KENNESTONE HOSPITAL, INC D/B/A WELLSTAR KENNESTONE HOSPITAL v. GEORGIA DEPARTMENT OF COMMUNITY HEALTH

THIRD DIVISION
ELLINGTON, P. J.,
BETHEL, J., and SENIOR APPELLATE JUDGE PHIPPS

NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules

June 1, 2018

In the Court of Appeals of Georgia
A18A0211. KENNESTONE HOSPITAL, INC. d/b/a WELLSTAR
KENNESTONE HOSPITAL et al. v. GEORGIA
DEPARTMENT OF COMMUNITY HEALTH et al.

ELLINGTON, Presiding Judge.

Kennestone Hospital, Inc. (“Wellstar Kennestone”) and Wellstar Cobb Hospital

Cancer Center, LLC (“Wellstar Cobb”) (collectively, “Wellstar”) appeal from the

order of the Superior Court of Cobb County affirming the Georgia Department of

Community Health’s (“DCH”) grant of a certificate of need (“CON”) to Piedmont

Hospital, Inc. d/b/a Piedmont Atlanta Hospital (“Piedmont”) for establishment of a

radiation therapy service in Cobb County. We affirm for the reasons set forth below.

The CON program, which is administered by DCH, “establishes a system of

mandatory review requiring that, before new institutional health services and facilities

can be developed, the developer must apply for and receive a CON from DCH.
OCGA §§ 31-6-1; 31-6-40 (a), (b).” ASMC, LLC v. Northside Hosp., Inc., 344 Ga.

App. 576, 577 (810 SE2d 663) (2018). DCH reviews and either grants or denies a

CON application “under general and specific review considerations in rules and

regulations promulgated by the DCH as set forth in Ga. Comp. R. & Regs. (rule or

rules) 111-2-1-.09 and 111-2-2-.01 through 111-2-2-.43.” Id.

The record shows that Piedmont, a general acute care hospital located in Fulton

County, offers radiation therapy services at two of its Atlanta campuses. Piedmont

operates one non-special purpose megavoltage radiation therapy (“non-special

MRT”) linear accelerator unit at its main campus on Peachtree Road (“Piedmont

Main”) and two such units at its “Piedmont West” campus on Howell Mill Road. In

2015, DCH published notice that there was not sufficient need for non-special MRT

services to warrant its acceptance of new applications for such services pursuant to

the need methodology set forth in its regulations.1 The notification provided that DCH

would nevertheless accept and review applications for new or expanded non-special

MRT services under the regulatory exceptions to the need methodology.2 One such

exception is the “atypical barrier” to care exception, which authorizes CONs “[t]o

1
See Ga. Comp. R. & Regs. r. 111-2-2-.42 (3) (a).
2
See Ga. Comp. R. & Regs. r. 111-2-2-42 (3) (b).

2
remedy an atypical barrier to non-special MRT services based on cost, quality,

financial access and geographic accessibility.”3

In response to the review notification, Piedmont filed an application with DCH

seeking a CON for a project that included decommissioning one of its linear

accelerators at Piedmont West and installing a new linear accelerator at its Kennesaw,

Cobb County, facility. Piedmont sought the CON on the ground that its project sought

to remedy an atypical barrier to care.

Wellstar, through a statement and a presentation to DCH, opposed Piedmont’s

CON application. Wellstar Kennestone offers radiation therapy services and operates

three non-special MRT units at its main campus in Marietta, Cobb County. Wellstar

Cobb provides radiation therapy services, including two linear accelerators, at its

campus in Austell, Cobb County.

Following its initial review,4 DCH denied Piedmont’s request for a CON to

establish non-special MRT service at the Kennesaw, Cobb County location. DCH

found, among other things, that Piedmont “failed to demonstrate that non-special

3
See Ga. Comp. R. & Regs. r. 111-2-2-42 (3) (b) 4.
4
See OCGA § 31-6-43 (governing acceptance or rejection of CON
applications).

3
radiation therapy services are not available to the proposed service population despite

the existence of a service in such close proximity[.]” Piedmont appealed DCH’s

initial decision to the Certificate of Need Appeal Panel for an administrative appeal

hearing,5 and Wellstar intervened in the hearing in support of DCH’s initial decision.6

Following an evidentiary hearing, the hearing officer reversed DCH’s initial decision

and ordered that DCH issue a CON to Piedmont.

