Brentwood Health Management of Mississippi, LLC v. Mississippi State Department of Health

29 So. 3d 775, 2009 Miss. App. LEXIS 261, 2009 WL 1383388
CourtCourt of Appeals of Mississippi
DecidedMay 19, 2009
Docket2008-SA-00169-COA
StatusPublished
Cited by2 cases

This text of 29 So. 3d 775 (Brentwood Health Management of Mississippi, LLC v. Mississippi State Department of Health) is published on Counsel Stack Legal Research, covering Court of Appeals of Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brentwood Health Management of Mississippi, LLC v. Mississippi State Department of Health, 29 So. 3d 775, 2009 Miss. App. LEXIS 261, 2009 WL 1383388 (Mich. Ct. App. 2009).

Opinion

ROBERTS, J.,

for the Court.

¶ 1. This appeal focuses on the Mississippi State Department of Health’s (MSDH) decision to revoke two “Certificates of Need” (CONs) formerly granted to Brentwood Health Management of Mississippi, LLC. To paraphrase, the MSDH revoked the CONs at issue based on its conclusion that Brentwood had failed to substantially undertake development of the project contemplated by the two CONs. Brentwood appealed to the Hinds County Chancery Court, and the chancellor affirmed the MSDH’s decision. Brent-wood appeals and raises four issues. Finding no error, we affirm.

FACTS AND PROCEDURAL HISTORY

¶ 2. There are two CONs at issue, both of which were held by Brentwood. 1 One CON was originally awarded in 1996. It allowed Brentwood to establish twenty beds for the treatment of child and adolescent psychiatric conditions. Miss.Code Ann. § 41 — 7—191 (4)(a)(iii) (Rev.2005). The other CON was originally awarded in 1997. It allowed Brentwood to establish sixty beds for psychiatric residential treatment. Miss.Code Ann. § 41-7-191(3)(b) (Rev. 2005). Although the CONs date back to 1996 and 1997, our present purposes require that we focus on events that transpired after the MSDH granted Brent-wood’s request to amend both CONs on September 5, 2001.

¶ 3. As of the 2001 amendments, the beds contemplated by the CONs were to be placed in a proposed 40,000 square foot facility to be built at a specific site west of the Vicksburg Medical Center in Warren County, Mississippi. Additionally, the allowed expenditure cost was increased to approximately $4,000,000. Brentwood had *777 one year from that date to complete the facility and to get the eighty beds into operation. If Brentwood failed to complete the project or request a six-month extension by that time, Brentwood’s CONs would expire.

¶ 4. On February 24, 2005, approximately two years and five months after the September 2002 deadline, the MSDH informed Brentwood that a progress report was due on or before March 11, 2005. Brentwood fulfilled the MSDH’s request. Brentwood estimated that the project was 2% complete at that time. Brentwood also reported that it had spent $200,000 on the project and that it was investigating potential construction locations. Brentwood did not report any progress on completing the facility at the location contemplated by the 2001 amendments to the CONs. Finally, Brentwood said that PSI was preparing a pro forma financial statement and a business plan. Brentwood also filed a request for a six-month extension to complete the project.

¶ 5. On August 8, 2005, the MSDH acknowledged receipt of Brentwood’s progress report and Brentwood’s request for an extension. The MSDH notified Brent-wood that Brentwood’s request for an extension was denied because it was untimely. The MSDH informed Brentwood that it had to demonstrate substantial progress toward the project by September 2005.

¶ 6. In January 2006, the MSDH requested another progress report. Brent-wood had not responded as of August 2006, so the MSDH repeated its request. On September 12, 2006, the MSDH received Brentwood’s second progress report. Yet again, Brentwood did not report any progress regarding the facility contemplated in the 2001 amendments. Instead, Brentwood said that PSI was still trying to find an appropriate location for the project and that it was still determining whether construction of the project was feasible. Brentwood estimated that the project was 3% complete at that time, as compared to its 2005 progress report in which Brentwood estimated that the project was 2% complete. In other words, after eighteen months, Brentwood estimated that it was 1% closer to completing the project.

¶ 7. By way of a letter dated December 18, 2006, Samuel H. Dawkins, the Director of the Office of Health Policy and Planning, put Brentwood on notice that the MSDH intended to revoke Brentwood’s two CONs. 2 Dawkins also notified Brent-wood that it had a right to a hearing regarding whether the MSDH should revoke the CONs. Brentwood exercised its right to a hearing.

¶ 8. On May 10, 2007, a MSDH hearing officer conducted the revocation hearing. The MSDH called Dawkins as its first and only witness. Brentwood called four witnesses: (1) Michael Carney, Brentwood’s chief executive officer; (2) Philip Cook, the president of PSI’s Mid-America Division; (3) Darren Rozas, an architect; and (4) Philip Merideth, M.D., Brentwood’s chief medical officer. Suffice it to say, Carney and Cook generally testified that Brent-wood preferred to move the project from Warren County to existing facilities in Rankin County, Mississippi, and Lauder-dale County, Mississippi. Rozas testified that Brentwood hired him to analyze the feasibility of locating property for the facility and building on that unimproved property, as well as renovating an existing facility at another alternative site. None *778 of Rozas’s efforts were focused on building the proposed facility at the location established in the 2001 amendments.

¶ 9. On July 31, 2007, the hearing officer rendered her findings of fact and conclusions of law. Broadly speaking, the hearing officer reported that the issues at the hearing were: (1) whether the MSDH had the authority to revoke a CON established by the direction of the Legislature; (2) whether the CON had expired; and (3) whether Brentwood had substantially undertaken completion of the project. The hearing officer found that “the [MSDH] did not abuse its discretion when making [its] determination that [Brentwood] had not substantially undertaken construction or other preparation for the project, and had not made a good faith effort toward the project.” Accordingly, the hearing officer recommended that the State Health Officer “concur with the [MSDH]’s withdrawal and revocation of the CONs.”

¶ 10. The hearing officer mentioned that, based on an unrelated request, the Mississippi Attorney General’s Office had recently issued an advisory opinion regarding the time a CON holder has to complete a project contemplated by a CON and the MSDH’s authority to revoke a CON. It bears mentioning that the attorney general’s office did not issue its advisory opinion until after the hearing. Stated differently, the attorney general’s opinion was not available before or at the time of the hearing.

¶ 11. At the next monthly CON meeting, interim state health officer F.E. Thompson, Jr., M.D., MPH, followed the hearing officer’s recommendation and entered a final order revoking Brentwood’s CONs. Specifically, Dr. Thompson stated, “I have reviewed the record prepared on [the CONs] and have determined that ... Brentwood ... [has not] substantially undertaken construction or other preparation to complete the ... project, and [has] not made a good faith effort toward the project.”

¶ 12. Brentwood appealed to the Hinds County Chancery Court. On December 14, 2007, the chancellor held oral arguments. Approximately one month later, the chancellor entered an order and opinion.

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29 So. 3d 775, 2009 Miss. App. LEXIS 261, 2009 WL 1383388, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brentwood-health-management-of-mississippi-llc-v-mississippi-state-missctapp-2009.