2004-824, APPEAL OF ST. JOSEPH HOSPITAL

described its service area as including the Merrimac k Valley of Massachusetts construction of a rehabilitation hospital. In its application, Northeast In 1982, the board issued a Certificate of Need (CON) to Northeast for the

affirm. Joseph had standing to move for reconsideration of the board’s decision. We chapter 151 - C (2005). Northeast cross - appeals the board’s decision that St. Medical Center in Nashua is not subject to review by the board under RSA Northeast’s facility in Salem to the campus of Southern New Hampshire (Northeast), to relocate fifteen comprehensive physical rehabilitation beds f rom (board) that the proposal by the respondent, Northeast Rehabilitation Hospital decision of the New Hampshire Health Services Planning and Review Board DUGGAN, J. The petitioner, St. Joseph Hospi tal (St. Joseph), appeals a

III, on the brief and orally), for the respondent. Wadleigh, Starr & Peters, P.L.L.C., of Manchester (Eugene M. Van Loan,

Christopher H.M. Carter on the brief, and Mr. Carter orally), for the petitioner. Hinckley, Allen & Snyder LLP, of Concord (Neil F. Castaldo and

(New Hampshire Health Services Planning and Review Board)

No. 2004 - 824 Health Services Planning and Review Board

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

the named facility in Salem to another existing facility in Nashua. existing CON does not permit, absent CON review, the relocation of beds from board regulations, N.H. Admin. Rules, He - Hea 70 p. 2 2.06(e), (j); and (3) North east’s (2) the proposed relocation constitutes a transfer of rehabilitation beds under establishment of a new institutional health service under RSA chapter 151 - C; RSA chapter 151 - C because: (1) the proposed re location constitutes the St. Joseph argues that the proposed relocation is subject to review under

704 (1991). standing and reach the merits of its appeal. See Stuart v. State, 134 N.H. 70 p. 2 2, Joseph had standing. We will assum e, without deciding, that St. Joseph had On appeal, Northeast argues that the board erred in determining that St.

review. upheld its original order that the proposed relocation was not subject to board substantially from th at described in Northeast’s CON application. The board of the CON applicant; and (6) the location of the relocated beds will not differ operation of Northeast; (5) the proposed relocation will not change the identity without any control or influence over the clinical practices, administration or of Southern New Hampshire Medical Center will be limited to that of landlord, and Northeast will remain separate and distinct corporate entities; (4) the role Hampshire region will not change; (3) Southern New Hampshire Medical Center the total number of comprehensive rehabilitation beds in the southern New (1) Northeast will reduce the number of beds at its Salem facility by fifteen; ( p. 2 2) among other things, the following findings regarding the proposed relocation: petition. After the rehearing, the board issued a decision which included, board granted St. Joseph’s motion and scheduled a rehearing on Northeast’s not a party to the proceedings. After a hearing on the issue of standing, the ground that St. Joseph lacked standing to request reconsideration, as it was proposed relocation required the issuance of a CON. Northeast objected on the order and requested a hearing on Northeast’s petition, alleging that the On June 17, 2004, St. Joseph moved for reconsideration of the board’s

relocation remained below certain statutor y thresholds. that the relocation was not subject to review, provided that the cost of the board review. The board held a hearing on the petition and issued an order determination fr om the board that the proposed relocation was not subject to New Hampshire Medical Center in Nashua. Northeast requested a fifteen of its 10 p. 2 2 beds from Salem to a new location on the campus of Southern On May 6, 2004, Northeast notified the board of its intention to relocate

