GEORGIA DEPARTMENT OF COMMUNITY HEALTH v. KENNESTONE HOSPITAL, INC. D/B/A WELLSTAR WINDY HILL HOSPITAL ( 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
June 29, 2022
In the Court of Appeals of Georgia
A22A0111. EMORY UNIVERSITY d/b/a EMORY UNIVERSITY
HOSPITAL SMYRNA et al. v. KENNESTONE HOSPITAL,
INC. d/b/a WELLSTAR WINDY HILL HOSPITAL.
A22A0112. GEORGIA DEPARTMENT OF COMMUNITY
HEALTH v. KENNESTONE HOSPITAL, INC. d/b/a
WELLSTAR WINDY HILL HOSPITAL.
HODGES, Judge.
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
OCGA § 31-6-40 et seq. In 2019, Kennestone Hospital, Inc. d/b/a WellStar Windy
Hill Hospital (“WellStar”) sought confirmation from the Georgia Department of
Community Health (“the DCH”) that its long-term care hospital beds at its Windy Hill
Hospital facility “would revert to their previous status as . . . short-stay acute care
beds” without obtaining a CON once the facility relinquished its Medicare long-term
care hospital certification. Emory University d/b/a Emory University Hospital Smyrna
and Saint Joseph’s Hospital of Atlanta, Inc. d/b/a Emory Saint Joseph’s Hospital
(collectively, “Emory”) objected to WellStar’s proposal, arguing that WellStar sought
to create a new short-stay acute care general hospital, which required prior CON
authorization. The DCH agreed with Emory, finding that WellStar had operated as a
long-term care hospital since 1996 and, as a result, had obtained various CONs during
that span which did not involve short-stay hospital beds. Thus, the DCH determined
that WellStar’s proposed transition of Windy Hill Hospital to a 115-bed short-stay
hospital constituted a “new institutional health service,” which required CON
approval. See OCGA § 31-6-40 (a).
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.”
2
We granted Emory and the DCH’s applications for discretionary appeal, and
now conclude that, based upon the plain language of OCGA § 31-6-40 et seq., Ga.
Comp. R. & Regs. r. 111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d), WellStar’s proposed
conversion of its long-term care hospital beds to short-term acute care hospital beds
requires a new CON. Therefore, we reverse the superior court’s judgment granting
WellStar’s petition for judicial review in Case No. A22A0111 and dismiss Case No.
A22A0112, filed by the DCH, as moot.
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 OCGA § 31-6-40 et seq. In 1983, Windy Hill
1
The parties executed a “Joint Stipulation of Undisputed Facts” during
WellStar’s appeal before the CON Appeal Panel. The hearing officer included the
facts in the officer’s order affirming the DCH’s initial agency decision and noted that
the parties “agree that there are no contested issues of fact[,]” and the DCH
commissioner specifically incorporated the stipulation in his final order affirming the
panel decision.
2
The CON Program became effective in 1979. See Ga. Code Ann. §§ 88-3301,
88-3306 (a) (1983). “The CON [P]rogram establishes a comprehensive system of
3
reduced its short-stay bed capacity from 165 to 115. In 1996, WellStar contacted the
State Health Planning Agency (“the SHPA”), the predecessor agency to the DCH,
inquiring whether a CON to convert Windy Hill from a short-stay general acute care
hospital to a long-term care hospital would be required. In addition to providing
long-term care, WellStar represented that it would provide outpatient surgical
services and convert the emergency room into a minor emergency, or immediate care,
facility.
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
planning for the orderly development of adequate health care services throughout the
state.” Palmyra Park Hosp., 310 Ga. App. at 488.
4
a new CON to renovate the hospital in order to add 5 additional beds.3 Thereafter,
although WellStar only operated 47 beds at Windy Hill, the hospital retained a
licensed bed capacity of 115 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
3
Importantly, the distinction between short-stay acute care general hospitals
and long-term care hospitals, which is discussed in greater detail infra, was
highlighted by the promulgation of Ga. Comp. R. & Regs. r. 111-2-2-.20 (“Specific
Review Considerations for Short-stay General Hospital Beds”) and 111-2-2-.36
(“Specific Review Considerations for Long Term Care Hospitals”), each of which
became effective in 2005.
5
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
6
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 11-2-2-.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
7
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 court erred in finding that WellStar went through the CON process in 1996
when it converted to a long-term care hospital from a short-stay general acute care
hospital and that it could, therefore, take advantage of certain CON reversion
procedures. We agree.
(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.
