The Medical Center of Central Georgia, Inc. v. Hospital Authority of Monroe County

FOURTH DIVISION
ELLINGTON, P. J.,
BRANCH and MERCIER, JJ.
NOTICE: Motions for reconsideration m us t be
physically re ceived in our clerk’s office within ten days
of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
March 7, 2017
In the Court of Appeals of Georgia
A16A1557. THE MEDICAL CENTER OF CENTRAL GEORGIA,
INC. v. HOSPITAL AUTHORITY OF MONROE COUNTY
A16A1558. GEORGIA DEPARTMENT OF COMMUNITY
HEALTH v. HOSPITAL AUTHORITY OF MONROE
COUNTY.
MERCIER, Judge.
In these related discretionary appeals, the Medical Center of Central Georgia,
Inc. (“MCCG”) and the Georgia Department of Community Health (the “Department”)
(collectively, “Appellants”) appeal the judgment of the Superior Court of Monroe
County (the “Superior Court”) reversing the Department’s grant of a letter of non-
reviewability (“LNR”) to MCCG for the acquisition of diagnostic equipment to be
installed in a medical office building.
1. As a threshold matter, we address the Department’s Motion to Vacate
Judgment Under Review and Remand For Dismissal in Case No. A16A1558.
Appellee, the Hospital Authority of Monroe County (d/b/a/ Monroe County Hospital)
(“MCH”), filed in both cases a supplemental brief stating that “MCH and MCCG have
negotiated a business and clinical affiliation that would include shared use of the
imaging center at the core of this appeal. MCH and MCCG reached an agreement . .
. that will, when finally executed, resolve the matter at issue in this appeal.” Thus,
MCH stated that it “will no longer defend the Superior Court Order overturning the
[Department’s] decision.” The supplemental briefs were submitted concurrently with
motions to withdraw MCH’s requests for oral argument in these cases.
The Department contends that its appeal from the Superior Court’s judgment
is thereby rendered moot, but because the mootness was created by circumstances
outside of the Department’s control, we should vacate the judgment and remand the
cases. See Pimper v. State, 274 Ga. 624, 626-627 (555 SE2d 459) (2001); Babies
Right Start v. Ga. Dept. of Pub. Health, 293 Ga. 553, 555 (2) (a) (748 SE2d 404)
(2013).
Contrary to the Department’s contention, a ruling by this Court in this case
would not constitute an advisory opinion or a determination of only abstract questions.
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MCH’s briefs indicate that there is an anticipated resolution of the issues between
MCH and MCCG, but the record does not demonstrate that a final resolution has been
achieved, or that the Superior Court’s reversal of the Department’s grant of the LNR
to MCCG has been rendered moot from the perspective of MCCG. See In re
M.D.H., 334 Ga. App. 394, 395 (1) (779 SE2d 433) (2015); compare Pimper, supra;
Babies Right Start, supra. The motion to vacate and remand is therefore denied, and
we consider herein the contentions raised by Appellants.
MCCG contends that the Superior Court erred in (1) determining that the
Department’s interpretation of the phrase “offered in a hospital” violates the
“equipment threshold” provision in OCGA § 31-6-40 (a) (3); (2) concluding that the
Department exceeded its statutory authority by applying said provision to a hospital-
based outpatient imaging center that is not located on a hospital’s main campus; (3)
ordering the Department to investigate certain expenditures related to the purchase and
renovation of the medical office building intended to house the equipment that is the
subject of the LNR; and (4) concluding that the exemption provisions of the Certificate
of Need Act are subject to the capital expenditure threshold. The Department contends
that the Superior Court erred in (1) finding that the Department’s final decision was
contrary to the equipment threshold provision in OCGA § 31-6-40 (a) (3); (2) finding
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that the Department enacted a “hospital-based rule”; (3) finding that the Department
abused its discretion by not conducting an investigation of the Monroe Regional
Medical Complex; (4) ordering the Department to conduct an investigation of the costs
of the Monroe Regional Medical Complex; and (5) reversing the Department’s final
decision where there was no genuine issue of material fact as to either prong of the
equipment threshold provision analysis. For the reasons that follow, we reverse the
judgment of the Superior Court.