In summary, the hearing officer’s findings show the following. Piedmont’s

proposed project in Kennesaw would primarily serve Cobb and Fulton County, with

a secondary service area in Cherokee and Pickens County. Radiation therapy services

are concentrated in the core of Atlanta notwithstanding growing populations in the

counties north of the city, resulting in a maldistribution of services. The roadways

5
The Certificate of Need Appeal Panel, which consists of a panel of
independent hearing officers, is an agency separate from the DCH and serves to
review DCH’s initial decision to grant or deny a CON application. OCGA § 31-6-44
(a). The appointed hearing officer conducts a full evidentiary hearing, OCGA § 31-6-
44 (e), and “[t]he appeal hearing conducted by the appeal panel hearing officer shall
be a de novo review of the decision of the department.” OCGA § 31-6-44 (f).
6
See OCGA § 31-6-44 (d) (“Any applicant for a project [or] any competing
health care facility that has notified the department prior to its decision that such
facility is opposed to the application before the department . . . shall have the right to
an initial administrative appeal hearing before an appeal panel hearing officer or to
intervene in such hearing.”).

4
needed to access Piedmont West and Piedmont Main are some of the most congested

in Atlanta. Other than Wellstar Kennestone, existing service providers are located 16

or more driving miles from the proposed project site and access to those providers

requires travel on roadways that are some of the most crowded in the State.

Many radiation courses require treatment on a daily basis, from Monday

through Friday, for a five to eight week period. Cancer patients often suffer from

conditions that impair their ability to drive or to travel, and the hearing officer noted

the “vast amount of physician testimony” addressing the debilitating effects of cancer,

its treatment, and the burden faced by cancer patients who must travel for radiation

therapy. Patients traveling from the project’s service area, the hearing officer

concluded, “face immense travel burdens that affect them physically, emotionally,

financially, and mentally, impacting their care and recovery.”

Cancer treatment also involves highly integrated care, and planning for cancer

services is different from other types of medical services because of the high number

of visits, the continued care, and the degree of coordination among multiple

specialists that is often required. Expert testimony supported a finding that it is in the

best interest of patients to receive radiation therapy care within an integrated health

care system as close to home as possible. Medical specialists who administer cancer

5
treatments closely coordinate patient treatment, often through interdisciplinary

meetings, but physicians outside the Piedmont system do not participate in those

meetings. When Piedmont cancer patients need radiation therapy and must obtain that

care outside the Piedmont system7 due to access concerns, their continuity of care is

broken, which negatively impacts those patients.8

The hearing officer found that many Piedmont patients face barriers to

radiation therapy services in the form of lack of continuity of care with their treatment

team, access to electronic medical records, and burdensome travel times. The hearing

officer also concluded that the proposed project to install a linear accelerator in

Kennesaw would allow certain patients to minimize their travel burdens and maintain

continuity of care. Although only five miles away from the site of the proposed

project, Wellstar Kennestone’s radiation therapy service was not, the hearing officer

found, a viable existing alternative to the project due to its high utilization9 and the

7
Physician testimony showed that Wellstar has a closed medical staff model
that precludes non-Wellstar physicians from treating patients at Wellstar’s radiation
therapy units.
8
For example, as one physician expressed at the hearing, “continuity of care
is extremely important because mistakes are made less often.”
9
Testimony at the hearing showed that utilization percentage has a particular
meaning in the context of radiation therapy services and is calculated by DCH using

6
lack of continuity of care for Piedmont patients. Based on these findings, the hearing

officer found that the CON requested by Piedmont was warranted under the atypical

barrier exception.

Wellstar appealed the hearing officer’s decision to the Commissioner of

DCH.10 In a final order, the Commissioner’s designee adopted the hearing officer’s

findings of fact and conclusions of law, affirmed the decision of the hearing officer,

and ordered DCH to award the requested CON to Piedmont. Wellstar sought judicial

review of DCH’s final order,11 which the superior court affirmed.12 Following this

Court’s grant of its application for discretionary appeal, Wellstar appeals from the

order of the superior court.

In reviewing DCH’s final order, the superior court was authorized to

reverse or modify the final decision only if substantial rights of the
appellant have been prejudiced because the procedures followed by the
department, the hearing officer, or the commissioner or the

a mechanism that weighs different visits based on category.
10
See OCGA § 31-6-44 (i).
11
For purposes of judicial review, DCH’s final order constituted the final
department decision. See OCGA § 31-6-44 (m)
12
See OCGA § 31-6-44.1 (providing for judicial review of DCH’s final
decision).

