Affinity Hospital, LLC, d/b/a Trinity Medical Center of Birmingham v. St. Vincent's Health System (Appeal from Montgomery Circuit Court: CV-10-901590)

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REL: 11/30/12 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e Reporter o f Decisions, Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2012-2013 2111014 A f f i n i t y H o s p i t a l , LLC, d/b/a T r i n i t y M e d i c a l Center o f Birmingham v. St. V i n c e n t ' s H e a l t h System 2111015 A f f i n i t y H o s p i t a l , LLC, d/b/a T r i n i t y M e d i c a l Center o f Birmingham v. Brookwood H e a l t h S e r v i c e s , I n c . , d/b/a Brookwood M e d i c a l Center 2111062 State H e a l t h P l a n n i n g and Development Agency v. St. V i n c e n t ' s H e a l t h System 2111063 State H e a l t h P l a n n i n g and Development Agency v. Brookwood H e a l t h S e r v i c e s , I n c . , d/b/a Brookwood M e d i c a l Center Appeals from Montgomery C i r c u i t Court (CV-10-1587 and CV-10-901590) BRYAN, J u d g e . These appeals concern whether Court erred i n r e v e r s i n g a State Affinity Hospital, L L C , d/b/a Birmingham ( " T r i n i t y " ) , t h e Montgomery Circuit agency's d e c i s i o n t o a l l o w Trinity Medical to relocate i t s hospital. Center For the r e a s o n s e x p l a i n e d b e l o w , we c o n c l u d e t h a t t h e c i r c u i t e r r e d , a n d we r e v e r s e i t s judgment. 2 of court 2111014/2111015/21110 62/21110 63 Procedural H i s t o r y and Factual Background T r i n i t y owns and o p e r a t e s a h o s p i t a l l o c a t e d on Road in Birmingham County. Health In from the facility 280 December Planning certificate ("the of 2008, and located on See Development campus Highway 280 Health 2002 later Services, Inc., Vincent's") Agency and with Trinity's vacant d/b/a the Highway (requiring a CON facilities). in project. Brookwood Vincent's to 280 Brookwood Medical Health opposition a digital-hospital Center System ("St. Trinity's a p p l i c a t i o n and r e q u e s t e d a c o n t e s t e d - c a s e h e a r i n g . owns and State hospital i n Birmingham ("the abandoned St. intervened the ("SHPDA") f o r relocate a Jefferson b e g a n c o n s t r u c t i o n on t h e Highway but ("Brookwood"), applied institutional health-service HealthSouth Corporation in to campus") i n § 22-21-265, A l a . Code 1975 f r o m SHPDA f o r new site Trinity n e e d ("CON") t o Montclair site"). Montclair Montclair CON Brookwood o p e r a t e s a h o s p i t a l l o c a t e d i n t h e C i t y o f Homewood, i n the Birmingham area, and St. Vincent's owns and operates a h o s p i t a l l o c a t e d i n Birmingham. SHPDA a p p o i n t e d an to hear the administrative contested-case hearing. 3 law j u d g e The ALJ ("the held a ALJ") 21-day 2111014/2111015/2111062/2111063 h e a r i n g , a t w h i c h he r e c e i v e d e x t e n s i v e e v i d e n c e . 2010, t h e A L J recommended allowing Trinity t o move that SHPDA i t s hospital campus t o t h e Highway 280 s i t e . Certificate the ALJ's o f Need R e v i e w B o a r d recommendation, grant In August Trinity from a CON the Montclair I n S e p t e m b e r 2010, SHPDA's ("the CONRB") v o t e d t o a d o p t and T r i n i t y was g r a n t e d a CON t o r e l o c a t e i t s h o s p i t a l t o t h e Highway 280 s i t e . Brookwood court, pursuant circuit and S t . V i n c e n t ' s appealed to the t o § 41-22-20, A l a . Code 1975. court, the p a r t i e s i n i t i a l l y disagreed circuit Before the over whether t h e c a s e s h o u l d be remanded t o SHPDA f o r t h e A L J t o c o n s i d e r certain negative (Ala. evidence; C i v . App. 2 0 1 1 ) . May court answered that question i n the i n Ex p a r t e A f f i n i t y H o s p i t a l , L L C , 85 So. 3d 1033 the c i r c u i t in this F o l l o w i n g our d e c i s i o n i n t h a t case, c o u r t h e l d a h e a r i n g on t h e m e r i t s o f t h e a p p e a l 2012. In July 2012, t h e c i r c u i t court entered a j u d g m e n t r e v e r s i n g SHPDA's d e c i s i o n p e r m i t t i n g T r i n i t y t o move t o t h e Highway 280 s i t e . T r i n i t y a n d SHPDA t i m e l y a p p e a l e d t o t h i s c o u r t , a n d we c o n s o l i d a t e d t h e a p p e a l s . Trinity filed a m o t i o n t o e x p e d i t e t h e a p p e a l s , w h i c h we g r a n t e d . heard oral a r g u m e n t s on O c t o b e r 23, 2012. 