I N T H E SUPR EM E C O UR T O F M I SS I SS I PPI NO. 2 0 0 4 - S A- 0 2 4 6 8 - S CT
S I N G I N G R I V ER H O S P I T A L S Y S T EM d / b / a OC EAN SPRI NGS HO SPITAL AND M I S S I S S I PP I S TAT E DEPARTM

EN T OFH

EALTH

v. BI LOXI REGIONAL M

EDICAL CENTER, GARDEN PARK

M EDICAL CENTER AND GU

LF C OAS T M

EDICAL CENTER
D A T E O F JU D G M E N T : 11/ 23/ 2004 TRI AL J UDG E: HON
. W I LL I AM HALE S I NGLET ARY COURT F ROM W HI CH APP EAL ED: HI NDS COUNTY CHANCERY COURT ATTO RN EYS FOR A PP ELLAN TS: BA RRY K. CO CK RELL S ARAH E. BER RY J E NNI F E R C
. E VANS ATT ORNEYS F OR APP EL LE ES : AND Y LOW RY THOM AS L
. KI RKLAND, J R. J UL I E A. BO WM AN BE TTY TO O N CO LLI N S DOUGL AS E
. L E VANWAY NA TUR E OF THE C ASE: CI VI L - STATE BO AR DS A ND AG ENC I ES D I SPO SI T I O N : A FFIRM E D - 03/ 30/ 2006 M OT I ON F OR RE HE AR I NG F I L E D: M ANDAT E I S S UE D:
EN BA NC. W ALLER, PRES I DI NG J UST I CE, FOR TH E COU RT: ¶1. T he Si ngi ng R i ver H os pi t al Sy s t em fi l ed an appl i cat i on for a cert i fi cat e of need t o ( 1)

r el ocat e s i xt ybeds fr om the S ingi ng R i verH os pi t al i n Pas cagoul a t o the O cea n Spr i ngsA p p e llee s B ilo x i R e g io n a l M e d ica l C e n ter , G a r d e n P a rk M e d ica l C e n ter a n d G u lf 1 C o ast M ed ical C en ter. 

### 2 H os pi t al i n Oce a n Sp r i n g s ; ( 2 ) r e n o v a t e a n d e x p a n d th e f i r s tf l o o ro f th e Oce a n Sp r i ngs H os pi t al ; and (3) cons t ruct a new t hr ee- fl oor t ow er on t he O cea n Spr i ngs H os pi t al campus t o hous e the s ixty r el ocat ed beds
. A ft erSi ngi ng R i ver ’ s C O N appl i cat i on w as fi l ed, other

a r e a h o s p i t a l s f

i l e d f o r ma l p r o t e s t s wi t h t h e He a l t h De p a r t me n t
. Af t e r a h e a r i n g , t h e CO N 1

w as issu ed
. T h e pro test ing h o sp it als fil ed a pe ti ti o n fo r j u d ici al rev iew
. T h e C h an ce ryC o u rt of H i nds C ount y , M i s s i s s i ppi , r evoked the i s s uance of the C O N , and fr om thi s deci s i on, S i ng i ng R i ver app eal s. ¶2. B ot h t he Si ngi ng R i verand the O cea n Spr i ngs H os pi t al s ar e underthe purvi ew of the Si ngi ng R i verH os pi t al Sy s t em and ar e l ocat ed i n J acks on C ount y , M i s s i s s i ppi
. A nd, even t hough t he St at e D epart m entof H eal t h has i s s ued one l i cens e t o oper at e both hos pi t al s t o the S in g in g R iv e r H o s p ita l S y s te m , e a c h o f t h e h o s p ita ls h a s a “ s e p a ra te p h y s ic a l lic e n s e ,” al l ow i ng t he Si ngi ng R i verH os pi t al t o have 404 l i cen sed beds and the O cea n Spr i ngs H o s p ita l to h a v e 1 3 6 lic e n s e d b e d s . ¶ 3
. T h e M iss iss ip p i S tate D e p a rtm e n t o f H e a lth h a s th e a u th o rityto g ra n t p e rm iss io n to
a l l h o s p i t a l s i n t h e s t a t e f o r , i n t e ra l i a , b u i l d i n g a n e w f a c i l i t y, e x p a n d i n g a n e x i s t i n g f a c i l i ty,
o r r e lo c a tin g s e rv ic e s to a n o th e r f a c ility. See M i s s . C ode A nn. §§ 41- 7- 171 - 41- 7- 209 ( R ev. 2005)
. T he H eal t h D epart m ent ’ s form al gr antof perm i s s i on i s t erm ed the i s s uance of a

