Appeal by Petitioners from a final agency decision entered 22
August 2005 by the North Carolina Department of Health and Human
Services, Division of Facility Services. Heard in the Court of
Appeals 10 October 2006.
Bode, Call & Stroupe, LLP, by S. Todd Hemphill, Diana Evans
Ricketts and Matthew A. Fisher, for petitioner-appellant.
Attorney General Roy Cooper, by Assistant Attorney General
Thomas M. Woodward, for respondent-appellee.
Wyrick Robbins Yates & Ponton, LLP, by K. Edward Greene, Lee
M. Whitman and Sarah M. Johnson, for respondent-intervenor
appellee, Bio-Medical Applications of North Carolina, Inc.
Poyner & Spruill, LLP, by William R. Shenton, Thomas R.
West and Pamela A. Scott, for respondent-intervenor
appellee, Total Renal Care of North Carolina, LLC.
MARTIN, Chief Judge.
Wake Forest University Health Sciences and Huntersville
Dialysis Center (hereinafter Petitioners) appeal the final agency
decision of the North Carolina Department of Health and HumanServices, Division of Facility Services, granting summary judgment
in favor of Respondents and upholding the decision of the
Certificate of Need Section of the Facility Services Division to
deny Petitioners' application for the transfer of ten dialysis
Briefly summarized, this appeal comes before us on the
following record: Petitioners filed a Certificate of Need (CON)
application with the North Carolina Department of Health and Human
Services, Division of Facility Services, Certificate of Need
Section (hereinafter Agency) for the approval of the transfer of
ten dialysis stations from Iredell County to Mecklenburg County.
The application sought to relocate dialysis stations to a
contiguous county based on the surplus of fifteen dialysis stations
in Iredell County and the deficit of ten dialysis stations in
Specifically, Petitioners' proposal would allow the transfer
of eighteen in-center dialysis patients currently served by
Petitioners' Lake Norman facility in Iredell County to the new
Huntersville facility in Mecklenburg County along with the transfer
of an existing home dialysis patient residing in Mecklenburg County
from Petitioners' Statesville Dialysis Center to the new
Huntersville facility. Petitioners sought to move dialysis
stations from the Iredell County facility with the most underused
capacity, Statesville Dialysis.
In general, there are two types of dialysis treatments
available to end-stage renal disease (ESRD) patients which areprovided by dialysis facilities: in-center hemodialysis and
peritoneal dialysis or home dialysis. In-center hemodialysis
involves the process of cycling a patient's blood through an
external dialysis machine that replaces the function of the kidney.
The external dialysis machines must be CON-approved and are known
as dialysis stations. Patients participating in in-center
hemodialysis treatment generally need treatment three times a week
in intervals of two-to-four hours.
The second method, home dialysis, involves the process of
patients introducing a sterile premixed solution into their
abdominal cavity. This method does not require the use of dialysis
stations within a dialysis center; however, patients must be
trained by the dialysis center for home dialysis over a period of
several weeks and then re-visit the center for regularly scheduled
On 28 July 2004 the Agency denied Petitioners' application
based upon the Agency's finding that the application did not
conform to the criterion set forth in Policy ESRD-2: Relocation of
Dialysis Stations. Specifically, the Agency found that
Petitioners' application failed to comply with the requirements
under ESRD-2 that dialysis stations be relocated only to
contiguous counties currently served
by the facility[.] (Emphasis
added). The Agency further found that Petitioners' application
failed to conform with Criterion 1, 3, 4, 5, 6, 12, and 18(a) under
N.C. Gen. Stat. § 131E-183(a). Subsequent to the Agency's denial of the application for a
CON, Petitioners filed a petition for a contested case hearing in
the Office of Administrative Hearings (hereinafter OAH). Total
Renal Care of North Carolina, LLC and Bio-Medical Applications of
North Carolina, Inc. (hereinafter Respondent-Intervenors) moved
to intervene, and their motions were subsequently granted by OAH.
Petitioners then filed a motion with OAH for partial summary
judgment and Respondent-Intervenors subsequently filed cross-
motions for summary judgment.
A recommended decision was issued by the Administrative Law
Judge (hereinafter ALJ) denying Petitioners' motion for partial
summary judgment, granting Respondent-Intervenors' motions for
summary judgment and recommending that the decision to deny the
application for a CON be upheld. The Agency adopted the
recommended decision of the ALJ and issued a final agency decision
in accordance therewith. Petitioners appeal, contending the Agency
erred in concluding that their application failed to meet Criterion
1 under ESRD-2.
