Noncompliance with any condition of this paragraph shall result in a monetary penalty in the amount of the difference between the services which the center is required to provide and the amount actually provided and may be subject to revocation of its exemption status by the department for repeated failure to pay any fees or moneys due to the department or for repeated failure to produce data as required by Code Section 31-6-70 after notice to the exemption holder and a fair hearing pursuant to Chapter 13 of Title 50, the "Georgia Administrative Procedure Act." The dollar amount specified in this paragraph shall be adjusted annually by an amount calculated by multiplying such dollar amount (as adjusted for the preceding year) by the annual percentage of change in the consumer price index, or its successor or appropriate replacement index, if any, published by the United States Department of Labor for the preceding calendar year, commencing on July 1, 2009. In calculating the dollar amounts of a proposed project for the purposes of this paragraph, the costs of all items subject to review by this chapter and items not subject to review by this chapter associated with and simultaneously developed or proposed with the project shall be counted, except for the expenditure or commitment of or incurring an obligation for the expenditure of funds to develop certificate of need applications, studies, reports, schematics, preliminary plans and specifications or working drawings, or to acquire sites. Subparagraph (B) of this paragraph shall not apply to facilities offering ophthalmic ambulatory surgery pursuant to the exclusion designated on June 30, 2008, as division (14)(G)(iii) of Code Section 31-6-2 that are owned by physicians in the practice of ophthalmology.
(Code 1981, §31-6-40, enacted by Ga. L. 1983, p. 1566, § 1; Ga. L. 1991, p. 1871, § 6; Ga. L. 1999, p. 296, § 22; Ga. L. 2008, p. 12, § 1-1/SB 433; Ga. L. 2009, p. 8, § 31/SB 46; Ga. L. 2019, p. 148, § 1-4/HB 186.)
The 2019 amendment, effective July 1, 2019, rewrote subsection (a); deleted former subparagraph (c)(2)(A), which read: "Provide notice to the department of the name, ownership, location, single specialty, and services provided in the exempt facility;"; substituted "(A) Provide" for "(B) Beginning on January 1, 2009, provide"; redesignated former subparagraph (c)(2)(C) as present subparagraph (c)(2)(B); and substituted "Subparagraph (B)" for "Subparagraph (C)" at the beginning of the last sentence of the undesignated paragraph of subparagraph (c)(2)(B).
Cross references.- Licensed hospice exempt from certificate of need requirement, § 31-7-179.
Code Commission notes.- Pursuant to Code Section 28-9-5, in 2008, "a" was deleted following "no case shall" in the seventh sentence of subsection (d).
Editor's notes.- By resolution (Ga. L. 1990, p. 970), the General Assembly directed the State Health Planning Agency to make certain studies and reports and to update its rules and regulations.
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 application of this statute in 2020, see Executive Order 03.20.20.02.
A listing of Executive Orders issued in 2020 can be found at https://gov.georgia.gov/executive-action/executive-orders/2020-executive-orders.
Law reviews.- For annual survey on administrative law, see 69 Mercer L. Rev. 15 (2017). For annual survey on administrative law, see 70 Mercer L. Rev. 1 (2018).
JUDICIAL DECISIONS
Constitutionality.
- By the statute's plain terms, O.C.G.A. § 31-6-40(a)(7)(C) does not authorize monopolistic contracts relating to providers of new institutional health services and only requires that all such providers obtain a Certificate of Need (CON) before adding new services; thus, it did not implicate the Anti-Competitive Contracts Clause in any way as the requirement did not authorize contracts between service providers or anyone else that would encourage a monopoly. Women's Surgical Ctr., LLC v. Berry, 302 Ga. 349, 806 S.E.2d 606 (2017).
Venue of action.
- Trial court did not err in the court's denial of the motion to transfer venue in a case involving an application for a Certificate of Need (CON) because the company began the process of purchasing property and applied for a CON to develop a psychiatric hospital in Coweta County, Georgia; therefore, the company engaged in business activities such that venue was proper there. Tanner Med. Ctr., Inc. v. Vest Newnan, LLC, 337 Ga. App. 884, 789 S.E.2d 258 (2016).
Health care legitimate legislative concern.
- Georgia Supreme Court held the availability of quality health care services was certainly a legitimate legislative purpose and that the government objectives with respect to Georgia's certificate of need laws were indeed legitimate. Women's Surgical Ctr., LLC v. Berry, 302 Ga. 349, 806 S.E.2d 606 (2017).
Relocation of facility.
- Nothing in O.C.G.A. § 31-6-40, or in rules of the State Health Planning Agency, gave the State Health Planning Agency (now Department of Community Health) authority to exempt a facility from Certificate of Need requirements if the facility was relocated. HCA Health Servs., Inc. v. Roach, 263 Ga. 798, 439 S.E.2d 494 (1994).
State Health Planning Agency (now Department of Community Health) did not have discretion to exempt a health care provider from review procedures established by the certificate of need program. North Fulton Medical Ctr. v. Roach, 263 Ga. 814, 440 S.E.2d 18 (1994).
Relocation rule invalid.