c e r t i f i c a t e o f n e e d ( “ C O N ” )
. T h e b e d s w h i c h S i n g i n g R i v e r p r o p o s e s t o r e l o c a t e a r e a l r e a d yl i censed bu tun used b eds.“H eal t h s ervi ce, ” as d efi ned i n the C er t i f i cat e of N eed Revi ew Manual , i s a 2 di agnos t i c, t r eatm entorr ehabi l i t at i ve s ervi ce. T he Stat e H

eal th P l an provides as fol l ow s: 3 1. N e e d C r i t e r i on:
a. P roj ect s w hi ch do not i nvol ve t he addi t i on of any acut e car e b ed s: T he appl i cants hal l documentt he nee d fort he pr opos ed pr oj ect
. D ocument at i on m aycons i s to f, but i s notl i m i t ed t o, ci t i ng of l i cens ur e or r egul at ory code de fi ci enci es , i ns t i tut i onal lon g -t erm p lans (du lyad o p ted b ythe g o v e rn in g b o ard ),



### 3 DI S CU S S I ON ¶4. T he s t andar d of r evi ew for a fi nal or der of t he St at e H eal t h D epart m ent i s contr ol l ed by M i s s . C ode A nn. 41- 7- 201( 2) ( f) ( R ev. 2001) , w hi ch pr ovi des i n par t t h at a r evi ew i ng
cour tm ayvaca t e the fi nal or deri f i t fi nds t hat t he fi nal or der“i s nots uppor t ed bys ubs t ant i al evi dence , [or ] i s contr aryt o t he man ifest w eigh tof the evi dence
. ” St . D om ini c-Jacks on Me m o ria l H

o sp ita l v. Miss . S ta te D e p ’t o f He a lth , 7 2 8 S o . 2 d 8 1 , 8 3 (M iss. 1 9 9 9 ). ¶5. T he Stat e H

eal th P l an ’ s need c r i t er i a fo r e x ist ing h o sp i t al s des i r i ng t o expand,

r enovat e orbui l d i s ent i t l ed “Cer t i fi cat e of N eed Cri t er i a and St andar ds forC ons t ruct i on, R enovat i on, E xpans i on, C api t al I m pr ovement s , R epl ace m entof H eal t h C ar e Faci l i t i es , and A ddi t i on of H os pi t al B eds ” ( “H os pi t al C ons t ruct i on”)
. O t her need cr i t er i a exi s t fort he

e s t a b l i s h me n to f a n e w h o s p i t a l o rf o rt h e p u r c h a s e o f

a n e w “ h e a l t h s e r v i c e ” s u c h a s M RI 2 i m agi ng equi pm ent
. E ach of t he di ffe r ent need cr i t er i a r equi r e di ffe r ents t andar ds of pr oof. T he nee d cr i t er i a forH os pi t al C ons truct i on has tw o s ubpart s : one for pr oj ect s w hi ch do not i nvol ve addi t i onal beds ( C r i t er i on 1a) and one for pr oj ect s w hi ch do i nvol ve addi t i onal beds (C riter io n 1 b ). N e ith e r o f th e tw o c riter ia u s e th e ter m “ re lo c a te.” T h e m a in d isp u te 3r ecomm endat i ons m ade by cons ul t antfi r m s , and def i ci enci es cit ed b yac cre d ita ti o n ag en cies (JC A H O , C A P , etc.)
. In addi t i on, for pr oj ect s w hi ch i nvol ve cons t ruct i on, r enovat i on, or e x p a n sio n o f

e m e rg e n c yd epartm ent faci l i t i es, the ap pli c a n t sh a ll in c lu d e a sta tem e n t in d ica tin g w h e th e r th e h o sp ital w ill par t i ci pat e i n t he s t at ew i de tr auma s y s t em and des cr i be t he l evel o f p a r t i c i p a t i o n , i f

a n y. b. P rojects w h i ch i n vo l ve the a d d i ti o n o f b ed s: T he appl i cant sh a ll d o c u m e n t th e n e e d f o r th e p ro p o se d p rojec t. In a d d iti o n to t he document at i on r equi r ed as s t at ed i n N eed C r i t er i on ( 1) ( a) the appl i cants hal l documentthatthe fa ci l i ty i n ques t i on has m ai ntai ned an o ccup ancyrat e of at l east 70 percent for the m ost recentt w o (2) y ears . 

