Uhs of Anchor, L.P. v. Dep't of Cmty. Health

351 Ga.App. 29

830 S.E.2d 413

UHS OF ANCHOR, L.P.

v.DEPARTMENT OF COMMUNITY HEALTH et al.

A19A0425

Court of Appeals of Georgia.

June 25, 2019

Robert Charles Threlkeld, Atlanta, Anthony Joseph Cestaro, for Appellant.

Christopher Michael Carr, Daniel Stephen Walsh, Christopher Scott Anulewicz, Austin Bruce Alexander, Atlanta, Marial Lanier Ellis, Roxana Dehnad Tatman, Rachel Louise King, Forrest Geoffrey Pearce, for Appellee.

Dillard, Chief Judge.

In this discretionary appeal, UHS of Anchor, L.P. d/b/a Southern Crescent Behavioral Health System ("Southern Crescent") appeals from the trial court’s order denying a petition for judicial review. In doing so, the trial court affirmed a final agency decision of the Georgia Department of Community Health in favor of Premier Health Care Investments, LLC d/b/a Flint River Hospital ("Flint River"). Southern Crescent argues that the trial court erred in denying the petition for review when the Department’s decision (1) does not follow its rules and is inconsistent with the plain language of various Georgia statutes; and (2) departs from longstanding departmental precedent and practice, making the decision arbitrary and capricious, and violating Southern Crescent’s constitutional rights. For the reasons set forth infra , we reverse.

On April 21, 2016, Lake Bridge Behavior Health System ("Lake Bridge"), a sister facility to Southern Crescent, sent the Department correspondence expressing concern that Flint River in Montezuma, Georgia, was providing "potentially unauthorized psychiatric and/or substance abuse inpatient care" by "operating beyond its Certificate of Need ... authorization" limit as to the number of beds available for providing such care. According to the letter and its attached exhibits, Flint River was only authorized to operate 12 psychiatric/substance-abuse beds but was instead operating 30 psychiatric beds and nine substance-abuse beds. As a result, Lake Bridge requested that the Department investigate and issue a cease-and-desist letter to prevent Flint River from operating beyond the authorization within its Certificate of Need ("CON").

The Department subsequently launched an investigation and, on July 27, 2016, issued a cease-and-desist letter, detailing its conclusion that Flint River was "operating its adult psychiatric and/or substance abuse inpatient program beyond the scope of its CON authorization by operating more than twelve (12) adult acute care psychiatric/substance abuse inpatient beds." Specifically, the Department concluded that Flint River expanded its psychiatric/substance-abuse services without first obtaining the necessary authorization to do so. Thus, the Department ordered Flint River to cease and desist from offering services beyond the 12 CON-authorized beds.

Flint River appealed from the Department’s issuance of the cease-and-desist letter, which was then reviewed by a hearing officer at a proceeding on June 13, 2017.¹ And during that hearing, Flint River admitted that despite receiving CON approval in 2010 to operate 12 psychiatric inpatient beds, it had—since 2014—used more than 12 beds for the treatment of psychiatric/substance-abuse patients. Nevertheless, Flint River argued that the CON law allowed it to "flex" its short-stay hospital beds for use with its psychiatric-inpatient program and "shift beds between approved categories, so long as it does not exceed its total CON-approved bed capacity."

The hearing officer considered the parties’ arguments and the relevant rules and laws, and then concluded that "a provider may not shift or ‘flex’ beds." The officer also determined that Flint River (1) never gave the appropriate Department division notice that it was operating beyond its 12-bed CON authorization for psychiatric/substance-abuse treatment, and (2) failed to comply with a Department rule allowing it to obtain a determination as to whether a proposed action required CON approval. The officer also contrasted Flint River’s operations from those of other hospitals it claimed had been permitted to "flex" their approved beds. Thus, the hearing officer affirmed the Department’s issuance of the cease-and-desist letter.

