Queen City Nursing Center, Inc. v. Mississippi State Department of Health
2011 Miss. LEXIS 575
| Miss. | 2011Background
- Meadowbrook Health and Rehab, LLC applied to the Mississippi DOH for a CON to build a 60-bed replacement nursing home in Lauderdale County.
- DOH staff recommended approval; surrounding nursing homes contested and requested a hearing under Miss. Code Ann. § 41-7-197.
- A three-day hearing occurred in September 2009; the hearing officer recommended denial, but the State Health Officer granted the CON.
- Contestants appealed to the Hinds County Chancery Court, which affirmed the SHO’s decision. The contestants appeal again to the Supreme Court.
- Issues include whether the SHO’s decision was arbitrary and capricious, whether the moratorium on new nursing home construction applies, and whether Meadowbrook met statutory criteria including need, alternatives, plan conformity, and financial feasibility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the SHO’s need finding was supported by substantial evidence | Meadowbrook argues SHO erred by adopting staff findings without independent analysis. | DOH argues substantial evidence supports need and deference to agency fact-finding is warranted. | Not arbitrary or capricious; substantial evidence supports need. |
| Whether Meadowbrook satisfied availability of alternatives | Contestants say alternatives were not adequately considered, including adding beds to Poplar Springs. | Record shows alternatives were considered and rejected as less effective or not feasible. | Substantial evidence supports consideration and rejection of alternatives. |
| Whether Meadowbrook conformed to State Health Plan goals | Project duplicative or inadequately aligned with plan goals, affecting access and cost containment. | Project advances plan goals by quality, access, and cost containment; Medicaid impact contested but manageable. | Substantial evidence supports conformity with Health Plan goals. |
| Whether Meadowbrook demonstrated financial feasibility | Expert evidence questioned financial viability and debt ratios. | Other experts testified feasibility; Medicaid cost considerations do not negate viability. | Substantial evidence supports financial feasibility. |
| Whether the moratorium on new nursing home construction applies to this replacement/relocation | Meadowbrook argues it is replacement/relocation, not new construction, thus moratorium does not apply. | DOH interprets moratorium as allowing replacement/relocation; not repugnant to statute; agency interpretation should be given deference. | DOH interpretation not repugnant; project falls within allowed replacement/relocation under the moratorium. |
Key Cases Cited
- Mississippi State Dept. of Health v. Natchez Cmty. Hosp., 743 So.2d 973 (Miss. 1999) (substantial-evidence standard; agency deference in review)
- Miss. State Dep’t of Health v. Baptist Mem’l Hosp.-Desoto, Inc., 984 So.2d 967 (Miss. 2008) (agency interpretation of regulations entitled to deference)
- Ricks v. Miss. State Dep’t of Health, 719 So.2d 173 (Miss. 1998) (deference to agency interpretation of statutes)
- Sierra Club v. Miss. Envtl. Quality Permit Bd., 943 So.2d 673 (Miss. 2006) (agency interpretation must not be repugnant to plain language)
- Greenwood Leflore Hosp. v. Miss. State Dep’t of Health, 980 So.2d 931 (Miss. 2008) (deference to agency findings on substantial-evidence review)