### 4 betw een the part i es on appea l i s w hether“r el ocat ed” be ds ar e “a ddi t i onal ” beds as
c o n te m p la te d u n d e r t h e N e e d C ri te ri a f o r H o s p ita l C o n s tru c tio n . ¶6. T he di s t i ncti o n b etw ee n the ap p li cat i on of C r i t er i on 1a orC r i t er i on 1b i s cruci al beca us e C r i t er i on 1b r equ ir es a more s t r i ngents t andar d of pr oof than C r i t er i on 1a. I f a pr opos al i nvol ves addi t i onal beds , t he pet i t i oni ng hos pi t al m us t s how t hat i thas “mai nt ai ned

an occ upancy r at e of at l eas t 70 per cent for t he m os t r ece nt t w o ( 2) y ear s . ” T her e i s no s uch

r equi r ementunderC r i t er i on 1a. I n t hi s cas e, th e H ea lt h D epar t m entappl i ed C r i t er i on 1a, fi ndi ng t hatSi ngi ng R i ver ’ s appl i cat i on di d noti nvol ve addi t i onal b ed s. T he cha ncel l or
r ever s ed the i s s uance of the C O N , fi ndi ng t hat t he appl i cat i on di d i ndeed i nvol ve addi t i onal b e d s a n d th a t th e H e a lth D e p a rt m e n t s h o u ld h a v e a p p lie d C ri te ri o n 1 b
. ¶ 7
. T h e re f

o re , th e iss u e b e f

o re th e C o u rt is w h e th e r th e S in g in g R iv e r be d s p ro p o se d to be r el ocat ed t o O cea n Spr i ngs ar e “a ddi t i onal ” beds
. Si ngi ng R i verand O cea n Spr i ngs ar gue t hatr eloc at ed beds cannotbe ca l l ed addi t i onal beds
. T hi s ar gum enti s bas ed on thei r( andA “hea l t h s ervi ce, ” as defi ned i n t he C er t i f i cat e of N

eed R evi ew Manual , i s a 4 d ia g n o s tic , tr e a tm e n t o r r e h a b ilita tiv e s e rv ic e . S ect i on § 4 1-7-191 provides i n p artas fol l ow s: 5 ( 1) N o per s on s hal l engage i n an y o f t he fol l ow i ng act i vi t i es w i t hout obt ai ni ng t he r equi r ed ce r t i fi cat e of ne ed: * * *


### 5 t he H eal t h D epart m ent ’ s ) i nt erpr et at i on of “r el ocat ed beds ” as pr evi ous l y - l i cens ed beds and of “a dd i t i on al ” bed s as new l y -l i censed bed s. ¶ 8
. H o w e v e r, w e m u s t c o n sid e r th e th e su b sta n c e o f th e p ro p o sa l ra th e r th a n its lab e l. S t. D o m in ic- J

a c k so n Me m o ria l H

o sp ita l v. Miss . S ta te D e p ’t o f He a lth , 728 So. 2d 81, 89 (M i ss. 19 99 ). T o m ake thi s det erm i nati on , w e l oo k at the fo l l ow i ng fact ors: 1. T he “r el ocat i on” of unus ed, l i cens ed beds f r o m Si n g i n g Ri v e rt o Oce a n Spr i ngs
w i l l r es ul ti n t he addi t i on of s i xt ybeds t o O cea n Spr i ngs . O cea n Spr i ngs ’ bed compl ement

w i l l i ncr eas e fr om 136 beds t o 196 beds
. T her e w i l l be an a ddi t i onal sixty b ed s atO cea n S p ri n g s , w h e th e r t h o s e b e d s a re “ re lo c a te d ” b e d s o r n e w ly-lic e n s e d b e d s . 2. N eed Cri t er i a 1a a nd 1b do notcont ain the w or ds “r el ocat e, ” “r el ocat ed, ” or “r el ocat i on. ” The cr i t er i a mer el ys peak t o w hethera bed i s “addi t i onal
. ” 3. Sect i on 41- 7- 191 of the M i ss. C o de A nn. ( R ev. 2005) del i neat es the “a cti v it ies” f

o r w h ich a C O N is ne ed ed
. W h en sp ea k ing o f a “re loca ti o n , ” 4 1 -7-1 9 1 ref ers t o t he r el ocat i on “of a heal t h car e fac i l i t y or por t i on t her eof, ” orof the “r el ocat i on of one or

m o re h e a lth s e rv ic e s f

ro m o n e p h y s ic a l f

a c ility o r s ite to a n o th e r p h y s ic a l f a c ility o r s ite .” 4 M i s s . C ode A nn. § 41- 7- 191( 1) ( b) & ( e)
. Si ngi ng R i ver ’ s C O N ap p li ca ti on does not 5(b ) T h e re lo c a tio n o f a h e a lth c a re f

a c ility o r p o rt io n th e re o f , . . . * * * ( e) T he r el ocat i on of one or m or e heal t h s ervi ces fr om one phy s i cal f a c ility o r s ite to a n o th e r p h y s ic a l f a c ility o r s ite
. . . . "O ur dutyi s t o carefull yrevi ew st atutoryl ang uag e and app l yi t s m ostreas o n a b le 6 i nterpret at i on and m eaning t o t he fact s o f a part i cularcase. " P ope v. B r ock , 912 So. 2d 935, 9 3 7 (M is s . 2 0 0 5 ). 