Salem, NH.” bed comprehensive rehabilitation hospital ... to be located on Butler Street, CON identified the new institutional health service as “[c]onstruction of a 10 p. 2 2 and all of New Hampshire, excluding Coos, Grafton, and Carroll counties. The p. 3 3

be patients of Northeast and billed by Northeast. The board found that Center under Northeast’s control and sup ervision, and that the patients would Northeast personnel or by personnel of Southern New Hampshire Medical Northeast, that the rehabilitation services would be provided either by that the relocated beds would continue to be owned by and licensed to At the hearing and rehearing before the board, Northeast demonstra ted

number of beds offered by Northeast, will change. rehabilitation beds in any of the regional rehabilitation service areas, nor the contends that no incr ease will result because neither the number of inpatient number of inpatient rehabilitation beds in the Nashua area. Northeast “increase of inpatient beds” because it will result in an increase in the total St. Joseph also argues that the proposed relocation constitutes an

to be offered by Northeast in that service area. He - Hea 702.0 p. 3 3, and under the proposed relocation, such services will continue in the southern New Hampshire regional service area, see N.H. Admin. Rules, “new” because inpatient rehabilitation services are already offered by Northeast not previously offered. In response, Northeast contends that the service is not newly - licensed facility in Nashua where inpatient rehabilitation services were development and offering of new inpatient services” because it will create a First, St. Joseph contends that the proposed relocation constitutes “the

relocation within the statutory definition of “new institutional health service.” II(c), (e). St. Joseph argues that both of these provisions bring the proposed increase or conversion of inpatient beds.” RSA 151 - C:2, XXII; RSA 151 - C:5, other things, “the development and offering of new inpatient services” and “the board. The term “new institutional health service” is defined to include, among offered or developed within the S tate without first obtaining a CON from the Pursuant to RSA 151 - C:4, I, no “new institutional health service” may be

I. “New Institutional Health Service”

Hosp., 1 p. 4 48 N.H. 55, 57 (2002). an issue of law that we review de novo. Cf. Appeal of Portsmouth Regional erroneously determined that the proposed relocation is not subject to review i s 547 - 48; see also RSA 151 - C:10, III; RSA 541:1 p. 3 3 (1997). Whether the board arbitrary or capricious or not made in compliance with applicable law. Id. at decision unless we find, by a clear preponderance of t he evidence, that it was 144 N.H. 546, 548 (1999) (quotation omitted). We will affirm the board’s board to be prima facie lawful and reasonable....” Appeal of N.E. Heart Inst., (1997 & Supp. 2004). RSA 151 - C:10, II. “[W]e deem all factual findings by the Appeals under RSA chapter 151 - C are governed by RSA chapter 541 4

service” or an “increase of inpatient beds.” institutional health service” because it does not constitute a “new inpatient subject to review under RSA chapter 151 - C on the ground that it is a “new of beds being off ered by Northeast. Therefore, the proposed relocation is not total number of beds in the southern region service area, nor the total number The board found that the proposed relocation would change neither the

defined in the board regulations. Id. 702.03. rehabilitation beds, the board need only consider the regional service areas new inpatient rehabilitation service being offered or an increase in inpatient thereunder, when determining whether, within a geographical area, there is a th e purposes of RSA chapter 151 - C and the regulations promulgated allocating those resources on a regional basis. Therefore, we conclude that, for of promoting the rational allocation of rehabilitation services is served by regional service area. This reflects a determination by the board that the policy rehabilitation services are allocated by any geographical unit ot her than by the statute or regulations to indicate that needed comprehensive physical the entire regional service area. Id. 702.0 p. 4 4, .10, 703.01(d). We find nothing in throughout the regional service area, and th e demographic characteristics for regional service area, the impact of the new service on the existing services applications, the board considers, among other factors, the unmet need in the entire service area. Id. 702.01 -.02. Then, when reviewing individual CON determines the need in each service area according to the population of the southern region includes both Nashua and Salem. Id. 702.03. The board board has divided the State into five regional rehabilitation service areas; the determining need is a regional one. N.H. Admin. Rules, He - Hea 702.0 1. The RSA 151 - C:5, III; N.H. Admin. Rules, He - Hea 702. The standard for determining the need for comprehensive physical rehabilitation services. See Pursuant to RSA chapter 15 1 - C, the board has developed standards for

