Opinion ID: 865867
Heading Depth: 2
Heading Rank: 3

Heading: Financial Feasability

Text: ¶25. The contestants claim lastly that Meadowbrook provided no evidence of General Criterion 4 – Economic Viability.16 The contestants argue that Meadowbrook never produced a cash-flow statement, did not include the cost of the twenty-one beds or the land on which the facility would be built in its capital-expenditure calculation,17 and that its debtservice ratio was less than one.18 ¶26. The contestants’ expert, Dr. John Hyde, testified that the new facility would not be financially feasible, while two of Meadowbrook’s experts testified that it would be. When asked his opinion about whether the new facility would be financially viable, Shane Hariel stated, “[b]ased on the assumptions that we utilized and that I’m comfortable with, I have no reason to believe that it would not be feasible.” And when asked if the facility would be profitable, Hariel testified: Yes . . . I go back to these are assumptions made. Nobody can predict what’s actually going to happen in the future, but they are reasonable assumptions, based on my work with other facilities. And assuming that these assumptions do come to fruition, there’s no reason that they can’t be quite profitable. 16 “Economic Viability: The immediate and long-term financial feasability of the proposal, as well as the probable effect of the proposal on the costs and charges for providing health services by the institution or service.” 15-991-8 Miss. Code R. § 100.01(4) (Weil 2011), available at http://msdh.ms.gov/msdhsite/_static/resources/3346.pdf (last visited Nov. 30, 2011). 17 Shane Hariel testified that both the Certificate of Need Review Manual and the staff analysis state that the cost of land is to be excluded when calculating the construction cost. 18 Dr. John Hyde, the contestants’ expert, testified that a debt-ratio of less than one means that “you’re not making enough income to pay your debt.” 15 Sullivan also testified that the project would be financially feasible, and that nothing he had heard from the contestants’ expert, Dr. Hyde, “changed [his] opinion about that.” We find that substantial evidence exists in the record from which the SHO could find that Meadowbrook’s project demonstrated financial feasibility. III. The project does not violate Section 41-7-191(2) of the Mississippi Code. ¶27. The contestants argue alternatively that the SHO’s decision to grant a CON to Meadowbrook violates Mississippi Code Section 41-7-191(2), which states, in pertinent part: The State Department of Health shall not grant approval for or issue a certificate of need to any person proposing the new construction of, addition to, or expansion of any health care facility defined in subparagraphs (iv) (skilled nursing facility)[19 ] . . . except as hereinafter authorized[20 ] . . . Miss. Code Ann § 41-7-191 (2) (Rev. 2009) (emphasis added). The parties refer to this statute as the “moratorium,” and the DOH has, since its passage in 1990, interpreted it to preclude only “new authorized beds and new facilities where none had previously existed.” The DOH has “always viewed the relocation of existing beds or facilities and/or the replacement of such existing facilities with more modern amenities as outside the parameters of the moratorium.” The DOH “does not interpret the moratorium to prohibit any and all construction when such construction is related to a skilled nursing facility.” ¶28. This Court has: 19 Section 41-7-173(h)(iv) defines “skilled nursing facility” as “an institution or a distinct part of an institution which is primarily engaged in providing to inpatients skilled nursing care and related services for patients who require medical or nursing care or rehabilitation services for the rehabilitation of injured, disabled or sick persons.” 20 The Legislature has since authorized many exceptions to the moratorium, but none is at issue in this case. See Miss. Code Ann. § 41-7-191(2)(a)-(t) (Rev. 2009). 16 generally accorded great deference to an administrative agency’s construction of its own rules and regulations and the statutes under which it operates . . . . “an agency’s interpretation of a regulation it has been authorized to promulgate is entitled to great deference and must be upheld unless it is so plainly erroneous or so inconsistent with either the underlying regulation or statute as to be arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law. Miss. State Dep’t of Health v. Baptist Mem’l Hosp., 984 So. 2d 967, 981 (Miss. 2008) (citations omitted) (emphasis added). And “unless the Department’s interpretation [of a statute] is repugnant to the plain meaning thereof, the court is to defer to the agency’s interpretation.” Ricks v. Miss. State Dep’t of Health, 719 So. 2d 173, 179 (Miss. 1998) (citations omitted) (emphasis added). We also have ruled that “where an administrative agency’s interpretation is contrary to the unambiguous terms or best reading of a statutory provision, the agency is not entitled to deference.” Sierra Club v. Miss. Envtl. Quality Permit Bd., 943 So. 2d 673, 679 (Miss. 2006) (citations omitted) (emphasis added).21 However, we think it important to clarify what we mean by “deference” and “defer” as used in these cases, and in numerous other cases, discussing an agency’s interpretation of its governing statutes. The ultimate authority and responsibility to interpret the law, including statutes, rests with this Court. But in determining the most reasonable and appropriate 21 The DOH previously requested an opinion from the Attorney General, asking him to opine on its interpretation of the moratorium. The contestants urge this Court to grant no deference to that interpretation, because the DOH “punted the decision to the Attorney General’s Office.” First, we disagree that the DOH has “punted” the interpretation to the AG’s Office, as the DOH states clearly in its brief that it had been interpreting the statute the same way that the AG ultimately interpreted it before it requested the opinion, and the contestants do not dispute that assertion. Second, and more importantly, this point is meritless in light of our discussion clarifying the consideration we give an agency’s interpretation. 