{ "id": 8208355, "name": "HOSPICE AT GREENSBORO, INC. d/b/a HOSPICE AND PALLIATIVE CARE OF GREENSBORO and HOSPICE OF THE PIEDMONT, INC., Petitioner v. NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES DIVISION OF FACILITY SERVICES, LICENSURE AND CERTIFICATION SECTION and NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION, Respondents, and LIBERTY HOME CARE, LLC, Respondent-Intervenor", "name_abbreviation": "Hospice At Greensboro, Inc. v. North Carolina Department of Health & Human Services of Facility Services", "decision_date": "2007-08-07", "docket_number": "No. COA06-1204", "first_page": "1", "last_page": "18", "citations": [ { "type": "official", "cite": "185 N.C. App. 1" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "625 S.E.2d 837", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12635086 ], "year": 2006, "pin_cites": [ { "page": "840" } ], "opinion_index": 0, "case_paths": [ "/se2d/625/0837-01" ] }, { "cite": "2005 N.C. Sess. Laws 1184", "category": "laws:leg_session", "reporter": "N.C. Sess. Laws", "opinion_index": 0 }, { "cite": "2005 N.C. Sess. Laws 1179", "category": "laws:leg_session", "reporter": "N.C. Sess. Laws", "opinion_index": 0 }, { "cite": "1991 N.C. Sess. Laws 2222", "category": "laws:leg_session", "reporter": "N.C. Sess. Laws", "opinion_index": 0 }, { "cite": "531 S.E.2d 219", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2000, "opinion_index": 0 }, { "cite": "138 N.C. App. 309", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11079584 ], "year": 2000, "opinion_index": 0, "case_paths": [ "/nc-app/138/0309-01" ] }, { "cite": "507 S.E.2d 310", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1998, "pin_cites": [ { "page": "311" } ], "opinion_index": 0 }, { "cite": "131 N.C. App. 395", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11200315 ], "year": 1998, "pin_cites": [ { "page": "396-97" } ], "opinion_index": 0, "case_paths": [ "/nc-app/131/0395-01" ] }, { "cite": "176 N.C. App. 46", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8300808 ], "year": 2006, "pin_cites": [ { "page": "51" } ], "opinion_index": 0, "case_paths": [ "/nc-app/176/0046-01" ] }, { "cite": "285 S.E.2d 626", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1982, "pin_cites": [ { "page": "628" } ], "opinion_index": 0 }, { "cite": "55 N.C. App. 313", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527210 ], "weight": 2, "year": 1982, "pin_cites": [ { "page": "317" } ], "opinion_index": 0, "case_paths": [ "/nc-app/55/0313-01" ] }, { "cite": "418 S.E.2d 232", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "235", "parenthetical": "stating that \"[statutory interpretation properly begins with an examination of the plain words of the statute.\"" } ], "opinion_index": 0 }, { "cite": "332 N.C. 141", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2508082 ], "year": 1992, "pin_cites": [ { "page": "144", "parenthetical": "stating that \"[statutory interpretation properly begins with an examination of the plain words of the statute.\"" } ], "opinion_index": 0, "case_paths": [ "/nc/332/0141-01" ] }, { "cite": "436 S.E.2d 122", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "pin_cites": [ { "page": "124" } ], "opinion_index": 0 }, { "cite": "335 N.C. 133", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2527406 ], "year": 1993, "pin_cites": [ { "page": "136" } ], "opinion_index": 0, "case_paths": [ "/nc/335/0133-01" ] }, { "cite": "393 S.E.2d 338", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 13, "year": 1990, "pin_cites": [ { "page": "342" }, { "page": "342" }, { "page": "340" }, { "page": "342" }, { "page": "342" }, { "page": "342" }, { "page": "342", "parenthetical": "emphasis added" }, { "page": "340" } ], "opinion_index": 0 }, { "cite": "99 N.C. App. 517", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523766 ], "weight": 9, "year": 1990, "pin_cites": [ { "page": "522" }, { "page": "522" }, { "page": "522" }, { "page": "522" }, { "page": "522" }, { "page": "522-23" }, { "page": "520" } ], "opinion_index": 0, "case_paths": [ "/nc-app/99/0517-01" ] } ], "analysis": { "cardinality": 1123, "char_count": 42709, "ocr_confidence": 0.741, "pagerank": { "raw": 1.6476792136662406e-07, "percentile": 0.6921776134438726 }, "sha256": "4e19abfa7a9d9501f2ea287cbe5978c3893c4b777cbc20365d53772e3413b2b0", "simhash": "1:39b7f8c467ac1433", "word_count": 6895 }, "last_updated": "2023-07-14T20:04:26.584781+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges MCCULLOUGH and CALABRIA concur." ], "parties": [ "HOSPICE AT GREENSBORO, INC. d/b/a HOSPICE AND PALLIATIVE CARE OF GREENSBORO and HOSPICE OF THE PIEDMONT, INC., Petitioner v. NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES DIVISION OF FACILITY SERVICES, LICENSURE AND CERTIFICATION SECTION and NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION, Respondents, and LIBERTY HOME CARE, LLC, Respondent-Intervenor" ], "opinions": [ { "text": "STROUD, Judge.\nRespondent-intervenor Liberty Home Care, L.L.C. appeals from the final agency decision entered by the North Carolina Department of Health and Human Services [DHHS], Division of Facility Services [DFS] in a contested case. Petitioner Hospice at Greensboro, Inc. [HGI] contested the DHHS, DFS Certificate of Need Section\u2019s [CON Section] issuance of a \u201cNo Review\u201d letter to Liberty, which authorized Liberty to open a hospice office in Greensboro, North Carolina without first obtaining a Certificate of Need [CON] from the department. The final DHHS agency decision granted summary judgment in favor of HGI based upon the agency\u2019s conclusions that Liberty\u2019s Greensboro hospice office was a \u201cnew institutional health service\u201d for which Liberty was required to obtain a CON and that HGI was \u201csubstantially prejudiced\u201d by the CON Section\u2019s actions.\nThis Court must resolve three issues on appeal: (1) whether N.C. Gen. Stat. \u00a7 131E-188 (2005) authorizes Liberty to appeal the final DHHS agency decision directly to this Court, (2) whether Liberty established a \u201cnew institutional health service\u201d in Guilford County for which it was required to obtain a CON, and (3) whether HGI has shown \u201csubstantial prejudice\u201d resulting from the CON Section\u2019s actions. We affirm.