Dept. of Community Health v. Gwinnett Hosp.

• Decision Date: 26 August 2003
• Docket Number: No. A03A1214, No. A03A1216, No. A03A1217., No. A03A1215
• Citation: 586 S.E.2d 762,262 Ga. App. 879
• Parties: DEPARTMENT OF COMMUNITY HEALTH, DIVISION OF HEALTH PLANNING v. GWINNETT HOSPITAL SYSTEM, INC. et al. EHCA, LLC et al. v. Gwinnett Hospital System, Inc. et al. EHCA, LLC et al. v. Saint Joseph's Hospital of Atlanta. Department of Community Health, Division of Health Planning v. Saint Joseph's Hospital of Atlanta.
• Court: Georgia Court of Appeals

586 S.E.2d 762

262 Ga. App. 879

DEPARTMENT OF COMMUNITY HEALTH, DIVISION OF HEALTH PLANNING v. GWINNETT HOSPITAL SYSTEM, INC. et al.

EHCA, LLC et al. v. Gwinnett Hospital System, Inc. et al.

EHCA, LLC et al. v. Saint Joseph's Hospital of Atlanta.

Department of Community Health, Division of Health Planning v. Saint Joseph's Hospital of Atlanta.

Nos. A03A1214, A03A1215, A03A1216, A03A1217.

Court of Appeals of Georgia.

August 26, 2003.

Thurbert E. Baker, Atty. Gen., Robert S. Bomar, Deputy Atty. Gen., Harold D. Melton, Isaac Byrd, Sidney R. Barrett, Jr., Senior Asst. Attys. Gen., James Coots, Asst. Atty. Gen., for Department of Community Health.

Powell, Goldstein, Frazer & Murphy, Randall L. Hughes, Adrienne E. Marting, Charlotte A. Combre, John S. Rees, Atlanta, for Gwinnett Hospital System, Inc.

Nelson, Mullins, Riley & Scarborough, Jeffrey C. Baxter, Stanley S. Jones, Jr., Jennifer D. Malinovsky, Atlanta, for EHCA, LLC.

Kilpatrick Stockton, Alexander S. Clay, Ray & Sherman, John W. Ray, James M. Sherman, Dawnmarie Rodziewicz, Atlanta, for Saint Joseph's Hospital of Atlanta, Inc.

Dorough & Dorough, Kathy K. Dorough, Decatur, amicus curiae. BARNES, Judge.

These four cases involve appeals from two trial courts' decisions to reverse the grant of a hospital certificate of need (CON), which was issued by the Georgia Department of Community Health (the Department), Division of Health Planning (the Division). Because these cases all involve the same facts, we have consolidated them for review.

In November 2000, EHCA, LLC, and two of its affiliates, EHCA Dunwoody, LLC d/b/a Emory Dunwoody Medical Center and EHCA West Paces, LLC d/b/a West Paces Medical Center (EHCA), completed an application for a CON to build a hospital in Duluth, proposing to "relocate and consolidate" Emory Dunwoody and West Paces hospitals. Three other hospitals intervened and objected to the proposed CON: Saint Joseph's Hospital of Atlanta, Inc., Gwinnett Hospital System, Inc. d/b/a Gwinnett Medical Center, and Joan Glancy Memorial Hospital.¹

The CON underwent three levels of administrative review. First, a Division analyst reviewed the application and approved it. The opponents appealed the decision to the State Health Planning Review Board (Board), which appointed a hearing officer to conduct a review. After conducting an eight-day hearing and reviewing the voluminous records presented by the parties, the hearing officer issued a 21-page opinion containing forty-one findings of fact and affirming the Division's decision to issue the CON. The opponents again appealed, and the Board affirmed the hearing officer's decision, concluding that his findings of fact were supported by substantial evidence and that his conclusions of law were correct.

Gwinnett Medical Center and Joan Glancy Memorial appealed the Review Board's decision in Gwinnett County Superior Court, and St. Joseph's appealed it in Fulton County Superior Court. In October 2002, the Gwinnett court made 27 findings of fact and reversed the Board, concluding that its decision was arbitrary, capricious, and not supported by substantial evidence. A month later, the Fulton court made 20 findings of fact and also reversed the Board, concluding that the decision was arbitrary, capricious, exceeded the Division's statutory authority, and was not supported by substantial evidence. Both the Division and EHCA applied to this court for discretionary review, which we granted. For the reasons that follow, we reverse both trial courts' decisions.