4
See Browne & Price, P.A. v. Innovative Equity Corp., 361 Ga. App. 521, 523
(1), n. 7 (864 SE2d 686) (2021) (“For convenience of discussion, we have taken the
enumerated errors out of the order in which appellant has listed them.”) (citation and
punctuation omitted).
8
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
OCGA § 31-6-1.5 The DCH is also authorized to promulgate rules for the
administration of the CON program. See OCGA § 31-6-21 (a).
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.
5
“The policy of this state and the purposes of this chapter are to ensure access
to quality health care services and to ensure that health care services and facilities are
developed in an orderly and economical manner and are made available to all citizens
and that only those health care services found to be in the public interest shall be
provided in this state. To achieve such public policy and purposes, it is essential that
appropriate health planning activities be undertaken and implemented and that a
system of mandatory review of new institutional health services be provided. Health
care services and facilities should be 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.” OCGA § 31-6-1.
9
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.
OCGA § 31-6-44.1 (a).
(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”
10
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 agreed and “reject[ed] Windy
Hill’s arguments that it is entitled to avail itself of the ‘reversion exception.’”
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.
11
(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
12
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.
13
(Emphasis supplied.) Similarly, Ga. Comp. R. & Regs. r. 111-2-2-.36 (2) (d) provides
that a “Long Term Care Hospital, or “LTCH” is:
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
14
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. Under OCGA §
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).
15
(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.” OCGA § 31-6-1.
At a bare minimum, then, review under the CON process first requires an
application. See OCGA § 31-6-43 (b). Here, the parties have not included a record
citation to, and our review of the record has not revealed, any such application filed
by Windy Hill for its evaluation, as either a short-stay general acute care hospital or
a long-term care hospital, at any point in its history6 prior to the 2019 application at
issue in this case.7 And even were we to generously construe WellStar’s June 11,
6
As a result, WellStar’s argument that it availed itself of the CON process in
1996 is unpersuasive. We further discuss Windy Hill’s “grandfathering” in Division
4 infra.
7
Indeed, the record does include at least two prior certificate of need
evaluations for Windy Hill — one for a change in ownership of Windy Hill in 1993
and one for the renovation of the third floor of its facility to “to set-up and staff
thirteen (13) additional long-term acute care . . . beds. . . .”
16
1996 letter to SHPA in which it sought to operate Windy Hill as a long-term care
hospital as an “application,” there is no ensuing review in which “[b]oth 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.”
Cobb Hosp., 349 Ga. App. at 461 (1) (c) (ii). To the contrary, SHPA stated in 1996
that Windy Hill need not participate in the CON process at that time. This cursory
statement hardly passes as the equivalent of the “detailed and lengthy” review we
have outlined above, which would satisfy the plain language requirement that a
hospital be “approved through the certificate of need process. . . .”
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.
17
(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 OCGA § 31-6-44.1 (a),
we further conclude that the superior court erred in reversing the DCH
commissioner’s decision and in finding that “Windy Hill is entitled to automatic
reversion of its beds to short-stay status under [Ga. Comp. R. & Regs. r.] 111-2-2-.36
(2) (d).”
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 OCGA § 31-6-2 (8), and that a new CON is not required to switch
from one category of hospital to the other. In effect, the superior court found that
Windy Hill was authorized to operate either a short-stay general acute care hospital
or a long-term care hospital under its 1996 authorization. This was error.
18
In its initial determination, the DCH cited OCGA § 31-6-40 (a) (5) and (6) and
found 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, as a result,
“Windy Hill’s offering of short-stay acute care services where none were offered
within the past . . . 12 months constitutes a reviewable new institutional health
service.” Accordingly, the DCH concluded that Windy Hill’s proposed reversion of
its long-term care hospital beds to short-stay beds under Ga. Comp. R. & Regs. r.
111-2-2-.20 (1) (d) and 111-2-2-.36 (2) (d) constituted “the development of a new
short-stay hospital where one currently does not exist [and] would constitute a
reviewable new short-stay hospital and would require prior CON review and
approval.” On appeal, the hearing officer agreed, noting that it was “undisputed that
Windy Hill has 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. The DCH commissioner likewise agreed.
The superior court noted that OCGA § 31-6-2 (8) defines “clinical health
services” as including “medical-surgical care,” but that it does not otherwise
19
distinguish between short-stay and long-term care. The superior court reasoned that,
regardless of whether the beds were short-stay or long-term, WellStar offered such
medical-surgical care both before and since the 1996 letter. The superior court thus
concluded that WellStar was not creating a “new institutional health service” that
required CON approval.
OCGA § 31-6-40 (a) establishes when a new institutional health service
requires a CON and provides, in relevant part:
(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[.]