\nI. Factual Background\nOn 21 February 2005, Liberty\u2019s Executive Director Anthony Zizzamia, Jr. sent a letter of intent to CON Section Chief Lee Hoffman, requesting permission to open \u201cbranch locations\u201d to its \u201cexisting licensed and certified hospices\u201d without first obtaining CONs. In the letter, Zizzamia expressed Liberty\u2019s \u201cunderstanding that the branch extension of existing hospice offices is exempt from [CON] review\u201d; thus, Zizzamia sought a \u201cNo Review\u201d letter from the CON section. Liberty proposed \u201cbranch office locations\u201d in four additional counties based on its \u201cexisting licensed and certified\u201d Fayetteville hospice and in nine additional counties based on its \u201cexisting licensed and certified\u201d Raeford hospice.\nOn 7 March 2005, the CON Section responded to Liberty\u2019s letter of intent and informed Liberty that \u201c[establishment of each branch office is a separate determination that requires a separate request.\u201d The CON section further explained that Liberty \u201cmust demonstrate the need for each branch office based on the provision of hospice services to patients who reside in that county from the home office that will support the branch office.\u201d\nOn 30 March 2005, Hoffman sent a letter to Zizzamia requesting additional information and responding to his inquiries \u201cas to whether a certificate of need is required prior to opening the branch offices\u201d that Liberty proposed. Hoffman stated that Liberty must document that the proposed offices would be \u201clocated in\u201d Liberty\u2019s \u201c \u2018current service area.\u2019 \u201d explaining \u201cdocumentation must be submitted to show that the proposed branch offices will be located in a county in which at least one patient is currently served bv one of vour existing licensed hospice agencies.\u201d (Emphasis added.) According to Hoffman, Liberty\u2019s \u201ccurrent service area\u201d included any county in which Liberty served at least one patient from its existing, licensed hospices, [hereinafter one patient rule]. An attachment to Hoffman\u2019s letter set forth a sample format for providing the requested information. The attachment was titled \u201cRE: Exempt from review/ branch office of cname of existing licensed hospice> Medicare Provider.\u201d\nThereafter, Liberty made a separate request for each proposed hospice office and submitted documentation to show the proposed hospice offices complied with the one patient rule. In particular, on 30 June 2005, Liberty informed the CON section that it had \u201crecently admitted a hospice patient in Guilford County, North Carolina,\u201d who was \u201cbeing served by [Liberty\u2019s] Hospice providing services from our Fayetteville location.\u201d Liberty requested that the CON section \u201cprovide [it] with a letter of \u2018[N]o [R]eview\u2019 with respect to this [Greensboro] branch office.\u201d\nAs documentation, Liberty attached a Home Health Certification and Plan of Care identifying one patient, S.H., in Greensboro, North Carolina. The form listed S.H.\u2019s \u201cstart of care date\u201d as 21 June 2005. It also listed authorized prescription medications for S.H. and set forth a plan for S.H\u2019s care, which included the use of oxygen, wound care, pain management, and \u201cshort term therapy management of terminal illness.\u201d Liberty received the Plan of Care on 27 June 2005 and the form was signed by S.H.\u2019s attending physician on 28 June 2005; however, S.H. died on 24 June 2005. Notwithstanding S.H.\u2019s death, Liberty attached the Plan of Care to its 30 June 2005 request for a \u201cNo Review\u201d letter as documentation of its \u201ccurrent service area.\u201d The Plan of Care for S.H. is the only documentation of current service area that Liberty provided to the CON section.\nOn 7 July 2005, the CON Section responded to Liberty\u2019s 30 June 2005 request for \u201cNo Review.\u201d The response provided, in part:\nBased on the CON law in effect on the date of this letter, the proposal described in your correspondence is not governed by, and therefore, does not currently require a certificate of need. . . . Further, it should be noted that this determination is binding only for the facts represented by you. Consequently, if changes are made in the project or in the facts provided in the correspondence referenced above, a new determination as to whether a certificate of need is required would need to be made by the Certificate of Need Section.\n[Hereinafter \u201cNo Review\u201d letter.]\nThe CON Section relied entirely upon Liberty\u2019s 30 June 2005 representations and made no further inquiry before issuing this \u201cNo Review\u201d letter to Liberty.\nOn 15 July 2005, based upon the \u201cNo Review\u201d letter, Liberty applied for a license from DHHS DFS License and Certification Section to operate a \u201cbranch office\u201d in Guilford County, which the Section granted. The license, which became effective 19 July 2005 and expired \u201c[m]idnight, December 31, 2005,\u201d authorized Liberty to \u201coperate a hospice known as Liberty Home Care and Hospice located at 2307 West Cone Blvd., Suite 150, City of Greensboro, North Carolina Guilford County.\u201d\nOn 5 August 2005, HGI filed a petition for a contested case hearing, requesting review of the CON Section\u2019s decision to approve Liberty\u2019s request for a \u201cNo Review\u201d letter and the decision of the License and Certification Section, to issue a license to Liberty for the Greensboro hospice office. Liberty intervened in the contested case on 18 August 2005.\nOn 2 December 2005, HGI filed motions for summary judgment, entry of a stay of the CON Section\u2019s 7 July 2005 \u201cNo Review\u201d letter to Liberty, and entry of a stay of the hospice license issued to Liberty on 19 July 2005 for the Greensboro hospice office. HGI argued that Liberty\u2019s Greensboro hospice office is a \u201cnew institutional health service\u201d for which Liberty was required to obtain a CON. On 9 December 2005, Liberty filed a motion for summary judgment arguing that HGI was not an \u201caggrieved party\u201d because the issuance of a \u201cNo Review\u201d letter to Liberty did not \u201csubstantially prejudice[]\u201d HGI\u2019s rights.