2020 Georgia Code
Title 31 - Health
Chapter 6 - State Health Planning and Development
Article 3 - Certificate of Need Program
§ 31-6-42. Qualifications for Issuance of Certificate

1. The written findings of fact and decision, with respect to the department's grant or denial of a certificate of need, shall be based on the applicable considerations specified in this Code section and reasonable rules promulgated by the department interpretive thereof. The department shall issue a certificate of need to each applicant whose application is consistent with the following considerations and such rules deemed applicable to a project, except as specified in subsection (f) of Code Section 31-6-43:
   1. The proposed new institutional health services are reasonably consistent with the relevant general goals and objectives of the state health plan;
   2. The population residing in the area served, or to be served, by the new institutional health service has a need for such services;
   3. Existing alternatives for providing services in the service area the same as the new institutional health service proposed are neither currently available, implemented, similarly utilized, nor capable of providing a less costly alternative, or no certificate of need to provide such alternative services has been issued by the department and is currently valid;
   4. The project can be adequately financed and is, in the immediate and long term, financially feasible;
   5. The effects of new institutional health service on payors for health services, including governmental payors, are not unreasonable;
   6. The costs and methods of a proposed construction project, including the costs and methods of energy provision and conservation, are reasonable and adequate for quality health care;
   7. The new institutional health service proposed is reasonably financially and physically accessible to the residents of the proposed service area;
   8. The proposed new institutional health service has a positive relationship to the existing health care delivery system in the service area;
   9. The proposed new institutional health service encourages more efficient utilization of the health care facility proposing such service;
   10. The proposed new institutional health service provides, or would provide, a substantial portion of its services to individuals not residing in its defined service area or the adjacent service area;
   11. The proposed new institutional health service conducts biomedical or behavioral research projects or new service development which is designed to meet a national, regional, or state-wide need;
   12. The proposed new institutional health service meets the clinical needs of health professional training programs which request assistance;
   13. The proposed new institutional health service fosters improvements or innovations in the financing or delivery of health services, promotes health care quality assurance or cost effectiveness, or fosters competition that is shown to result in lower patient costs without a loss of the quality of care;
   14. The proposed new institutional health service fosters the special needs and circumstances of health maintenance organizations;
   15. The proposed new institutional health service meets the department's minimum quality standards, including, but not limited to, standards relating to accreditation, minimum volumes, quality improvements, assurance practices, and utilization review procedures;
   16. The proposed new institutional health service can obtain the necessary resources, including health care personnel and management personnel; and
   17. The proposed new institutional health service is an underrepresented health service, as determined annually by the department. The department shall, by rule, provide for an advantage to equally qualified applicants that agree to provide an underrepresented service in addition to the services for which the application was originally submitted.
2. In the case of applications for the development or offering of a new institutional health service or health care facility for osteopathic medicine, the need for such service or facility shall be determined on the basis of the need and availability in the community for osteopathic services and facilities in addition to the considerations in subsection (a) of this Code section. Nothing in this chapter shall, however, be construed as otherwise recognizing any distinction between allopathic and osteopathic medicine.
   1. Paragraphs (4), (5), (6), (9), (12), (13), (15), (16), and (17) of subsection (a) of this Code section;
   2. That the proposed new destination cancer hospital can demonstrate, based on historical data from the applicant or its affiliated entities, that its annual patient base shall be composed of a minimum of 65 percent of patients who reside outside of the State of Georgia;
   3. That the proposed new destination cancer hospital states its intent to provide uncompensated indigent or charity care which shall meet or exceed 3 percent of its adjusted gross revenues and provide care to Medicaid beneficiaries;
   4. That the proposed new destination cancer hospital shall conduct biomedical or behavioral research projects or service development which is designed to meet a national or regional need;
   5. That the proposed new destination cancer hospital shall be reasonably financially and physically accessible;
   6. That the proposed new destination cancer hospital shall have a positive relationship to the existing health care delivery system on a regional basis;