In 1999, the legislature created the Department of Community Health to perform the functions previously performed by the Health Planning Agency, by the Department of Medical Assistance, and by the State Personnel Board with respect to the State Health Benefit Plan. OCGA § 31-5A-4. In describing its intent in creating this new department, the legislature recognized that "the manner in which health care is currently administered at the state level is fragmented and often unresponsive to health care issues." OCGA § 31-5A-1. Among other reasons, the Department was created "[t]o minimize duplication and maximize administrative efficiency in the state's health care systems by removing overlapping functions and streamlining uncoordinated programs," and "[t]o allow the state to develop a better health care infrastructure that is more responsive to the consumers it serves while improving access to and coverage for health care...." OCGA § 31-5A-1 (3), (4). The Department is thus charged with administering the State Health Planning and Development Act, OCGA § 31-6-1 et seq., "to create a system for planning new health service institutions to avoid costly duplication of services where insufficient need existed." Albany Surgical v. Dept. of Community Health, 257 Ga.App. 636, 572 S.E.2d 638 (2002). The legislative intent expressed in the Act is

to ensure that adequate 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 this public policy and purpose, 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, and that is compatible with the health care needs of the various areas and population of the state.

OCGA § 31-6-1. Before it can establish new institutional services or health care facilities, an institution must apply to the Division for a CON, and the Division must determine that a need exists for the new services or facilities before issuing a certificate. OCGA § 31-6-40(a), (b). The statute defines "new institutional health service" as, among other things, any capital expenditure over a certain amount, OCGA § 31-6-2(14)(B), and institutions that want to relocate an existing facility must apply for and receive a CON. Phoebe Putney Mem. Hosp. v. Roach, 267 Ga. 619, 621, 480 S.E.2d 595 (1997).

Finally, the legislature has outlined the qualifications required for a CON, providing, "The [D]epartment shall issue a certificate of need to each applicant whose application is consistent with the following considerations and such rules deemed applicable to a project." OCGA § 31-6-42(a). These 14 "considerations" include a showing that the facility is "reasonably consistent with the relevant general goals and objectives of the state health plan," that a need exists in the service area, that the facility is financially feasible, and that the proposed facility encourages "more efficient utilization of the health care facility proposing such service." Id.

The statute outlining the CON system is broad. In addition to outlining the procedure generally, the legislature directed the Division to prepare a draft state health plan, which was then submitted to the Health Strategies Council for adoption, and finally submitted to the governor for signature. OCGA § 31-6-21(b)(2). The legislature also directed the Division "to adopt, promulgate, and implement rules and regulations sufficient to administer the provisions of this chapter including the certificate of need program." OCGA § 31-6-21(b)(4). These rules and regulations, which were promulgated pursuant to OCGA §§ 31-6-21.1 and 50-13-4, provide further guidance on applying the directives of the statute to specific CONs.

The Division is responsible for interpreting and applying the statute, the state health plan, and its rules and regulations in order to fulfill its function as established by the legislature. See St. Joseph's Hosp. v. Thunderbolt Health Care, 237 Ga.App. 454, 457(2), 517 S.E.2d 334 (1999) (physical precedent only). The legislature cedes this authority to the Division 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.

[A]gencies 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.

Bentley v. Chastain, 242 Ga. 348, 350-351(1), 249 S.E.2d 38 (1978). Thus the "interpretation of a statute by an administrative agency which has the duty of enforcing or administering it is to be given great weight and deference." Hosp. Auth. of Gwinnett County v. State Health Planning Agency, 211 Ga.App. 407, 408(2), 438 S.E.2d 912 (1993).

Implicit in the interlocking parts of the statutory scheme is the legislative intent that the [Division] use the considerations [listed in OCGA § 31-6-42] as a base, filling the interstices of the statutory considerations with the agency's rules interpreting and implementing them. What was implicit in the statutory scheme has now been made explicit.

North Fulton Community Hosp. v. State Health Planning &c., 168 Ga.App. 801, 804(2), 310 S.E.2d 764 (1983).

In addition to giving deference to the Division's statutory interpretation and application of its own rules and regulations, we accept its factfinding if it is supported by substantial evidence. The CON statute grants an aggrieved party the right to seek judicial review of...