2. The Department is authorized to administer Georgia’s certificate of need
(“CON”) program, codified at OCGA § 31-6-40 et seq. See OCGA § 31-6-21. The
Department is authorized to “adopt, promulgate, and implement rules and regulations
sufficient to administer” the program. OCGA § 31-6-21 (b) (4). Generally, when a
party seeks to establish a “new institutional health service,” it must obtain a CON.
OCGA § 31-6-40 (a). A party seeking approval for an activity that is believed not to
be subject to the CON requirement based on the equipment threshold must provide
prior notice to the Department of such activity and obtain an LNR. OCGA § 31-6-
47.1; Ga. Comp. R. & Regs., r. 111-2-2-.10; see OCGA § 31-6-40 (a) (3).
MCCG is a not-for-profit hospital, and its main campus is located in Macon,
Bibb County, Georgia. MCH is a political subdivision of the State of Georgia,
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organized under the Georgia Hospital Authorities Law, OCGA § 31-7-70 et seq., and
operates a hospital in Forsyth, Monroe County, Georgia. In 2013, MCCG proposed
to establish a diagnostic suite at a medical office complex in Forsyth, Georgia, located
in Monroe County, approximately 25 miles from MCCG’s main campus. MCCG
submitted an LNR request to the Department in August 2013, seeking a determination
that its acquisition of a CT scanner, mammography equipment, and an x-ray machine
did not require a CON. The application stated that the total value of the equipment and
related items to be purchased was $701,032.30. Of that amount, the total value of the
CT scanner and related items was $419,669.20.
MCCG’s LNR request was based on OCGA § 31-6-40 (a) (3) (referred to
herein as the “equipment threshold provision”), which provides that “new institutional
health services” requiring a CON include
[t]he purchase or lease by or on behalf of a health care facility or a
diagnostic, treatment, or rehabilitation center of diagnostic or therapeutic
equipment with a value in excess of $1 million [adjusted annually based
on the consumer price index]; provided, however, that diagnostic or
other imaging services that are not offered in a hospital or in the offices
of an individual private physician or single group practice of physicians
exclusively for use on patients of that physician or group practice shall
be deemed to be a new institutional health service regardless of the cost
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of equipment; and provided, further, that this shall not include build out
costs, as defined by the department, but shall include all functionally
related equipment, software, and any warranty and services contract
costs for the first five years.
MCH filed a written objection to MCCG’s LNR request, arguing that the
diagnostic equipment would not be offered in a hospital, and that even if the purchases
were for hospital-based equipment, they would exceed the capital expenditure
threshold under OCGA § 31-6-40 (a) (2) (any expenditure in excess of 2.5 million
dollars), and thus were subject to CON review. MCH argued that the expenses
purportedly incurred in connection with the medical complex should be examined to
determine whether they were necessary to the installation of the equipment at issue but
not identified in the LNR request, and that the purchase of the equipment was part of
a larger project whose aggregate cost exceeded the capital expenditure threshold in
OCGA § 31-6-40 (a) (2).
The Department granted the LNR to MCCG, finding that the equipment was for
use “in a hospital.” It found that mammography and x-ray equipment were not subject
to CON review or the diagnostic imaging equipment threshold, and that the CT
scanner and related costs were below the then-current equipment threshold of
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$1,126,874 for diagnostic imaging services offered in a hospital. Further, the
Department found that the costs of the medical office building were not simultaneously
developed and associated with the purchase of the equipment, based on MCCG
having “confirmed” that the costs associated with the building were incurred
approximately three years prior, citing Ga. Comp. R. & Regs., r. 111-2-2-.01 (8) (a),
(b) (which provides that activities, services, expenditures and items are associated and
simultaneously developed or planned if they occur within a six-month period), and
noting that pursuant to OCGA § 31-6-40 (a) (3), build-out costs related to diagnostic
and therapeutic equipment are excluded from the calculation of the equipment
threshold.
