EMORY UNIVERSITY d/b/a EMORY UNIVERSITY HOSPITAL SMYRNA et al. v. KENNESTONE HOSPITAL, INC. d/b/a WELLSTAR WINDY HILL HOSPITAL.
A22A0111, A22A0112
Court of Appeals of Georgia
June 29, 2022
FIRST DIVISION BARNES, P. J., BROWN and HODGES, JJ.
NOTICE: Motions for reconsideration must be physically received in our clerk‘s office within ten days of the date of decision to be deemed timely filed. https://www.gaappeals.us/rules
In this appeal, we are asked to determine whether an authorized long-term care hospital may convert its beds and available services to operate as a short-stay general acute care hospital without first obtaining a new certificate of need (“CON“). See
WellStar appealed to the CON Appeal Panel, and a hearing officer affirmed the DCH‘s decision. WellStar next appealed to the DCH commissioner, who affirmed the hearing officer. However, the Superior Court of Cobb County granted WellStar‘s petition for judicial review and reversed the DCH commissioner‘s decision, finding that WellStar “is entitled to revert its beds to their previous short-stay status without prior CON review and approval.”
We granted Emory and the DCH‘s applications for discretionary appeal, and now conclude that, based upon the plain language of
1. At the outset, we determine “whether ‘substantial evidence’ supports the agency‘s findings of fact[.]” Palmyra Park Hosp. v. Phoebe Sumter Med. Center, 310 Ga. App. 487, 488 (714 SE2d 71) (2011). In this case, the operative facts are undisputed.1 So viewed, the record demonstrates that WellStar Windy Hill Hospital (“Windy Hill“) opened in 1973 as a general acute care short-stay hospital before Georgia enacted its CON program.2 See
Based on WellStar‘s representations, the SHPA issued a determination letter stating that WellStar would “not need to obtain CON approval in order to implement its proposal” because the operation of Windy Hill “as a long-term acute care hospital is within the original scope of Windy Hill‘s CON authorization as a general acute care hospital.” Thereafter, Windy Hill surrendered its original permit, which had authorized Windy Hill to operate as a “General Hospital,” and the SHPA marked the permit as “Void.” WellStar obtained a new permit in 1997 authorizing it to operate as a “Specialized Long Term Acute Care Hospital,” and it began operating as a long-term care hospital. Windy Hill initially had 42 beds, but in 2007, WellStar obtained a new CON to renovate the hospital in order to add 5 additional beds.3 Thereafter, although WellStar only operated 47 beds
In 2019, WellStar sought a determination from the DCH that its complement of 115 long-term beds would revert to short-stay beds without going through CON approval, and that it would then have authorization to operate as a short-stay general acute care hospital, if it relinquished its Medicare long-term care hospital certification. In support of its application, WellStar cited Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d), which allow for the automatic conversion, or reversion, of certain long-term beds to short-stay beds for hospitals that have been approved through the CON process.
Emory objected to WellStar‘s proposal, arguing that WellStar sought to create a new short-stay hospital, which constituted a “new institutional health service” and required prior CON approval. In its initial agency determination, the DCH agreed with Emory, finding that WellStar had operated as a long-term care facility since 1996 and, as such, had obtained various CONs which did not involve short-stay hospital beds. In addition, the DCH‘s determination noted that the SHPA determined in 1996 “that Windy Hill‘s operating as a [long-term care hospital] was not subject to prior CON review and approval.” Thus, the DCH determined that WellStar‘s proposed transition to a 115-bed short-stay hospital constituted a new institutional health service, which required CON review and approval.
WellStar appealed the DCH‘s initial decision to the CON Appeal Panel, and a hearing officer affirmed the agency‘s decision. The hearing officer, citing Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d), upon which WellStar also relied, rejected WellStar‘s argument that it was “an existing general acute care hospital that was approved through the CON process to operate as a [long-term care hospital.]” The hearing officer concluded that WellStar had not gone through the CON process in converting to a long-term care hospital, instead finding that “Windy Hill permissibly avoided rather than underwent, much less was ‘approved through,’ a CON process.” The hearing officer also determined that Windy Hill had not “offered inpatient short-stay acute care services since it converted to a [long-term care hospital] . . . 23 years ago” and that “[o]perating a short-stay acute care facility offering such services where none were offered on a regular basis within the previous 12 months would make it a ‘new institutional health service‘” that required CON review and approval. Finally, the hearing officer rejected WellStar‘s argument that refusing to allow Windy Hill to convert its beds into short-stay acute care beds violated equal protection by treating it differently than other long-term care hospitals that could revert beds to short-term care beds. WellStar appealed to the DCH commissioner, who affirmed the hearing officer. The commissioner concluded that Windy Hill‘s proposed conversion “would result in the offering of a reviewable new health service” that required CON review and approval, and that accepting WellStar‘s argument “would result in a hospital‘s being able to flip back and forth[,]” thereby undermining the purpose of the CON program.