care resources in the state.” RSA 151 - C:1, I. avoids unnecessary duplication ... and promotes rational allocation of health institutional health services [are] offered or developed in a manner which omitted). One purpose of RSA chapter 151 - C is to ensure that “all new with its purpose.” Appeal of Boucher, 1 p. 4 48 N.H. 458, 460 (2002) (quotation words used, considering the statute as a whole and interpreting it consistent “In construing a statute, we ascribe the plain and ordinary meaning to

inpatient beds.” services in Nashua constitutes a “new inpatient service” or an “increase of Thus, we consider only whether, given these facts, Northeast’s offering of entities. We find nothing arbitrary or capricious in these findings of fact. landlord, and that the two hospitals would remain separate and distinct Southern New Hampshire Medical Center would merely be Northeast’s p. 5 5

transfers beds to another hospital in the same region, “the facility intending to these regulations. Whenever the holde r of a CON for rehabilitation services which St. Joseph relies and the apparent policy of the board in promulgating Thus, we look next to the context of the two transfer provisions upon

Appeal of Hoyt Rental & Leasing Co., 130 N.H. 130, 132 - 33 (1987). harmonizes with the context and with the apparent policy of the agency. susceptible to multiple constructions, we adopt the meaning which best transfer of ownership. When regulatory language contains a word that is offer little guidance in distinguis hing between a transfer of location and a International Dictionary 2426 - 27 (unabridged ed. 2002). These definitions property) by a legal process [usually] for consideration.” Webster’s Third New “to make o ver or negotiate the possession or control of (a right, title, or move or send to a different location [especially] for business ... purposes,” or variations, including “to carry or take from one person or place to another,” “to N.H. 422, 423 (2000) (quotation omitted). The definition of “transfer” has many ascribe the plain and ordinary meanings to words used.” Appeal of Flynn, 14 p. 5 5 “In construing rules, as in construing statutes, where possible, we

omitted). intended to serve.” Appeal of Morin, 140 N.H. p. 5 515, 518 (1995) (quotation language of the regulation and with the purpose whi ch the regulation was must still examine whether the agency’s interpretation is consistent with the interpretation of its regulations, that deference is not total. A reviewing court refer to a transfer of ownership. “While deference is accorded to an agency's review, the board rejected St. Joseph’s argument and interpreted “transfer” to the CON for beds. In deciding that the proposed relocation was not subject to whereas Northea st argues that “transfer” refers to a transfer of ownership of Joseph argues that “transfer” refers to a change in physical location of beds, The term “transfer” is not defined in the regulations. See id. 701.01. St.

Center, and is thus subject to review under RSA chapter 1 p. 5 51 - C. of rehabilitation beds from Northeast to Southern Ne w Hampshire Medical 702.06(j). St. Joseph argues that the proposed relocation constitutes a transfer of inpatient beds and for comprehensive physical rehabilitation services. Id. the statutory and regulatory CON r equirements for the increase or conversion 702.06(e). However, “[a]ny facility receiving the transferred beds” is subject to [hospital] in the same region provided notice is made to the board.” Id. rehabilita tion beds to “transfer all or a portion of those beds to another See id. 702.06(e) - (k). These regulations permit the holder of a CON for services contain a series of rules governing the “transfer” of rehabilitation beds. Board regulations regarding comprehensive physical rehabilitation

II. “Transfer” p. 6 6

existing facility in Nashua. CON review, the relocation of beds from the named facility in Salem to another St. Joseph argues that Northeast’s existing CON does not permit, absent