Thereafter, the Office of the Commissioner for the Department conducted a review of the hearing officer’s decision at Flint River’s request. The Department found that because Flint River had (1) prior CON approval to offer beds for adult psychiatric/substance-abuse treatment, (2) "reconfigured" the use of other existing beds for such treatment but did "not exceed its licensed evaluated bed capacity," and (3) costs associated with the reconfiguration that "were under the capital expenditure threshold," its actions "did not trigger prior CON review and approval."²

In doing so, the Department reasoned as follows:

Since the Department determined that [Flint River’s] bed reconfiguration was accomplished within the meaning of [OCGA] § 31-6-2 (14) and [OCGA] § 31-6-40 [,] the Department disagrees with the [h]earing [o]fficer’s ... [c]onclusion ... [which] mischaracterizes "expansion" to simply mean the addition of beds. The analysis requires a more detailed examination of the subsections addressing "Applicability" and "Definitions" contained in both Ga. Comp. R. & Regs. r. 111-2-2-.20 and 111-2-2-.26, respectively, which are not addressed in the [hearing officer’s] [f]inal [o]rder. Such a mischaracterization is misleading and limiting in view of the Department’s treatment of reconfigurations[.] Therefore, the Department’s analysis is more reasonable than that of the [h]earing [o]fficer. ... Proposed bed reconfigurations that satisfy the conditions set forth above may not always require prior CON review and approval.

It is from this final decision by the Department’s Office of the Commissioner that Southern Crescent filed its petition for judicial review, under OCGA § 50-13-19,³ in the Superior Court of Fulton County on January 19, 2018. Southern Crescent argued that the Department erred by overturning the two prior agency reviews of the issue. But following a hearing, the trial court denied Southern Crescent’s petition, affirming the Department’s decision. We subsequently granted Southern Crescent’s application for a discretionary appeal, which follows.

Under Georgia’s Administrative Procedure Act,⁴ parties aggrieved by an agency’s final decision are entitled to judicial review in superior court.⁵ The review "shall be conducted by the court without a jury and shall be confined to the record";⁶ and the court "shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact"⁷ and "may affirm the decision of the agency or remand the case for further proceedings."⁸ The reviewing court may reverse or modify the agency’s decision if

substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) [i]n violation of constitutional or statutory provisions; (2) [i]n excess of the statutory authority of the agency; (3) [m]ade upon unlawful procedure; (4) [a]ffected by other error of law; (5) [c]learly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) [a]rbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.⁹

Upon further discretionary appeal to this Court, our duty is not to review whether the record supports the trial court’s decision but to determine whether "the record supports the final decision of the administrative agency."¹⁰ In this regard, agency findings of fact are reviewed to determine if they are supported by any evidence, while an agency’s conclusions of law are reviewed de novo .¹¹

With these guiding principles in mind, we will now address Southern Crescent’s contentions that the trial court erred in denying the petition for review when the Department’s final decision (1) does not follow its rules and is inconsistent with the plain language of various Georgia statutes, and (2) departs from longstanding departmental precedent, making the decision arbitrary and capricious, and violating Southern Crescent’s constitutional rights.

1. In two separate enumerations of error, Southern Crescent argues that the superior court erred in denying the petition for review when the Department’s final decision does not follow Department Rule 111-2-2-.26 and is inconsistent with the plain language of various Georgia statutes.¹²

When construing statutes, agency rules, and regulations, we employ the rules of statutory construction and look to the plain language of the relevant text to determine its meaning.¹³ In doing so, we must construe the statute, rule, or regulation "according to its own terms, to give words their plain and ordinary meaning, and to avoid a construction that makes some language mere surplusage."¹⁴ Still, even if words are apparently plain in meaning, they "must not be read in isolation and instead, must be read in the context of the [statute, rule, or] regulation as a whole."¹⁵ Additionally, judicial deference is—for the time being— "to be afforded the agency’s interpretation of statutes it is charged with enforcing or administering and the agency’s interpretation of rules and regulations it has enacted to fulfill the function given it by the legislative branch."¹⁶ With these canons of construction in mind, we turn now to the relevant Certificate-of-Need authority.

(a) The Relevant Certificate-of-Need Statutes, Rules, and Regulations.

(i) What is a Certificate of Need?

Georgia law provides that the Department is "authorized to administer the certificate of need program established under this chapter" and, likewise, must "provide, by rule, for procedures to administer its functions until otherwise provided by the [Board of Community Health]."¹⁷ Thus, the General Assembly further provided that one of the Department’s functions is to "adopt, promulgate, and implement rules and regulations sufficient to...