WellStar then petitioned for judicial review in the superior court. Following a hearing, the superior court reversed the DCH commissioner‘s decision, concluding that: (1) WellStar was entitled to automatically revert its beds from long-term care to short-stay beds under Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d) because the 1996 letter from SHPA acknowledging WellStar‘s right to change from a short-stay hospital to a long-term care hospital constituted a determination under the “CON process” referenced in the Rules; (2) WellStar was not offering a new institutional health service requiring compliance with the CON procedure; and (3) WellStar was authorized to operate either short-stay or long-term beds, and to take away one of those vested rights would be unconstitutional. From that order, we granted Emory and the DCH‘s applications for discretionary appeal. We consider each appeal in turn, starting with Emory‘s appeal.
No. A22A0111
2. Considering Emory‘s fourth enumeration first,4 Emory contends that the superior
(i) General Principles. “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.” (Citation and punctuation omitted.) Cobb Hosp., Inc. v. Dept. of Community Health, 349 Ga. App. 452, 456 (1) (a) (825 SE2d 886) (2019), reversed in part on other grounds, 307 Ga. 578 (837 SE2d 371) (2019); see also
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.
(Citation omitted.) Cobb Hosp., 349 Ga. App. at 456 (1) (a).
As a result, “on appeal to this Court, our duty is not to review whether the record supports the superior court‘s decision but whether the record supports the final decision of the administrative agency.” (Citation and punctuation omitted.) Ga. Dept. of Community Health v. Satilla Health Svcs., 266 Ga. App. 880, 885 (1) (c) (598 SE2d 514) (2004). To that end, we may reverse or modify the agency‘s decision only if the decision is:
(1) [i]n violation of constitutional or statutory provisions; (2) [i]n excess of the statutory authority of the department; (3) [m]ade upon unlawful procedures; (4) [a]ffected by other error of law; (5) [n]ot supported by substantial evidence, which shall mean that the record does not contain such relevant evidence as a reasonable mind might accept as adequate to support such findings, inferences, conclusions, or decisions, which such evidentiary standard shall be in excess of the “any evidence” standard contained in other statutory provisions; or (6) [a]rbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
(ii) Analysis. For the following reasons, we conclude that the plain language of the relevant rules and statutes confirms that Windy Hill is not “a hospital that has been approved through the certificate of need process. . . .”
In its initial determination letter, the DCH broadly stated that “Windy Hill‘s [Long-Term Acute Care] Beds Were not Approved through the CON Process.” The CON Appeal Panel hearing officer agreed, finding that Windy Hill “permissibly avoided rather than underwent, much less was ‘approved through,’ a CON process” in 1996. As a result, the hearing officer concluded that Windy Hill‘s long-term care hospital beds did not revert to short-stay beds under Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d) because Windy Hill had not been “approved through a CON process[.]” The DCH commissioner
In contrast, the superior court found that WellStar was entitled to have its long-term care hospital beds automatically revert to short-stay beds under Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d). In support of its judgment, the superior court found that Windy Hill was “approved through the [CON] process” in 1996 when it obtained approval from the DCH to change from a general care hospital to a long-term health facility without obtaining a CON.
(A) Relevant Rules Applicable to this Case. At the outset, we note that when examining statutory provisions,
we apply the fundamental rules of statutory construction that require us to construe the statute according to its terms, to give words their plain and ordinary meaning, and to avoid a construction that makes some language mere surplusage. Thus, a statute should be read according to its natural and most obvious import of the language without resorting to subtle and forced constructions for the purpose of either limiting or extending its operation.
(Citation omitted.) Cobb Hosp., 349 Ga. App. at 459 (1) (c) (ii). “Similarly, in construing agency regulations, we employ the basic rules of statutory construction and look to the plain meaning of the regulation to determine its meaning.” (Citation and punctuation omitted.) Id. at 459-460 (1) (c) (ii).
Accordingly,
when an administrative agency decision is the subject of judicial review, judicial deference is to be afforded the agency‘s interpretation of rules and regulations it has enacted to fulfill the function given it by the legislative branch. And in construing administrative rules, the ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the rule.