4 This court 2111014/2111015/2111062/2111063 Standard of Review This court reviews a circuit c o u r t ' s j u d g m e n t as to an agency's d e c i s i o n w i t h o u t a presumption of c o r r e c t n e s s because the circuit court is in no better agency's d e c i s i o n than i s t h i s So. 2d 258, 261 (Ala. Civ. p o s i t i o n to court. App. review the C l a r k v. F a n c h e r , 1994). In 662 reviewing an a g e n c y ' s d e c i s i o n , t h i s c o u r t ' s s t a n d a r d o f r e v i e w i s t h e same as t h a t o f t h e circuit court. v. L e g a l E n v t l . A s s i s t a n c e ( A l a . C i v . App. g o v e r n s our 2007). review and d e c i s i o n i n t h i s case. A l a b a m a Dep't o f E n v t l . Mgmt. Found., I n c . , 973 So. 2d 369, S e c t i o n 4 1 - 2 2 - 2 0 ( k ) , A l a . Code the circuit court's review " ( k ) E x c e p t where j u d i c i a l r e v i e w i s by t r i a l de novo, t h e a g e n c y o r d e r s h a l l be t a k e n as p r i m a f a c i e just and reasonable and the court shall not s u b s t i t u t e i t s j u d g m e n t f o r t h a t o f t h e a g e n c y as t o t h e w e i g h t o f t h e e v i d e n c e on q u e s t i o n s o f f a c t , e x c e p t where o t h e r w i s e a u t h o r i z e d by s t a t u t e . ... The c o u r t may r e v e r s e or m o d i f y the d e c i s i o n or grant other appropriate relief from the agency a c t i o n ... i f t h e c o u r t f i n d s t h a t t h e a g e n c y a c t i o n i s due t o be s e t a s i d e o r m o d i f i e d u n d e r s t a n d a r d s s e t f o r t h i n appeal or review s t a t u t e s a p p l i c a b l e t o that agency or i f substantial rights of the p e t i t i o n e r have b e e n p r e j u d i c e d b e c a u s e t h e a g e n c y a c t i o n i s any one o r more o f t h e f o l l o w i n g : 5 of 1975, o f SHPDA's In p e r t i n e n t p a r t , i t p r o v i d e s : "(1) In v i o l a t i o n statutory provisions; 375 constitutional or 2111014/2111015/2111062/2111063 "(2) In excess of the s t a t u t o r y a u t h o r i t y of t h e agency; "(3) rule; I n v i o l a t i o n o f any p e r t i n e n t a g e n c y "(4) Made upon u n l a w f u l procedure; "(5) A f f e c t e d by other e r r o r of l a w ; Unreasonable, arbitrary, or c h a r a c t e r i z e d b y an abuse o f d i s c r e t i o n or a c l e a r l y unwarranted e x e r c i s e of discretion." Our review o f SHPDA's c o n c l u s i o n s o f law and i t s a p p l i c a t i o n o f t h e l a w t o t h e f a c t s i s de novo. Care Servs., Inc., Ex p a r t e W i l b a n k s Health 986 So. 2d 422, 425 ( A l a . 2 0 0 7 ) . Discussion The c i r c u i t court presented v a r i o u s reasons f o r r e v e r s i n g SHPDA's d e c i s i o n t o g r a n t T r i n i t y t h e CON p e r m i t t i n g i t t o move t o t h e Highway 280 s i t e . in We w i l l address those reasons turn. "The The State "provide[s] Health f o r the 60% O c c u p a n c y Plan is a development 6 Rule" comprehensive of health plan programs that and 2111014/2111015/21110 62/21110 63 resources to a v a i l a b l e and assure that quality health services will be a c c e s s i b l e i n a manner w h i c h a s s u r e s c o n t i n u i t y of care, at r e a s o n a b l e c o s t s , f o r a l l r e s i d e n t s of the s t a t e . " § 2 2 - 2 1 - 2 6 0 ( 1 3 ) , A l a . Code 1975. that Trinity's CON The application c i r c u i t court did not p a r t i c u l a r r u l e found i n the S t a t e H e a l t h .14(3)(b), A l a . A d m i n . Code occupancy r u l e . " The 60% determined comply with a P l a n , R u l e 410-2-4- (SHPDA), a l s o occupancy r u l e known as "the 60% provides: "(b) F o r r e p l a c e m e n t o f h o s p i t a l s , t h e o c c u p a n c y r a t e f o r t h e most r e c e n t a n n u a l r e p o r t i n g p e r i o d s h o u l d have b e e n a t l e a s t 60 p e r c e n t . If this o c c u p a n c y l e v e l was n o t met, the h o s p i t a l s h o u l d a g r e e t o a r e d u c t i o n i n bed capacity that will i n c r e a s e i t s o c c u p a n c y r a t e t o 60 p e r c e n t . For e x a m p l e , i f a 90-bed h o s p i t a l had an a v e r a g e d a i l y c e n s u s (ADC) o f 45 p a t i e n t s , i t s o c c u p a n c y r a t e was 50 p e r c e n t . (The ADC o f 45 p a t i e n t s d i v i d e d by 90 b e d s e q u a l s 50 p e r c e n t ) . To d e t e r m i n e a new bed capacity that would increase the hospital's o c c u p a n c y r a t e t o 60 p e r c e n t , s i m p l y d i v i d e t h e ADC o f 45 p a t i e n t s by .60 (A f r a c t i o n o f a bed s h o u l d be r o u n d e d u p w a r d t o t h e n e x t w h o l e bed) The h o s p i t a l ' s new c a p a c i t y s h o u l d be 75 b e d s , a 15 bed reduction t o i t s o r i g i n a l c a p a c i t y o f 90 b e d s . " ( E m p h a s i s added.) SHPDA campus has i.e., is the only found 560 that beds but Trinity's hospital at the Montclair t h a t T r i n i t y ' s average d a i l y a v e r a g e number o f b e d s o c c u p i e d by p a t i e n t s 222.7, w h i c h r o u n d s up t o 223. 7 Therefore, census, daily, Trinity's 2111014/2111015/2111062/2111063 c u r r e n t o c c u p a n c y r a t e i s 3 9 . 8 % (223 beds ^ 560 beds = 3 9 . 