20
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,
OCGA § 31-6-21 (b) (8) requires the DCH to
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 Ga. Comp. R. & Regs. r.
111-2-2-.20) and “Specific Review Considerations for Long Term Care Hospitals”
(see Ga. Comp. R. & Regs. r. 111-2-2-.36). Accordingly, the CON process evaluates
each category of hospital differently.
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.” Ga. Comp. R. & Regs.
r. 111-2-2-.20 (2) (n).
21
“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.) Ga. Comp. R. & Regs. r. 111-2-2-.36 (2) (d). Moreover,
according to federal regulations, to be so classified, long-term care hospitals “must
have an average Medicare inpatient length of stay of greater than 25 days (which
includes all covered and noncovered days of stay of Medicare patients)[.]” 42 CFR
412.23 (e) (2) (i).
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 42 CFR 412.23 (e) (1)
and (2).” Windy Hill also indicated it would “convert its emergency room department
to a minor emergency facility (“Immediate Care Department”).” After the SHPA
22
notified Windy Hill that it would not need CON approval in order to convert the
hospital to a long-term care hospital, Windy Hill received a permit to operate a
“Specialized Long Term Acute Care Hospital.” Thereafter, Windy Hill operated as
a long-term care hospital for the next 23 years. In its Annual Hospital Questionnaire
sent to DCH each year from 2015 to 2018 inclusive, Windy Hill noted that it
maintained a permit to operate a “Specialized Long-Term Acute Care Hospital” and
that it had no emergency room or any beds other than long-term care hospital beds —
including no short-stay hospital beds.
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
8
Moreover, despite any overlap in the manner of care provided by short-stay
general acute care hospitals and long-term care hospitals, the regulations lawfully
promulgated by the DCH note that a long-term care hospital generally provides
“extended medical and rehabilitative care for patients who are clinically complex and
may suffer from multiple acute or chronic conditions[,]” including “comprehensive
rehabilitation, respiratory therapy, head trauma treatment, and pain management.” Ga.
Comp. R. & Regs. r. 111-2-2-.36 (2) (d). There are no such limitations on the role of
23
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 OCGA § 31-6-40 (a) (5) (stating that a new institutional health service
includes “[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”).10 Because the superior court impermissibly equated the two categories to
a short-stay general acute care hospital.
9
For this reason, coupled with WellStar’s 1996 surrender of its “General
Hospital” permit, WellStar’s arguments — that short-stay care and long-term care are
essentially the same and encompassed under a broad “clinical health service” or
“medical-surgical care” umbrella — are unavailing.
10
Furthermore, we find unpersuasive WellStar’s argument, based upon OCGA
§ 31-6-40 (a) (6), that it is entitled to forego the CON process because a CON would
only be required for “the conversion or upgrading of any general acute care hospital
to a specialty hospital but not the converse” in view of the application of OCGA § 31-
24
hold that Windy Hill did not need prior CON approval, and finding no basis to
reverse the DCH commissioner’s decision under OCGA § 31-6-44.1, we again
conclude that the superior court erred in reversing the final agency decision.
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 not
6-40 (a) (5).
11
The Supreme Court of Georgia “has exclusive jurisdiction over all cases
involving construction of the Constitution of the State of Georgia and of the United
States and all cases in which the constitutionality of a law, ordinance, or
constitutional provision has been called into question.” Atlanta Independent School
System v. Lane, 266 Ga. 657 (1) (469 SE2d 22) (1996); accord Ga. Const. of 1983,
Art. VI, Sec. VI, Par. II (1). However, this Court has “limited jurisdiction to review
constitutional questions.” City of Decatur v. DeKalb County, 284 Ga. 434, 436 (2)
(668 SE2d 247) (2008). As a result, we have jurisdiction over cases that “involve the
application, in a general sense, of unquestioned and unambiguous provisions of the
Constitution to a given state of facts and that do not involve construction of some
constitutional provision directly in question and doubtful either under its own terms
or under the decisions of the Supreme Court of Georgia or the Supreme Court of the
United States.” Id. (punctuation omitted). Here, it is not clear that a constitutional
question was squarely raised below. Furthermore, the resolution of the question
appears to involve the application of settled constitutional law. Under these
25
have a vested right to remain a general acute care hospital throughout its operation
as a long-term care hospital.
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
circumstances, jurisdiction is proper in this Court.
12
The superior court’s order does not make an express finding that Windy Hill
has a vested right. Even to the extent it made such a finding, the order contains no
analysis explaining how the superior court determined that Windy Hill’s prior
operation as a short-stay general acute care hospital qualified as a vested right.