III. The Existing CON

(1985). intended to serve. See N.H. Retirement System v. Sununu, 12 p. 6 6 N.H. 104, 108 language of RSA chapter 151 - C, and the purpose that the regulations were language of other regulations governing the transfer of rehabilitation beds, the the board’s interpretation, finding that it is reasonable and consistent with the context of the regulations and policies of the board. Furthermore, we defer to rather than a transfer of physical location alone, best harmonizes with the We conclude that defi ning “transfer” to refer to a transfer of ownership,

much of the information that it deems critical to the application review process. without notification to or review by the board, the board may never receive prov ider - specific criteria. See id. 700. If the ownership of a CON changes appropriateness of its quality assurance program, id. 702.09, and other adequacy of its treatment policies, N.H. Admin. Rules, He - Hea 702.07, the rehabilitation services, the applicant must demonstrate to the board the interest to the board. In undertaking a review of a CON application for services make clear that the identity of the holder of the CON is of significant By contrast, the regulations governing comprehensive rehabilitation

allocation of rehabilitation services. the region may be irrelevant to the board in its effort to promote the rational services serves this purpose. Thus, the specific location of the services within has made clear through its rules that regional allocation of rehabilitation care resources in the State. RSA 151 - C:1, I. As we explained above, the board one purpose of RSA chapter 151 - C is to promote rational allocation of health must be consistent with the policy of the board’s enabling statute. As noted, Further more, the policy of the board in promulgating its regulations

entities, and not merely a transfer from one physical location to another. to interpret “transfer” to mean a transfer between two separate and distinct project cost. Id. p. 7 702.0 p. 6 6(k). In the context of these provisions, it is reasonable purchase price paid by the transferee is not included in the calculat ion of the 702.06(f) - (g). That notice must be signed by “both parties.” Id. 702.06(g). Any facility and the identity of the receiving facility. N.H. Admin. Rules, He - Hea board of the transfer, including in the notice the ident ity of the transferring transfer the beds and the facility receiving the beds” must jointly notify the 7

concurred. BRODERICK, C.J., and NADEAU, DALIANIS and GALWAY, JJ.,

relocation is not subject to review under RSA chapter 151 - C. We therefore affirm the decision o f the board that Northeast’s proposed

the current regulations should apply to a CON issued in 1982. Rules, He - Hea 304.05(a). However, St. Joseph makes no argument as to why the specific location at which they plan to provide services. See N.H. Admin. the board’s regulations have been revised to require that all applicants iden tify should take into consideration the fact that, since RANE was decided in 1989, St. Joseph seems to suggest that our application of RANE to this case

Northeast can, consistent with its CON, relocat e beds from Salem to Nashua. Hampshire, excluding only Coos, Grafton, and Carroll counties. Thus, construction of a new facility to service parts of Massachusetts and all of New this case, the original application filed by Northeast in the early 1980s was for facility, regardless of the site identified in the CON. RANE, 131 N.H. at 566. In geographical area identified in an application for the construction of a new Street in Salem. However, in RANE, we held that a CON is valid for the entire issued, identifies the location of Northeast’s rehabilitation services as Butler change in Northeast’s premises or geographical area. Northeast’s CON, as Second, St. Joseph argues that the proposed relocation will result in a

not constitute a change in the scope o f the original CON. the site identified in its CON to another site within the same service area does Therefore, under RANE, Northeast’s proposal to move some of the beds from to exclude a cha nge of site without a change in service area. Id. at 565 - 66. beds or a substantial change in the total capital expenditure of the project, but in the “scope” of a project to include factors such as a change in the number of N.H. at 565 (quotation and ellipses omitted). In RANE, we interpreted a change project. “Scope” denotes “the general range or extent of activity.” RANE, 131 Northeast’s CON, and thus results in a change in the scope of Northeast’s fragmentation of services not contemplated by the board in the issuance of First, St. Joseph argues that the proposed r elocation constitutes a

in the statute. See RSA 151 - C:2. RANE). The words “scope,” “premises” and “geographical area” are not defined Appeal of Rehab. Assoc’s of N.E., 131 N.H. 560, 564 (1989) (hereinafter cited as change in scope, premises or geographical area requires board approval. Cf. geographical area named in the application.” RSA 151 - C:12, IV. Thus, a “valid only for the designated scope of the project and for the premises and Once a project proposed in a CON application is operational, the CON is