Affinity Hospital, LLC v. St. Vincent's Health System

129 So. 3d 1022, 2012 WL 5974240
CourtCourt of Civil Appeals of Alabama
DecidedNovember 30, 2012
Docket2111014, 2111015, 2111062, and 2111063
StatusPublished
Cited by6 cases

This text of 129 So. 3d 1022 (Affinity Hospital, LLC v. St. Vincent's Health System) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Affinity Hospital, LLC v. St. Vincent's Health System, 129 So. 3d 1022, 2012 WL 5974240 (Ala. Ct. App. 2012).

Opinion

BRYAN, Judge.

These appeals concern whether the Montgomery Circuit Court erred in reversing a State agency’s decision to allow Affinity Hospital, LLC, d/b/a Trinity Medical Center of Birmingham (“Trinity”), to relocate its hospital. For the reasons explained below, we conclude that the circuit court erred, and we reverse its judgment.

[1025]*1025 Procedural History and Factual Background

Trinity owns and operates a hospital located on Montclair Road in Birmingham (“the Montclair campus”) in Jefferson County. In December 2008, Trinity applied with the State Health Planning and Development Agency (“SHPDA”) for a certificate of need (“CON”) to relocate Trinity’s hospital from the Montclair campus to a vacant digital-hospital facility located on Highway 280 in Birmingham (“the Highway 280 site”). See § 22-21-265, Ala.Code 1975 (requiring a CON from SHPDA for new institutional health-service facilities). HealthSouth Corporation began construction on the Highway 280 site in 2002 but later abandoned the project. Brookwood Health Services, Inc., d/b/a Brookwood Medical Center (“Brook-wood”), and St. Vincent’s Health System (“St. Vincent’s”) intervened in opposition to Trinity’s CON application and requested a contested-case hearing. Brookwood owns and operates a hospital located in the City of Homewood, in the Birmingham area, and St. Vincent’s owns and operates a hospital located in Birmingham.

SHPDA appointed an administrative law judge (“the ALJ”) to hear the contested-case hearing. The ALJ held a 21-day hearing, at which he received extensive evidence. In August 2010, the ALJ recommended that SHPDA grant Trinity a CON allowing Trinity to move its hospital from the Montclair campus to the Highway 280 site. In September 2010, SHPDA’s Certificate of Need Review Board (“the CONRB”) voted to adopt the ALJ’s recommendation, and Trinity was granted a CON to relocate its hospital to the Highway 280 site.

Brookwood and St. Vincent’s appealed to the circuit court, pursuant to § 41-22-20, Ala.Code 1975. Before the circuit court, the parties initially disagreed over whether the case should be remanded to SHPDA for the ALJ to consider certain evidence; this court answered that question in the negative in Ex parte Affinity Hospital, LLC, 85 So.3d 1033 (Ala.Civ.App.2011). Following our decision in that case, the circuit court held a hearing on the merits of the appeal in May 2012. In July 2012, the circuit court entered a judgment reversing SHPDA’s decision permitting Trinity to move to the Highway 280 site. Trinity and SHPDA timely appealed to this court, and we consolidated the appeals. Trinity filed a motion to expedite the appeals, which we granted. This court heard oral arguments on October 23, 2012.

Standard of Review

This court reviews a circuit court’s judgment as to an agency’s decision without a presumption of correctness because the circuit court is in no better position to review the agency’s decision than is this court. Clark v. Fancher, 662 So.2d 258, 261 (Ala.Civ.App.1994). In reviewing an agency’s decision, this court’s standard of review is the same as that of the circuit court. Alabama Dep’t of Envtl. Mgmt. v. Legal Envtl. Assistance Found., Inc., 973 So.2d 369, 375 (Ala.Civ.App.2007). Section 41-22-20(k), Ala.Code 1975, governs our review and the circuit court’s review of SHPDA’s decision in this case. In pertinent part, it provides:

“(k) Except where judicial review is by trial de novo, the agency order shall be taken as prima facie just and reasonable and the court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact, except where otherwise authorized by statute.... The court may reverse or modify the decision or grant other appropriate relief from the agency action ... if the court finds that the agency action is due to be set aside or modified under standards set forth in [1026]*1026appeal or review statutes applicable to that agency or if substantial rights of the petitioner have been prejudiced because the agency action is any one or more of the following:
“(1) In violation of constitutional or statutory provisions;
“(2) In excess of the statutory authority of the agency;
“(3) In violation of any pertinent agency rule;
“(4) Made upon unlawful procedure;
“(5) Affected by other error of law;
“(6) Clearly erroneous in view of the reliable, probative, and substantial evidence of the whole record; or
“(7) Unreasonable, arbitrary, or capricious, or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.”

Our review of SHPDA’s conclusions of law and its application of the law to the facts is de novo. Ex parte Wilbanks Health Care Servs., Inc., 986 So.2d 422, 425 (Ala.2007).

Discussion

The circuit court presented various reasons for reversing SHPDA’s decision to grant Trinity the CON permitting it to move to the Highway 280 site. We will address those reasons in turn.

I.

“The 60% Occupancy Rule”

The State Health Plan is a comprehensive plan that “provide[s] for the development of health programs and resources to assure that quality health services will be available and accessible in a manner which assures continuity of care, at reasonable costs, for all residents of the state.” § 22-21-260(13), Ala.Code 1975. The circuit court determined that Trinity’s CON application did not comply with a particular rule found in the State Health Plan, Rule 410-2-4-.14(3)(b), Ala. Admin. Code (SHPDA), also known as “the 60% occupancy rule.” The 60% occupancy rule provides:

“(b) For replacement of hospitals, the occupancy rate for the most recent annual reporting period should have been at least 60 percent. If this occupancy level was not met, the hospital should agree to a reduction in bed capacity that will increase its occupancy rate to 60 percent. For example, if a 90-bed hospital had an average daily census (ADC) of 45 patients, its occupancy rate was 50 percent. (The ADC of 45 patients divided by 90 beds equals 50 percent). To determine a new bed capacity that would increase the hospital’s occupancy rate to 60 percent, simply divide the ADC of 45 patients by .60 (A fraction of a bed should be rounded upward to the next whole bed) The hospital’s new capacity should be 75 beds, a 15 bed reduction to its original capacity of 90 beds.”

(Emphasis added.)

SHPDA found that Trinity’s hospital at the Montclair campus has 560 beds but that Trinity’s average daily census, i.e., the average number of beds occupied by patients daily, is only 222.7, which rounds up to 223. Therefore, Trinity’s current occupancy rate is 39.8% (223 beds -r- 560 beds = 39.8%), less than 60%. In its CON application, Trinity sought to relocate 398 of its 560 beds to the Highway 280 site. Using the average daily census of 223, the occupancy rate for a 398-bed hospital would be only 56% (223 beds 398 beds = 56%), less than the 60% occupancy standard. Thus, SHPDA found that Trinity’s application, in applying for 398 beds, did not meet the 60% occupancy standard.

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Cite This Page — Counsel Stack

Bluebook (online)
129 So. 3d 1022, 2012 WL 5974240, Counsel Stack Legal Research, https://law.counselstack.com/opinion/affinity-hospital-llc-v-st-vincents-health-system-alacivapp-2012.