### 6 p r o p o s e t h e r e l o c a t i o n o f a h e a l t h c a r e f a c i l i t y o r o f o n e o rmo r e h e a l t h s e r v i c e s . T h e s e t wo
s ubpar t s ar e the onl ypr ovi s i ons w hi ch s peak of a r el ocat i on. 4. A r guabl y , t he r el ocat i on of s om e of a h eal t h car e fa ci l i t y ’ s beds coul d be

cons i der ed t o be t he r el ocat i on of a “port i on” of thatheal t h car e fa ci l i t y . B ut41- 7- 191( 1) ( c)

s p e c i f i c a l l y s p e a k s t o c h a n g e s i n a h e a l t h c a r e f a c i l i t y ’ s n u mb e ro rt yp e o f b e d s . A C ON

m u s t b e is s u e d f

o r “ a n yc h a n g e in th e e x istin g b e d c o m p lem e n t o f a n yh e a lth c a re f

a c ili ty t hr ough t he addi t i on or conver s i on of anybeds ort he al t er at i on, m oderni zi ng orr efurbi s hi ng of anyuni tordepart m enti n w hi ch the beds m aybe l ocat ed.
. . . ” M i s s . C ode A nn. § 41- 7- 191( 1) ( c)
. U nder t he st atut e, a “r el ocat i on” of a bed i s notcont empl at ed t o be “[ a] nychange i n t he exi s t i ng bed compl ement
. ” I ns t ead, change s i n t he exi s t i ng bed compl ementar e made

e ith e r b ya d d in g n e w b e d s o r b yth e “ c o n v e rs io n ” o f b e d s . 5. T he S tate Hea lth P lan d o e s notdefi ne “c onver s i on” butthe A m er i can H er i tage D i ct i onar

y of the Engl is h Language ( 1981 ed. ) defi nes “conve r t ” as “t o change i nt o another form , s ubs t ance , s t at e orpr oduct ; t r ans fo rm ; tr ansm ut e. ” A r eas onabl e i nt erpr et at i on of 6

s ubs ect i on ( c) ’ s us e of t he w or d “conve r s i on” w oul d t her efor e be t he change of an exi s t i ng“ T h e d u tyo f th is C o u rt is t o in terp re t th e sta tu tes a s w ritten . It i s n o t th e d u tyo f th is 7 C our tt o add l anguage w her e w e s ee f i t
. ‘ [O ] ur pr i m ary obj ect i ve w hen cons t rui ng s t atut es i s t o adoptt hati nt erpr et at i on w hi ch w i l l m eett he true meani ng of the L eg isl ature
. ’ ” See Mauldin v. B r anch , 866 So. 2d 429, 435 ( M i s s . 2003) ( quot i ng S to c k still v. S ta te , 854 So. 2d 1 0 1 7 , 1 0 2 2 -2 3 (M is s . 2 0 0 3 ))
. T he C er t i f i cat e of N eed Revi ew Manualprovides i n p artas fol l ow s: 8 5. N ee d fo r th e P ro jec t: O ne orm or e of the fol l ow i ng i t ems m aybe con si dered i n d et erm i ning w hethera need for the p roj ectexis t s: * * * b. I n t he ca s e of the r el ocat i on of a f aci l i t y ors er vi ce , the nee d t hat th e p o p u latio n p re se n tly se rv e d h a s fo r th e se rv ice , the e x ten t to w hi ch that need w i l l be metadequa t el ybythe pr opos ed r el ocat i on or by al t ernat i ve ar r angement s , and t he effec t of the rel ocati on of the service on t he ab i l i t y o f lo w i nco m e persons, r aci al and ethn ic m i nor i t i es , w om en, handi cappe d per s ons and ot herunder s erved gr oups, an d t he el der l y , t o obt ai n neede d heal t h car e. C h ap ter 8, p. 51 (em p h asis ad d ed ). 