17 interpretation of a statute, the agency’s interpretation is an important factor that usually warrants strong consideration. However, we do not defer to the agency’s interpretation in the sense that we yield judgment or opinion. ¶29. Meadowbrook argues that, if the Legislature had “intended to apply the moratorium to the construction of replacement nursing homes and the relocation of existing nursing home beds, it would have included such language in the statute.” Meadowbrook notes that, since 1990, the Legislature has passed numerous exceptions to the moratorium, each dealing with either the “creation of new never-before-authorized nursing home beds or the creation of new never-before authorized nursing homes.” ¶30. The DOH agrees with Meadowbrook and argues that its project is not the “new construction” that the moratorium statute is designed to prohibit: Although the bricks and mortar Meadowbrook will use to construct the building will be new, the actual nursing home itself will not be considered new for health planning purposes in the State. It will replace a previously operating but still existing nursing home – Kemper. The beds which will be used for the provision of skilled nursing care at Meadowbrook will not be new, they will be currently existing beds – twenty-one previously authorized Kemper beds and 39 previously authorized Poplar Springs beds. This CON application does not involve the creation of new beds or the creation of any additional skilled nursing facility and thus the moratorium does not apply. ¶31. And we note the chancellor’s order, in which he stated that the “Meadowbrook Application did not propose the ‘new construction of, addition to or expansion of’ a skilled nursing facility; instead, the Application requested to replace the old, dilapidated building that formerly housed twenty-one existing beds comprising Kemper Homeplace and to relocate the Kemper beds and 39 Poplar Springs’ beds to a new building . . . .” 18 ¶32. After review, we find that the DOH’s interpretation is not “repugnant” to the plain meaning of the statute, nor is it “contrary” to its unambiguous terms, so we therefore find it to be a reasonable and appropriate interpretation. We now turn to whether Meadowbrook’s project properly falls within the DOH’s interpretation. ¶33. As mentioned above, the DOH has “always interpreted the moratorium to be expressly prohibiting the increase of two things, new authorized beds and new facilities where none had previously existed,” and it has “always viewed the relocation of existing beds or facilities and/or the replacement of such existing facilities with more modern amenities as outside the parameters of the moratorium.” ¶34. The contestants argue that Meadowbrook’s project does not fall within this interpretation. They argue that Meadowbrook is not a “replacement” of an “existing” facility, because Kemper Homeplace does not “exist.” They also argue that the project is not a “relocation” of an existing facility, as again, Kemper Homeplace does not exist, and Poplar Springs “means to continue doing business right where it is.” We disagree. ¶35. First, we find that Kemper Homeplace is still an “existing” facility for purposes of the CON process. The CON statute does not require a CON if a facility attempts to reopen within sixty months of ceasing to operate. See Miss. Code § 41-7-191(1)(a) (Rev. 2009).22 22 “(1) No person shall engage in any of the following activities without obtaining the required certificate of need: (a) The construction, development or other establishment of a new health care facility, which establishment shall include the reopening of a health care facility that has ceased to operate for a period of sixty (60) months or more[.]” Miss. Code Ann. § 41-7-191 (1) (a) (Rev. 2009). 19 And Don Eicher, the Director of the DOH’s Office of Health Policy and Planning, clearly testified that: The Legislature amended the Certificate of Need law several years ago, and they required that any healthcare facility that’s been closed or not provided service in 60 months or more be analyzed as a new facility. And so this facility will lose its – after 60 months of being closed and not providing any service, it would not be considered an existing facility. So, despite this facility being closed for three-and-a-half years, it’s still in existence under the Certificate of Need law until that 60-month threshold gets crossed. So we find that moving the twenty-one Kemper Homeplace beds to Meadowbrook’s proposed facility is a “replacement” of an “existing healthcare facility,” a project not prohibited by the moratorium under the DOH’s interpretation. Second, we find that moving the thirty-nine beds from Poplar Springs to Meadowbrook’s proposed facility is a “relocation,” as defined by the DOH, as it clearly states that it has “always viewed the relocation of existing beds” as “outside the parameters of the moratorium.”