\nDepositions and affidavits submitted for the purpose of summary judgment established that Liberty first hired employees for its Greensboro hospice office in April or May of 2005. Thereafter, Liberty provided hospice services to one patient named S.H. for four days, from 21 to 24 June 2005. Before coming into Liberty\u2019s care, S.H. was a resident in Oakhurst nursing facility. A representative of Oakhurst contacted Liberty to inform Liberty that Oakhurst had a patient who needed hospice services. At that time, Liberty was \u201cactively looking for hospice patients to serve\u201d so that it could \u201cestablish [its] hospice unit\u201d in Greensboro. As of 26 September 2005, Liberty had not provided hospice services to any patient in Greensboro other than S.H. Liberty did not obtain a CON for its Greensboro hospice office, but received a license for this office based upon the CON Section\u2019s issuance of a \u201cNo Review\u201d letter.\nThe \u201cNo Review\u201d process is not set forth in statute or rule, but is a practice DHHS developed over time based on its understanding of this Court\u2019s decision, in In re Total Care. In In re Total Care, this Court held that \u201cthe opening of branch offices by an established home health agency within its current service area is not the construction,' development, or other establishment of a new health service facility\u201d for which a CON was required. In re Total Care, 99 N.C. App. 517, 522, 393 S.E.2d 338, 342 (1990). When determining whether a proposed branch office is within a health service provider\u2019s current service area the CON section considered only whether the applicant hospice had recently \u201cprovided hospice services in the county in which they want to open a branch.\u201d Here, the CON Section relied entirely upon Liberty\u2019s representations to make this determination.\nAdministrative Law Judge Agustus B. Elkins, II entered a recommended decision granting HGI\u2019s motion for summary judgment on 25 January 2006. DFS Director Robert J. Fitzgerald reviewed the recommended decision, considered written exceptions, and heard oral argument on 21 April 2006. Fitzgerald entered a final agency decision on 12 June 2006, adopting most of Judge Elkin\u2019s findings and granting HGI\u2019s motion for summary judgment. Liberty appealed the final agency decision to this Court.\nII. Jurisdiction\nHGI asks this Court to dismiss Liberty\u2019s appeal, arguing that appeal from a final DHHS agency decision concerning a \u201cNo Review\u201d letter must be filed in Superior Court, Wake County pursuant to section 150B-45 of the North Carolina Administrative Procedure Act. N.C. Gen. Stat. \u00a7 150B-45 (2005). Liberty agrees with HGI that section 150B-45 controls but asks this Court to grant certiorari review pursuant to Rule 21 of the North Carolina Rules of Appellate Procedure. N.C. R. App. P. 21 (2005). In their briefs, both parties acknowledge that N.C. Gen. Stat. \u00a7 131E-188(a) (2005) permits \u201cany affected person\u201d to contest the CON Section\u2019s decision to \u201cissue, deny, or withdraw a certificate of need or exemption\u201d and that N.C. Gen. Stat. \u00a7 131E-188(b) (2005) provides a direct appeal to this Court from \u201call or any portion\u201d of any final DHHS agency decision resolving a contested case filed under this section. However, the parties conclude that section 131E-188 does not authorize immediate appeal to this Court from the final DHHS agency decision resolving petitioner\u2019s challenge to the CON section\u2019s issuance of a \u201cNo Review\u201d letter because a \u201cNo Review\u201d letter is not an \u201cexemption.\u201d\nWe disagree with both parties and hold that the CON section\u2019s issuance of a \u201cNo Review\u201d letter is the issuance of an \u201cexemption\u201d for purposes of section 131E-188(a). Accordingly, we conclude that section 131E-188(b) confers jurisdiction on this Court to hear Liberty\u2019s appeal.\n\u201cAny person affected,\u201d by the CON Section\u2019s \u201cdecision to issue ... a certificate of need or exemption\u201d is \u201centitled to a contested case hearing under Article 3 of Chapter 150B of the General Statutes.\u201d N.C. Gen. Stat. \u00a7 131E-188 (2005). Chapter 150B of the North Carolina General Statutes is commonly known as the Administrative Procedure Act and Article 3 of that Chapter sets forth the procedures governing administrative hearings in contested cases. A \u201ccontested case\u201d is \u201can administrative proceeding ... to resolve a dispute between an agency and another person that involves the person\u2019s rights, duties, or privileges.\u201d N.C. Gen. Stat. \u00a7 150B-2(2) (2005). Generally, \u201cto obtain judicial review of a final decision\u201d entered pursuant to Article 3 of Chapter 150B, \u201cthe person seeking review must file a petition in the Superior Court of Wake County or in the superior court of the county where the person resides.\u201d N.C. Gen. Stat. \u00a7 150B-45 (2005). However, when the final agency decision resolves a contested case filed pursuant to section 131E-188, appeal may be taken to this Court as of right. N.C. Gen. Stat. \u00a7 131E-188(b); N.C. Gen. Stat. \u00a7 7A-29(a) (2005).\nHGI contests the CON Section\u2019s issuance of a \u201cNo Review\u201d letter to Liberty. If the \u201cNo Review\u201d letter represents an \u201cexemption,\u201d then section 131E-188(b) confers jurisdiction on this Court to consider Liberty\u2019s appeal from the final DHHS decision resolving the contested case. If not, then appellate jurisdiction lies in Superior Court, Wake County or in the superior court of the county where Liberty resides.\nThe term \u201cexemption\u201d is not defined by N.C. Gen. Stat. \u00a7 131E-176 (2005), which provides definitions for many terms of art used throughout Chapter 131E. Although N.C. Gen. Stat. \u00a7 131E-184 (2005) lists circumstances in which DHHS \u201cshall exempt . . . a new institutional health service\u201d from certificate of need review, that section does not define the term \u201cexemption.\u201d Finding no express definition of the term \u201cexemption\u201d in Chapter 131E, we \u201cpresume[] the General Assembly intended the word[] it used to have the meaning [it has] in ordinary speech.\u201d Nelson v. Battle Forest Friends Meeting, 335 N.C. 133, 136, 436 S.E.2d 122, 124 (1993); see also Correll v. Division of Social Services, 332 N.C. 141, 144, 418 S.E.2d 232, 235 (1992) (stating that \u201c[statutory interpretation properly begins with an examination of the plain words of the statute.