8 % ) , less than 60%. I n i t s CON a p p l i c a t i o n , T r i n i t y r e l o c a t e 398 o f i t s 560 beds t o t h e Highway sought t o 280 s i t e . Using t h e a v e r a g e d a i l y c e n s u s o f 2 2 3 , t h e o c c u p a n c y r a t e f o r a 398b e d h o s p i t a l w o u l d be o n l y 5 6 % (223 beds l e s s t h a n t h e 60% o c c u p a n c y s t a n d a r d . Trinity's application, i n applying the 60% o c c u p a n c y = 56%), Thus, SHPDA f o u n d t h a t f o r 398 b e d s , d i d n o t meet instead of denying T r i n i t y ' s CON a p p l i c a t i o n , SHPDA t o o k a f l e x i b l e approach i n dealing with standard. ^ 398 beds However, t h i s shortcoming. So t h a t t h e 60% o c c u p a n c y r u l e w o u l d be s a t i s f i e d , awarded T r i n i t y t h e CON " s u b j e c t number of acute twenty-six beds (26) b e d s . " instead (398 beds care be to the s t i p u l a t i o n that the further reduced by another T h a t i s , SHPDA g r a n t e d t h e CON f o r 372 o f t h e 398 beds - 26 beds average d a i l y beds SHPDA f o r which T r i n i t y = 372 b e d s ) . G i v e n t h a t T r i n i t y h a s an census o f 223, a h o s p i t a l w i t h meet t h e 60% o c c u p a n c y r u l e had a p p l i e d 372 beds would (using the formula i n the r u l e , 223 ^ .6 = 371.7, w h i c h r o u n d s up t o 3 7 2 ) . The The circuit circuit court, court however, characterized 8 rejected SHPDA's s o l u t i o n . the condition imposed by 2111014/2111015/2111062/2111063 SHPDA, r e d u c i n g t h e number o f r e q u e s t e d b e d s b y 26 b e d s , as an impermissible attempt t o "cure" Trinity's CON a p p l i c a t i o n , w h i c h SHPDA h a d d e t e r m i n e d t o be n o n c o m p l i a n t on i t s f a c e w i t h the 60% o c c u p a n c y court essentially d e t e r m i n e d t h a t T r i n i t y was b o u n d b y i t s p r o p o s a l to relocate 398 b e d s . satisfy the 60% that occupancy r u l e . occupancy Trinity § standard, simply The c i r c u i t had v i o l a t e d permits The c i r c u i t B e c a u s e t h e number o f p r o p o s e d b e d s , 398, d i d n o t concluded SHPDA standard. the circuit had not s a t i s f i e d court therefore 22-21-266(1), court t h e 60% concluded A l a . Code that 1975, w h i c h SHPDA t o i s s u e a CON f o r new i n p a t i e n t f a c i l i t i e s only i f the "proposed f a c i l i t y or s e r v i c e i s c o n s i s t e n t " w i t h "the appropriate state plan," i . e . , the State i n c l u d e s t h e 60% o c c u p a n c y r u l e . that SHPDA requirement .02(1)(a), had violated found in § A l a . Admin. Health Plan, which The c i r c u i t c o u r t a l s o f o u n d i t s own rules reflecting 22-21-266(1). See Code (stating (SHPDA) Rule the 410-1-6that the " p r o p o s e d new i n s t i t u t i o n a l h e a l t h s e r v i c e s h a l l be c o n s i s t e n t with" the State Admin. 266(1)). Code Health (SHPDA) Plan); (mirroring Under t h e c i r c u i t and Rule 410-1-6-.18, A l a . t h e language court's reasoning, 9 in § 22-21- t h e number o f 2111014/2111015/2111062/2111063 p r o p o s e d beds Trinity withdrew application and could disagree circuit court occupancy As from 398 t o 372 and submitted i t s application t o SHPDA r e q u e s t i n g St. Vincent's SHPDA n o t be r e d u c e d agree w i t h with t h e l o w e r number. the c i r c u i t the c i r c u i t court. court, another Brookwood T r i n i t y and arguing e r r e d a n d t h a t SHPDA c o r r e c t l y unless that a p p l i e d t h e 60% rule. Trinity a n d SHPDA c o r r e c t l y note, t h e 60% o c c u p a n c y rule i t s e l f contemplates the procedure used i n t h i s case. rule provides that " [ i ] f [ t h e 60%] o c c u p a n c y l e v e l most r e c e n t a n n u a l r e p o r t i n g p e r i o d ] i t s o c c u p a n c y r a t e t o 60 p e r c e n t . " case. Trinity's Before was n o t met, t h e h o s p i t a l i n support disagreed census, the v a r i a b l e t h a t t h e number o f b e d s t h a t T r i n i t y c o u l d move. evidence of a relatively Trinity higher and S t . V i n c e n t ' s daily c e n s u s was l o w e r , based on t h e e v i d e n c e argued that the ALJ selected before h i m , a n d SHPDA 10 presented average daily However, Trinity's that over determines c e n s u s t h a t w o u l d have s u p p o r t e d m o v i n g 398 b e d s . Brookwood increase That p r o c e d u r e o c c u r r e d i n the ALJ, the parties average d a i l y The [for the should agree t o a r e d u c t i o n i n bed c a p a c i t y t h a t w i l l this the lower average number adopted that 2111014/2111015/21110 62/21110 63 finding. B e c a u s e t h a t f a c t u a l f i n d i n g o f a l o w e r number w o u l d s u p p o r t m o v i n g o n l y 372 b e d s , SHPDA t h e n c o n d i t i o n e d Trinity's CON occupancy on a 26-bed standard, reduction to satisfy does not apply to a r g u e t h a t t h e 60% this case "agreed" t o a r e d u c t i o n f r o m 398 It opposed the i s true that T r i n i t y earlier stages of t h i s t h a t T r i n i t y be a l l o w e d Trinity objecting filed an because Thus, the