7
 administrative findings, inferences, and conclusions contained in the
final decision are: (1) In violation of constitutional or statutory
provisions; (2) In excess of the statutory authority of the department;(3)
Made upon unlawful procedures; (4) Affected by other error of law; (5)
Not supported by substantial evidence, which shall mean that the record
does not contain such relevant evidence as a reasonable mind might
accept as adequate to support such findings, inferences, conclusions, or
decisions, which such evidentiary standard shall be in excess of the “any
evidence” standard contained in other statutory provisions; or (6)
Arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion.

OCGA § 31-6-44.1 (a). Wellstar did not contest DCH’s findings of fact or contend

that its decision was not supported by substantial evidence. Thus, on judicial review

the superior court determined whether, as a matter of law, “the conclusions of law

drawn by the DCH from those findings of fact supported by substantial evidence are

sound.” (Citation and punctuation omitted.) ASMC, LLC v. Northside Hosp., Inc., 344

Ga. App. at 581. On appeal, this Court applies the same standard of review. Id. “[O]ur

duty is not to review whether the record supports the superior court’s decision but

whether the record supports the final decision of the administrative agency.” (Citation

and punctuation omitted.) Ga. Dept. Of Community Health v. Satilla Health Svcs.,

Inc., 266 Ga. App. 880, 883 (598 SE2d 514) (2004).

8
 1. At issue is whether DCH properly applied its “atypical barrier” exception in

awarding the CON. The atypical barrier exception contemplates that DCH may grant

a CON to an applicant so as “[t]o remedy an atypical barrier to non-special MRT

services based on cost, quality, financial access and geographic accessibility.” Ga.

Comp. R. & Regs. r. 111-2-2-.42 (3) (b) 4. In construing a similar rule in Surgery

Center, LLC v. Hughston Surgical Institute, LLC, 293 Ga. App. 879, 881-882 (668

SE2d 326) (2008) (physical precedent only), this Court concluded that a CON

applicant, in order to establish an atypical barrier to service, must show that “service

of a sufficiently high quality was not available in the area, that a particular group of

patients needed such care, and that the proposed project would reach this

population.”13 The hearing officer, in reliance on Hughston Surgical, found that in

order to qualify for the atypical barrier to care exception Piedmont was required to

show: “(1) that radiation therapy services are not sufficiently available in the project

area, (2) that there is an identified population of patients in need of radiation therapy

services who are not able to access those services, and (3) that Piedmont’s proposed

project will remedy the atypical barrier.”

13
The parties agree that the Hughston Surgical criteria should apply in
assessing whether an applicant has shown an atypical barrier to non-special MRT
services.

9
 Wellstar argues that DCH’s final order was arbitrary, capricious, and an abuse

of discretion in that it ruled that the atypical barrier exception may be granted to

improve access to particular provider of radiation therapy services– in this case to

remedy barriers faced by Piedmont patients in accessing Piedmont’s radiation therapy

services. See OCGA § 31-6-44.1 (a) (6). Rather, Wellstar maintains, Ga. Comp. R.

& Regs. r. 111-2-2-.42 (3) (b) 4 refers to barriers to “non-special MRT services”

(emphasis supplied), and not to barriers in accessing a particular provider. DCH’s

final order, Wellstar maintains, is therefore (i) inconsistent with the plain language

of DCH regulations, OCGA § 31-6-40 et seq. (the “CON Act”), and this Court’s

decision in Hughston Surgical, and (ii) ignores DCH’s own interpretation of the

atypical barrier exception.

(a) DCH’s final order does not expressly rule that the atypical barrier exception

may be applied to improve access to a particular provider of radiation therapy

services. Rather, Wellstar points to the findings made by the hearing officer and

argues that, given these findings, which were incorporated in DCH’s final order, DCH

awarded the CON based on difficulties faced by Piedmont patients in accessing

radiation therapy at Piedmont’s two existing locations rather than a barrier in

accessing radiation therapy services generally. The hearing officer’s decision does

10
identify, among other things, the difficulty Piedmont patients face in accessing

Piedmont’s existing radiation therapy services, and its findings often refer to barriers

faced by Piedmont patients in particular, not only in traveling from the project area

but in maintaining continuity of care. Wellstar acknowledges, however, that DCH

administrative precedent shows that a CON applicant may rely on its own patients as

the type of patient facing an atypical barrier to care.14 In addition to Piedmont’s

radiation therapy services, the hearing officer considered Wellstar Kennestone and

