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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska Spine Center, LLC v. Mat-Su Valley Medical Center LLC, et al. (3/29/2019) sp-7349

Alaska Spine Center, LLC v. Mat-Su Valley Medical Center LLC, et al. (3/29/2019) sp-7349

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

          Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

                                                                                                                  

          303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                                                    

          corrections@akcourts.us.  



                        THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  



ALASKA  SPINE  CENTER,  LLC,                                       )  

                                                                   )    Supreme Court No. S-16917  

                                                                                                        

                               Appellant,                          )  

                                                                   )    Superior  Court  No.  3AN-16-10186  CI  

          v.                                                       )  

                                                                   )                        

                                                                        O P I N I O N  

                                                   

MAT-SU VALLEY MEDICAL CENTER, )  

                                                                                                            

                                                   

LLC, an Alaska limited liability company                           )    No. 7349 - March 29, 2019  

                                                  

d/b/a Mat-Su Regional Medical Center;                              )  

                                          

SURGERY CENTER OF WASILLA,                                         )  

                                   

LLC; and STATE OF ALASKA,                                          )  

                                                                   )
  

                               Appellees.                          )
  

                                                                   )
  



                                                                                                        

                    Appeal from the Superior Court of the State of Alaska, Third  

                                                                                               

                    Judicial District, Anchorage, Frank A. Pfiffner, Judge.  



                                                                                                       

                    Appearances:              Susan  Orlansky,  Reeves  Amodio  LLC,  

                                                                                                     

                    Anchorage, for Appellant.   Jennifer M.  Coughlin, Landye  

                                                                                                     

                    Bennett  Blumstein  LLP,  Anchorage,  for Appellee  Mat-Su  

                                                                                                     

                    Valley Medical Center, LLC.  Danielle M. Ryman, Perkins  

                                                                                              

                    Coie LLP, Anchorage, and David B. Robbins, Kathleen M.  

                                                                                                    

                    O'Sullivan,  and  Luke  Rona,  Perkins  Coie  LLP,  Seattle,  

                                                                                                                  

                    Washington, for Appellee Surgery Center of Wasilla, LLC.  

                                                                                              

                    Notice   of   nonparticipation   filed  by   Dario   Borghesan,  

                                                                                            

                    Assistant         Attorney         General,         Anchorage,            and      Jahna  

                                                                                                              

                    Lindemuth, Attorney General, Juneau, for Appellee State of  

                    Alaska.  



                                                                                                     

                    Before: Bolger, Chief Justice, Winfree, Stowers, and Carney,  

                                                                       

                    Justices.  [Maassen, Justice, not participating.]  


----------------------- Page 2-----------------------

                     CARNEY, Justice.   



I.        INTRODUCTION  



                     The state agency responsible for regulating the operation of healthcare  

                                                                                                                     



facilities  throughout Alaska requires most such  facilities to  document  the need  for  

                                                                                                                                 



proposed services before the state approves construction of a new facility.  The agency  

                                                                                                                           



determined that an ambulatory surgical facility seeking to relocate from Anchorage to  

                                                                                                                                   



Wasilla did not need to submit such documentation because it was moving within the  

                                                                                                                                 



same community as defined by the relevant statute.  Competing medical facilities in the  

                                                                                                                                 



Matanuska-Susitna Borough objected to the determination, arguing that Anchorage and  

                                                                                                                                



Wasilla are not the "same community" and that the proposed relocation required the  

                                                                                                                                 



usual certification of need. Because Anchorage and Wasilla are not the same community  

                                                                                                                     



as contemplated by the statute, we reverse the determination that the facility was exempt  

                                                                                                                           



from the required certification process.  

                                                



II.       FACTS AND PROCEEDINGS  

                                  



          A.         Background  



                     The Alaska Department of Health and Social Services is responsible for the  

                                                                                                                                 



regulation and provision of numerous health and social services programs.  In order to  

                                                                                                                                   



promote the balanced development and operation of such facilities throughout the state,  

                                                                                                                              



the legislature established a "Certificate of Need" program to be administered by the  

                                                                                                                                 

Department.1  Pursuant to statute and regulation, program staff determine the healthcare  

                                                                                                                      



needs of an area by using a number of general and service-specific review standards and  

                                                                                                                                

calculations.2   The standards address "Alaska's distinctive operational environment" by  

                                                                                                                                  



          1         AS 18.07;        see  Ch. 275,  2, SLA 1976.            



          2  

                                                                                                                          

                    See  AS  18.07.035,  18.07.101;  7  Alaska  Administrative  Code  (AAC)  

                                                                                                                (continued...)  