case. reduction Trinity the "agreed" SHPDA's d e c i s i o n . never When t h e A L J beds. during recommended t o move 372 b e d s i n s t e a d o f 398 exception appealed Trinity t h e 26-bed r e d u c t i o n to the ALJ's i n beds decision to the to beds. reduction Trinity by However, T r i n i t y d i d not when B r o o k w o o d grant beds, recommendation, t o an a l l o w a n c e o f f e w e r t h a n 398 cross-appeal occupancy p r o p o s e d b e d s t o 372 a f t e r SHPDA a d o p t e d t h e A L J ' s r e c o m m e n d a t i o n , Vincent's 60% p r e c i s e l y as t h e r u l e c o n t e m p l a t e s . B r o o k w o o d and S t . V i n c e n t ' s rule the and the acquiescing St. CON. to I n d e e d , t h i s c a s e w o u l d n o t have p r o c e e d e d to t h i s point but f o r T r i n i t y ' s agreeing to the r e d u c t i o n . We f u r t h e r n o t e t h a t t h e r u l e d o e s n o t s p e c i f y when an a p p l i c a n t must a g r e e t o a r e d u c t i o n This i n beds. case i l l u s t r a t e s the n e c e s s i t y of a p p l y i n g 11 the 60% 2111014/2111015/2111062/2111063 occupancy rule as SHPDA d i d . As i n t h i s case, p a r t i e s may d i s a g r e e on a h o s p i t a l ' s a v e r a g e d a i l y c e n s u s , t h e number t h a t w i l l d e t e r m i n e how many b e d s a h o s p i t a l may move i n c a s e s this one. like I n s u c h c a s e s , t h e A L J must d e t e r m i n e t h e a v e r a g e d a i l y c e n s u s t o d e t e r m i n e how many b e d s may be moved u n d e r t h e rule. After such r e q u e s t e d beds a d e t e r m i n a t i o n i s made, s h o u l d be r e d u c e d standard, i f necessary. t h e number o f t o meet t h e 60% occupancy " ' T h i s c o u r t and t h e [ c i r c u i t ] must g i v e s u b s t a n t i a l d e f e r e n c e t o an a g e n c y ' s of i t s r u l e s and r e g u l a t i o n s . interpretation "[A]n agency's i n t e r p r e t a t i o n of i t s own r e g u l a t i o n must s t a n d i f i t i s r e a s o n a b l e , e v e n it may not appear interpretation."'" (Ala. So. of 2006) Fowler court's hospitals. v. J o h n s o n , SHPDA's rule rigid i n this case interpretation ability to as though some other 961 So. 2d 122, 130 P e r s . Bd. v. T i l l m a n , ( A l a . C i v . App. 1 9 9 9 ) ) . t h e 60% o c c u p a n c y hamstring reasonable (quoting M o b i l e Cnty. 2d 517, 518 circuit as court permit SHPDA's 751 application i s reasonable. of the the rule The would relocation of Under t h a t i n t e r p r e t a t i o n , i f t h e p r o p o s e d number o f b e d s t o be moved i s d e t e r m i n e d t o be even high the applicant one number t o o w o u l d have t o abandon t h e a p p l i c a t i o n a n d 12 2111014/2111015/2111062/2111063 s t a r t the p r o c e s s a g a i n a f t e r the evidentiary hearing. a d r a c o n i a n a p p r o a c h w o u l d u n d e r m i n e our need for "efficient, administration" Ala. Code economical in administrative and legislature's effective procedures. § Such stated government 41-22-2(b), 1975. II. Evidentiary Whether the Matters Evidence Submitted Applies t o a 372-Bed I n a d d i t i o n t o d e t e r m i n i n g t h a t T r i n i t y ' s CON d i d not comply w i t h the 60% occupancy r u l e , the Hospital application circuit court a l s o d e t e r m i n e d t h a t T r i n i t y had p r e s e n t e d e v i d e n c e o n l y as to a The proposed circuit 398-bed h o s p i t a l , court not a 372-bed hospital. explained: "An a p p l i c a n t b e a r s t h e b u r d e n o f p r o d u c i n g e v i d e n c e d e m o n s t r a t i n g t h a t i t s CON a p p l i c a t i o n c o m p l i e s w i t h a l l o f t h e a p p l i c a b l e CON review c r i t e r i a . [Rule 410-1-6-.01(1), A l a . Admin. Code (SHPDA).] ... T r i n i t y i n t r o d u c e d volumes of e v i d e n c e i n s u p p o r t of i t s p r o p o s a l t o r e l o c a t e 398 b e d s , b u t i t i n t r o d u c e d no evidence of any kind regarding a 372-bed hospital. T r i n i t y i n t r o d u c e d no e v i d e n c e o f the cost o f a 372-bed p r o j e c t , no utilization and f i n a n c i a l p r o j e c t i o n s f o r a 372-bed p r o j e c t , and no a r c h i t e c t u r a l d r a w i n g f o r a 372-bed p r o j e c t . ... By a p p r o v i n g T r i n i t y t o r e l o c a t e 372 b e d s d e s p i t e t h e l a c k o f any e v i d e n c e r e g a r d i n g t h e c o s t , design, financial f e a s i b i l i t y , or bed complement o f a 13 2111014/2111015/21110 62/21110 63 372-bed p r o j e c t , SHPDA f a i l e d t o f o l l o w i t s own r e g u l a t i o n s r e q u i r i n g an a p p l i c a n t t o d e m o n s t r a t e c o m p l i a n c e w i t h a l l o f t h e a p p l i c a b l e CON r e v i e w criteria. [Rule] 410-l-6-.01(l)." SHPDA i s s u e d T r i n i t y a CON t o move 372 b e d s , n o t t h e 398 beds that Trinity concerning. had sought and had