CLC of Biloxi, LLC v. Mississippi Department of Health
2012 Miss. LEXIS 323
| Miss. | 2012Background
- Miramar Lodge Nursing Home (180 beds) was destroyed by Hurricane Katrina in Pass Christian, Mississippi, on Aug. 29, 2005.
- GCC filed a certificate of need (CON) on Jan. 5, 2010 to replace Miramar and relocate 90 beds to central Harrison County; 60 beds had already been relocated to Boyington Health Care Facility in Gulfport in 2006.
- The remaining 30 Miramar beds were proposed for relocation to Hattiesburg under a separate CON.
- DOH reviewed GCC’s CON under the FY2010 State Health Plan and the CON Review Manual; staff found substantial compliance.
- A three-day hearing was held in 2010; the hearing officer recommended granting a CON for a 90-bed replacement in Harrison County, which the State Health Officer affirmed.
- Chancery Court affirmed the SHO’s decision; contestants appeal to the Mississippi Supreme Court alleging statute violations, lack of need, lack of economic viability, and DOH rule deviations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DOH violated MS law by approving a CON to reopen within 60 months of Miramar’s destruction | Contestants argue reopening within 60 months violated §41-7-191(l)(a)/(m). | GCC argues issue was waived and DOH properly reviewed under relocation provisions. | Issue without merit; sixty-month period not elapsed, DOH acted under correct relocation/review provisions. |
| Whether there is a demonstrated need for Miramar replacement beds | Contestants contend no need; Harrison County already has sufficient capacity. | DOH found need under health-planning policies and General Review Criteria, supported by evidence. | Substantial evidence supports need for replacing beds destroyed by Katrina. |
| Whether Miramar is economically viable | Contestants challenge projected profits and working capital; believe projections are insufficient. | SHO and hearing officer found substantial evidence of viability; Family Trust capital uses sealed figures. | Substantial evidence supports economic viability; court defers to SHO’s findings. |
| Whether DOH properly followed its own rules and regulations in reviewing GCC’s CON | Contestants claim data gaps, inconsistencies, and ownership/land-contract issues were not fully reviewed. | DOH decision supported by substantial evidence; minor procedural issues do not negate viability. | DOH’s decision affirmed; substantial evidence supports the ruling. |
Key Cases Cited
- Delta Reg’l Med. Ctr. v. Miss. State Dep’t of Health, 759 So.2d 1174 (Miss. 1999) (deference to agency decisions; substantial evidence standard)
- Queen City Nursing Center, Inc. v. Miss. Dep’t of Health, 80 So.3d 73 (Miss. 2011) (statutory interpretation and agency deference in health planning)
- Sprouse v. Miss. Employment Sec. Comm’n, 639 So.2d 901 (Miss. 1994) (rebuttable presumption in favor of agency decision; burden on challenger)
- Miss. State Dep’t of Health v. Rush Care, Inc., 882 So.2d 205 (Miss. 2004) (substantial evidence standard; agency decisions affirmed)
- Baptist Mem’l Hosp.-Desoto v. Miss. State Dep’t of Health, 984 So.2d 967 (Miss. 2008) (economic-viability review; deference to SHO findings)