(Citation and punctuation omitted.) ASMC, LLC v. Northside Hosp., 344 Ga. App. 576, 582 (810 SE2d 663) (2018). In short, we “defer to the DCH‘s decisions regarding policy, as well as to the DCH‘s interpretation and enforcement of its own rules.” (Citations, punctuation, and footnote omitted.) Cobb Hosp., 349 Ga. App. at 460 (1) (c) (ii). This is so because
agencies provide a high level of expertise and an opportunity for specialization unavailable in the judicial or legislative branches. They are able to use these skills, along with the policy mandate and discretion entrusted to them by the legislature, to make rules and enforce them in fashioning solutions to very complex problems. Thus, their decisions are not to be taken lightly or minimized by the judiciary. Review overbroad in scope would have the effect of substituting the judgment of a judge or jury for that of the agency, thereby nullifying the benefits of legislative delegation to a specialized body.
(Citation and punctuation omitted.) Id. at 460 (1) (c) (ii). “In the context of the DCH, the administration of the CON program requires a particularly high level of expertise and specialization [because] [t]he DCH rules promulgated to administer the program are detailed and lengthy.” (Citation and punctuation omitted.) Id. at 460-461 (1) (c) (ii).
(B) ”Certificate of Need Process.” Against this backdrop, we turn to the relevant rules governing, and a basic overview of, the CON process.
(1) Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) provides that
a hospital that has been approved through the Certificate of Need process to use a certain number of short-stay hospital beds for long-term acute care (“LTAC“) beds shall have such LTAC beds removed from the official inventory of available short-stay beds once the LTAC is certified by Medicare; provided, however, that such beds will revert to the hospital‘s official inventory of available short-stay beds at any point that the LTAC ceases operation or is no longer certified by Medicare.
a hospital that has been approved through the Certificate of Need process to use all of its short-stay beds for a Freestanding LTCH shall have such beds removed from the official inventory of available short-stay beds when the LTCH is certified by Medicare; provided, however, that the hospital‘s beds will revert to the official inventory of available short-stay beds at any point that the facility ceases to be certified by Medicare as an LTCH.
(Emphasis supplied.) Accordingly, these provisions, which the DCH commissioner and the parties dubbed collectively as the “reversion exceptions,” are available only to those hospitals that have been “approved through the certificate of need process” to use short-stay hospital beds in a long-term care hospital. Our authorities make clear that Windy Hill has not been so approved.
(2) We have described the CON process as “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.” ASMC, 344 Ga. App. at 577. As part of its evaluation,
[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. UnderOCGA § 31-6-42 (a) , “[t]he [DCH] shall issue a certificate of need to each applicant whose application is consistent with the [considerations set forth in the statute] and such rules deemed applicable to a project,” including the establishment of a need for the services.
(Footnote omitted.) ASMC, 344 Ga. App. at 577. And as we have noted,
the administration of the CON program requires a particularly high level of expertise and specialization. The DCH rules promulgated to administer the program are detailed and lengthy. See, e.g., Ga. Comp. R. & Regs. r. 111-2-2-.07, which describes the review procedures for CON applications. Both the hospital seeking a CON and the hospitals opposing it gather and organize vast amounts of data, expert testimony, and other evidence which are presented to the agency staff, which then interprets and synthesizes the evidence and applies it to the agency rules. See
OCGA § 31-6-43 . . . .Further administrative review is also highly specialized. The hearing officer who reviews the initial DCH staff decision is one of five members of the CON Panel, all of whom are appointed by the Governor and are attorneys “who are familiar with the health care industry but who do not have a financial interest in or represent or have any compensation arrangement with any health care facility.”
OCGA § 31-6-44 (a), (b) .
(Citation and punctuation omitted; emphasis supplied.) Cobb Hosp., 349 Ga. App. at 460-461 (1) (c) (ii). Therefore, to enforce Georgia‘s stated policy directives, the CON process requires the DCH to thoroughly evaluate a party‘s CON application to ensure that “[h]ealth care services and facilities [are] provided in a manner that avoids unnecessary duplication of services, that is cost effective, that provides quality health care services, and that is compatible with the health care needs of the various areas and populations of the state.”
