STATE OF NORTH CAROLINA IN THE OFFICE OF ADMINISTRATIVE HEARINGS
COUNTY OF CABARRUS
RAI CARE CENTERS OF NORTH )
CAROLINA II, LLC d/b/a RAI CARE )
CENTERS-CONCORD, )
)
Petitioner, )
v. ) File No. 11 DHR 3173
)
N.C. DEPT. OF HEALTH AND HUMAN )
SERVICES, DIVISION OF HEALTH )
SERVICE REGULATION, CERTIFICATE )
OF NEED SECTION, )
)
Respondent, )
and )
)
TOTAL RENAL CARE OF NORTH )
CAROLINA, LLC, )
)
Respondent-Intervenor. )
__________________________________________)
TOTAL RENAL CARE OF NORTH )
CAROLINA, LLC, )
)
Petitioner, )
v. ) File No. 11 DHR 3476
)
N.C. DEPT. OF HEALTH AND HUMAN )
SERVICES, DIVISION OF HEALTH )
SERVICE REGULATION, CERTIFICATE )
OF NEED SECTION, )
)
Respondent, )
and )
)
RAI CARE CENTERS OF NORTH CAROLINA )
II, LLC d/b/a RAI CARE CENTERS- )
CONCORD, )
)
Respondent-Intervenor. )
__________________________________________)
This matter came for hearing before Joe L. Webster, Administrative Law Judge (“ALJ”), on October 3-7 and 11, 2011, in Raleigh, North Carolina. Having heard all of the evidence in the case, and having considered the exhibits, arguments, and relevant law, the undersigned makes the Findings of Fact, by a preponderance of the evidence, enters his Conclusions of Law thereon, and makes the following decision.
APPEARANCES
For RAI Care Centers of North Carolina II, LLC d/b/a RAI Care Centers-Concord:
Denise M. Gunter
Candace S. Friel
Nelson Mullins Riley & Scarborough LLP
The Knollwood, Suite 530
380 Knollwood Street
Winston-Salem, NC 27103
For Total Renal Care of North Carolina, LLC d/b/a Harrisburg Dialysis Center and total Renal Care of North Carolina LLC d/b/a Cabarrus County Dialysis:
William R. Shenton
Jessica M. Lewis
Poyner Spruill LLP
301 Fayetteville Street, Suite 1900
Raleigh, NC 27601
For Respondent N.C. Department of Health and Human Services, Division of Health Service Regulation, Certificate of Need Section:
June S. Ferrell
Assistant Attorney General
North Carolina Department of Justice
Post Office Box 629
Raleigh, NC 27602-0629
APPLICABLE LAW
1. The procedural statutory law applicable to this contested case hearing is the North Carolina Administrative Procedure Act ("APA"), N.C. Gen. Stat. § 150B-1, et seq.
2. The substantive statutory law applicable to this contested case hearing is the North Carolina CON Law, N.C. Gen. Stat. § 131E-175, et seq.
3. The administrative rules applicable to this contested case hearing are the North Carolina Certificate of Need Administrative Rules, 10A N.C.A.C. 14C.0101, et seq., the Criteria and Standards for End-Stage Renal Disease Services, 10A N.C.A.C. 14C.2200, et seq., and the Office of Administrative Hearings Rules, 26 N.C.A.C. 3.0001, et seq.
BURDEN OF PROOF
RAI, TRC Harrisburg and TRC Cabarrus each bears the burden of showing by the greater weight of the evidence that the Agency substantially prejudiced their respective rights, and that the Agency also acted outside its authority, acted erroneously, acted arbitrarily and capriciously, used improper procedure, or failed to act as required by law or rule:
1. In finding RAI’s competing application to develop a 23 station dialysis facility in Cabarrus County nonconforming with statutory review Criteria 1, 3, 4, 5, 6, 13(c), 18a and 20 and rules 10A N.C.A.C.14C.2203(a).
2. In finding TRC Harrisburg’s competing application to add stations to its existing dialysis facility in Cabarrus County, nonconforming with statutory review Criteria 1, 4, 18a and 20 and rules 10A N.C.A.C.14C.2204(7) and (1).