p r e s e n t e d evidence I n i s s u i n g T r i n i t y a CON t o move o n l y 372 b e d s , SHPDA f o u n d t h a t t h e e v i d e n c e s u p p o r t e d s u c h a move, e v i d e n t l y f i n d i n g t h a t t h e 26-bed r e d u c t i o n i s an i m m a t e r i a l change t h a t did not require the presentation of a d d i t i o n a l evidence. R e g a r d i n g t h i s f a c t u a l i s s u e , SHPDA's d e c i s i o n " s h a l l be t a k e n as prima f a c i e j u s t and reasonable substitute i t s judgment weight of the evidence." f o r that o f t h e agency § 41-22-20(k). e v e n i n c a s e s where t h e t e s t i m o n y i s meager, a n d r e a s o n a b l e and t h e c o u r t "'This s h a l l not as t o t h e holds i s generalized, the evidence minds might d i f f e r as t o t h e c o r r e c t r e s u l t . ' " C o l o n i a l Mgmt. G r o u p , L.P. v . S t a t e H e a l t h & Dev. A g e n c y , (quoting Planning Health 853 So. 2d 972, 975 Care Auth. (Ala. Planning C i v . App. 2002) o f H u n t s v i l l e v. S t a t e Health A g e n c y , 549 So. 2d 973, 975 ( A l a . C i v . App. 1989)). Regarding f a c t u a l matters, decision true a c i r c u i t c o u r t may r e v e r s e SHPDA's i f the decision i s " [ c ] l e a r l y erroneous i n view of the r e l i a b l e , p r o b a t i v e , and s u b s t a n t i a l e v i d e n c e o f t h e whole 14 2111014/2111015/2111062/2111063 record" or i s "[u]nreasonable, 41-22-20(k)(6) and (7). arbitrary, Moreover, or c a p r i c i o u s . " considering § SHPDA's r e c o g n i z e d e x p e r t i s e i n t h i s s p e c i a l i z e d a r e a , t h e w e i g h t and significance o f any g i v e n CON-application piece of evidence presented in a c a s e i s l e f t p r i m a r i l y t o SHPDA's d i s c r e t i o n . C o l o n i a l Mgmt. Group , 853 So. 2d a t 975. In this case, SHPDA d i d n o t e r r i n i m p l i c i t l y finding t h a t a r e d u c t i o n f r o m 398 b e d s t o 372 b e d s i s an i m m a t e r i a l change i n e v a l u a t i n g w h e t h e r t h e CON s h o u l d be g r a n t e d . change would Highway 280 not a f f e c t site. At Trinity's the acquisition hearing, cost Trinity That of the presented p r o j e c t i o n s r e g a r d i n g r e v e n u e a n d e x p e n s e s f o r t h e Highway 280 site based on a maximum of only 300 o c c u p i e d beds. Thus, t h o s e p r o j e c t i o n s w o u l d n o t change due t o a r e d u c t i o n f r o m 398 p r o p o s e d b e d s t o 372 p r o p o s e d b e d s . SHPDA as t o f a c t u a l area, the c i r c u i t matters Given the deference due a n d SHPDA's e x p e r t i s e i n this c o u r t e r r e d i n s o f a r as i t r e v e r s e d SHPDA's d e c i s i o n on t h i s i s s u e . Evidence In Regarding t h e Type o f H o s p i t a l Beds R e d u c e d r e v e r s i n g SHPDA's d e c i s i o n , t h e c i r c u i t 15 court also 2111014/2111015/2111062/2111063 determined record that "[t]here [on a p p e a l ] i s n o t even any e v i d e n c e a s t o what t y p e o f h o s p i t a l b e d s w i l l up t h e 372 b e d s f o r w h i c h T r i n i t y i s a p p r o v e d . " determination i n the i s unsupported by t h e r e c o r d . make However, t h a t In applying f o r 398 b e d s , T r i n i t y s o u g h t 317 " a c u t e c a r e " b e d s , 64 p s y c h i a t r i c b e d s , a n d 17 i n p a t i e n t - r e h a b i l i t a t i o n 398). The CONRB a w a r d e d stipulation that t h e number reduced by another Brookwood Trinity t h e CON of acute twenty-six and S t . V i n c e n t ' s beds care (26) b e d s . " a hospital they say, a hospital t o the be f u r t h e r ( E m p h a s i s added.) i s an " a c u t e a r e "acute care" care" facility; beds therefore, reduced T r i n i t y acknowledges t h a t , g e n e r a l l y , a l l beds i n may be r e f e r r e d t o a s " a c u t e a r e l o c a t e d i n an " a c u t e Trinity notes, between "general the State acute care" Health care A l a . Admin. Code care" beds facility. Plan beds," i n p a t i e n t - r e h a b i l i t a t i o n beds. -.10 beds i t i s u n c l e a r what t y p e o f b e d was a c t u a l l y by 26 b e d s . they "subject make a somewhat h y p e r t e c h n i c a l argument t h a t a l l beds i n a h o s p i t a l because (317 + 64 + 17 = makes However, as distinctions psychiatric See R u l e s because beds, and 410-2-4-.02, - . 0 8 , (SHPDA)(establishing different need m e t h o d o l o g i e s and p l a n n i n g areas f o r t h e t h r e e types o f b e d s ) . 16 2111014/2111015/2111062/2111063 We conclude that the 2 6 reduced beds are obviously general a c u t e - c a r e beds as opposed t o p s y c h i a t r i c beds o r i n p a t i e n t r e h a b i l i t a t i o n beds. Ex P a r t e S h e l b y M e d i c a l C e n t e r The Trinity circuit a CON court also because, reversed the decision the c i r c u i t court t o grant determined, the d e c i s i o n " i s i n d i r e c t c o n f l i c t w i t h " Ex p a r t e S h e l b y M e d i c a l C e n t e r , I n c . , 564 So. 2d 63 ( A l a . 