“all other providers” within at least 16 miles of the project in assessing whether there

was a barrier to care. The hearing officer also expressly applied the Hughston

Surgical criteria and acknowledged that at issue was whether radiation therapy

services were not sufficiently available in the project area. Additionally, the hearing

14
For example, the record shows that, based on the atypical barrier exception,
the DCH granted Northeast Georgia Medical Center a CON to acquire and operate
a linear accelerator to provide radiation therapy services at the applicant’s existing
campus in Hall County. The project proposed to remedy a barrier to quality of care
for a subset of patients in the vicinity of that campus. In its decision, the hearing
officer considered evidence of the applicant’s patients who faced difficulties
accessing treatment as “representative of the type of patients experiencing a barrier
to care,” and found that DCH “reasonably concluded that, for a subset of patients in
[the area of the proposed project], the requirement to travel to the [applicant’s main
campus] for treatment” caused hardships such as aggravation of side effects and
missing or altering treatment.

11
officer’s findings show the integrated nature of cancer care, often involving

numerous specialists, and the importance of maintaining continuity of care in

receiving radiation therapy–which is far different from, as the hearing officer noted,

“choosing a physical therapist after an orthopedic referral.” The hearing officer’s

factual findings and conclusions of law are 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 CON simply for the purpose of making it more

convenient for Piedmont patients to drive to a Piedmont facility. Wellstar does not

show that DCH in its final order violated Ga. Comp. R. & Regs. r. 111-2-2-.42 (3) (b)

4, the CON Act, or the Hughston Surgical criteria.

(b) Wellstar also contends that DCH failed to follow its own administrative

precedent and did not explain its departure from that precedent. See Charter

Medical-Fayette County v. Health Planning Agency, 181 Ga. App. 184, 184 (2) (351

SE2d 547) (1986) (reviewing claim of error that, in denying a certificate of need, the

health planning agency departed from administrative precedent without

explanation).15 The record shows that, in a previous decision, DCH denied a CON

15
See generally Atchison, Topeka & Santa Fe R. Co. v. Wichita Board of
Trade, 412 U.S. 800, 808 (II) (37 LE2d 350, 93 SCt 2367) (1973) (an agency’s
departure from prior norms “must be clearly set forth so that the reviewing court may

12
application by Emory Johns Creek Hospital (the “Emory Johns Creek” decision) to

establish non-special MRT Services so as to remedy atypical barriers to such services

based on geographical accessability and quality.16 Wellstar argues that, in light of

Emory Johns Creek, DCH administrative precedent establishes that access to a

particular provider is not a valid basis for granting an atypical barrier exception, and

that DCH departed from that precedent without explanation. Although grant of the

CON would have the effect of making it easier for Piedmont patients to access

Piedmont’s radiation therapy services, evidence showed that the barriers faced by

Piedmont patients had an adverse effect on the quality of patient care. In Emory Johns

understand the basis of the agency’s action”).
16
In Emory Johns Creek, the proposed project “was expected to yield greater
conveniences specifically in accessing MRT Services associated with Emory
Healthcare.” The project was also “expected to increase patient access to the most
advanced cancer services within the defined service area, through innovative
treatment options, clinical trials and research.” In determining that there was no
geographical access barrier, the DCH found “that in-house access to MRT services,
as a non-emergent service, is not required for the service to be reasonably accessible
to the region or to any defined service area.” The DCH also noted that “access to a
particular provider, as the basis for granting an exception, would undermine the
Department’s health planning effort to maintain accessible services regionally[.]”
(Emphasis in original). In finding that there was no barrier to services based on
quality, the DCH found that “service area patients have reasonable access to quality
radiation therapy services . . . despite the service not being provided” at the proposed
location.

13
Creek, on the other hand, patients in the service area already had access to quality

radiation therapy services notwithstanding that the area may have lacked the “unique”

and “cutting edge” services that the applicant’s project sought to provide. Other

material differences in this case from Emory Johns Creek include the finding of a

maldistribution of services in Cobb County, where the proposed project is to be

located, and the barriers to continuity of care faced by patients in the proposed service

area. And, as the superior court noted, the Emory Johns Creek decision did not

involve existing area providers having limited or no capacity to provide radiation

therapy because they were full,17 near full, or largely inaccessible. Because of these

material differences, Wellstar does not show that DCH departed from established

administrative precedent, or that its final order should be deemed arbitrary and

capricious because it departed from such precedent without explanation.