At a bare minimum, then, review under the CON process first requires an application. See
Moreover, we defer to an agency‘s interpretation of its rules and regulations so long as that interpretation is consistent with the CON statute. See Medical Center of Central Ga. v. Hosp. Auth. of Monroe County, 340 Ga. App. 499, 504 (3) (798 SE2d 42) (2017) (“While reviewing courts defer to agency interpretations of the statutes they are charged with administering, that deference applies only as far as the agency interpretation is consistent with the statute.“) (citation omitted). In this case, for the reasons outlined above, we conclude that the DCH‘s “interpretation correctly reflects the plain language of the statute and comports with the legislative intent.” Id.
(B) Effect of Lack of Certificate of Need Process. Because we conclude that Windy Hill has not been “approved through the certificate of need process,” it necessarily follows that Windy Hill is not entitled to the benefits of the “reversion exception” in either Ga. Comp. R. & Regs. r. 111-2-2-.20 (1) (d) or 111-2-2-.36 (2) (d). As a result, we conclude that the record supports the DCH commissioner‘s decision that Windy Hill‘s proposed conversion from a long-term care hospital to a short-stay general acute care hospital “would require prior CON review and approval.” Therefore, in the absence of any basis codified in
3. Next, Emory argues that the superior court erred in finding that a long-term care hospital and a short-stay general acute care hospital are legally the same “clinical health service,” see
In its initial determination, the DCH cited
The superior court noted that
(a) On and after July 1, 2008, any new institutional health service shall be required to obtain a certificate of need pursuant to this chapter. New institutional health services include:
. . .
(5) Clinical 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; [and]
(6) Any conversion or upgrading of any general acute care hospital to a specialty hospital or of a facility such that it is converted from a type of facility not covered by this chapter to any of the types of health care facilities which are covered by this chapter[.]
See also Premier Health Care Investments v. UHS of Anchor, 310 Ga. 32, 35-36 (2) (a) (849 SE2d 441) (2020).
The superior court‘s conclusion ignores additional statutory language and rules that reflect a clear intent to treat short-stay and long-term beds differently. First,
establish, by rule, need methodologies for new institutional health services and health care facilities. . . . The [DCH] shall establish service-specific need methodologies and criteria for at least the following clinical health services: short stay hospital beds[.]”
(Emphasis supplied.) To that end, the DCH promulgated “Specific Review Considerations for Short-Stay General Hospital Beds” (see
Second, the two types of hospitals are defined differently based upon the services they provide. A “[s]hort stay hospital’ or ‘hospital’ is defined as a facility with an average length of stay of less than thirty (30) days.”
“Long Term Care Hospital” or “LTCH” or “Long Term Acute Care Hospital” or “LTACH” means a hospital that is classified as a long term hospital by the Medicare program pursuant to
42 CFR 412.23(e) . These hospitals typically provide extended medical and rehabilitative care for patients who are clinically complex and may suffer from multiple acute or chronic conditions. Services typically include comprehensive rehabilitation, respiratory therapy, head trauma treatment, and pain management.
(Emphasis supplied.)
Third, this distinction is represented in the evidence provided to the hearing officer during WellStar‘s appeal from the DCH‘s initial determination. Between 1973 and 1996, it is undisputed that Windy Hill operated as a short-term general acute care hospital. When it contacted SHPA in 1996, Windy Hill specifically stated that it wanted to operate “a long-term acute care hospital pursuant to
These factors indicate a clear legal distinction between short-stay general acute care hospitals and long-term care hospitals, and demonstrate that Windy Hill was being operated as a long-term care hospital. That there may be a minimal level of overlap between the two categories does not alter the fact that the categories are defined differently, evaluated differently, reported differently, and provide different levels of care.8 According to Windy Hill‘s own evidence, it maintained 47 long-term care hospital beds, and only long-term care beds, when it sought to convert its entire complement of 115 beds to short-stay beds in 2019, after having operated as a long-term care hospital for more than 20 years. As a result, Windy Hill‘s annual reporting confirmed that it did not maintain any beds for pediatric care, gynecological care, general medicine, general surgery, or medical/surgical care.9 Under these facts, the DCH commissioner was authorized to find that Windy Hill‘s proposed conversion constituted a “new institutional health service” that required prior CON review and approval. See
hold that Windy Hill did not need prior CON approval, and finding no basis to reverse the DCH commissioner‘s decision under
4. Finally, in two interrelated enumerations of error, Emory asserts that the superior court erred in finding that WellStar had a “vested right” to “provide [long-term care hospital] services while retaining its status as a general acute care hospital” and that reversing the DCH commissioner‘s decision “avoids an unconstitutional result,” which, Emory argues, itself results in an unconstitutional application of the rules and statutes governing the CON program.11 We conclude that WellStar did
In its order, the superior court tacitly found that Windy Hill had a vested right to operate as a short-stay general acute care hospital based upon the 1996 letter from SHPA.12 As a result, the superior court concluded that
[e]ven if “short-stay beds” and “long-term beds” were distinct clinical health services, [the] DCH cannot interpret its later-adopted rules to retroactively take away Windy Hill‘s vested right to provide both short-stay and long-term medical-surgical care. As reflected by the 1996 [SHPA letter], Windy Hill had a right to provide [long-term care hospital] services while retaining its status as a general acute care hospital. That right — expressly recognized in a ruling from the state CON agency — has never been relinquished. Thus, even if [the] DCH‘s subsequent adoption of separate rules for Short-Stay Hospital Beds and Long Term Care Hospitals created distinct clinical health services, Windy Hill had already vested its right to offer long-term beds while retaining its general acute care CON authorization, including offering medical-surgical care.