\u201d).\nTo be \u201cexempt\u201d ordinarily means to be \u201cfree from an obligation or liability to which others are subject\u201d or to be \u201creleased from or not subject to, an obligation, liability, etc.\u201d Random House Webster\u2019s College Dictionary. 467 (1st ed. 1991); Black\u2019s Law Dictionary 612 (8th ed. 2004) (defining \u201cexempt\u201d as \u201cfree or released from a duty or liability to which others are held\u201d); Ballentine\u2019s Law Dictionary. 435 (3rd ed. 1969) (defining \u201cexempt\u201d as \u201cfree of an obligation which is binding on others\u201d).\nWith respect to health service providers, N.C. Gen. Stat. \u00a7 131E-178(a) (2005) states, \u201cNo person shall offer or develop a new institutional health service without first- obtaining a certificate of need\u201d from DHHS. The plain language of section 131E-178(a) places an affirmative duty on any person seeking to \u201coffer or develop a new institutional health service\u201d to apply for and receive a CON first. Here; the CON Section released Liberty from the obligation to obtain a CON for its Greensboro hospice office by issuing the \u201cNo Review\u201d letter. Thus, the CON section\u2019s issuance of a \u201cNo Review\u201d letter is an \u201cexemption\u201d which HGI was entitled to contest pursuant to section 131E-188(a). See also In re Wilkesboro, Ltd., 55 N.C. App. 313, 317, 285 S.E.2d 626, 628 (1982) (similarly concluding under prior law that the CON Section\u2019s issuance of a \u201cletter relieving Wilkesboro, Limited of the requirement to apply for a certificate of need\u201d was \u201c[an] approval, an approval with conditions, or [a] denial of an application for a certificate of need\u201d which the petitioner was entitled to contest).\nFor the reasons stated above, we hold that the CON Section\u2019s issuance of a \u201cNo Review\u201d letter is the issuance of an \u201cexemption\u201d for purposes of section 131E-188(a). Accordingly, we conclude that section 131E-188(b) confers jurisdiction on this Court to hear the incident direct appeal.\nIII. Summary Judgment\nLiberty argues that DHHS erred by granting petitioner\u2019s motion for summary judgment. In particular, Liberty assigns error to the agency\u2019s conclusions that (1) \u201cLiberty\u2019s proposal to open a new hospice office in Guilford County constitutes the establishment of a new hospice agency which required a Certificate of Need\u201d and (2) \u201c[HGI is] substantially prejudiced as a matter of law by [the CON Section\u2019s] actions.\u201d Citing In re Total Care, 99 N.C. App. 517, 393 S.E.2d 338 (1990), Liberty concludes that it was not required to obtain a CON before opening the Greensboro office because the office (1) is located within the \u201cservice area\u201d of its existing Fayetteville hospice and (2) is a \u201cbranch office\u201d of the Fayetteville hospice. Citing N.C. Gen. Stat. \u00a7 150B-23 (2005) and Bio-Medical Applications of N.C., Inc. v. N.C. Dep\u2019t of Health and Human Servs., No. COA04-1644, slip op. (N.C. App. Oct. 4, 2005) (unpublished), Liberty concludes HGI failed to show that the CON Section\u2019s issuance of the \u201cNo Review\u201d letter substantially prejudiced its rights because HGI\u2019s claims of prejudice are speculative and because HGI does not have a right to be free from competition. These are questions of law which this Court reviews de novo. Craven Reg\u2019l Medical Authority v. N.C. Dep\u2019t of Health and Human Servs., 176 N.C. App. 46, 51, 625 S.E.2d 837, 840 (2006). We disagree with Liberty and affirm the final DHHS agency decision.\nA. New Institutional Health Service\nN.C. Gen. Stat. \u00a7 131E-178 provides that \u201cNo person shall offer or develop a new institutional health service without first obtaining a certificate of need\u201d from DHHS. (Emphasis added.) \u201c \u2018New institutional health service\u2019 means,\u201d in part, \u201c[t]he construction, development, or other establishment of a hospice.\u201d N.C. Gen. Stat. \u00a7 131E-176(16)(n) (2005). Therefore, any person seeking to construct, develop, or otherwise establish a hospice must first obtain a CON from DHHS.\nIn 1990, this Court considered whether an existing home health agency must obtain a CON before opening a branch office within its service area. See In re Total Care, 99 N.C. App. 517, 393 S.E.2d 338. At that time, section 131E-176 defined \u201cnew institutional health service\u201d to mean, in part, \u201c[t]he construction, development, or other establishment of a new health service facility.\u201d N.C. Gen. Stat. \u00a7 131E-176(16) (1989). New \u201chealth service facility\u201d was defined, in part, as a \u201chome health agency.\u201d Id. Considering these statutory definitions, together with the statutory definition of home health agency, this Court held that \u201cthe opening of branch offices by an established home health agency within its current service area is not the construction, development, or other establishment of a new health service facility\u201d for which a CON was required. In re Total Care, 99 N.C. App. at 522, 393 S.E.2d at 342. In so doing, the Court reasoned that a home health agency\u2019s opening of a second office inside its current service area did not \u201ctransform\u201d it into two separate agencies. Id. at 520, 393 S.E.2d at 340. The Court noted that \u201cif the legislature had intended to require a CON for each office used by the home health agency in providing home health services it could have specified this in the statute,\u201d and specifically in the statutory definition of \u201cnew health service facility.\u201d\nWe conclude that the reasoning and rule of In re Total Care govern the case sub judice. An existing hospice\u2019s opening of a second office within its current service area does not transform it into two separate hospices. Correspondingly, if the legislature had intended to require a CON for each office used by a hospice then it could have specified this in the statutory definition of \u201cnew institutional health service.\u201d Therefore, the opening of branch offices by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. Our conclusion applies only to the statutory definition of \u201cnew institutional health service\u201d in effect in July 2005, at the time the CON Section issued the \u201cNo Review\u201d letter for Liberty\u2019s proposed Greensboro hospice office.