Rather, it simply refers to the Georgia Constitution’s prohibition against applying
laws “retroactively so as to impair vested rights.”
26
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 OCGA § 31-6-1 (stating that public policy supporting CON laws is “to ensure
access to quality health care services and to ensure that health care services and
facilities are developed in an orderly and economical manner and are made available
to all citizens and that only those health care services found to be in the public
interest shall be provided in this state”) (emphasis supplied); Cobb Hosp., 349 Ga.
27App. at 456 (1) (a) (finding that “the public is better served by having experts in the
complexities of health care planning make . . . decisions”).
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 OCGA § 31-6-
40 (c) (1) (“Any person who had a valid exemption granted or approved by the former
Health Planning Agency or the department prior to July 1, 2008, shall not be required
to obtain a certificate of need in order to continue to offer those previously offered
services.”).
28
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
13
In its initial determination, the DCH noted that Windy Hill “originally
operated as a short-stay hospital with 165 beds. The Georgia CON statute became
effective in 1979[;] as a result Windy Hill’s operation of its short-stay hospital was
grandfathered under the law.” Indeed, Windy Hill acknowledged as much, stating in
its CON application that “[s]ince its founding in 1973, WellStar Windy Hill had
operated as a general acute care short-stay hospital.”
14
In fact, to the extent the 1996 letter conveyed any right at all, it granted
Windy Hill the right to operate as a long-term care hospital — just as Windy Hill
sought. See Ga. Comp. R. & Regs. r. 111-2-2-.10 (1) (a) (“Determinations are
conclusions of the Department that are based on specific facts and are limited to the
specific issues addressed in the request for determination, as applicable. Therefore,
the conclusions of a specific determination shall have no binding precedent in relation
to parties not subject to the request and to other facts or factual situations that are not
presented in the request.”). As we have noted, after the SHPA issued its 1996 letter,
Windy Hill received a new permit authorizing it to operate as a “Specialized Long
Term Acute Care Hospital,” and returned its former permit, which had authorized
Windy Hill to operate as a “General Hospital” and which the SHPA marked as
“Void.”
29
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, OCGA § 31-6-1 requires the DCH to ensure that
health care services and facilities are provided in a manner that is cost-effective and
that avoids the unnecessary duplication of services. If Windy Hill, or any other
facility, retains a purported right to unilaterally change the nature of the services it
offers, the DCH would be precluded from fulfilling its legislatively-mandated
regulatory role, and the codified public policy underlying the CON process would be
rendered meaningless. We cannot read the relevant rules and statutes in such a way.
See generally Langley v. Langley, 279 Ga. 374, 376 (1) (613 SE2d 614) (2005)
(holding that, in case where enforcement of an agreement was a matter of public
policy, “considerations of public policy cannot be ignored”).
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
15
In its motion for summary adjudication before the CON Appeal Panel,
WellStar argued that Emory’s proposed reading of certain CON regulations “would
cause an unconstitutional retroactive impairment of WellStar Windy Hill’s vested
30
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 that the DCH’s determination was arbitrary and
capricious.
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
rights to remain a general acute care hospital throughout operation as [a long-term
care hospital.]” Therefore, WellStar properly raised the argument during the agency
proceedings, and the superior court was authorized to consider WellStar’s argument.
See Cobb Hosp. v. Dept. of Community Health, 357 Ga. App. 358, 360 (850 SE2d
831) (2020) (“A party aggrieved by a state agency’s decision must raise all issues
before that agency and exhaust available administrative remedies before seeking any
judicial review of the agency’s decision.”) (citation and punctuation omitted).
16
We need not consider Emory’s remaining enumeration that the superior court
failed to address its argument that WellStar’s proposal resulted in a new short-stay
general acute care hospital without obtaining a new CON. See OCGA § 31-6-40 (a)
(1).
31
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 [Ga. Comp.
R. & Regs. r.] 111-2-2-.36 (2) (d)[;] because Windy Hill was not a ‘[a] hospital that
[had] been approved through the Certificate of Need process[;]’” (2) a long-term care
hospital and a short-stay general acute care hospital are legally the same “clinical
health service,” such that a new CON is not required to switch from one category of
hospital to the other; and (3) 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[.]”
Therefore, we reverse the superior court’s judgment in Case No. A22A0111 and
dismiss Case No. A22A0112 as moot.
Judgment reversed in Case No. A22A0111. Appeal dismissed as moot in Case
No. A22A0112. Barnes, P. J., and Brown, J., concur.
32