3. In finding TRC Cabarrus’s competing application to develop a 10 station dialysis facility in Cabarrus County nonconforming with statutory review Criteria 1, 4, 18a and 20.
N.C. Gen. Stat. § 150B-23(a); Britthaven, Inc. v. N.C. Dept. of Human Resources, et al., 118 N.C. App. 379, 455 S.E.2d 455, 459, disc. rev. denied, 341 N.C. 418, 461 S.E.2d 754 (1995). Also see generally, Jt. Ex. 1 at 1264-1332.
ISSUES PRESENTED
1. Whether the Agency exceeded its authority or jurisdiction; acted erroneously; failed to use proper procedure; acted arbitrarily or capriciously; or failed to act as required by law or rule law by finding the RAI Application nonconforming with multiple statutory review criteria in N.C. Gen. Stat. § 131E-183(a) and regulatory criteria in 10A N.C.A.C. 14C.2200 et seq., and denying the RAI Application.
2. Whether the Agency exceeded its authority or jurisdiction, acted erroneously; failed to use proper procedure; acted arbitrarily or capriciously; or failed to act as required by law or rule by finding the TRC Harrisburg Application nonconforming with multiple statutory review criteria in N.C. Gen. Stat. § 131E-183(a) and regulatory criteria in 10A N.C.A.C. 14C.2200 et seq., and denying the TRC Harrisburg Application.
3. Whether the Agency exceeded its authority or jurisdiction, acted erroneously; failed to use proper procedure; acted arbitrarily or capriciously; or failed to act as required by law or rule by finding the TRC Cabarrus Application nonconforming with multiple statutory review criteria in N.C. Gen. Stat. § 131E-183(a), and denying the TRC Cabarrus Application.
4. It was stipulated by the Parties that the following statutory review criteria are not at issue in this contested case: N.C. Gen. Stat. § 131E-183(a)(3a), Criterion 3a, § 131E-183(a)(7), Criterion 7, § 131E-183(a)(8), Criterion 8, § 131E-183(a)(9), Criterion 9, § 131E-183(a)(10), Criterion 10, § 131E-183(a)(12), Criterion 12, § 131E-183(a)(13(a-e)), Criterion 13, § 131E-183(a)(14), Criterion 14. (Joint Prehearing Order, p. 13)
WITNESSES
A. Witnesses for RAI
1. Angela Allen Matthes. Ms. Matthes currently is employed as an investigator at the North Carolina Board of Nursing. (Matthes, Vol. 1, p. 27) Ms. Matthes also worked at the Agency, first as a Project Analyst and then a Team Leader. (Matthes, Vol. 1, p. 28)
2. Martha Frisone. Ms. Frisone is currently employed as the Assistant Chief by the Agency, a position she has held since March 1, 2010. (Frisone, Vol. 1, pp. 133-34) Ms. Frisone has been employed by the Certificate of Need Section since 1994 and has served as a Project Analyst and Team Leader. (Frisone, Vol. 1, p. 134)
3. Tanya Rupp. Ms. Rupp is currently employed as a Project Analysis with the Agency. (Rupp, Vol. 1, p. 187) Ms. Rupp was the Project Analyst for the review of the RAI Application, the TRC Harrisburg Application, the TRC Cabarrus Application and the TRC Copperfield Application. (Rupp, Vol. 1, p. 190)
4. Celine Marie McGill. Ms. McGill is Regional Director for Renal Advantage, Inc. She has been employed by RAI since 2005. (McGill, Vol. 2, pp. 272-73)
5. Craig Richard Smith. Mr. Smith is the Chief of the Certificate of Need Section and has held that position since December 2009. (Smith, Vol. 2, p. 231) Mr. Smith has been employed by the Certificate of Need Section first as a Project Analyst and then as Assistant Chief since 1988. (Smith, Vol. 2, pp. 330-31)
6. Sawsan Yateem. Ms. Yateem is a Registered Nurse and Center Director of the RAI Glenwater facility in Charlotte. She has worked in dialysis care since 1993. (Yateem, Vol. 2, pp. 398, 400)
