St. Dominic-Jackson Memorial Hospital v. Mississippi State Department of Health

87 So. 3d 1040, 2012 WL 1432542, 2012 Miss. LEXIS 205
CourtMississippi Supreme Court
DecidedApril 26, 2012
DocketNo. 2011-SA-00007-SCT
StatusPublished
Cited by3 cases

This text of 87 So. 3d 1040 (St. Dominic-Jackson Memorial Hospital 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
St. Dominic-Jackson Memorial Hospital v. Mississippi State Department of Health, 87 So. 3d 1040, 2012 WL 1432542, 2012 Miss. LEXIS 205 (Mich. 2012).

Opinion

KING, Justice,

for the Court:

¶ 1. This Court is asked to decide whether the Mississippi Department of Health (Department) erred by denying the eertificate-of-need (CON) application of St. Dominic-Jackson Memorial Hospital (St. Dominic). In its CON application, St. Dominic sought to relocate seventy-one general acute-care beds from its Jackson location to a new facility it planned to build in Madison County. The Department found that St. Dominic’s proposed project was actually a new hospital, not a relocation. Because St. Dominic did not meet the need criteria for a new hospital, the Department denied the request. The Madison County Chancery Court affirmed this decision.

¶ 2. Aggrieved, St. Dominic has appealed to this Court, raising four issues:

I. Whether St. Dominic’s CON application is a relocation of a portion of a health-care facility as contemplated under Mississippi Code Section 41-7-191(l)(b).
II. Whether St. Dominic’s CON application complies with the specific need criteria for a relocation of a portion of a health-care facility detailed in the State Health Plan.
III. Whether St. Dominic’s CON application complies with the specific need criteria for the proposed institution of obstetrical services as set forth in the State Health Plan.
IV. Whether St. Dominic’s CON application complies with the General Review Criteria as set forth in the Mississippi Certificate of Need Review Manual.

We determine that the Department did not err by finding St. Dominic’s proposed project was actually a new hospital. Because St. Dominic could not meet the need criteria for a new hospital, the Department did not err by denying its CON application, and the chancery court did not err by affirming this decision. Thus, we affirm.

FACTS AND PROCEDURAL HISTORY

¶ 3. St. Dominic, which is located in General Hospital Service Area 3 (GHSA), is a short-term, general, acute-care facility. At the time of its application, St. Dominic had a licensed capacity of 535 beds that included 417 medical/surgical beds, 35 chemical-dependency beds, and 83 psychiatric beds.

¶ 4. In June 2007, St. Dominic filed a CON application to build a new hospital in Madison County. St. Dominic later withdrew that application. Then, on December 1, 2008, St. Dominic filed a CON application requesting approval to relocate seventy-one beds (sixty-five general acute-care beds and six obstetric beds) from its Jackson location to a new “satellite campus” it planned to build in Madison. The project was estimated to cost $125,303,387 and would be located at the future Interstate 55/Reunion Interchange, between the existing Madison and Gluckstadt exits.

¶ 5. The application consisted of four components: (I) to relocate sixty-five licensed and operational, general, acute-care beds and related services and to construct a new facility, (II) to construct an accompanying 60,000 squarefoot medical office building, (III) to provide MRI services at the new facility, and (IV) to relocate six licensed, general, acute-care beds for obstetrical and neonatal services. St. Dominic stated that it would implement [1043]*1043Components II, III, and IV only if the Department approved Component I.

¶ 6. In February 2009, a staff analysis recommended the application be denied. St. Dominic requested a hearing. Madison HMA, Incorporated (also doing business as Madison River Oaks), the operator of a sixty-seven-bed hospital in Canton, Mississippi, challenged St. Dominic’s CON application. The public hearing took place February 4 through February 25, 2010, and included evidence and testimony in support of and in opposition to St. Dominic’s application.

¶ 7. The hearing officer found that St. Dominic’s proposed relocation was actually a new hospital, finding (1) “the proposed project ‘does not reduce the scope of services available at the Jackson campus[;]’ ” (2) “Since St. Dominic has not identified the beds that will be relocated, there is no basis for determining if the ‘relocated’ beds are actually operational;]” (3) “St. Dominic has not identified staff that will be relocated, and acknowledges new personnel will be hired to staff the new hospital[;]” (4) “St. Dominic’s application contemplates the purchase of new equipment!];]” and (5) “St. Dominic proposed to construct a new building which, regardless of licensure classification, will be a separate hospital.”

¶ 8. After concluding that the proposed project was actually a new hospital, the hearing officer analyzed St. Dominic’s CON application under the “Certificate of Need Criteria and Standards for the Establishment of a General Acute Care Hospital.” Under the criteria, the hearing officer determined that Madison County had an existing hospital — Madison HMA. The applicable formula showed the area was “over-bedded” — Madison County with an excess of thirty-four beds and GHSA 3 with an excess of 1,300 beds. Based on these figures, the hearing officer concluded that Madison County did not need an additional hospital.

¶ 9. In addition to complying with the requirements of the State Health Plan, St. Dominic had to comply with the sixteen General Review Criteria (GRC) set forth in the CON Review Manual. The hearing officer determined that three criteria did not apply; St. Dominic passed six criteria; but St. Dominic failed to comply with the following seven criteria.

GRC 1 State Health Plan: For the reasons stated above, the hearing officer found that St. Dominic failed to comply with the State Health Plan.
GRC 3 Availability of Alternatives: Based on the evidence, the hearing officer concluded that St. Dominic had decided to build a hospital in Madison many years ago.1 St. Dominic only considered two options: renovating/expanding its existing facility and building a second facility in Madison. Thus, the hearing officer opined that St. Dominic did not truly consider its alternatives.
GRC Jp Economic Viability: Evidence did not support a finding that the project would be profitable by its second or third years of operation.
GRC 5(a)-(d) Need for the Project: Because the proposed project would be placed in a “relatively young, wealthy population,” the hearing officer was not convinced that the motivation for the project was to improve healthcare access for low income, minority, and under-served groups. Although Madison County’s population was increasing, the growth was not significant enough to [1044]*1044support a new hospital. The proposed facility would have a negative effect on Madison HMA. There was huge opposition to St. Dominic’s application, and St. Dominic used misleading advertising and giveaways to gain supporters.
GRC 6 Access to Facility or Service: The hearing officer determined that this project was not geared toward serving underserved groups. The proposed project would be in close proximity to eight other hospitals. And, because funding for the Reunion Interchange was lost, the facility would not be directly accessible from the highway.
GRC 8 Relationship to Existing Healthcare System: Evidence suggested that the proposed project would negatively affect the existing hospital-Madison HMA.
GRC Up Construction Projects:

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Bluebook (online)
87 So. 3d 1040, 2012 WL 1432542, 2012 Miss. LEXIS 205, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-dominic-jackson-memorial-hospital-v-mississippi-state-department-of-miss-2012.