA § 31-6-2 (14) and OCGA § 31-6-40 controlled. Specifically, the Department held that Flint River "reconfigured" its existing beds within the meaning of OCGA § 31-6-2 (14) and OCGA § 31-6-40. But Southern Crescent argues that the Department's final decision is inconsistent with the plain language of OCGA § 31-6-41 and OCGA § 31-6-40, contending that it violates the rule requiring a CON "prior to the establishment of a new or the expansion of an existing acute care adult psychiatric and/or substance abuse inpatient program."[63]

         (c) Our Conclusion.

         Having considered the above-detailed statutes and regulations, we agree with Southern Crescent that the Department's final decision is erroneous in its interpretation of the relevant statutes and rules. We disagree, then, with the Department's conclusion that Flint River "flexed"-i.e., reallocated or redistributed- beds from one approved service to use in another approved service without increasing the total number of beds within the facility as a whole and, as a result, was not required to obtain a CON prior to initiating this change.

         Southern Crescent correctly notes that Department Rule 111-2-2-.26 (a) explicitly requires that a CON be obtained "prior to . . . the expansion of an existing acute care adult psychiatric and/or substance abuse inpatient program." And once again, "expansion" is defined within that Rule to mean "the addition of beds to an existing CON-authorized or grandfathered psychiatric and/or substance abuse inpatient program."[64]

         While it is true that OCGA § 31-6-40 (a) does not specifically include the expansion of existing programs in its list of "new institutional health services" that are required to obtain a CON, [65] that list is not exclusive. Indeed, the plain language of the statute provides that "[n]ew institutional health services include" the categories that follow within the Code Section, [66] whereas elsewhere the General Assembly gave the Department the power to

establish, by rule, need methodologies for new institutional health services and health facilities. In developing such need methodologies, the department shall, at a minimum, consider the demographic characteristics of the population, the health status of the population, service use patterns, standards and trends, financial and geographic accessibility, and market economics.[67]

         And this specific subsection further provides that the Department is required to "establish service-specific need methodologies and criteria for . . . psychiatric and substance abuse inpatient programs[.]"[68] Additionally, the General Assembly also provided that another function of the Department is to "adopt, promulgate, and implement rules and regulations sufficient to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.