IN THE SUPREME COURT OF MISSISSIPPI NO. 2015-SA-01464-SCT BAPTIST MEMORIAL HOSPITAL-DESOTO, INC. d/b/a BAPTIST MEMORIAL HOSPITAL-DESOTO

v. MISSISSIPPI STATE DEPARTMENT OFHEALTH AND METHODIST HEALTHCAREOLIV E BRANCH HOSPITAL

DATE OF JUDGMENT: 08/28/2015 TRIAL JUDGE: HON. DENISE OW ENS COURT FROM W HICH APPEALED: HINDS COUNTY CHANCERY COURT ATTORNEY FOR APPELLANT: BARRY K. COCKRELL ATTORNEYS FOR APPELLEES: CASSANDRA S. W ALTER KATHRYN RUSSELL GILCHRIST ALLISON TRELOAR JONES NATURE OF THE CASE: CIVIL - STATE BOARDS AND AGENCIES DISPOSITION: AFFIRMED - 03/30/2017 MOTION FOR REHEARING FILED: MANDATE ISSUED:

EN BANC.
MAX WELL, JUSTICE, FOR THE COURT: ¶1. The Mississippi State Departm ent of Health (MSDH) i s t asked with a ddressing
M ississippians’ h ealthcare through the State Health P lan and the certif i cate-of -need regulatory schem e. T he State Health Plan sets the g oals and c r i t e r i a f or healthcare in the

state. And the certif

icate-of

- need process ensures healthcare providers m axim ize access to quality healthcare, while m inim izing cost and inef f iciency

.¶2. Citing the 2014 State H e a lth Plan, Methodist Healthcare

- Olive Branch Hospital

(Methodist) applied f

or a certif

icate of need (CON)—seekin g approval to perf orm percutaneous coronary intervention(s), a ty pe of cardiac procedure, at its O l i v e B r a nch hospital. But Baptist Mem orial Hospital - DeSoto (Baptist)—a com peting hospital f

rom the

sam e service area—contested Methodist’s application. MSDH held a hearing a nd u ltim ately approved Methodist’s application. Baptist appealed to the H i n d s County Chancery Court. And a f ter review, the chancellor af f irm ed MSDH’s decisi o n . Baptist now appeals to this
Court. ¶3. On appeal, we give great def erence t o M S DH’s decisions. And we a f f irm those decisions if supported by substantial evidence. 1 Here, w e f ind s ubstantial evidence that Methodist’s application substantially com plied with t he State Health Plan and was consistent with its requirem ents. So we af f irm

. B ackground Facts and Procedural History ¶4. On July 29, 2010, Methodist a pplied f or and was granted a CON. This CON authorized Methodist to construct a 100-bed, a c ute-care hospital in DeSoto County , Mississippi. The CON f urther allowed Met h o d i s t t o provide diagnostic a nd therapeutic cardiac catheterizations. The hospital opened August 26, 2 013, and began treating patients in Decem b er 2013. W hen M e t h o d i s t w a s granted its CON in 2010, the Mississippi State Health Plan allowed healthcare providers to perf orm therapeutic cardiac catheterization(s) only i f the provider had a n on-site, open-heart-surgery p rogram . But the State Health Plan

1 See CLC of Biloxi, LLC v. Miss. Dep’t o f H ealth , 91 So. 3d 6 33, 6 39 (Miss. 2012), and Miss. State Dep’t of Health v. Rush Care, Inc. , 882 So. 2d 205, 210-11 (Miss. 2004). 2was m o dif

ied i n 2 0 14 to allow p ercutaneous coronary interv e n t i o n ( s ) (PCI)—a ty pe of therapeutic cardiac catheterization—without r equiring an on-site, o pen-heart-surgery
program . ¶5. In response, Methodist—whose on-site, o pen-heart-surgery program was n o t y et operational—applied f