- Relocation rule under which the State Health Planning Agency (now Department of Community Health) issued a certificate of need to a facility more than two years after it had already relocated to a new site and commenced operation was in direct conflict with the requirement that both new and relocating facilities first must obtain a certificate of need before commencing operations. North Fulton Medical Ctr., Inc. v. Stephenson, 269 Ga. 540, 501 S.E.2d 798 (1998).
Determination of agency to "grandfather" facility.
- State Health Planning Agency (now Department of Community Health) did not have discretion to determine whether to "grandfather" a particular health care facility; rather, the agency is simply authorized to determine whether the facility may be grandfathered as one which existed and performed the same services prior to the Certificate of Need program in 1979. HCA Health Servs., Inc. v. Roach, 263 Ga. 798, 439 S.E.2d 494 (1994).
Mobile cardiac catherization unit which was "grandfathered" and exempt from obtaining a certificate of need when the unit began operating was required to obtain a certificate of need when the unit was relocated. Phoebe Putney Mem. Hosp. v. Roach, 267 Ga. 619, 480 S.E.2d 595 (1997).
"Offered in a hospital."
- Trial court erred in determining that the Georgia Department of Community Health's interpretation of the phrase "offered in a hospital" violated the equipment threshold provision in O.C.G.A. § 31-6-40. Medical Ctr. of Cent. Ga. v. Hosp. Auth., 340 Ga. App. 499, 798 S.E.2d 42 (2017).
Conversion of hospital beds into skilled nursing beds.
- Certificate of need was properly granted to a hospital for an 11 bed nursing facility, which would be created by converting 13 general acute care hospital beds into 11 skilled nursing beds, notwithstanding the contention of a nursing home that the nursing home should have received the certificate of need. St. Joseph's Hosp. v. Thunderbolt Health Care, Inc., 237 Ga. App. 454, 517 S.E.2d 334 (1999).
Expansion of rehab facility required certificate of need.
- Hospital could not decouple the hospital's Certificate of Need (CON) for a comprehensive in-patient rehabilitation (CIPR) program that was located in the hospital for hospital patients and transfer the program and the CON to a separately licensed rehabilitation facility without prior CON review and approval; the separate rehab facility was a "health care facility" and if the facility acquired the hospital's 16-bed CIPR program, then the rehab facility's CIPR program would expand from 56 beds to 72 beds. Dep't of Cmty. Health v. Emory Univ., 351 Ga. App. 257, 830 S.E.2d 628 (2019), cert. denied, No. S19C1532, 2020 Ga. LEXIS 157 (Ga. 2020).
Addition of beds to adult psychiatric facility required certificate of need.
- Trial court erred in denying the challenger's petition for review because the agency's final decision holding that the hospital was not required to obtain a Certificate of Need (CON) before the hopsital increased the hospital's available beds was inconsistent with the plain language of O.C.G.A. § 31-6-40(a) and Ga. Comp. R. & Regs. 111-2-2-.26(a), which explicitly required CON prior to the expansion of an existing acute care adult psychiatric and/or substance abuse inpatient program. UHS of Anchor, L.P. v. Dep't of Cmty. Health, 351 Ga. App. 29, 830 S.E.2d 413 (2019).
Application to Open Records Act.
- Procedures set forth in O.C.G.A. T. 31, Ch. 6, Art. 3, for consideration of a certificate of need by the Health Planning Agency (now Department of Community Health), and appeal to the Health Planning Review Board (now Certificate of Need Appeal Panel), establish administrative proceedings within the meaning of O.C.G.A. § 50-18-70. Clayton County Hosp. Auth. v. Webb, 208 Ga. App. 91, 430 S.E.2d 89 (1993).
Exhaustion of administrative remedies.
- Court of appeals erred in ruling that a society of surgery centers did not have to exhaust administrative remedies under the Georgia Administrative Procedure Act, O.C.G.A. § 50-13-19(a), in the society's action seeking to prevent the Georgia Department of Community Health and its Commissioner from requiring its members to respond to certain disputed requests in an annual survey because the futility exception to the exhaustion requirement was inapplicable; the Commissioner's position in the lawsuit did not establish futility because actions taken to defend a lawsuit could not establish futility. Ga. Dep't of Cmty. Health v. Ga. Soc'y of Ambulatory Surgery Ctrs., 290 Ga. 628, 724 S.E.2d 386 (2012).
Court of appeals erred in ruling that a society of surgery centers did not have to exhaust administrative remedies under the Georgia Administrative Procedure Act, O.C.G.A. § 50-13-19(a), in the society's action seeking to prevent the Georgia Department of Community Health (DCH) and its Commissioner from requiring its members to respond to certain disputed requests in an annual survey because the "acting outside statutory authority" exception to the exhaustion requirement did not apply; the society did not allege that DCH was acting wholly outside DCH's jurisdiction under O.C.G.A. § 31-6-70 to conduct surveys, but instead, the society claimed that the manner in which the survey was being conducted did not fully comply with the procedural requirements of the statute. Ga. Dep't of Cmty. Health v. Ga. Soc'y of Ambulatory Surgery Ctrs., 290 Ga. 628, 724 S.E.2d 386 (2012).