\nHaving concluded that the rule of In re Total Care is applicable to hospice branch offices opened within an existing hospice\u2019s service area, this Court must consider whether Greensboro is within the \u201cservice area\u201d of Liberty\u2019s Fayetteville hospice. In so doing, we emphasize that this Court\u2019s decision in In re Total Care was \u201cpremised on [the] undisputed fact\u201d that the plaintiff \u201cinten[ded] to open additional offices only in its existing geographical service area.\u201d In re Total Care, 99 N.C. App. at 522, 393 S.E.2d at 342. Thus, whether the home health care office proposed by the plaintiff home health care agency in In re Total Care was actually located within the plaintiff\u2019s \u201cservice area\u201d was not an issue on appeal and was not addressed in the Court\u2019s opinion.\n1. Service Area\nA \u201cservice area\u201d is \u201cthe area of the State, as defined in the State Medical Facilities Plan or in the rules adopted by [DHHS] which receives services from a health services facility.\u201d N.C. Gen. Stat. \u00a7 131E-176(24a) (2005). The 2005 State Medical Facilities Plan [SMFP] defines a \u201chospice\u2019s service area\" as \u201cthe hospice planning area in which the hospice is located.\u201d N.C. Dep\u2019t of Health and Human Servs., 2005 State Medical Facilities Plan 252 (2005). \u201cEach of the 100 counties in the State is a separate hospice planning area.\u201d Id. Thus, the North Carolina General Statutes define a hospice\u2019s \u201cservice area\u201d as the county in which it is located.\nAs explained above, this Court did not consider whether the home health care office proposed by the plaintiff home health care agency in In re Total Care was actually located within the plaintiff\u2019s service area. In fact, the plaintiff in In re Total Care established its home health agency in 1978, which is before the effective date of the CON act. Because the plaintiff \u201cwas granted a license under the grandfather provisions of the CON law when the law was enacted,\u201d it .operated without a CON in approximately fourteen counties, including four in which it had offices. For purposes of that appeal, the Court treated the fourteen counties in which the plaintiff operated as \u201cequivalent to a geographic service area under a CON,\u201d citing the SMFP in effect at that time. Thus, when stating its holding, this Court used the term \u201cservice area\u201d as the term was defined in the SMFP. The Court did not create a new definition for this term or consider whether the plaintiffs \u201cservice area\u201d actually complied with the SMFP definition. The definition of \u201cservice area\u201d was not at issue in that case.\nApplying In Re Total Care to the case sub judice, we hold that the opening of branch offices by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. Service area means \u201cthe hospice planning area in which the hospice is located.\u201d Liberty holds a CON for its hospice located in Fayetteville, North Carolina. The planning area and, therefore, the service area for this hospice is Cumberland County. Because Liberty seeks to open a hospice office in Greensboro, North Carolina, which is located in a county outside the service area of its existing hospice, Liberty has not met the requirements set forth in In re Total Care.\nLiberty urges this Court to ignore the statutory definition of \u201cservice area,\u201d arguing that the home health care office proposed by the plaintiff home health care agency in In re Total Care did not meet the statutory definition of \u201cservice area\u201d; the CON Section has interpreted In re Total Care to create a new definition of service area, such that a health service provider\u2019s service area is any area in which it has recently served at least one patient; and the statutory definition of \u201cservice area\u201d is used only to determine whether there is a need for a \u201cnew institutional health service.\u201d We are not persuaded.\nFirst, this Court\u2019s opinion in In re Total Care was \u201cpremised on [the] undisputed fact\u201d that the plaintiff \u201cinten[ded] to open additional offices only in its existing geographical service area.\u201d In re Total Care, 99 N.C. App. at 522, 393 S.E.2d at 342. Again, whether the proposed home health care offices were actually located within the plaintiff home health care agency\u2019s existing service area was \u201cundisputed\u201d and not at issue on appeal.\nSecond, we agree with Liberty that an agency\u2019s interpretation of a statutory term is entitled to deference when the term is ambiguous and the agency\u2019s interpretation is based on a \u201cpermissible construction of the statute.\u201d County of Durham v. N.C. Dep\u2019t of Env\u2019t and Natural Res., 131 N.C. App. 395, 396-97, 507 S.E.2d 310, 311 (1998). However, we conclude that the statutory term \u201cservice area\u201d is not ambiguous and that the CON Section\u2019s interpretation of this term is not based on \u201cconstruction of the statute\u201d; rather, it is based on an erroneous reading of this Court\u2019s decision in In re Total Care.\nCON Section Chief Lee Hoffman testified at a deposition taken in preparation for the hearing in this contested case. When asked how the CON Section defined the term \u201ccurrent service area,\u201d Hoffman explained that the Section considered a \u201ccurrent service area\u201d to be any county where \u201cthere was a patient being served at about that time\u201d or \u201cthere had been a pattern and practice of services provided to that county, even if there wasn\u2019t a patient currently being served in the most recent past.\u201d Hoffman also repeatedly testified that the CON Section gleaned this definition from this Court\u2019s decision in In re Total Care and nowhere else.\nDHHS is not entitled to judicial deference to its misinterpretation of In re Total Care. In fact, by implementing a one patient rule, DHHS has encouraged a practice that this Court disavowed in that case: \u201c[the] offering . . . and opening [of] offices in leapfrog fashion across the State without obtaining a CON for such services and offices.