or a s epar a t e C O N to perf o rm PCIs. MSDH reviewed Methodist’s application and r ecom m ended to grant it. MSDH issued the statutorily required notice to the public and o ther h e a l t h c a re providers in the service area. 2 And Baptist requested a public hearing, which was held on August 14 and 15, 2014. ¶6. The hearing f

ocused on f

our of the nine criteria f or the acquisition or control of therapeutic cardiac catheterization equipm ent and/or services, under Section 115.04 of the 2014 State Health Plan: Criterion 1: the m inim

u m population base required in the service area(s) Criterion 2: the m i nim

um num ber o f diagnostic a nd therapeutic procedures required annually Criterion 7: the requirem ents f o r o f f e r i n g P C I s w i thout an o n-site, openheart-surgery

program Criterion 9: the m inim

u m n u m ber of diagnostic c atheterization procedures required i n the two m ost recent y ears, prior to an application, f or existing diagnostic c atheteri z a t i o n p r o v i d e r s s e e king to establish a therapeutic cardiac catheterization program

2 Mississippi Code Section 41-7-197 r equires wr i t t e n n o t i fi c a t i o n fr o m M S D H t o o t her healthcare f

acilities i n the service area and n otice by publication to the public in the service area. A public hearing m ay be held upon request by a n af f ected party , i.e., other h ealthcare f acilities or private citizens. Miss. Code Ann. § 41-7-197 (Supp. 2016). 3¶7. Don Eicher t estif ied f or MSDH, presenting Methodist’s application and MSDH’s

recom m endation. He believed M e t h o d ist’s project was consistent with the State Health Plan’s regulatory g oals. M ethodist presented f ourteen witnesses—ranging f r om phy sicians, nurses, and em ergency - services representatives to the present and f orm e r May ors of

Olive Branch and an expert in hospital planning. Baptist of f ered only one witness—an expert in hospital planning. Thirty -three separate exhibits were presented to the hearing of f icer. ¶8. The h earing of

f i cer f ound that Methodist’s application s u b s t a n t i a l l y c o m

p l i e d with the
State Health Plan. And h e subm itted these f indings to the M ississippi State Health Of f icer, who agreed with the recom m endations and granted Methodist a CON. ¶9. Upset w ith this d ecision, Baptist appealed to the Hinds County Chancery C o urt. Both Methodist and Baptist subm itted b rief s to the chancellor. On appeal, Baptist only contested
MSDH’s interpretation and appl i c a t i o n of C riteria 1 and 9 o f Section 115.04 of the 2014
State Health Plan. 3 B aptist argued MSDH had wrongly c o ncluded the m inim um -population

3 Under Section 115.04 of the 2014 State Health Plan, Criterion 1 states in f ull: The applicant shall docum ent a m inim um population b ase o f 100,000 in the CC/OHSPA where t he proposed therapeutic cardiac c atheterization equipm ent/service is to be located. Division of Health Planning and Resource Developm ent population projections shall be used. And Criterion 9 states in f u ll:
An a p p l i c a n t p r o p o s i n g t

h e e s t a b l i s h m e nt of therapeutic cardiac c atheterization services, who is already an existing p rovider of d iagnostic c atheterization services, shall dem onstrate that its diagnostic cardiac catheterization unit h as been utilized f

or a mi n i m

um o f 300 procedures per y ear f o r the two m ost recent y ears as ref

lected in the data supplied to a n d / o r v e r if ied by the Mississippi State Departm ent of Health. 4criteri o n was m et and im properly waived the m inim um -procedure criterion. But the chancellor disagreed. ¶10. For C riterion 1, the chancellor f ound M ethodist had properly docume n t e d t he population in the proposed serv i c e a r e a . A t t he tim e there w ere 311,111 people, with substantial f

uture population g r o w t h

. A nd MSDH was not required to conduct a m arketshare analy sis to divide t he population between Baptist and Methodist. The chancellor held Baptist f ailed to dem o n strate MSDH’s chosen m ethodology was arbitrary

or capricious. ¶11. The chancellor a l s o f o u nd MSDH could reasonably conclude Criterion 9 did not disqualif y providers f