### 7 b e d in to a n o th e r k in d o f b e d , e. g. , t he conve r s i on of a bed des i gnat ed forpedi atr i c ca r e t o a bed des i gnat ed forcar di ac c ar e. 6
. S u b s e c tio n (c ) d o e s n o t u s e th e w o rd s “ re lo c a te ,” re lo c a te d ” o r “ re lo c a tio n .” Y et ot her s ubs ect i ons of 41- 7- 191 do. W e ca n onl yconcl ude that , i f the Legi s l atur e i nt ended

s ubs ect i on ( c) t o cover“r el ocat ed” be ds , i tw oul d have s t at ed s o i n t he s t atut e. 7 7. T he C er t i

f i cat e of N eed Revi ew Manual , w hi ch i s publ i s hed byt he D epart m ent of H eal t h, us es t he w or d “r el ocat i on” onl y w hen r efe r r i ng t o “the r el ocat i on of a fa ci l i tyor
s e rv ic e .” See Cert i

f i cat e of N eed Revi ew Manual , C h a p ter 8 - C riter ia U se d b yS tate 8

### 8

D epart m entof H eal t h forE val uat i on of Pr oj ect s , ¶ 5, “N eed f ort he Pr oj ect , ” p. 51. A p ro p o s a l f

o r t h e re lo c a tio n o f

b e d s is n o t d is c u s s e d u n d e r “ N e e d f o r t h e P roje c t.” ¶ 9
. T h e r e f

o r e , w e f i n d t h a t t h e d e s i g n a t i o n o r l a b e l o f a b e d a s “ r e l o c a t e d ” o r a s “ n e w l yl i cens ed” i s i r r el evant w hen det erm i ni ng, under t he N eed Cri t er i a forH os pi t al C ons t ruct i on,
w hethera bed i s addi t i onal ornot
. T he r el ocat i on of unus ed butal r eady

- l i cens ed beds fr om
o n e h e a lth c a re f

a c ili ty to a n o th e r is n o t co n tem p late d u n d e r th e re lev a n t sta tu te. T h e sta tu te onl y us es t he w or d “r el ocat i on” w hen spea ki ng of the r el ocat i on of an e nt i r e ora port i on of

a h ea lt h car e fa ci l i t y , orof hea l t h s ervi ces , notof beds
. T he N eed Cri t er i a forH os pi t al Con s t ru c t i o n d o n o t c o n t a i n t h e wor d s “ r e l o c a t e , r e l o c a t e d o r r e l o c a t i o n . ” T he C e rtifica te of N eed Revi ew Manualdoes notus e th e w o rds “rel ocat e, r el ocat ed orr el ocat i on” w hen

s peaki ng of beds
. Fi nal l y , and mosti m por t ant l y , the pr opos al , i n actual i t y , i s for O cea n Spr i ngs t o add

si xtybed s. ¶ 1 0
. W e f

in d th a t th e S tate H e a lth D e p a r tm e n t’ s is s u a n c e o f a C e rtific a te o f

N e e d to Si ngi ng R i verH os pi t al Sy s t em i s not s uppor t ed by s ubs t ant i al evi dence beca us e the pr opos al i n Si n g i n g Ri v e r ’ s CO N a p p l i c a t i o n r e s u l t s i n t h e a d d i t i o n o f s i x t y b e d s t o Oce a n Spr i ngs H os pi t al
. B eca us e si xt y beds w oul d be added , t he St at e H eal t h D epart m ent s houl d have us ed C r i t er i on 1b ( per t ai ni ng t o prop o sals fort he addi t i on of beds ) undert he N eed Cri t er i a for H os pi t al C ons t ruct i on i ns t ead of C r i t er i on 1a ( per t ai ni ng t o pr opos al s w hi ch do noti ncl ude t he addi t i on of beds )
. T he Si ngi ng R i ver H os pi t al Sy s t em has confe s s ed i tcannotm eetthe

s t a n d a r d i n c l u d e d i n Cr i t e r i o n 1 b ; t h e r e f o r e , t h e c h a n c e l l o r wa s c o r r e c t i n r e v o k i n g t h e CO N is s u e d to th e m .

### 9 CO NC L US I ON ¶11. W e affi r m t he chanc ell o r’s d eci s i on t o r evoke t he H eal t h D epart m ent ’ s i s s uance of

a ce r t i fi cat e of ne ed t o t he Si ngi ng R i ver H os pi t al Sy s t em forthe r el ocat i on of beds fr om t he S in g in g R iv e r H o sp ital to th e O c e a n S p rin g s H o sp ital. ¶ 1 2 . AF F I RM ED . S M I TH, C. J . , CO BB , P . J . , CARL S ON AND DI CKI NS ON, J J . , CONCUR. EAS LEY AND G RAV ES , J J . , DI S S ENT W I TH O U T S EPARATE W RI TTEN OP I NI ON . DI AZ AN D R AN DO L P H, J J . , NO T P AR T I CI P AT I NG .