1 9 9 0 ) . I n Ex p a r t e S h e l b y M e d i c a l C e n t e r , t h e L l o y d N o l a n d F o u n d a t i o n a p p l i e d f o r a CON to construct a hospital Jefferson i n the Riverchase area and n o r t h e r n Shelby Counties. of southern 564 So. 2d a t 65. L l o y d Noland a l r e a d y had a h o s p i t a l i n the area; L l o y d Noland planned to relocate a certain h o s p i t a l t o the proposed o l d e r h o s p i t a l open. number o f beds from that new h o s p i t a l w h i l e a l s o k e e p i n g t h e I d . a t 69. I n 1986, SHPDA g r a n t e d t h e CON f o r t h e new h o s p i t a l a f t e r h o l d i n g a one-day h e a r i n g . I d . a t 65. Unlike i n this c a s e , SHPDA d i d n o t make a n y f i n d i n g s of f a c t other than t r a c k i n g the requirements e s t a b l i s h e d i n § 22-21-266, A l a . Code 1975. I d . a t 70. After a series of a p p e a l s , o u r supreme c o u r t d e t e r m i n e d t h a t SHPDA h a d e r r e d i n 17 2111014/2111015/21110 62/21110 63 g r a n t i n g t h e CON. The supreme c o u r t c o n c l u d e d , among o t h e r t h i n g s , t h a t t h e r e was i n s u f f i c i e n t e v i d e n c e t o e s t a b l i s h of the f i v e services Shelby requirements found three Center, the ( 3 ) , and requirements the f a c t s of t h i s similarities Center, (5). i n light Initially, of § We or R e l y i n g on Ex p a r t e court i n this evidence 22-21-266, will facilities discuss case to establish i.e., § each 22-21- of these o f Ex p a r t e S h e l b y M e d i c a l C e n t e r a n d case. we n o t e t h a t , a l t h o u g h t h e r e a r e some f a c t u a l between there circuit t h e r e was i n s u f f i c i e n t of the requirements 266(1), inpatient i n § 22-21-266(1)-(5). Medical concluded that f o r new each are this also case a n d Ex p a r t e S h e l b y substantial Medical differences. Cases c o n c e r n i n g CON a p p l i c a t i o n s a r e f a c t - i n t e n s i v e , a n d i t i s v e r y u n l i k e l y t h a t two c a s e s w i l l e v e r have t h e same f a c t s . It is SHPDA's r e s p o n s i b i l i t y t o w e i g h t h e e v i d e n c e i n e a c h c a s e , a n d SHPDA i s afforded findings. Neither much deference this court i n making i t s factual nor the c i r c u i t court may " s u b s t i t u t e i t s j u d g m e n t f o r t h a t o f [SHPDA] as t o t h e w e i g h t of t h e e v i d e n c e on q u e s t i o n s o f f a c t . " 18 § 41-22-20(k). 2111014/2111015/2111062/2111063 § 22-21-266(1) As n o t e d e a r l i e r , a CON f o r new § 2 2 - 2 1 - 2 6 6 ( 1 ) p e r m i t s SHPDA t o i s s u e inpatient facilities only i f the "proposed f a c i l i t y or s e r v i c e i s c o n s i s t e n t " with the State Health I n Ex p a r t e Shelby Medical that "the [State Health care resources C e n t e r , t h e supreme c o u r t Plan. observed Plan] i s designed t o a l l o c a t e h e a l t h i n s u c h a way t h a t health care a v a i l a b l e and a c c e s s i b l e a t r e a s o n a b l e c o s t s . " services are 564 So. 2d a t 69. The supreme c o u r t t h e n d e t e r m i n e d t h a t " [ c ] o n s t r u c t i n g a new $26,270,000 h o s p i t a l i n an o v e r b e d d e d area, relocating c u r r e n t l y u n s t a f f e d b e d s i n t o t h e new h o s p i t a l , a n d p r o v i d i n g duplicative services [State Health the supreme Plan's] court i n t h e new h o s p i t a l do n o t p r o m o t e t h e goal of cost determined that containment." Id. SHPDA's d e c i s i o n t o g r a n t t h e CON t o L l o y d N o l a n d was i n c o n s i s t e n t w i t h t h e S t a t e Plan the and, t h e r e f o r e , circuit court v i o l a t e d § 22-21-266(1). f o u n d Ex p a r t e Thus, Health In t h i s Shelby Medical case, C e n t e r t o be d i r e c t l y on p o i n t . However, the pertinent facts d i s t i n g u i s h a b l e f r o m t h o s e i n Ex p a r t e It i s true that Jefferson in this Shelby Medical County i s c u r r e n t l y 19 case are Center. "overbedded," 2111014/2111015/2111062/2111063 i . e . , t h e r e a r e more h o s p i t a l b e d s i n t h e c o u n t y t h a n as was t h e c a s e the i n Ex p a r t e S h e l b y M e d i c a l C e n t e r . p r o p o s e d move b y T r i n i t y substantially needed, However, t o t h e Highway 280 s i t e r e d u c e t h e number o f T r i n i t y ' s beds. would Trinity c u r r e n t l y h a s 560 b e d s , b u t i t w o u l d be a l l o w e d t o move o n l y 372 b e d s , w h i c h w o u l d r e d u c e t h e number o f b e d s i n J e f f e r s o n County Center, by 188. Thus, the proposed r e l o c a t i o n a l l e v i a t e overbedding. Medical unlike Center, hospital, i n Ex p a r t e i n this Furthermore, Trinity i s seeking n o t d i v i d e i t s beds case Shelby Medical