Petitioners assert that the Agency's determination that their
application for a CON was non-conforming with Criterion 1 was
erroneous as a matter of law. Specifically, N.C. Gen. Stat. §
131E-183 states that all applications for a certificate of need
must comply with the policies and need determinations set forth in
the State Medical Facilities Plan (SMFP). N.C. Gen. Stat. §
131E-183(a)(1) (2005). Where a party contends that an agency decision was based on an
error of law, the appropriate standard of review is de novo
Dialysis Care of N.C., LLC v. N.C. Dep't of Health and Human
137 N.C. App. 638, 646, 529 S.E.2d 257, 261, aff'd
N.C. 258, 538 S.E.2d 566 (2000).
The 2004 SMFP Policy ESRD-2 governs the relocation of dialysis
stations and states:
Relocations of existing dialysis stations are
allowed only within the host county and to
contiguous counties currently served
facility. Certificate of need applicants
proposing to relocate dialysis stations shall:
(1) demonstrate that the proposal
shall not result in a deficit
in the number of dialysis
stations in the county that
would be losing stations as a
result of the proposed project,
as reflected in the most recent
semiannual Dialysis Report, and
(2) demonstrate that the proposal
shall not result in a surplus
of dialysis stations in the
county that would gain stations
as a result of the proposed
project, as reflected in the
most recent semiannual Dialysis
10A N.C.A.C. 14B.0138 (2006)(emphasis added).
The dispute in this case centers around the meaning of the
words currently served as contained in the aforementioned policy.
The final agency decision found the application for a certificate
of need to be non-conforming with this section in that it did not
report that any in-center dialysis patients from Mecklenburg County
were currently being served by the Statesville Dialysis Center, thelocation from which the stations were being relocated.
Specifically, the Agency concluded that in determining whether a
contiguous county was currently served by the facility from which
dialysis stations were being transferred, only in-center dialysis
patients were to be considered and not home based patients.
In interpreting a statute, we first look to the plain meaning
of its language. Where the language of a statute is clear, the
courts must give the statute its plain meaning; however, where the
statute is ambiguous or unclear as to its meaning, the courts must
interpret the statute to give effect to the legislative intent.
Burgess v. Your House of Raleigh,
326 N.C. 205, 209, 388 S.E.2d
134, 136-37 (1990). Respondent correctly notes that the reviewing
criteria are set forth in rules promulgated by the Agency and
therefore the Agency's interpretation of the policies should be
given some deference.
Although the interpretation of a statute by an
agency created to administer that statute is
traditionally accorded some deference by
appellate courts, those interpretations are
not binding. The weight of such [an
interpretation] in a particular case will
depend upon the thoroughness evident in its
consideration, the validity of its reasoning,
its consistency with earlier and later
pronouncements, and all those factors which
give it power to persuade, if lacking power to
Total Renal Care of N.C., LLC v. N.C. Dep't of Health and Human
171 N.C. App.
734, 740, 615 S.E.2d 81, 85 (2005) (citations
With these principles of construction in mind we must
determine the meaning of the words currently served as set forthin the SMFP guidelines for the relocation of dialysis stations. To
serve, as defined by American Heritage College Dictionary,
to provide goods and services for. American Heritage College
ed. 1997). Additionally, the Agency relied on
Principle 5 enumerated in the 2004 SMFP which states that in
projecting the need for new dialysis stations for end-stage renal
disease dialysis facilities in North Carolina that, [h]ome
patients will not
be included in the determination of need for new
stations. Home patients include those that receive hemodialysis or
peritoneal dialysis in their home. (Emphasis added).
The Agency asserts and this Court agrees that it is implicit
in the policies set forth, as well as in the action sought by
Petitioners, i.e., the transfer of dialysis stations, that only in-
center patients would be considered in determining whether the
application complies with ESRD-2. The application seeks to
transfer dialysis stations. These stations are only used by in-
center hemodialysis patients. While home-center patients would
benefit from the ability to transfer to a center located within
Mecklenburg County, they are not the patients currently served by
or sought to be served by the dialysis stations. Therefore, within
the context of applying for a certificate of need contemplating the
transfer of dialysis stations, the Agency correctly interpreted
ESRD-2's terms currently served to include only in-center
patients, those patients who now require the use of dialysis
stations. Accordingly, we overrule Petitioners' corresponding
assignment of error and hold the Agency correctly determined thatPetitioners' application for the transfer of ten dialysis stations
failed to conform to the criteria set forth under ESRD-2.
Because we affirm the Agency's final decision, we need not
address Respondents' cross-assignment of error. N.C.R. App. P
10(d) (2006); see Carawan v. Tate
, 304 N.C. 696, 286 S.E.2d 99
(1982)(purpose of cross-assignment of error is to protect an
appellee who has been deprived, by an action of the trial court, of
an alternative legal basis upon which the judgment might be
Judges WYNN and MCGEE concur.
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