\u201d In re Total Care, 99 N.C. App. at 522, 393 S.E.2d at 342. This Court expressly \u201cpremised\u201d its ruling \u201con [the] undisputed fact\u201d that the plaintiff home health agency intended \u201cto open additional offices only in its existing geographical service area\u201d and explained that its decision in In re Total Care was \u201climited to the facts of [that] particular appeal\u201d to prevent such an interpretation. Id.\nMoreover, DHHS is not entitled to deference for a policy that is contrary to the plain language of section 131E-176(24a), which defines a hospice\u2019s service area as the county in which the hospice is located by statutorily adopting the definition of service area set forth in the SMFR The one patient rule further frustrates the General Assembly\u2019s express purpose to prevent \u201c[t]he proliferation of unnecessary health service facilities\u201d by permitting hospice providers to open facilities in \u201cleapfrog fashion\u201d without a determination that such facilities are needed. N.C. Gen. Stat. \u00a7 131E-175(4) (2005). The General Assembly has determined that \u201cunnecessary health service facilities result[] in costly duplication and underuse of facilities,\u201d as well as \u201cunnecessary use of expensive resources\u201d and \u201can enormous economic burden on the public who pay for the construction and operation of these facilities as patients, health insurance subscribers, health plan contributors, and taxpayers,\u201d which the CON process is designed to prevent. N.C. Gen. Stat. \u00a7 131E-175(4), (6) (2005).\nThird, Liberty argues that the statutory definition of \u201cservice area\u201d is used only to determine the need for a \u201cnew institutional health service,\u201d and should not be used to determine whether its proposed Greensboro hospice office meets the definition of \u201cnew institutional health service.\u201d In essence, Liberty asks this Court to determine that its proposed Greensboro office is not subject to the requirements of the CON law because the proposed office is inside Liberty\u2019s service area and that the proposed office is inside Liberty\u2019s service area because the CON law (specifically the statutory definition of service area) does not apply. We reject this circular argument.\n2. Extension of In re Total Care\nThis Court limited its holding in In re Total Care as follows:\n[T]his opinion is limited to the facts of this particular appeal and does not determine the question whether extension of home health services to patients in counties outside an agency\u2019s current service area, or the expansion of branch offices of an established home health agency outside the agency\u2019s current service area would trigger the CON requirement under N.C. Gen. Stat. \u00a7 131E-176.\nIn re Total Care, 99 N.C. App. at 522-23, 393 S.E.2d at 342 (emphasis added). Having concluded that Liberty\u2019s Greensboro hospice office is located outside the service area of its Fayetteville hospice, we must answer the question left unresolved by In re Total Care: whether an existing hospice care provider must obtain a CON before opening an office outside its service area. We conclude that it must.\nBecause a branch hospice office is necessarily supported by an existing certified \u201cparent\u201d hospice, it is also necessarily subject to the limitations imposed on the \u201cparent\u201d hospice by the CON law. See In re Total Care, 99 N.C. App. at 520, 393 S.E.2d at 340. (reasoning that a branch home health office and parent home health agency comprise a single agency). Every CON is issued for a finite \u201cservice area.\u201d See N.C. Gen. Stat. \u00a7 131E-181(a) (entitled \u201cNature of a Certificate of Need\u201d) (stating \u201c[a] certificate of need shall be valid only for the defined scope, physical location, and person named in the application). It is well established that an existing institutional health service must obtain a new CON to relocate outside this service area. N.C. Gen. Stat. \u00a7 131E-176(16)(q). This is because \u00b0\u201cthe relocation of a health service facility from one service area to another\u201d establishes a \u201cnew institutional health service.\u201d Id,.; But see Christenbury Surgery Center v. N.C. Dep\u2019t of Health, 138 N.C. App. 309, 531 S.E.2d 219 (2000). Similarly, we hold that an existing institutional health service must obtain a new CON to open a \u201cbranch office\u201d outside its service area. Such an office, regardless of the label affixed by its developer, is a \u201cnew institutional health service\u201d for which a CON is required.\n3. Conclusion\nFor the reasons stated above, we hold that the opening of a branch office by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. This holding is applicable only to Chapter 131E as it existed in July 2005. We further hold that the Greensboro hospice office proposed by Liberty is not located within its current service area; therefore, the proposed office is a \u201cnew institutional health service\u201d for which Liberty was required to obtain a CON. Accordingly, this assignment of error is overruled.\nB. Substantial Prejudice\nLiberty assigns error to DHHS\u2019s denial of its motion for summary judgment. In support of its argument, Liberty contends that HGI failed to allege in its petition for a contested case hearing that the CON Section \u201csubstantially prejudiced\u201d its rights and failed to forecast evidence of \u201csubstantial prejudice\u201d as required by N.C. Gen. Stat. \u00a7 150B-23(a) (2005). We disagree and hold that the issuance of a \u201cNo Review\u201d letter, which results in the establishment of \u201ca new institutional health service\u201d without a prior determination of need, substantially prejudices a licensed, pre-existing competing health service provider as a matter of law.\nN.C. Gen. Stat. \u00a7 150B-23(a) provides, in part, that a petition for a contested case hearing \u201cshall state facts tending to establish that the agency named as the respondent has deprived the petitioner of property, has ordered the petitioner to pay a fine or civil penalty, or has otherwise substantially prejudiced the petitioner\u2019s rights.