2. Wellstar contends that DCH’s final order erroneously fails to consider the

ability of existing radiation therapy providers to serve the same pool of patients that

Piedmont’s project would serve. In evaluating a CON application, DCH is directed

to consider, among other things, whether “[e]xisting alternatives for providing

17
Evidence showed that Northstar Cherokee, the only radiation therapy
provider in Cherokee County, was operating at over 100 percent utilization in 2015.

14
services in the service area the same as the new institutional health service proposed

are neither currently available, implemented, similarly utilized, nor capable of

providing a less costly alternative[.]” OCGA § 31-6-42 (a) (3). See also Ga. Comp.

R. & Regs. r. 111-2-2-.09 (1) (c) (3) (In evaluating existing alternatives, “[u]tilization

of existing facilities and services similar to a proposal to initiate services shall be

evaluated to assure that unnecessary duplication of services is avoided.”).

Wellstar contends that DCH “erroneously concludes that Wellstar Kennestone

is not an existing alternative because it is not part of the Piedmont system.” Neither

DCH’s final order, nor the hearing officer’s findings of fact and conclusions of law

incorporated therein, make such a finding. Rather, the hearing officer concluded, even

if Wellstar Kennestone had more capacity, “it would not solve the disruption to

continuity of care identified by Piedmont.” Wellstar does not show that the hearing

officer’s findings as to the importance of continuity of care in promoting better

outcomes, and the negative impact on patients of the lack continuity of care, are

unsupported by substantial evidence. As the superior court noted, “if these barriers

[as to the lack of continuity of care generally, including lack of access to medical

records and treatment information for this subset of patients] didn’t exist, different

findings may have resulted.” Wellstar’s argument is without merit.

15
 3. Wellstar also claims that, notwithstanding that Kennestone Wellstar

radiation therapy services were operating at over 80 percent capacity, it was not, as

the hearing officer found, “full for health planning purposes.” Wellstar contends that

this finding constitutes an erroneous legal conclusion inasmuch as the exceptions to

the need standard “allow expansion of an existing service, if the actual utilization of

each radiation therapy unit within that service has exceeded 90% of optimal

utilization over the most recent two years.” Ga. Comp. R. & Regs. r. 111-2-2-.42 (3)

(b) 2. DCH was not, however, evaluating Piedmont’s CON application based on this

exception, and Wellstar does not show that the 90 percent utilization standard is the

controlling standard for purposes of considering existing alternatives to a proposed

service. Rather, the finding objected to by Wellstar was a finding of fact, and Wellstar

makes no attempt to show the finding was not supported by substantial evidence. At

the hearing, for example, Piedmont’s expert on health planning testified that Wellstar

Kennestone was “full for planning purposes.”

4. Wellstar argues that DCH’s final order erroneously construed the existing

alternative criterion for purposes of OCGA § 31-6-42 (a) (3) and failed to apply the

atypical barrier exception consistent with its own precedent. Although set forth as a

separate claim of error, Wellstar does not offer any independent argument in support

16
of this claim. Rather, Wellstar references arguments that it previously made and

which we have already considered. Accordingly, Wellstar shows no error.

5. Wellstar contends that DCH’s final order violates its due process and equal

protection rights under the Georgia and United States Constitutions by treating it

differently from other existing providers. See OCGA § 31-6-44.1 (a) (1) (“[T]he court

may reverse or modify the final decision only if substantial rights of the appellant

have been prejudiced because . . . the administrative findings, inferences, and

conclusions contained in the final decision are . . . [i]n violation of constitutional or

statutory provisions[.]”). Wellstar argues that it was treated differently from the

similarly situated health care providers who objected to the issuance of a CON in

Emory Johns Creek. See, e. g., Hughes v. Reynolds, 223 Ga. 727, 730 (157 SE2d 746)

(1967) (“Where laws are applied differently to different persons under the same or

similar circumstances, equal protection of law is denied.”). In light of the material

dissimilarities between this case and Emory Johns Creek, Wellstar does not show that

it is in the same or similar circumstances as the objecting providers in that decision.

It follows that this claim of error is without merit. See Charter Medical-Fayette

County v. Health Planning Agency, 181 Ga. App. at 185 (4) (dissimilarities in

17
circumstances in issuance of a CON rendered appellant’s equal protection argument

meritless).

In light of all of the foregoing, we conclude that the superior court did not err

in affirming DCH’s final order.

Judgment affirmed. Bethel, J., and Senior Appellate Judge Herbert E. Phipps

concur.

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