                                                                -2-                                                          7349
  


----------------------- Page 3-----------------------

taking into account accessibility and the needs of local stakeholders. The program's goal                                                                                                   



is to ensure that no area receives more or fewer services than it needs.                                                                                         



                              Most healthcare facilities are required to obtain a certificate of need (CON)                                                                           



before beginning construction:                                          



                               (a)  Except as provided in (c) and (d) of this section, a person                                                        

                                                                                                                                      [  ]  

                                                                                                                                       3    or more for  

                              may not make an expenditure of $1,000,000                                                                                         

                              any of the following unless authorized under the terms of a  

                                                                                                                                                                    

                              certificate of need issued by the department:  

                                                                                                         



                                              (1) construction of a health care facility;  

                                                                                                                        



                                              (2)  alteration  of  the  bed  capacity  of  a  health  care  

                                                                                                                                                            

                               facility; or  

                                                  



                                              (3) addition of a category of health services provided  

                                                                                                                                                   

                                                                                     [  ]  

                              by a health care facility. 4 

                                                                    



                              Preparing and submitting a CON application is a time-consuming process.  

                                                                                                                                                                                                       



The CON application must contain all of the information required in the Department's  

                                                                                                                                                                      



Certificate of Need Application Packet, which includes:   a project description with  

                                                                                                                                                                                          



detailed cost estimates and construction timelines; estimates of the population to be  

                                                                                                                                                                                               



served and in what capacity; analysis of the need for these services; documented efforts  

                                                                                                                                                                                      



of community outreach; comparison to community, state, and federal plans; analysis of  

                                                                                                                                                                                                 



alternatives; calculations of the impact the facility will have on the existing healthcare  

                                                                                                                                          



system; and evidence that the facility will be accessible to users. The applicant must also  

                                                                                                                                                                                            



               2               (...continued)  



                                                     TATE OF              ALASKA, D                 EP 'T OF           HEALTH   & S                  OC. S       ERVS., A             LASKA  

07.025(a)(3) (2019); S 

CERTIFICATE                       OF       NEED              REVIEW                STANDARDS                       AND           METHODOLOGIES                               1       (2005),  

                                                                                                                                                                           

http://www.dhss.alaska.gov/ dhcs/Documents/CertificateOfNeed/Standards.pdf.   



               3              AS 18.07.031(d) raised the threshold to $1.5 million as of July 2014.  

                                                                                                                                                                               



               4              AS 18.07.031(a).  

                                        



                                                                                               -3-                                                                                       7349
  


----------------------- Page 4-----------------------

pay an application fee, agree to participate in a statewide reporting system required by                                                                     



statute, and state whether the proposed CON is intended to change the bed capacity of                                                



                              5  

the service area.                 



                                                                                                                                                               

                         But a statutory exemption allows an existing ambulatory surgery facility to  



                                                                                                                                                       

relocate within the same community as long as it does not increase the services that it  



offers:  



                                                                                                                          

                         Notwithstanding (a) of this section, a person who is lawfully  

                                                                                                                          

                         operating a health care facility that is an ambulatory surgical  

                                                                                                                                      

                         facility at a site may make an expenditure of any amount in  

                                                                                                                                     

                         order to relocate the services of that facility to a new site in  

                         the same community without obtaining a certificate of need  

                                                                                                                                    

                         as  long  as  neither  the  bed  capacity  nor  the  number  of  

                                                                                                                                     

                         categories  of  health  services  provided  at  the  new  site  is  

                                       [  ]  

                         greater. 6 



                         The relocation exemption was added to the CON statute in 2000 after an  

                                                                                                                                                              



ambulatory surgical center that wished to relocate two blocks from its existing location  

                                                                                                                                                   



in  Anchorage lobbied for  an  exemption to  allow it to  avoid  the costs of  the  CON  

                                                                                                                                                       



               7  

process.            The Anchorage facility's move was exempted shortly after the legislation  

                                                                                                                                              



passed.  Fifteen years later a Wasilla facility relocated within Wasilla, and was granted  

                                                                                                                                                    



the same exemption. Alaska Spine is the third applicant for an exemption from the CON  

                                                                                                                                                        



requirement.  