\u201d Here, HGI alleges only that the CON Section\u2019s issuance of a \u201cNo Review\u201d letter to Liberty has \u201csubstantially prejudiced\u201d its rights. In support of this allegation, HGI forecast evidence regarding the potential for loss of patients, patient confusion, and impairment of fund-raising for non-profit hospices. Because we resolve this issue as a matter of law, we do not consider the sufficiency of the evidence forecast by HGI.\nHGI is a hospice care provider that has been operating licensed hospices in Guilford County since 1978 and has a significant interest in ensuring that unnecessary and duplicative hospice services are hot opened in its service area. Because an applicant for a CON must \u201cdemonstrate that the proposed project will not result in unnecessary duplication of existing or approved health service capabilities or facilities,\u201d this interest (which the General Assembly has also determined to be a public interest) is vetted during the CON application process. Competing hospice providers, like HGI, may participate in the CON application process by filing \u201cwritten comments and exhibits concerning a proposal [for a new institutional health service] under review with the Department.\u201d N.C. Gen. Stat. \u00a7 131E-185(al) (2005). Such comments may include\na. Facts relating to the service area proposed in the application;\nb. Facts relating to the representations made by the applicant in its application, and its ability to perform or fulfill the representations made;\nc. Discussion and argument regarding whether, in light of the material contained in the application and other relevant factual material, the application complies with relevant review criteria, plans, and standards.\nId.\nHere, HGI was denied any opportunity to comment on the CON application, because there was no CON process. In fact, the CON Section\u2019s issuance of a \u201cNo Review\u201d letter to Liberty effectively prevented any existing health s\u00e9rvice provider or other prospective applicant from challenging Liberty\u2019s proposal at the agency level, except by filing a petition for a contested case. We hold that the issuance of a \u201cNo Review\u201d letter, which resulted in the establishment of a \u201cnew institutional health service\u201d in HGI\u2019s service area without a prior determination of need was prejudicial as a matter of law. Cf. In re Wilkesboro, Ltd., 55 N.C. App. 313, 285 S.E.2d 626 (decided under prior law, holding that the petitioner was entitled to a contested case hearing, and concluding that the petitioner, who was a competitor of the respondent, had \u201ca substantial stake in the outcome of the controversy, such that the Court could, \u201cin fact, think of no better person to assure complete review of this issue\u201d).\nIV. Conclusion\nFor the reasons stated above, we hold that the CON Section\u2019s issuance of a \u201cNo Review\u201d letter is the issuance of an \u201cexemption\u201d for purposes of section 131E-188(a). Accordingly, we conclude that section 131E-188(b) confers jurisdiction on this Court to hear the incident appeal.\nAdditionally, we hold that the opening of a branch office by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. As explained above, this holding is applicable only to Chapter 13 IE as it existed in July 2005. We further hold that the Greensboro hospice office proposed by Liberty is not located within the current service area of its Fayetteville hospice; therefore, the proposed office is a \u201cnew institutional health service\u201d for which Liberty must obtain a CON.\nFinally, we hold that the issuance of a \u201cNo Review\u201d letter, which results in the establishment of \u201ca new institutional health service\u201d without a prior determination of need, substantially prejudices a licensed, pre-existing competing health service provider as a matter of law.\nAccordingly we affirm the final agency decision entered on or about 12 June 2006 by DHHS, DFS Director Robert J. Fitzgerald awarding summary judgment to HGI.\nAFFIRMED.\nJudges MCCULLOUGH and CALABRIA concur.\n. Although the letter from Liberty stated that a \u201csigned Hospice Plan of Care identifying the location of this patient is attached,\u201d the form actually attached was a Home Health Certification and Plan of Care, which is DHHS Health Care Financing Administration Form 4-485, not a hospice care plan.\n. Additionally, we note that Rule 21 of the North Carolina Rules of Appellate Procedure authorizes this Court to grant certiorari review only \u201cwhen the right to prosecute an appeal has been lost by failure to take timely action, or when no right to appeal from an interlocutory order exists, or for review pursuant to N.C. Gen. Stat. \u00a7 15A-1422(c)(3) of an order of the trial court denying a motion for appropriate relief.\u201d N.C. R. App. P. 21(a)(1) (2005). None of these circumstances are present in the case sub judice.\n. N.C. Gen. Stat. \u00a7 131E-188(c) (2005) defines an \u201caffected person\u201d as \u201cthe applicant . . . [and] any person who provides services, similar to the services under review, to individuals residing within the service area or the geographic area proposed to be served by the applicant.\u201d\n. This interpretation of section 131E-188 is consistent with the CON section\u2019s own understanding of \u201cNo Review\u201d letters. The CON section itself described the \u201cNo Review\u201d process as an \u201cexemption\u201d in the attachment to its 30 March 2005 letter to Liberty. In that letter, the CON section explained what information it needed to consider Liberty\u2019s request for \u201cNo Review.\u201d The attachment contained the following template for the title of Liberty\u2019s \u201cNo Review\u201d request: \u201cRE: Exempt from review/branch office of cname of existing licensed hospice>Medicare Provider.\u201d (Emphasis added.) The final DHHS agency decision also states that appeal lies to this Court pursuant to section 131E-188.\n. At that time, section 131E-176(12) defined a \u201chome health agency\u201d as \u201ca private organization or public agency, whether owned or operated by one or more persons or legal entities, which furnishes or offers to furnish home health services.\u201d N.C. Gen. Stat. \u00a7 131E-176(12) (1989).