r o m seeking a therapeutic catheterization program , i f t he p rovider’s diagnostic catheterization program was l e s s t h a n two y ears old. This determ ination was deem ed reasonable, since Criterion 9 d o e s n o t require an applicant to be a d iagnostic catheterization provider f or two y ears bef

ore apply ing f

or a t herapeuti c c atheterization
program . Alternatively , t he c hancellor f ound Crite r i o n 9 i napplicable because Methodist had

an existing therapeutic cardiac catheterization program . S he f ound Criterion 9 deals solely with providers s eeking t o establish such a program . As the chancellor saw it, Methodist was already in com

pliance with t he State He a l t h Plan because its therapeutic c atheterization
program had already been approved. Thus, it d id not h a v e t o me e t the C riterion 9 requirem ent. Based o n t hese f indings, the chancellor af f irm e d MSDH’s decision. Baptist has now appealed to this Court.
Discussion

5¶12. Mississippi Code Section 41-7-193(1) (Supp. 2016) g ove r ns C ON approvals. The

statute is c lear that no CON s h a l l b e granted unless it has been “reviewed f or consistency with the s pecif

ications and c riteria established by the State Departm ent of Health and

s u b s t a n t i a l l

y complies with the projection of need as reported in the State Health Plan in ef f ect at the tim e . . . .” Miss. Code Ann. § 41-7-193(1) (em phasis added). ¶13. This Court’s standard of review f or adm inistrative a g ency decisions applies to CON appeals: The o rder shall not be vacated or s et a s ide, e ither in who l e o r in part, except f or errors o f law, unless the court f inds that the order o f the State D epartm ent of Health is not supported by substantial evidence, is contrary t o the m anif e st weight o f t he evidence, is in excess of t he statutory a uthority or jurisdiction of the State Departm ent of Health, o r violates any v ested c onstitutional rights of any party involved in the appeal. Miss. Code Ann. § 41-7-201(2)(f ) (Supp. 2016). W e af

f o r d “ g r e a t def

erence” to the decisions of hearing of

f i cers and the State Health Of f icer. M i s s . State Dep’t of Health v. Natchez Cm ty. Hosp. , 743 So. 2d 973, 976 (Miss. 1999) (citations om itted). But if MSDH’s decision i s n ot based on su b s t a n t i a l e vidence, “ i t necessarily f ollows that the decision is arbitrary and capricious.” Queen City Nursing Ctr., Inc. v. Miss. State Dep’t of Health , 80 So. 3d 73, 78 (Miss. 2011) (quoting Natchez Cm ty. Hosp. , 743 So. 2d at 977). ¶14. “The burden of proof rests on the challenging p arty to p rove that MSDH erre d .”
Jackson HMA, I

nc. v. Miss. State Dep’t of Health , 822 So. 2d 968, 970 (Miss. 2002) (citing
Delta R eg’l Med. Ctr. v. Miss. State Dep’t of Health , 759 So. 2d 1174, 1176 (Miss. 1999)). And t his Court will af

f irm a de c i s i o n b y MSDH, d espite a n im perf ect analy sis or review, where the decision is supported by substantial evidence. See CLC of Biloxi, LLC v. Miss.

6Dep’t of Health , 91 So. 3d 6 33, 6 39 (Miss. 2012) (MSDH’s decisions should be af f irm ed where supported by substantial evidence, even w h e r e it allegedly f ailed t o f ollow its own regulations or em

p l oy ed im perf e ct m ethods); see also Miss. State Dep’t of Health v. Rush Care, Inc. , 882 So. 2d 205, 210-11 (Miss. 2004) (this C o u r t u p holds MSDH’s decisions based on substantial evidence, even when im perf ect analy sis is used). ¶15. On appeal t o this Court, B aptist attacks the chancellor’s d ecision, again claim ing
MSDH’s interpretation and application of Criteria 1 and 9 o f S ection 115.04 of the 2014
S t a t e H e a l th Plan w ere arbitrary and capricious. But t his Court f i nds Methodist’s CO N application substantially com pl i e d w i t h t he 2014 State H ealth P lan, and that MSDH’s f indings are supported by