7. Maura Theresa McCann. Ms. McCann is a Registered Nurse and the Regional Quality Administrator for RAI and is responsible for thirteen outpatient dialysis clinics in both North Carolina and South Carolina. (McCann, Vol. 2, p. 438-39) She has been working in dialysis since the early 1970s. (McCann, Vol. 2, p. 439) She was admitted by the Court as an expert witness is the field of quality assurance and outpatient dialysis clinics. (McCann, Vol. 2, p. 446)
8. David Stephen Legarth. Mr. Legarth is the owner of DanEs Planning, Inc., a health care planning firm specializing in CON preparation and other related CON regulatory issues primarily in the State of North Carolina. (Legarth, Vol. 2, p. 488) Mr. Legarth was the preparer of the RAI Application. He holds a bachelor's degree in business administration from East Carolina University and a master's degree in health care administration from the University of North Carolina at Chapel Hill. He has prepared approximately 90 CON applications as the sole preparer and has assisted with the preparation of approximately 40 to 50 additional CON applications concerning a variety of proposals and modalities. (Legarth, Vol. 2, pp. 487-89) Mr. Legarth was admitted by the Court as an expert witness in CON preparation and analysis and health planning. (Legarth, Vol. 2, p. 496)
B. Witnesses for TRC Harrisburg and TRC Cabarrus
1. William K. Halstenberg, M.D. Dr. Halstenberg is a nephrologist licensed to practice medicine in the State of North Carolina. (Halstenberg, Vol. 1, p. 89) Dr. Halstenberg is employed at Central Carolina Nephrology in Concord, Cabarrus County, North Carolina.
2. Tammy Leahy. Ms. Leahy is a Registered Nurse and Regional Operations Director for DaVita. (Leahy, Vol. 3, pp. 738-39) She has been employed in that capacity for six years and as of the date of the TRC Applications was responsible for TRC Copperfield and TRC Harrisburg facilities. (Leahy, Vol. 3, p. 739)
3. Celine Codd. Ms. Codd is a Registered Nurse and is employed as the Director of Clinical Services for DaVita. (Codd, Vol. 4, pp. 844-45) She has held that position for seven to eight years and is responsible for high level overview of facilities in North Carolina, Virginia and South Carolina as it related to quality, education and survey preparedness. (Codd, Vol. 4, p. 846) Ms. Codd was admitted as an expert witness by the Court in matters relating to quality assurance in outpatient dialysis facilities. (Codd, Vol. 4, p. 847)
4. Daniel J. Sullivan. Mr. Sullivan is employed by Sullivan Consulting Group, Inc. (Sullivan, Vol. 4, p. 968) Mr. Sullivan holds a master's degree in health administration from Duke University. He has worked in the health care industry since 1974. (Sullivan, Vol. 4, p. 969) Mr. Sullivan was admitted by the Court as an expert witness in the areas of CON preparation and analysis and health planning. (Sullivan, Vol. 4, p. 972)
5. William Lawrence Hyland. Mr. Hyland is the Director of Health Care Planning for DaVita, Inc. where he has been employed nearly twelve years. (Hyland, Vol. 4, p. 1111) He prepared the TRC Harrisburg, TRC Cabarrus and TRC Copperfield Applications. Mr. Hyland was admitted by the Court as an expert witness in dialysis certificate of need preparation and analysis.
C. Witnesses for Agency
1. Tanya S. Rupp. Ms. Rupp holds a Bachelor of Arts degree in political science and a Juris Doctor degree. (Rupp, Vol. 5, p. 1228) She has been employed as a Project Analyst by the CON Section since 2005. (Id.)
2. Craig Richard Smith. Mr. Smith is the Chief of the CON Section and has worked for the CON Section for over 23 years. (Smith, Vol. 6, p. 1283) He holds a bachelor's degree in political science from the University of New Hampshire and a master's degree in urban and regional planning from Virginia Tech. (Smith, Vol. 6, p. 1285) He has been responsible for approximately 600 dialysis decisions over his tenure at the CON Section. (Id.)
