American Medical Intern., Inc. v. Charter Lake Hosp., Inc., s. 75589
| Decision Date | 22 February 1988 |
| Docket Number | Nos. 75589,75590,s. 75589 |
| Citation | 366 S.E.2d 795,186 Ga.App. 204 |
| Parties | AMERICAN MEDICAL INTERNATIONAL, INC. v. CHARTER LAKE HOSPITAL, INC., et al. CHARTER LAKE HOSPITAL, INC. v. AMERICAN MEDICAL INTERNATIONAL, INC. |
| Court | Georgia Court of Appeals |
Charles L. Gregory, Atlanta, for American Medical Intern., inc.
Richard L. Shackelford, Atlanta, for Charter Lake Hosp., Inc.
Michael J. Bowers, Atty. Gen., Susan L. Baranoff, Staff Asst. Atty. Gen., for State Health Planning Agency.
The State Health Planning Agency (SHPA) approved the application of American Medical International, Inc. (AMI) for a Certificate of Need (CON) to add 24 adult psychiatric beds at McIntosh Trail Regional Medical Center in Griffin, Georgia. Charter Lake Hospital, Inc. (Charter), a psychiatric hospital in Macon, Georgia, appealed this decision to the State Health Planning Review Board (the Board), which, after hearings, affirmed the SHPA's issuance of the CON. Charter then sought judicial review of the Board's decision. The Superior Court of Bibb County rejected one of Charter's claims of error, but reversed the Board's decision on another ground alleged by Charter. AMI appeals from the Superior Court's reversal of the Board's decision, and Charter cross-appeals from the Superior Court's other ruling.
Georgia law requires that a CON be obtained prior to the development of any new institutional health service. OCGA § 31-6-40. Applications are submitted to and reviewed by the SHPA, which determines whether a CON should be issued, in accordance with the criteria set forth in the applicable statute, OCGA § 31-6-42, and with any applicable rules. Parties aggrieved by the decision of the SHPA may request an appeal hearing before a three- member panel of the Board. OCGA § 31-6-44. The decision of the Board then becomes the "final agency decision" for purposes of judicial review in accordance with the Georgia Administrative Procedure Act, OCGA §§ 50-13-1 et seq. and 31-6-44(g).
1. The key question governing the issuance of a CON is whether the proposal fills a need, since the purpose of State Health Planning in general, and of mandatory review of proposed new institutional health services in particular, is that such services "should be provided in a manner that avoids unnecessary duplication of services, that is cost effective, and that is compatible with the health care needs of the various areas and populations of the state." OCGA § 31-6-1. In determining whether new psychiatric beds are needed, SHPA Rule 272-2-.09 (14) (The Psych Rule) must be applied. This rule provides a four-step formula for assessing the number of psychiatric beds needed in a certain area. First, the service area of the proposed project is determined. Second, if any existing or already approved psychiatric facility outside the service area is operating below 85 percent capacity, and its service area overlaps that of the proposed project, then the population in the overlapping area is allocated to the existing or approved facility, and subtracted from the population served by the applicant. In this case, it is undisputed that there are underutilized facilities in both the Atlanta and Macon areas whose circular service areas overlap that of appellant's proposed project, and that the population of those overlapping areas must be allocated to the existing facilities, and not to McIntosh Trail's service area. Third, a prescribed formula is applied to the remaining population in the applicant's service area to determine the total number of beds needed in that service area. Lastly, the "beds available in the service area of the proposed service" are deducted from the total number needed, to arrive at the number of additional beds needed. Rule 272-2-.09 (14)(b)(3)(iv). Because of differing methods of measuring geographical areas, the parties' estimates of population allocated to the McIntosh Trail project varied, and thus the estimates of the number of total beds needed to serve that population, as determined under step three of the process, ranged from 29 to 32.
The main dispute between the parties to this appeal centers on step four of the process, specifically, whether 11 adult psychiatric beds at Clayton General Hospital, which is located within the service area of AMI's proposed project, should be subtracted from the total beds needed to arrive at the figure for "unmet bed need." AMI contends they should not be subtracted because, since Clayton General's occupancy rate exceeds 85 percent, those beds are not "available." The Superior Court disagreed, ruling instead that the plain language of the rule, and the only interpretation consistent with the Psych Rule as a whole, is that "beds available" means "beds in existence." Thus, the Superior Court held that since Clayton General's 11 beds were in existence, they should have been subtracted from the total beds needed to serve the population in the service area of AMI's proposed project, and since they had not been subtracted, the decision of the Board granting a CON must be reversed. We do not agree.
Even assuming, arguendo, that the Superior Court was correct in finding that the Clayton General Hospital beds should have been deducted in step four, we find that such a finding does not require, or even support, reversal of the Board's decision affirming the issuance of a CON to AMI. The Board's approval of...
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