                          



                         To determine whether it qualifies for an exemption or must expend the time  

                                                                                                                                                          



and resources needed to prepare a CON application, a healthcare facility may submit a  

                                                                                                                                                                



             5           7  AAC  07.040(a)  (2010).  



             6           AS   18.07.031(c).  



             7           Ch. 18,  2, SLA   2000;  see  Beal   v.  McGuire,   216   P.3d   1154,   1159-61  



(Alaska  2009)  (providing  a  history  of  the  exemption's  creation).  



                                                                              -4-                                                                       7349
  


----------------------- Page 5-----------------------

Request   for   Determination   (RFD)   to   the   Department   prior   to   beginning   the   CON  



             8  

process.                                                                                                                        

                Once the Department makes a determination, it must publish notice of its  



                                                                     9  

                                                     

decision online and in a statewide newspaper. 



          B.        Facts  



                    Alaska  Spine  Center  is  an  ambulatory  surgical  facility  located  in  

                                                                                                                               



Anchorage. Alaska Spine was not required to obtain a CON when it first constructed its  

                                                                                                                                



facility, nor when it later built an addition, because each of those projects cost less than  

                                                                                                                             



the threshold amount at the time.  

                                                    



                    In early August 2016 Alaska Spine submitted an RFD to the Department  

                                                                                                



seeking  a  determination  that  its  relocation  to  Wasilla  was  exempt  from  CON  

                                                                                                                          



requirements under AS 18.07.031(c).  It requested the exemption because it would be  

                                                                                                                                



                                                                                                                                 10  

relocating within the "same community" and would not increase its service capacity.                                                  

                                                                                                                    



The RFD acknowledged that costs "will exceed the current CON monetary threshold of  

                                                                                                                                 



$1.5million." Alaska Spine explained that further cost details wereunnecessary because  

                                                                                                                        



the relocation exemption permitted expenditures of any amount.  

                                                                                                   



                    The Department's CON program staff sent a letter to Alaska Spine seeking  

                                                                                                                        



additional information: acertifiedcostestimate, amorespecificlocation description, and  

                                                                                                                               



a description of specific services to be offered.  In response to Alaska Spine's claim that  

                                                                                                                              



a more detailed cost estimate was unnecessary, the letter stated that "the Department  

                                                                                                                  



cannot make that [d]etermination on the information provided."  

                                                                                                    



          8         7  AAC  07.031.  



          9         7  AAC  07.032.  



          10        See   AS   18.07.031(c)   (allowing   ambulatory   surgical   facility   to   relocate  



regardless  of  cost  and  without  CON  so  long  as  bed  capacity  and  services  provided  do  not  

increase  and  it  moves  within  same  community).  



                                                               -5-                                                         7349
  


----------------------- Page 6-----------------------

                    Alaska  Spine  met  with  CON  program  staff  to  discuss  the  RFD,  then  

                                                                                                                            



submitted additional information on October 11.  Following the meeting, program staff  

                                                                                                                            



agreed  with  Alaska  Spine  that  no  cost  estimate  was  necessary  and  accepted  the  

                                                                                                                             



acknowledgment that the cost would exceed $1.5 million because "there is no issue  

                                                                                                                           



regarding whether this project will exceed the CON cost threshold."  Program staff also  

                                                                                                                             



determined that accepting such an estimate was in line with past CON determinations.  

                                                                                                                                    



          C.        Proceedings  



                    In October 2016 the Department published its determination:   "For the  

                                                                                                                              



purposes of CON, Wasilla is considered to be in the same service area as Anchorage.  

                                                                                                                                    



Therefore, the proposed relocation is considered to be within the same community." The  

                                                                                                                              



determination  also  noted  "neither  capacity  nor  the  number  of  categories  of  health  

                                                                                                                         



services provided at the site will be greater."  The Department concluded that Alaska  

                                                                                                                        



Spine satisfied the exemption requirements of AS 18.07.031(c) and did not require a  

                                                                                                                                 



CON to relocate its facility to Wasilla.  