MCH requested a fair hearing under the Georgia Administrative Procedure Act
(“APA”). MCCG moved for summary adjudication. A hearing was held on September
4, 2014. The Department-appointed hearing officer granted summary adjudication to
MCCG on November 5, 2014, concluding that there was no genuine dispute of
material fact as to the issue of whether the proposed equipment purchase was for use
in a hospital and that the value of the equipment was below the equipment threshold.
In addition to the statutory and regulatory grounds cited in the LNR, the hearing officer
noted that the medical office building was not purchased or renovated by MCCG and
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the costs associated with it should not be included in the equipment threshold
calculation.
MCH requested a review of the hearing officer’s decision by the Department’s
Commissioner. On December 30, 2014, the Commissioner issued a final decision
affirming the hearing officer’s decision and the grant of the LNR (the “Final
Decision”). MCH then filed a petition for judicial review in the Superior Court of
Monroe County, contending that the Department’s interpretation of the statutory
phrase “offered in a hospital” in OCGA § 31-6-40 (a) (3) violated the plain language
of the statute and exceeded the Department’s statutory authority, and further arguing
that the Department abused its discretion by not investigating expenditures related to
the purchase and renovation of the medical office complex. The Superior Court
reversed the Final Decision on the following grounds: (1) the Final Decision was
contrary to the Equipment Threshold Provision; (2) The Department exceeded its
authority in enacting a “hospital-based rule”; and (3) the Department abused its
discretion in failing to investigate MCCG’s expenditures on the medical office
complex. The Superior Court reversed the Final Order, ordered MCCG to apply for
a CON for the diagnostic equipment, and ordered the Department to conduct an
investigation into the costs of the medical office complex.
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3. We agree with Appellants that the Superior Court erred in determining that the
Department’s interpretation of the phrase “offered in a hospital” violates the equipment
threshold provision in OCGA § 31-6-40, in concluding that the Department exceeded
its statutory authority by applying said provision to a hospital-based outpatient imaging
center, and in finding that the Department enacted a “hospital-based rule.”
The Georgia APA, OCGA § 50-13-1 et seq., provides for the review by the
Superior Courts of final agency decisions.
The court shall not substitute its judgment for that of the agency as to the
weight of the evidence on questions of fact. The court may affirm the
decision of the agency or remand the case for further proceedings. The
court may reverse or modify the decision if substantial rights of the
appellant have been prejudiced because the administrative findings,
inferences, conclusions, or decisions are: (1) In violation of constitutional
or statutory provisions; (2) In excess of the statutory authority of the
agency; (3) Made upon unlawful procedure; (4) Affected by other error
of law; (5) Clearly erroneous in view of the reliable, probative, and
substantial evidence on the whole record; or (6) Arbitrary or capricious
or characterized by abuse of discretion or clearly unwarranted exercise
of discretion.
OCGA § 50-13-19 (h). “Pursuant to this Code section, courts review agency findings
of fact to determine whether they are supported by any evidence. And in considering
9
agency conclusions of law, courts conduct a de novo review.” Infinite Energy v. Ga.
PSC, 257 Ga. App. 757, 758 (1) (572 SE2d 91) (2002) (footnote omitted).
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. Administrative
agencies may not change a statute by interpretation, or establish different
standards within a statute that are not established by a legislative body.
[The Department] is authorized only to adopt and implement rules
sufficient to administer the Act’s provisions, including the CON
program. The judicial branch determines independently whether the
agency’s interpretation correctly reflects the plain language of the statute
and comports with the legislative intent. If reviewing courts find that [the
Department] has acted within the authority granted the agency by statute,
they defer to [the Department’s] interpretation and application of the
CON statute and the rules and regulations it has enacted to fulfill the
function given it by the legislative branch.
