Arkansas Health Services Commission v. Regional Care Facilities, Inc.

93 S.W.3d 672, 351 Ark. 331, 2002 Ark. LEXIS 648
CourtSupreme Court of Arkansas
DecidedDecember 19, 2002
Docket01-1106
StatusPublished
Cited by17 cases

This text of 93 S.W.3d 672 (Arkansas Health Services Commission v. Regional Care Facilities, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arkansas Health Services Commission v. Regional Care Facilities, Inc., 93 S.W.3d 672, 351 Ark. 331, 2002 Ark. LEXIS 648 (Ark. 2002).

Opinion

Tom Glaze, Justice.

The State has appealed from the trial court’s granting of summaiy judgment in favor of Regional Care Facilities, Inc., a Benton County-based company that applied for a permit to construct a nursing home in Benton County. This appeal presents a question of whether a rule adopted by the Arkansas Health Services Commission constitutes special or local legislation in violation of Ark. Const, amend. 14; our jurisdiction arises under Ark. Sup. Ct. R. l-2(a)(l).

The Commission is vested with the authority to approve permits of approval for the construction of new nursing homes in the state. See Ark. Code Ann. § 20-8-104(d) (Repl. 1991). In order to determine whether new nursing home beds are needed in a particular county, the Commission has adopted certain “methodologies” that look at populations and occupancy rates in the county. At a meeting on March 19, 1999, the Commission adopted an “emergency rule” to create a one-time exception to its population-based methodology. Prior to the change, this population-based methodology allowed the Commission to determine the need for additional nursing home beds merely by determining the difference between the total beds that exist for an area and the projected need for beds in the future. For a “need” for new nursing home beds to exist, a county’s population figures must show a projected bed need, and the occupancy levels of existing facilities in the county must show that the facilities have been, on average, at least 94.5% occupied during the previous fiscal year.

At least part of the reason for adopting the March 1999 emergency rule was to respond to repeated requests for additional nursing home beds in the Bella Vista area of Benton County. Residents of Bella Vista, members of the Bella Vista Long Term Care Committee, representatives of Washington Regional Medical System (a Benton County-based nursing home company doing business as Bella Vista Health Care) and members of the Arkansas General Assembly from Benton and Washington Counties had all made such requests. Indeed, from 1996 until the filing of this lawsuit, Washington Regional had worked in conjunction with the Bella Vista Long Term Care Committee to seek a permit for Washington Regional to construct a new nursing home in Benton County. In fact, Washington Regional in 1996 had applied for, and the Commission granted, a permit to construct a new nursing home, but the Commission’s decision to award it a permit was later reversed by a Pulaski County .court in 1997.

Thereafter, Washington Regional submitted a proposal to the Commission in the form of a new rule change that would create an exception whereby the 94.5% occupancy requirement could be disregarded. Washington Regional’s proposal was subsequently adopted by the Commission in March 1999, and that new rule permitted the occupancy requirement to be disregarded one time in order to approve a new 70-bed facility in a county where the projected need for the county exceeded the “existing” (i.e. licensed and approved) beds by 150 or more beds. When this new rule was adopted in March 1999, the Commission believed that Benton County was the only county in the state that fell within the provisions of the new rule. The Commission later learned that other counties could comply when, in May of 1999, two separate applicants applied to construct new nursing homes in Garland and Pulaski counties.

In June of 1999, the Commission repealed the March 1999 emergency rule on the expressed grounds that an improper notice had been given. 1 After repealing the March 1999 rule, the Commission then adopted a modified version on August 19, 1999, which read as follows:

The Commission may disregard the overall county occupancy one time in order to approve a 70-bed facility in a county where the projected need for the county exceeds the “existing” (i.e. licensed and approved) beds by 250 or more beds. This rule could be used every three (3) years.

(Emphasis added.) The effect of this change was to make the rule applicable only to Benton County, since that county was the only one whose projected need exceeded 250 or more beds. In this respect, the Commission’s August 1999 rule excluded Garland and Pulaski counties by increasing the earlier 150-bed requirement to 250 or more beds. It also added that the rule could be used only every three years. The Commission expressed no explanation for this increase in beds. In sum, under the permanent August 1999 version of the rule, only one new 70-bed facility could be added in a county showing a need for over 250 additional beds.

Prior to the Commission’s adoption of the August 1999 rule, Regional Care Facilities, Inc. had filed an application for a permit to construct a new nursing home in the Bella Vista area of Benton County, but the Commission voted to deny Regional Care’s application in May of 1999. 2 In early November of 1999, Washington Regional submitted an application for a permit of approval under the August 1999 rule, but prior to the Commission’s acting on that application, Regional Care filed a complaint on November 30, 1999, seeking a declaratory judgment to have the August 1999 rule declared invalid as special or local legislation. 3 In the complaint, Regional Care asserted that the issuance of a permit to Washington Regional would affect and jeopardize the feasibility and existence of Regional Care’s proposed facility; for that reason, Regional Care sought both a declaration that the new rule was invalid and a preliminary injunction restraining the Commission from applying the rule and accepting or acting upon applications under the rule.

The trial court denied the preliminary injunction, finding that Regional' Care had failed to establish that it would be irreparably harmed in permitting the Commission to hear and consider Washington Regional’s application. Subsequently, Regional Care filed a motion for summary judgment, contending that it was entitled to a judgment as a matter of law on the basis that the Commission had acted arbitrarily and in violation of Ark. Const, amend. 14, which prohibits special and local legislation.

The circuit court granted Regional Care’s summary judgment motion, finding .there was no rational basis for excluding from the rule other counties, such as Garland and P.ulaski, that showed a population-based net numerical need but low occupancy. The court further noted that, if the Commission’s recent August 1999 rule was intended to meet a need for additional beds, then there was no rational basis for excluding Garland and Pulaski and other counties showing a net numerical need from the rule. The Commission has appealed the trial court’s order, arguing the court erred in two respects: 1) in concluding' that the rule was special or local legislation; and 2) in considering the deposition testimony of members of the Commission regarding their opinions bearing on the intent and purpose of the rule.

The first issue we address is whether the amended rule adopted by the Commission in August of 1999 constitutes special or local legislation in violation of Amendment 14 to the Arkansas Constitution. This Amendment states that “[t]he General Assembly shall not pass any local or special act.” In Arkansas Game & Fish Comm’n v. Clark, 192 Ark.

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Bluebook (online)
93 S.W.3d 672, 351 Ark. 331, 2002 Ark. LEXIS 648, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arkansas-health-services-commission-v-regional-care-facilities-inc-ark-2002.