      (6.1) That the proposed new destination cancer hospital shall enter into a hospital transfer agreement with one or more hospitals within a reasonable distance from the destination cancer hospital or the medical staff at the destination cancer hospital has admitting privileges or other acceptable documented arrangements with such hospital or hospitals to ensure the necessary backup for the destination cancer hospital for medical complications. The destination cancer hospital shall have the capability to transfer a patient immediately to a hospital within a reasonable distance from the destination cancer hospital with adequate emergency room services. Hospitals shall not unreasonably deny a transfer agreement with the destination cancer hospital. In the event that a destination cancer hospital and another hospital cannot agree to the terms of a transfer agreement as required by this paragraph, the department shall mediate between such parties for a period of no more than 45 days. If an agreement is still not reached within such 45 day period, the parties shall enter into binding arbitration conducted by the department;

   7. That an applicant for a new destination cancer hospital shall document in its application that the new facility is not predicted to be detrimental to existing hospitals within the planning area. Such demonstration shall be made by providing an analysis in such application that compares current and projected changes in market share and payor mix for such applicant and such existing hospitals within the planning area. Impact on an existing hospital shall be determined to be adverse if, based on the utilization projected by the applicant, such existing hospital would have a total decrease of 10 percent or more in its average annual utilization, as measured by patient days for the two most recent and available preceding calendar years of data; and
   8. That the destination cancer hospital shall express its intent to participate in medical staffing work force development activities.

      the department shall not apply the consideration contained in paragraph (2) of subsection (a) of this Code section.

3. If the denial of an application for a certificate of need for a new institutional health service proposed to be offered or developed by a:
   1. Minority administered hospital facility serving a socially and economically disadvantaged minority population in an urban setting; or
   2. Minority administered hospital facility utilized for the training of minority medical practitioners

      would adversely impact upon the facility and population served by said facility, the special needs of such hospital facility and the population served by said facility for the new institutional health service shall be given extraordinary consideration by the department in making its determination of need as required by this Code section. The department shall have the authority to vary or modify strict adherence to the provisions of this chapter and the rules enacted pursuant hereto in considering the special needs of such facility and its population served and to avoid an adverse impact on the facility and the population served thereby. For purposes of this subsection, the term "minority administered hospital facility" means a hospital controlled or operated by a governing body or administrative staff composed predominantly of members of a minority race.

4. For the purposes of the considerations contained in this Code section and in the department's applicable rules, relevant data which were unavailable or omitted when the state health plan or rules were prepared or revised may be considered in the evaluation of a project.
5. The department shall specify in its written findings of fact and decision which of the considerations contained in this Code section and the department's applicable rules are applicable to an application and its reasoning as to and evidentiary support for its evaluation of each such applicable consideration and rule.

(b.1)In the case of applications for the construction, development, or establishment of a destination cancer hospital, the applicable considerations as to the need for such service shall not include paragraphs (1), (2), (3), (7), (8), (10), (11), and (14) of subsection (a) of this Code section but shall include:

(b.2)In the case of applications for basic perinatal services in counties where:

Only one civilian health care facility or health system is currently providing basic perinatal services; and

There are not at least three different health care facilities in a contiguous county providing basic perinatal services,

(Code 1981, §31-6-42, enacted by Ga. L. 1983, p. 1566, § 1; Ga. L. 1984, p. 22, § 31; Ga. L. 1999, p. 296, § 22; Ga. L. 2008, p. 12, § 1-1/SB 433.)

- Ga. L. 2008, p. 12, § 3-1/SB 433, not codified by the General Assembly, provides that the amendment to this Code section shall only apply to applications submitted on or after July 1, 2008.

- For annual survey on administrative law, see 64 Mercer L. Rev. 39 (2012).

JUDICIAL DECISIONS

Definition of "part of a hospital" not unconsitutionally vague.