would actually u n l i k e i n Ex p a r t e Shelby to relocate i t s entire between two h o s p i t a l s . The r e l o c a t i o n would not p r o v i d e d u p l i c a t i v e s e r v i c e s because a l l of Trinity's site. s e r v i c e s w o u l d be p r o v i d e d a t t h e Highway 280 F o r t h e s e r e a s o n s , Ex p a r t e S h e l b y M e d i c a l C e n t e r does not e s t a b l i s h t h a t r e l o c a t i n g T r i n i t y ' s h o s p i t a l would f a i l t o promote t h e g o a l o f c o s t containment found i n t h e S t a t e H e a l t h Plan. Thus, determining we conclude that the c i r c u i t court t h a t Ex p a r t e S h e l b y M e d i c a l C e n t e r erred i n dictates the conclusion that the proposed f a c i l i t y i s i n c o n s i s t e n t w i t h the State Health Plan. 20 2111014/2111015/2111062/2111063 § 22-21-266(3) S e c t i o n 2 2 - 2 1 - 2 6 6 ( 3 ) p e r m i t s SHPDA t o i s s u e a CON f o r new inpatient facilities only i f "existing providing inpatient services similar inpatient t o those facilities proposed are b e i n g u s e d i n an a p p r o p r i a t e a n d e f f i c i e n t manner c o n s i s t e n t with community Medical Center, requirement the area demands our for services." supreme was n o t met. court I n Ex p a r t e determined Shelby that this The c o u r t b a s e d i t s d e t e r m i n a t i o n on f a c t t h a t , "while the population i n the proposed s e r v i c e i s increasing, t h e occupancy hospitals are f a l l i n g . " circuit 564 So. 2d a t 69. court found the reasoning controlling on t h i s rates issue. for surrounding I n t h i s case, the o f t h e supreme c o u r t t o be The c i r c u i t court noted that h o s p i t a l s i n J e f f e r s o n C o u n t y c o n t i n u e t o have a l o w o c c u p a n c y rate and difficult that the economic reimbursement rates "low occupancy conditions and rates, the a v a i l a b l e i n Alabama, combined with relatively low have created an extremely d i f f i c u l t o p e r a t i n g environment f o r J e f f e r s o n County hospitals." circuit Citing Ex court concluded parte Shelby Medical Center, the t h a t " t h e r e i s no way t h a t SHPDA c a n 21 2111014/2111015/21110 62/21110 63 make a f i n d i n g t h a t existing Jefferson being appropriate 'used i n an County h o s p i t a l s are and e f f i c i e n t manner,' as r e q u i r e d b y § 22-21-2 6 6 ( 3 ) . " However, t h i s c a s e c o n t a i n s e v i d e n c e t h a t was n o t p r e s e n t in Ex p a r t e circuit Shelby court's Medical judgment Center. As T r i n i t y d i d not discuss i n d i c a t i n g t h a t Brookwood and S t . V i n c e n t ' s an appropriate and e f f i c i e n t t h a t Brookwood t r e a t s n e a r l y manner. notes, the certain evidence are being used i n The r e c o r d indicates 40,000 p a t i e n t s a n n u a l l y emergency department, orthopedics s e r v i c e s a n d some s p e c i a l t y s e r v i c e s , h a s t h e most active provider. indicating that The record St. Vincent's i n i t s primary-care recently high experienced growth in i t s s u r g i c a l volumes i n Alabama, and i s Alabama's l a r g e s t outpatient growth has inits also contains has e x p e r i e n c e d services evidence significant and s u r g i c a l s e r v i c e s , s o u g h t a CON f o r a d d i t i o n a l a c u t e - c a r e b e d s due t o occupancy r a t e s , and has s t a t e d t h e need f o r a d d i t i o n a l critical-care circuit court "Jefferson beds t o meet demand. Furthermore, as t h e a c k n o w l e d g e d i n i t s j u d g m e n t , SHPDA f o u n d County has a w o r l d - c l a s s health that system" and t h a t " p e o p l e come t o J e f f e r s o n C o u n t y f o r h e a l t h c a r e f r o m a l l o v e r 22 2111014/2111015/2111062/2111063 t h e s t a t e , t h e s o u t h e a s t , a n d t h e w o r l d , " f i n d i n g s t h a t do n o t a p p e a r t o be d i s p u t e d . We emphasize again that the c i r c u i t court may not " s u b s t i t u t e i t s j u d g m e n t f o r t h a t o f [SHPDA] as t o t h e w e i g h t of t h e evidence this case, on q u e s t i o n s of f a c t . " § 41-22-20(k). t h e r e was s u b s t a n t i a l e v i d e n c e In s u p p o r t i n g SHPDA's f i n d i n g t h a t e x i s t i n g h o s p i t a l s i n J e f f e r s o n County a r e b e i n g " u s e d i n an a p p r o p r i a t e a n d e f f i c i e n t manner," as r e q u i r e d b y § 22-21-266(3). V i e w i n g SHPDA's f i n d i n g t h r o u g h t h e p r i s m o f our standard deferential " [ c ] l e a r l y erroneous of review, i n view that finding of the r e l i a b l e , was n o t p r o b a t i v e , and s u b s t a n t i a l evidence o f t h e whole r e c o r d " o r " [ u ] n r e a s o n a b l e , arbitrary, or c a p r i c i o u s . " § 41-22-20(k)(6) and ( 7 ) . § 22-21-266(5) Section 22-21-266(5) t h a t must be s a t i s f i e d SHPDA