Because the Georgia Society of Ambulatory Surgical Centers represented the interests of members that had adequate administrative remedies, and those members had not exhausted those remedies, the trial court was required to dismiss its case alleging that an annual survey the Georgia Department of Community Health (DCH) issued to ambulatory surgery centers (ASC) sought information beyond the scope of O.C.G.A. § 31-6-70. Furthermore, the procedures set forth in the Georgia Administrative Procedure Act, O.C.G.A. § 50-13-19 and O.C.G.A. §§ 31-6-40(c), and31-6-47(a)(18), and Ga. Comp. R. & Regs. 111-2-2-.05(2)(e) were available to ACSs before DCH took any final adverse action against them for failing to provide the required survey information, the procedures afforded adequate administrative remedies to aggrieved ACSs. Ga. Soc'y of Ambulatory Surgery Ctrs. v. Ga. Dep't of Cmty. Health, 316 Ga. App. 433, 729 S.E.2d 565 (2012).
Certificate of need properly granted.
- Division of Health Planning (now Department of Community Health) granting a certificate of need was not arbitrary and capricious as the proposed new institutional health service was reasonably consistent with the relevant goals and objectives of the State Health Plan as set forth in Ga. Comp. R. & Regs. r. 272-2-.08(b)(1), and it did not err in interpreting the 12-month rule in O.C.G.A. § 31-6-2. Ga. Dep't of Cmty. Health, Div. of Health Planning v. Gwinnett Hosp. Sys., 262 Ga. App. 879, 586 S.E.2d 762 (2003).
Trial court erred in reversing the grant of a certificate of need on the ground that the applicant was attempting to circumvent a cease-and-desist order issued to a corporation owned by the same individual as the applicant; by seeking the certificate of need, the applicant was not doing anything that the law did not allow, the Department of Community Health held an extensive evidentiary hearing before granting the application, and the trial court improperly disregarded the corporate forms of the corporation and the applicant based on the fact that they were owned by the same individual. Global Diagnostic Dev., LLC v. Diagnostic Imaging of Atlanta, 284 Ga. App. 66, 643 S.E.2d 338 (2007).
Because the hearing officer's factual findings and conclusions of law were consistent with an application of the atypical barrier exception to remedy a barrier to services faced by an identified group of patients, and not to award a certificate of need (CON) simply for the purpose of making it more convenient for patients, the plaintiff did not show that the defendant in the defendant's final order violated Ga. Comp. R. & Regs. 111-2-2-.42(3)(b)4, the Certificate of Need Act, or the Hughston Surgical criteria. Kennestone Hosp. v. Dep't of Cmty. Health, 346 Ga. App. 70, 815 S.E.2d 266 (2018).
Substantial evidence supported the Department of Community Health's (Department) finding of a need for the proposed hospital based on rising population, general growth in the area, and increased emergency room usage at other hospitals and, thus, the Department was authorized to conclude that the appellee's certificate of need application met the general need requirements for a new short-stay hospital. Doctors Hosp. of Augusta, LLC v. Dep't of Cmty. Health, 350 Ga. App. 36, 827 S.E.2d 725 (2019).
Certificate of need properly denied.
- Given the ability of an area's patients to secure adult open-heart surgery service at a significant rate, the Georgia Health Planning Review Board (now Certificate of Need Appeal Panel) did not exceed the board's authority, abuse the board's discretion, act arbitrarily or without substantial evidence, or otherwise err by rejecting the hearing officer's determination that a certificate of need (CON) should be issued to the area's medical center under a geographical barrier exception to the Georgia Department of Community Health's CON regulations. The Board determined that neither the use of out-of-state services, nor the reluctance of the area's physicians to refer patients to in-state facilities, created a geographical barrier warranting an exception. Ga. Dep't of Cmty. Health v. Satilla Health Servs., 266 Ga. App. 880, 598 S.E.2d 514 (2004).
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).
Cited in Ga. Oilmen's Ass'n v. Ga. Dep't of Revenue, 261 Ga. App. 393, 582 S.E.2d 549 (2003); Lakeview Behavioral Health Sys., LLC v. UHS Peachford, LP, 321 Ga. App. 820, 743 S.E.2d 492 (2013).
OPINIONS OF THE ATTORNEY GENERAL
Increase of ten beds or ten percent of bed capacity requires certificate when new service created.
- Though an increase of the lesser of ten beds or ten percent of bed capacity would be excluded from review generally under O.C.G.A. § 31-6-47(a)(15), it is likely that such increases would require a certificate of need if the new beds were used to create new institutional health services. 1983 Op. Att'y Gen. No. 83-34.
Hospital authority may apply for certificate of need outside its area of operation and without the permission of the affected governing authority or hospital authority board in the planned service area; provided, however, that in order to implement the certificate, permission to pursue the health care activity would be required. 1995 Op. Att'y Gen. No. 95-13.
RESEARCH REFERENCES
Am. Jur. 2d.
- 40A Am. Jur. 2d, Hospitals and Asylums, §§ 5, 6.