substantial evidence. Thus, f or these reasons, we af

f irm

. I. Criterion 1 - Minim um Population Base ¶16. W h ile dif

f erent m ethodologies exist to m easure whether a CON applicant m eets the

m inim um -population criterion, the ultim ate goal “is to determ ine need.” HTI Health Servs. of M i ss., I nc. v. Miss. State Dep’t of H e a l t h , 6 03 S o. 2d 8 48, 853 (Miss. 1992). Baptist, however, pitches a v e ry narrow view of how it believes MSDH should determ ine need. As Baptist see s it, MSDH has a “longstanding p ractice” of using m arket-share analy sis. So it

was required to apply a m arket-share a naly sis t o the service area p o p u lation to ensure Methodist’s m arket share m e t the 1 00,000 m ark. In other words, Baptist insists m arket-share analy sis i s ma ndatory

. As support, B aptist c ites cases where this Court af f i rm e d MSDH’s

use of m arket-share analy sis f or m inim um -population c alculations. But what B aptist m isses

7is that those cases s ay m arket-share analy s is is an allowable m ethod—no t t h e sole m ethod

to consider the m i nim

um -population criterion. 4 ¶17. Indeed, this Court has never m andated MSDH p erf orm a m arket-share analy sis when considering m inim

um -population criteria. Nor does the a p plicable State Health P lan support this v iew. Paragraph 7 of Section 115.02 of the 2014 S tate Health Plan explains MSDH may

u s e d if f erent m ethodologies to analy ze a CON application, depending upon th e circum stances. 5 Furtherm ore, t his Court has af f irm ed MSDH’s use of a dif f e r e nt

m ethodology based on the circum stances of that application. Miss. State Dep’t of Health

v. Sw. Miss. Reg’l Med. C tr. , 580 So. 2d 1238, 1241-42 ( Miss. 1991). So, despite Baptist’s protestations, sim

ply because MSDH has applied a certain m ethodology in the past, its use of an alternative m ethod is not itself arbitrary or capricious. 6

4 For exam

ple, Baptist cites HTI Health Servs. of Miss., Inc. , 603 So. 2d 848 (the use of m arket-share m ethodology d oes not exceed MSDH’s s tatutory authority ); S w. Miss. Reg’l Med. Ctr. , 580 So. 2d 1238 (the m inim um -population criterion a i m s t o prevent a h ealthcare program f rom being established t hat will b e underutilized); Miss. State Dep’t of Health v. Golden Triangle Reg’l Med. Ctr. , 603 So. 2 d 8 54 (M iss. 1 992) (MSDH’s u se of m arketshare m ethodology to r eview c ertif icate of need applications is not arbitrary or capricious); and Delta Reg’l Med. C

t r. , 7 5 9 So. 2 d 1174 ( this Court has c onsistently upheld MSDH’s m arket-share m ethodology ).

5 Paragraph 7 of

Section 115.02 of

the 2014 SHP states, in part:
At its discretion, the Departm ent of Health m ay u se m a rket share a naly sis and other m ethodologies in the analy sis of a CON application

. . . [ t]he D epartm ent shall not rely upon m arket share analy sis or other statistical evaluations i f they are f o und inadequate to address access to care concerns.