Palmyra Park Hosp. v. Phoebe Sumter Med. Center, 310 Ga. App. 487, 491 (1) (714
SE2d 71) (2011) (citations and punctuation omitted).
The Superior Court found that the Department’s interpretation of the phrase “in
a hospital” in OCGA § 31-6-40 (a) (3) was contrary to that statute’s plain meaning. We
disagree.
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When we consider the meaning of a statute, we must presume that the
General Assembly meant what it said and said what it meant. To that end,
we must afford the statutory text its “plain and ordinary meaning,” we
must view the statutory text in the context in which it appears, and we
must read the statutory text in its most natural and reasonable way, as an
ordinary speaker of the English language would.
Deal v. Coleman, 294 Ga. 170, 172 (1) (a) (751 SE2d 337) (2013) (citations and
punctuation omitted). The Superior Court acknowledged this principle, but found that
“[n]o ordinary understanding of this term would include services offered in a medical
mall nearly 25 miles from the sponsoring hospital.” The Superior Court’s interpretation
is contrary to the definition given by the legislature to the term “hospital;” the latter
defines “hospital” as:
an institution which is primarily engaged in providing to inpatients, by or
under the supervision of physicians, diagnostic services and therapeutic
services for medical diagnosis, treatment, and care of injured, disabled
or sick persons or rehabilitation services for the rehabilitation of injured,
disabled, or sick persons. Such term includes public, private, psychiatric,
rehabilitative, geriatric, osteopathic, and other specialty hospitals.
(Emphasis supplied).
OCGA § 31-6-2 (21). This definition is not limited to a particular location, and nothing
in OCGA § 31-6-40 indicates that a different definition is to be used therein, or that
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this applicable definition is to be limited in the context of the equipment threshold
provision.1
We disagree with MCH and the Superior Court that the use of the phrase “part
of a hospital” elsewhere in the Health Planning Act requires that the phrase “in a
hospital” be interpreted to include a geographical limitation. MCH points to Ga.
Comp. R. & Regs., r. 111-2-2-.40, regarding ambulatory surgery service, as an
example, and the Superior Court referenced that rule as a comparison as well. This rule
provides that if the ambulatory surgery service is or will be provided as “part of a
hospital,” the hospital’s provision of such service is not subject to CON review; it
further provides that such services are always considered to be “part of a hospital” if
1) the service is located within the hospital, or 2) if the service is located in a building
on the hospital’s primary campus and that building, or relevant portion thereof, is
included in the hospital’s permit; and the Department will make determinations of
1
“Institution” is pertinently defined as “an established organization or
corporation (as a bank or university) especially of a public character.”
https://www.merriam-webster.com/dictionary/institution. Other definitions include “a
significant practice, relationship, or organization in a society or culture”; “something
or someone firmly associated with a place or thing;” and “a facility or establishment
in which people (such as the sick or needy) live and receive care typically in a confined
setting and often without individual consent.” Id.
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reviewability on a case-by-case basis in other situations involving hospitals. Ga.
Comp. R. & Regs., r. 111-2-2-.40 (1). MCH contends, and the Superior Court held,
that the Department’s interpretation of “in a hospital” is inconsistent with this rule
because if “hospital” includes an entire institution, without geographical limits, then the
second part of the definition of “part of a hospital” in this rule would be unnecessary.
It is true that we must “avoid constructions that make some language mere
surplusage or meaningless,” construe a statute “in relation to other statutes of which
it is a part,” and construe together and harmonize “all statutes relating to the same
subject-matter” wherever possible. Aimwell, Inc. v. McLendon Enterprises, Inc., 318
Ga. App. 394, 397 (1) (734 SE2d 84) (2012). But it would be improper to overlook
the statutory definition of a term and assume that a different meaning applies based on
this limited definition of a similar phrase in an inapplicable Department rule. The
definition of “part of a hospital” in the ambulatory surgery service rule is limited to that
specific rule and does not conflict with the legislature’s definition of the term
“hospital” used in OCGA § 31-6-40. See Ga. Comp. R. & Regs., r. 111-2-2-.40 (1)
(a).