- Ga. Comp. R. Regs. 111-2-2-.40, which provided that an ambulatory surgical center (ASC) that was part of a hospital was not subject to more stringent certificate of need (CON) specifications, was not unconstitutionally vague because it stated two clear examples of when an ASC was part of a hospital and provided that other situations would be considered under a case-by-case review by the Department of Community Health. Ga. Dep't of Cmty. Health v. Northside Hosp., Inc., 295 Ga. 446, 761 S.E.2d 74 (2014).

- Review Board (now Certificate of Need Appeal Panel) could use not only the considerations listed in O.C.G.A. § 31-6-42, but also State Health Planning and Development Agency (now Department of Community Health) standards and criteria in interpreting those standards to make a decision in the case before the board. North Fulton Community Hosp. v. State Health Planning & Dev. Agency, 168 Ga. App. 801, 310 S.E.2d 764 (1983).

In determining whether a given application was consistent with the considerations set forth in O.C.G.A. § 31-6-42 and the State Health Planning Agency (now Department of Community Health) rules, the board was entitled to place more emphasis on one consideration than another absent some mandatory language to the contrary, and such emphasis was entitled to great deference by a reviewing court. Medical Ctr., Inc. v. State Health Planning Agency, 219 Ga. App. 334, 464 S.E.2d 925 (1995).

- Two hospitals that opposed an application for a certificate of need for perinatal services failed to show any harm resulting from alleged deficiencies in the initial decision issued by a hearing officer of the Department of Community Health which prejudiced the hospitals' ability to present their case to the hearing officer. The hospitals could have, but did not, present additional evidence pursuant to O.C.G.A. § 31-6-44. Palmyra Park Hosp., Inc. v. Phoebe Sumter Med. Ctr., 310 Ga. App. 487, 714 S.E.2d 71 (2011).

- Determination by the State Health Planning Agency (now Department of Community Health) that the establishment of open heart surgery service at two applying hospitals would adversely impact existing service was supported by evidence that open heart service at another hospital would be reduced to less than 350 procedures annually and by more than ten percent of its total annual volume. Hospital Auth. v. State Health Planning Agency, 211 Ga. App. 407, 438 S.E.2d 912 (1993).

Trial court erred by reversing a decision of the Department of Community Health denying an ambulatory surgery center's application for a certificate of need to develop an orthopedic center in a city as the trial court substituted the court's own judgment for that of the agency since the Department made a finding that the service area already had a surplus of operating rooms, which were significantly underutilized, and the ambulatory surgery center failed to prove that any specific patient population was in need of the new center or that any barrier to quality care existed. Surgery Ctr., LLC v. Hughston Surgical Inst., LLC, 293 Ga. App. 879, 668 S.E.2d 326 (2008).

Appellate court reinstated the agency denial of a Certificate of Need to establish an inpatient psychiatric hospital because the agency's conclusion that the applicant did not meet the applicant's burden of establishing no adverse impact on similar existing programs was supported by substantial evidence, in particular, expert testimony and exhibits regarding the applicant's unrealistic projections, overinflated market share, and failure to account for an existing facility's additional 30 pediatric beds. Tanner Med. Ctr., Inc. v. Vest Newnan, LLC, 337 Ga. App. 884, 789 S.E.2d 258 (2016).

Reversal of the agency and denial of a Certificate of Need (CON) was affirmed because the atypical barrier exception did not support the agency's grant of the CON as its interpretation of the atypical barrier exception in the rule was inconsistent with the plain language of the rule, clearly erroneous, and prejudiced the substantial rights of the challenging hospitals who already provided the same services. ASMC, LLC v. Northside Hosp., Inc., 344 Ga. App. 576, 810 S.E.2d 663 (2018), cert. denied, 2018 Ga. LEXIS 610 (Ga. 2018).

Cited in St. Joseph's Hosp. v. Hospital Corp. of Am., 795 F.2d 948 (11th Cir. 1986).