\n. Thereafter, the North Carolina General Assembly amended the statutory definition of \"new institutional health service\u201d to include \u201c[t]he opening of an additional office by an existing home health agency within its service area as defined by rules adopted by the Department; or the opening of any office by an existing home health agency outside its service area as defined by rules adopted by the Department.\u201d 1991 N.C. Sess. Laws 2222.\n. Recently, the General Assembly further amended the statutory definition of \u201cnew institutional health service\u201d to include \u201cthe opening of an additional office by an existing . . . hospice within its service area ... or outside its service area.\u201d 2005 N.C. Sess. Laws 1179. Although this session law was ratified by the General Assembly on 16 August 2005 and signed by the Governor on 26 August 2005, it did not \u201cbecome[] effective for hospices and hospice offices\u201d until 31 December 2005. 2005 N.C. Sess. Laws 1184. Liberty requested a \u201cNo Review\u201d letter for its proposed Greensboro office in March 2005, shortly before the original Bill was filed in the Senate. S. 740, 2005 Gen. Assem., Reg. Sess. (N.C. 2005).\n. Our holding is consistent with a 15 February 2004 declaratory ruling entered by DFS Director John M Syria, who determined that an existing, licensed hospice did not need to obtain a CON to open a \u201cbranch office\u201d within its \u201cexisting service area.\u201d\n. At that time, the SMFP stated that \u201c[a] proposed service area (for home health services) may also consist of a grouping of contiguous counties.\u201d N.C. Dep\u2019t of Health and Human Servs., 1989 State Medical Facilities Plan 27 (1989).\n. We note that Total Care did not define \u201cbranch office\u201d as it was undisputed in that case that the new home health office was a \u201cbranch office. The CON law contains no formal definition of a \u201cbranch office.\u201d For purposes of this opinion reviewing summary judgment, we assume that Liberty\u2019s Greensboro office is a \u201cbranch office.\u201d However, this opinion also does not define \u201cbranch office\u201d as such a holding is not necessary.", "type": "majority", "author": "STROUD, Judge." } ], "attorneys": [ "Wyrick Robbins Yates & Ponton, LLP by K. Edward Greene for Respondent-intervenor Liberty Home Care, LLC.", "Smith Moore, LLP by Maureen Demarest Murray and Susan M. Fradenburg for Petitioner Hospice at Greensboro, Inc. d/b/a Hospice and Palliative Care of Greensboro\u2019s and Hospice of the Piedmont, Inc.", "Attorney General Roy A. Cooper, III by Assistant Attorney General June S. Ferrell for Respondent-Appellee N. C. Dept, of Health and Human Services.", "Bode Gall & Stroupe, L.L.P. by Matthew A. Fisher for Amicus Community CarePartners, Inc.", "Maupin Taylor, P.A. by Marcus C. Hewitt for Amicus Community Home Care of Johnston County, Inc., Garrolton Home Care, Inc., and Community Home Care of Vance County, Inc.", "Parker Poe Adams & Bernstein by Renee J. Montgomery, Susan L. Dunathan, and Robert A. Leandro for Amicus Hospice & Palliative Care Charlotte Region d/b/a Hospice at Charlotte.", "Johnston, Allison & Hord, P.A. by Patrick E. Kelly for Amicus The Carolinas Center for Hospice and End of Life Care." ], "corrections": "", "head_matter": "HOSPICE AT GREENSBORO, INC. d/b/a HOSPICE AND PALLIATIVE CARE OF GREENSBORO and HOSPICE OF THE PIEDMONT, INC., Petitioner v. NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES DIVISION OF FACILITY SERVICES, LICENSURE AND CERTIFICATION SECTION and NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF FACILITY SERVICES, CERTIFICATE OF NEED SECTION, Respondents, and LIBERTY HOME CARE, LLC, Respondent-Intervenor\nNo. COA06-1204\n(Filed 7 August 2007)\n1. Hospitals and Other Medical Facilities\u2014 hospice \u2014 no review letter \u2014 exemption\u2014appeal to Court of Appeals\nThe issuance of a \u201cno review\u201d letter by the N.C. Department of Health and Human Services Certificate of Need section is the issuance of an \u201cexemption\u201d for purposes of N.C.G.S. \u00a7 131E-188(a), so that there may be an immediate appeal to the Court of Appeals rather than to superior court.\n2. Hospitals and Other Medical Facilities\u2014 certificate of need \u2014 hospice\u2014branch office\nThe opening of a branch office by an established hospice within its current service area is not the construction of a new institutional health service for which a certificate of need (CON) is required (as Chapter 131E existed in July 2005). However, Liberty was required to obtain a CON for its proposed Greensboro hospice office because that office is not located within the current service area of its Fayetteville office and is a new institutional health service.\n3. Hospitals and Other Medical Facilities\u2014 hospice \u2014 no review letter for expansion \u2014 prejudice to existing competing provider\nThe issuance of a \u201cno review\u201d letter, which results in the establishment of a new institutional health service (in this case a hospice) without a prior determination of need, substantially prejudiced a licensed, pre-existing competing health service provider as a matter of law.\nAppeal by respondent-intervenor from final agency decision entered on or about 12 June 2006 by North Carolina Department of Health and Human Services, Division of Facility Services Director Robert J. Fitzgerald. Heard in the Court of Appeals 11 April 2007.\nWyrick Robbins Yates & Ponton, LLP by K. Edward Greene for Respondent-intervenor Liberty Home Care, LLC.\nSmith Moore, LLP by Maureen Demarest Murray and Susan M. Fradenburg for Petitioner Hospice at Greensboro, Inc. d/b/a Hospice and Palliative Care of Greensboro\u2019s and Hospice of the Piedmont, Inc.\nAttorney General Roy A. Cooper, III by Assistant Attorney General June S. Ferrell for Respondent-Appellee N. C. Dept, of Health and Human Services.\nBode Gall & Stroupe, L.L.P. by Matthew A. Fisher for Amicus Community CarePartners, Inc.\nMaupin Taylor, P.A. by Marcus C. Hewitt for Amicus Community Home Care of Johnston County, Inc., Garrolton Home Care, Inc., and Community Home Care of Vance County, Inc.\nParker Poe Adams & Bernstein by Renee J. Montgomery, Susan L. Dunathan, and Robert A. Leandro for Amicus Hospice & Palliative Care Charlotte Region d/b/a Hospice at Charlotte.\nJohnston, Allison & Hord, P.A. by Patrick E. Kelly for Amicus The Carolinas Center for Hospice and End of Life Care." }, "file_name": "0001-01", "first_page_order": 33, "last_page_order": 50 }