EXHIBITS ADMITTED INTO EVIDENCE
Joint Exhibits
1. Agency File
2. CON Application of TRC Cabarrus, Project I.D. No. F-8581-10
3. CON Application of TRC Copperfield, Project I.D. No. F-8584-10
4. CON Application of TRC Harrisburg, Project I.D. No. F-8577-10
5. CON Application of RAI, Project I.D. No. F-8590-10
RAI Exhibits
101. Respondent's Objections and Responses to Petitioner's First Set of Interrogatories and First Request for Production of Documents
104. Map: Projected Population Growth, 2010-2020
105. Chart: Annual County Population Totals, 2010-2019
106. Web Page: University Medical Associates/Medical Providers
107. Web Page: Carolinas Medical Center/Carol Anne Rupe, M.D.
108. Licensee Information – Amir Ishak Kaldas, M.D.
109. Licensee Information – Curtis William DeSena, M.D.
110. Licensee Information – Ronnie Thurston Beamon, M.D.
111. Licensee Information – Shalini Mundra, M.D.
112. Licensee Information – Roberto Fulvio Ferraro, M.D.
113. Tally of RAI Physician Letters in RAI Application Number 12
114. Web Page: Town of Huntersville
115. Chart: Census figures for Mecklenburg County
116. Chart: Zip Code of Residence for Patients Currently Dialyzing in Network 6 Units (grouped by State and County and current as of 1/3/2011)
117. Chart: Zip Code of Residence for Patients Currently Dialyzing in Network 6 Units (grouped by State and County and current as of 10/6/2010)
118. Total Renal Care of North Carolina, LLC's Responses and Objections to RAI Care Centers of North Carolina II, LLC d/b/a RAI Care Centers-Concord's First Set of Interrogatories and First Request for Production of Documents
119. Required State Agency Findings dated 2/10/09 issued to Total Renal Care of North Carolina, LLC d/b/a Davie County Dialysis Center, Project I.D. No. G-8222-08 and Wake Forest University Health Sciences and Davie Kidney Center of Wake Forest University d/b/a Davie Kidney Center, Project I.D. No. G-8227-08
120. C.V. of Maura Traynor McCann
123. TRC Copperfield August 3, 2009 Licensure and Certification Survey Report, RAI Bates-Stamp RAI CABARRUS 2757-2774
125. Dialyzer
126. Dialyzer with top off to expose fibers
127. Clamp
134. DaVita Mission Statement
139. Dr. Van Wyck's PowerPoint Presentation entitled Governance, Administrative & Supervisory Issues for the Medical Director
140. Letter dated 3/18/10 to North Charlotte Dialysis Center from Acute and Home Care Licensure and Certification Section regarding Recertification Survey and attached March 4, 2010 survey report (for impeachment purposes only)
141. Letter dated 2/16/11 to Southeastern Dialysis-Wilmington from Acute and Home Care Licensure and Certification Section regarding Follow-Up Survey, ESRD CMS Certification Number (CCH): 34-2511 and attached January 21, 2011 survey report (for impeachment purposes only)
142. Letter dated 3/30/09 to Dialysis Care of Richmond County from Acute and Home Care Licensure and Certification Section regarding Medicare Complaint Survey, CMS Certification Number (CCN): 342539 (for impeachment purposes only)
143. Letter dated 1/10/11 to Charlotte East Dialysis from Acute and Home Care Licensure and Certification Section regarding Follow-Up Survey, ESRD CMS Certification Number (CCN): 34-2627 and attached October 21 and 28, 2010 survey reports (for impeachment purposes only)
145. January 15, 2009 Dialysis Care of Kannapolis Survey Report (for impeachment purposes only)
146. Letter dated 4/21/09 to Goldsboro South Dialysis from Acute and Home Care Licensure and Certification Section regarding Medical Recertification Survey, CMS Certification Number (CCH): 342587 and attached April 9, 2009 survey report (for impeachment purposes only)
147. Letter dated 8/2/10 to Vance County Dialysis from Acute and Home Care Licensure and Certification Section regarding Medicare Recertification Survey, CMS Certification Number (CCH): 342543 and attached July 16, 2010 survey report (for impeachment purposes only)
149. David Legarth Expert Opinion, June 24, 2011
152. Documents Produced by TRC (p. 467 only)
154. Chart: List of Patients in Cabarrus County and Huntersville