Our Supreme Court “has said that the term vested rights means interests which it is proper for the state to recognize and protect and of which the individual cannot be deprived arbitrarily without injustice.” (Citation and punctuation omitted.) Deal v. Coleman, 294 Ga. 170, 177 (2) (a) (751 SE2d 337) (2013). However, “‘vested rights’ must be private rights, and public rights — those rights that belong to the People in common — can be modified by the elected representatives of the People prospectively or retroactively, as they see fit.” (Emphasis supplied.) Id. at 181 (2) (a). Furthermore, like the Open Records Act at issue in Deal, the CON laws were “enacted for the protection of the public, and not for the benefit of any particular individual or calling.” (Citation and punctuation omitted.) See id. at 180 (2) (a); see also
Here, the superior court concluded, in effect, that Windy Hill is free to operate either long-term beds or short-stay beds because Windy Hill was grandfathered into the CON program. This was error. It is true that, when the CON regulation was enacted, it did not apply to those facilities that pre-existed the legislation. See HCA Health Svcs. v. Roach, 263 Ga. 798, 800 (3) (a) (439 SE2d 494) (1994), overruled on other grounds by Marsh v. Clarke County School District, 292 Ga. 28 (732 SE2d 443) (2012). Such “grandfathering” applies to facilities that “existed and performed the same services prior to the CON program in 1979.” (Emphasis supplied.) Id. at 801 (3) (a). In other words, facilities were allowed to continue operating in the same manner as they had operated prior to the enactment of the CON laws. See also
Prior to 1979, Windy Hill operated as a short-term general acute care hospital.13 Therefore, due to the ability to be “grandfathered” in, Windy Hill continued to operate as a short-stay general acute care hospital after the CON laws became effective in 1979. In 1996, Windy Hill transformed from a short-stay hospital to a long-term care hospital and thus no longer provided the same services it provided prior to the CON program in 1979. Under these circumstances, WellStar relinquished any right it had obtained by operation of being grandfathered to operate as a short-stay hospital.14
Furthermore, as the DCH commissioner found, and contrary to WellStar‘s argument, concluding that a facility is entitled to switch back and forth between operating short-stay and long-term beds undermines the purpose of the CON program. As a matter of express public policy,
Finally, having failed to demonstrate a vested right to operate as a short-stay general acute care hospital, it necessarily follows that WellStar cannot show a violation of its constitutional rights.15 The superior court erred in holding otherwise.16
Case No. A22A0112
5. In Case No. A22A0112, the DCH asserts that the superior court: (1) relied upon an unreasonable interpretation of the facts; (2) misinterpreted the rules governing CONs; (3) misinterpreted the term “clinical health services“; (4) erroneously found that reversing the DCH‘s determination avoids an unconstitutional result; and (5) erred in finding
However, in view of our decision in Case No. A22A0111 reversing the superior court‘s order granting WellStar‘s petition for judicial review, we need not consider the DCH‘s enumerations of error. Accordingly, Case No. A22A0112 is dismissed as moot. See generally Turner Outdoor Advertising v. Werco, 194 Ga. App. 14, 15 (2) (389 SE2d 778) (1989).
In sum, we conclude that the superior court erred in finding that: (1) “Windy Hill is entitled to automatic reversion of its beds to short-stay status under [
Judgment reversed in Case No. A22A0111. Appeal dismissed as moot in Case No. A22A0112. Barnes, P. J., and Brown, J., concur.