Dialysis Solution, LLC v. Mississippi State Department of Health

31 So. 3d 1204, 2010 Miss. LEXIS 81, 2010 WL 548188
CourtMississippi Supreme Court
DecidedFebruary 18, 2010
Docket2008-CA-02073-SCT
StatusPublished
Cited by12 cases

This text of 31 So. 3d 1204 (Dialysis Solution, LLC v. Mississippi State Department of Health) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dialysis Solution, LLC v. Mississippi State Department of Health, 31 So. 3d 1204, 2010 Miss. LEXIS 81, 2010 WL 548188 (Mich. 2010).

Opinion

GRAVES, Presiding Justice,

for the Court.

¶ 1. This case requires interpretation of Section 41-7-195 of the Mississippi Health Care Certificate of Need Law of 1979. This statutory section addresses the validity and duration of a Certificate of Need (CON), which is a certificate that healthcare providers must obtain from the Mississippi State Department of Health (MSDH) prior to constructing certain healthcare facilities or offering designated health services. The two issues before this Court are: 1) Whether, pursuant to Section 41-7-195, the MSDH has the authority to grant an extension of a CON after the date of expiration specified in the CON; and 2) whether, pursuant to Section 41-7-195, the MSDH has the authority to grant multiple extensions of a CON. The plaintiff — Dialysis Solution, a company desiring to develop a kidney-disease treatment facility in Montgomery County, Mississippi — argues that the MSDH has never had the authority to take either of these actions. The defendants — the MSDH, the State Health Officer (the late Dr. Ed Thompson 1 ), the State of Mississippi, and RCG-Montgomery, LLC (RCG), the developer of a kidney-disease treatment facility in Montgomery County and holder of the CON at issue — argue that the MSDH had the authority to take both these actions. The trial court ruled in favor of the defendants on both issues. Finding that the MSDH did not have the authority to grant an extension of RCG’s CON after the CON’s expiration date, and finding this issue dispositive, we reverse and render.

FACTS AND PROCEDURAL HISTORY

¶ 2. This case focuses on the validity of a Certificate of Need (CON) that was issued to defendant RCG-Montgomery County, LLC (RCG), to develop a kidney-disease treatment facility in Montgomery County. To assist the trial court in making its final judgment on the issues presented, all parties agreed to stipulate to the facts of the case. Unless otherwise noted, all of the following facts were taken from the parties’ Joint Stipulation of Facts.

¶ 3. The Mississippi Health Care Certificate of Need Law of 1979 (The Health Care CON Law) (Miss.Code Ann. §§ 41-7-178 through 41-7-209 (Rev.2009)) designates the Mississippi State Department of Health (MSDH) as the sole agency to administer and supervise all state health planning responsibilities. Miss.Code Ann. § 41-7-175 (Rev.2009). The purposes of Mississippi’s health planning and regulatory activities are to prevent unnecessary duplication of health resources, provide cost containment, improve the health of Mississippi residents, and increase the accessibility, acceptability, continuity, and quality of health services. Mississippi Department of Health, State Health Plan for Fiscal Year 2005: Introduction, available at http://msdh.ms.gov/ msdhsite/_static/re-sources/1083.pdf (last accessed Feb. 11, 2010).

¶ 4. The Health Care CON Law authorized the MSDH to develop and implement a statewide health CON program. Miss. Code Ann. § 41-7-187 (Rev.2009). A CON must be obtained from the MSDH *1207 before a person may undertake any of the activities described in Section 41-7-191(1), which include the establishment of End-Stage Renal Disease (ESRD) facilities. Miss.Code Ann. § 41-7-191(1) (Rev.2009). No final arrangement or commitment for financing such activity may be obtained by any person unless the MSDH has issued a CON for such arrangement or commitment. Miss.Code Ann. § 41-7-193(1) (Rev.2009). No CON shall be issued unless the project proposed in the application for such CON has been reviewed for consistency with the specifications and criteria established by the MSDH and substantially complies with the projection of need as reported in the Mississippi State Health Plan which is in effect at the time the application is submitted to the MSDH. Miss.Code Ann. § 41-7-193(1).

¶ 5. The Mississippi State Board of Health authorized the MSDH to issue CONs for the construction or expansion of ESRD facilities having a need in several counties, including Montgomery County. On December 16, 2004, after having reviewed a CON application from RCG, the MSDH issued a CON to RCG for a six-station ESRD facility in the City of Wino-na in Montgomery County.

¶ 6. While the CON for the RCG ESRD facility was issued in December 2004, for two significant reasons, RCG did not commence development and construction of the project until approximately September 2007. 2 First, approximately eight months after the CON was issued, Hurricane Katrina devastated the Mississippi Gulf Coast. The hurricane had a significant impact on ESRD facilities operated by RCG’s parent company, Renal Care Group, Inc., and also on facilities operated by the company that was involved in negotiations to acquire RCG’s parent company, Fresenius Medical Care Holdings, Inc. (Fresenius). As a result, those two companies devoted all of their time and resources to recovery efforts on the Gulf Coast, which were necessary to insure that ESRD patients in that area had access to dialysis treatment. Second, in 2005, Renal Care Group, Inc. (RCG’s parent company), negotiated and executed an agreement to be acquired by Fresenius. Renal Care Group, Inc., announced the definitive agreement on May 4, 2005, but RCG could not move forward with the development of the ESRD facility in Montgomery County until federal regulatory approvals were secured regarding the transaction. More specifically, RCG had to wait until the *1208 Federal Trade Commission could analyze the operations of Renal Care Group, Inc., and Fresenius in Mississippi to determine whether either or both companies would have to sell assets and/or facilities to address antitrust concerns. Until this federal review was complete, there was no way to know whether the RCG Montgomery County dialysis facility project could be retained and developed. After the necessary federal regulatory approvals were obtained on July 5, 2006, and following the recovery from Hurricane Katrina, RCG turned its attention back to the development of the dialysis facility in Montgomery County.

¶ 7. On December 29, 2006 (about eight or nine months before RCG began construction on its dialysis facility), MSDH received a CON application for the establishment of a twelve-station ESRD facility in Montgomery County from Dialysis Solution. 3

¶ 8. On January 8, 2007 (ten days after the MSDH received a CON application from Dialysis Solution), RCG filed its first request for a six-month extension of the CON that it had been issued on December 16, 2004. On January 18, 2007, the State Health Officer granted the requested six-month extension. In August 2007, RCG requested a second six-month extension.

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31 So. 3d 1204, 2010 Miss. LEXIS 81, 2010 WL 548188, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dialysis-solution-llc-v-mississippi-state-department-of-health-miss-2010.