must find provides i n this "[t]hat y e t another case. Under t h a t patients w i l l requirement provision, experience serious problems i n o b t a i n i n g i n p a t i e n t care of the type proposed i n the absence o f t h e proposed Medical Center, the new s e r v i c e . " supreme 23 court I n Ex p a r t e concluded that Shelby this 2111014/2111015/2111062/2111063 r e q u i r e m e n t h a d n o t been s a t i s f i e d . among o t h e r The supreme c o u r t noted, t h i n g s , t h a t t h e s e r v i c e s t o be o f f e r e d b y L l o y d Noland's p r o p o s e d h o s p i t a l "would d u p l i c a t e those o f f e r e d by existing circuit that facilities court i n the area." 564 So. 2d a t 70. f o u n d t h e same t o be t r u e i n t h i s there are 7 h o s p i t a l s located Highway 280 s i t e i n Birmingham. within case, noting 10 m i l e s The c i r c u i t The of the court also noted the ready a v a i l a b i l i t y of h i g h - q u a l i t y h e a l t h - c a r e s e r v i c e s i n Jefferson County. Thus, the c i r c u i t court determined that SHPDA e r r e d b y f i n d i n g t h a t p a t i e n t s w i l l experience serious problems i f Trinity i s not allowed i n obtaining case presents are s i m i l a r i t i e s between t h e cases, f a c t s t h a t were n o t e v i d e n t Center. relocate, the In short, Highway the area 280 situation. F o r one, t h e r e experiences chronic affects care to relocate. Although there Medical needed h e a l t h the time emergency treatment hospitals located from where T r i n i t y corridor, presents i s no d i s p u t e traffic needed i n Ex p a r t e that congestion. to transport t h e Highway t o the north 24 Shelby seeks t o a unique Highway That patients 280 this 280 congestion i n need o f area to local o f t h e Highway 280 site, 2111014/2111015/21110 62/21110 63 including fire the Montclair chief, testified campus. that Ivor Brooks, there Birmingham's was a " g r e a t need" fora h o s p i t a l i n t h e Highway 280 a r e a , w h i c h he d e s c r i b e d a s h a v i n g experienced a "population having a hospital travel time explosion." a t t h e Highway and i n c r e a s e Brooks explained 280 the chances r e q u i r i n g emergency-room t r e a t m e n t . site would that decrease of s u r v i v a l i n cases S i m i l a r l y , more t h a n 60 paramedics and f i r e - a n d - r e s c u e supporting T r i n i t y ' s p r o p o s e d move t o t h e Highway 280 s i t e . Also, there extensive i s no h o s p i t a l area between personnel located submitted on Highway letters 280 i n t h e Brookwood's h o s p i t a l and S y l a c a u g a , l o c a t e d south o f Birmingham; T r i n i t y seeks t o r e l o c a t e i n t h a t area, away f r o m t h e c l u s t e r o f h o s p i t a l s t o t h e n o r t h . I n i t s d e c i s i o n , SHPDA s u m m a r i z e d t h e u n i q u e n e e d f o r a h o s p i t a l a t t h e Highway 280 s i t e : "In t h e absence o f t h i s [proposed] facility, p a t i e n t s i n southern J e f f e r s o n and n o r t h e r n Shelby c o u n t i e s , as w e l l as c e r t a i n p a t i e n t s t o t h e n o r t h , s o u t h a n d w e s t o f T r i n i t y ' s e x i s t i n g campus, w i l l experience s e r i o u s problems i n o b t a i n i n g needed healthcare. The p r o p o s e d r e l o c a t i o n w o u l d i m p r o v e a c c e s s t o , and a v a i l a b i l i t y o f , e m e r g e n c y room services f o r patients i n the region by making T r i n i t y more a c c e s s i b l e f o r a l l p a t i e n t s due t o t h e h o s p i t a l ' s p r o x i m i t y t o a l l of t h e area's major r o a d w a y s , as w e l l a s t o t h o s e u n d e r s e r v e d p a t i e n t s r e s i d i n g i n t h e i m m e d i a t e a r e a a r o u n d t h e Highway 25 2111014/2111015/2111062/2111063 280 s i t e a n d f u r t h e r corridor." Considering see § that down t h e Highway 280 t h e d e f e r e n c e due SHPDA's f i n d i n g s o f f a c t , 41-22-20(k), finding [south] we patients conclude will that SHPDA experience d i d not e r r i n serious problems i n o b t a i n i n g n e e d e d h e a l t h c a r e i f T r i n i t y i s n o t a l l o w e d t o move its hospital. Ex parte Shelby Medical d i s t i n g u i s h a b l e a n d i s n o t c o n t r o l l i n g on t h i s Center is point. Conclusion The c i r c u i t c o u r t e r r e d i n r e v e r s i n g SHPDA's d e c i s i o n t o permit site. the Trinity to relocate We r e v e r s e i t s h o s p i t a l t o t h e Highway 280 the c i r c u i t court's case f o r the e n t r y j u d g m e n t , a n d we remand o f a judgment i n f a v o r of T r i n i t y . 2111014 -- REVERSED AND REMANDED. 2111015 -- REVERSED AND REMANDED. 2111062 -- REVERSED AND REMANDED. 2111063 -- REVERSED AND REMANDED. Thompson, concur. P . J . , and P i t t m a n , 26 Thomas, a n d Moore, J J . ,

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