6 In H T I H ea lth S ervices , th is C o u rt n o ted t h e S tate H ealth P lan “d o es n o t id en tif y sp ecif ic m eth o d s w h ich m

u st b e u sed t o d eterm in e if th e req u irem en ts o f th e P l an h av e b een m et.” H T

I H ea lth S ervs. o

f M i ss., In c. , 6 0 3 S o . 2 d at 8 5 3

. R ath er, w e r eco g n ized , “[ t] h e m eth o d o lo g y u sed t o d eterm in e o r m easu re p o p u latio n b ase in an y g iv e n case sh o u ld n o t b e 8¶18. The objectives of the 2 014 State Health Plan were to i ncr e a s e c a rdiac services f or
poor, m inor i t y , and r

ural populations. And the 2 014 State Health Plan e m phasizes that certain m ethodologies, such as p opulation b ase a n d optim um capacity at existing providers, have been inef

f ective to m eet Mississippi’s c ardiac-care needs. Both MSDH and the

c h a n c e l l o r fo u

n d M e t h o d i s t ’ s m i nim

um -population m ethodology subst a n t i a l l y c o m

p l i e d w i t h objectives of

the 2014 State Health Plan. And we too f ind substantial com

pliance.
II. Criterion 9 - Minim um Annual Diagnostic Catheterizations ¶19. Criterion 9 of S ection 1 15.04 requires an existing provide r o f d i a g nostic cardiac catheterizations, seeking to e stablish a th e r apeutic catheterization program , perf orm a

m inim um of 300 diagnostic c atheterizations each y ear f or two y e a rs prior to its application. 7 ¶20. Criterion 9 applies to providers of di a g n o s t i c catheterizations proposing the establishment of a therapeutic catheterization program . And here, Methodist is not seeking

to e stablish a therapeutic catheterization program

— it already has one. R ather, M ethodist is seeking p e rm ission to operate a PCI program without h aving a f u lly operational on-site,

carv ed in g r an ite; in stead , so m e f lex ib ility is req u ired .” Id

. T h e p ru d en t a p p r o a c h i s t o “u tilize a m eth o d o lo g y th at w ill acco m m o d ate th e v ario u s an d su n d ry circu m stan ces f o u n d in each in d iv i d u al c ase.” Id

. T h u s, it i s q u ite ap p aren t M S D H h a s a g o o d b it o f d iscretio n an d f l ex ib ility in m a k in g th ese calls.

7 M S D H d e term in ed C riterio n 9 sh o u ld b e w aiv e d u n til t h e h o sp ital reach ed its th ird y ear o f o p eratio n . A t th at tim e, th e n u m b er o f d iag n o stic p ro ced u res sh o u ld b e ex am i n ed

. H o w e v e r , th e h earin g o f f icer f o u n d M eth o d ist h ad m et th e req u irem en ts o f C riterio n 9 b ecau se it sh o w e d p ro

j e ctio n s it w o u ld m eet m in im u m -p r o ced u re req u irem en ts w ith in th ree y ears. N o tw ith stan d i n g t h e s e d if f erin g a n aly ses, w e af

f irm d ecisio n s b y M S D H b ased o n su b stan tial ev id en ce, d e sp i te im p erf ect an aly s is o r rev iew

. S

ee C L C o f B ilo x i, L L C , 9 1 S o . 3 d at 6 3 9 ; see a lso R u sh C a re, In c. , 8 8 2 S o . 2 d a t

2 1 0 -1 1

. 9open-heart-surgery program . This is perm issible under the 2014 State Health P lan, provided

Criterion 7 is m et—which is not at issue. Sim ply put, Criterion 9 does not apply here. ¶21. W e t

heref o re f ind that Methodist “substantially com plie[ d] with the projec t i o n o f n e e d

as reported i n the s tate h ealth plan in ef f ect at the tim e . . . .” Miss. Code Ann. § 41-7-193(1). And Baptist has f

a iled to show MSDH’s decision that Methodist substantially com plied with the 2014 State Health Plan was not based on substantial evidence. W e theref o re af f irm

. Conclusion ¶22. MSDH’s analy sis is supported by substantial evidence, and Baptist f ailed to m eet its burden of proof

. This C ourt theref

ore af f irm s MSDH’s g rant of a C ON to M e t h o d i s t to provide PCI services. ¶23. AFFIRMED. WALLER, C.J., DICKINSON AND RANDOLPH, P.JJ., KITCHENS, KING, COLEMAN, BEAM AND CHAMBERLIN., JJ., CONCUR.

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