MCH contends that an institution-wide interpretation of “in a hospital” is
contrary to the importance of geography in the context of the Health Planning Act and
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the Department’s rules, citing several examples throughout the Health Planning Act and
the related Department rules in which the scope of CONs or exceptions thereto are
geographically limited. However, no such restriction or condition was provided in the
portion of the equipment threshold provision at issue here, and we can assume that the
legislature would have provided such a restriction or condition if it intended to do so,
as it did elsewhere in the statute. See Deal, supra.
The Superior Court erred in holding that the Department’s interpretation of the
phrase “offered in a hospital” is contrary to the equipment threshold provision in
OCGA § 31-6-40, and in holding that the Department exceeded its statutory authority
in finding that a hospital-based outpatient imaging center is included in services that are
offered “in a hospital.” Further, the court was incorrect in holding that the Department
had created a hospital-based rule, where the Department was applying the statutory
provision. We therefore reverse the trial court’s reversal of the Final Decision as to the
grant of the LNR.
4. We agree with the Department and with MCCG that the Superior Court
exceeded its jurisdiction in ordering the Department to investigate certain expenditures
related to the purchase and renovation of the medical office complex. Whether the
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Superior Court had jurisdiction to do so is a question of law that we review de novo.
Walker v. DOT, 279 Ga. App. 287, 288 (1) (630 SE2d 878) (2006).
Ga. Comp. R. & Regs., r. 111-2-2.10 (6) authorizes a party who opposes the
Department’s determination approving a request for an exemption to obtain “judicial
review of a final decision in the same manner and under the same provisions as in
OCGA § 31-6-44.1 and Rule 274-1 et seq.” The reviewing court may affirm the
decision of the agency, remand the case for further proceedings or, under certain
circumstances, reverse or modify the decision. OCGA § 50-13-19 (h); OCGA § 31-6-
44.1 (a); see Ga. Comp. R. & Regs. r. 274-1-.20.
Here, the Superior Court stated:
Having concluded that the [d]iagnostic [e]quipment should have
undergone CON review, this [c]ourt turns its attention to the Monroe
Regional Medical Complex as a whole. MCH does not contend in this
appeal that MCCG’s past spending on the Monroe Regional Medical
Mall Complex was reviewable as part of the instant LNR application, but
rather that its opposition to the LNR put [the Department] on notice of
spending that likely would have required a CON under OCGA § 31-6-40
(a) (2), and [the Department] abused its discretion in failing to investigate
such spending.
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By the Superior Court’s own description, this issue was outside the scope of its
review of the Department’s Final Decision regarding the grant of the LNR for specific
equipment, and MCH cites no authority for a superior court to order the Department
to conduct investigations. The Department has the authority to make public or private
investigations or examinations to determine whether the provisions of Chapter 6 of
Title 31 have been violated, and interested persons may bring an action for injunctive
relief to enforce the provisions of the chapter. OCGA § 31-6-45 (d) and (e); compare
Diversified Health Mgmt. Svcs., Inc. v. Visiting Nurses Assoc. of Cordelle, Inc., 254
Ga. 500, 502 (4) (330 SE2d 885) (1985). However, the Department was under no
obligation to conduct an investigation, and the initiation of such an investigation is “in
the discretion of the [D]epartment.” OCGA § 31-6-45 (e); Ga. Comp. R. & Regs.
111-2-2-.05 (3). Therefore, insofar as the Superior Court’s judgment orders the
Department to investigate spending related to the medical complex, it is reversed.
Having reversed the Superior Court’s judgment which (a) reversed the Final
Decision as to the grant of the LNR, and (b) ordered the Department to conduct an
investigation, we need not address the Appellants’ remaining contentions.
Judgments reversed. Ellington, P. J., and Branch, J., concur.
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