                                                             



                    In  November  2016  Mat-Su  Valley  Medical  Center,  LLC  filed  suit  in  

                                                                                                                               



Anchorage  superior  court  challenging  the  Department's  determination,  seeking  

                                                                                                                      



declaratory and injunctive relief against the Department and Alaska Spine.   Mat-Su  

                                                                                                                       



Medicaloperates fivesurgerysuites in theMatanuska-SusitnaValley at aPalmer facility.  

                                                                                                                                    



Mat-Su Medical argued that Anchorage and the Matanuska-Susitna Valley are not the  

                                                                                                                              



"same  community,"  that  Alaska  Spine  therefore  did  not  qualify  for  a  relocation  

                                                                                                                   



exemption, and that the Department's determination that it was exempt from a CON did  

                                                                                                                              



not comply with the RFD regulation and was therefore void.   Mat-Su Medical also  

                                                                                                                            



sought  both  preliminary  and  permanent  injunctions  against  the  construction  and  

                                                                                                                            



operation of Alaska Spine's proposed Wasilla facility unless and until a CON was  

                                                                                                                            



obtained.  Both Alaska Spine and the Department answered the complaint, arguing the  

                                                                                                                              



                                                               -6-                                                        7349
  


----------------------- Page 7-----------------------

 Department'sdetermination was entitled to deference                                                                                                                                                                                  and that it had properly                                                                           interpreted  



 the CON laws and regulations.                                                                                                           



                                                           In April 2017 Alaska Spine moved for summary judgment, arguing that the                                                                                                                                                                                                                                                           



 Department's determinationand                                                                                                              its acceptanceoftheRFDwereowed deference because                                                                                                                                                           



 both were within the Department's specialized expertise.                                                                                                                                                                                                 In response Mat-Su Medical                                                                 



 filed   a   cross-motion   for  summary   judgment,   arguing   that   the   meaning   of   "same  



 community"    was    an    issue    of    statutory    interpretation    committed    to    the    court's  



 independent judgment. It also argued that the statutory language, legislative history, and                                                                                                                                                                                                                                                                              



 the Department's own regulations did not support the determination that Anchorage and                                                                                                                                                                                                                                                                                    



 Wasilla are in the "same community." Mat-Su Medical argued in addition that a certified                                                                                                                                                                                                                                                         



 cost estimate was explicitly required by regulation and could not be waived in an RFD.                                                                                                                                                                                                                                                                                                      



                                                           The Department supported Alaska Spine's motion for summary judgment                                                                                                                                                                                                                 



 and opposed Mat-Su Medical's cross-motion. Alaska Spine opposed Mat-Su Medical's                                                                                                                                                                                                                                                            



 cross-motion for summary judgment.                                                                                                                                  



                                                            SurgeryCenter of                                                            Wasilla, LLC, the only other ambulatory surgical                                                                                                                                                                  facility  



 operating in theMatanuska-SusitnaValley,                                                                                                                                                  moved to intervene in June. Mat-Su                                                                                                                        Medical  



 asked the                                court to allow                                              the intervention; both the Department and Alaska Spine opposed                                                                                                                                                                                 



 it.   The superior court granted the motion to intervene and Surgery Center of Wasilla                                                                                                                                                                                                                                                                



joined Mat-Su Medical's arguments against the exemption determination and lack of a                                                                                                                                                                                                                                                                                                 



                                                                                                               11  

 cost estimate in the RFD.                                                                                             



                                                           The superior court granted Mat-Su Medical's cross-motion for summary  

                                                                                                                                                                                                                                                                                                                                               



judgment and denied Alaska Spine's motion for summary judgment.  The court applied  

                                                                                                                                                                                                                                                                                                                                                         



 its independent judgment and concluded that Anchorage and Wasilla are not the same  

                                                                                                                                                                                                                                                           



                              11  

                                                                                                                                                                                                                                                                                                                                                      

                                                           On appeal, we refer to Mat-Su Medical and Surgery Center of Wasilla  

                                                                                                          

 collectively as "Mat-Su Medical."  



                                                                                                                                                                                       -7-                                                                                                                                                                                             7349  


----------------------- Page 8-----------------------

community.   The court also found that Alaska Spine's RFD was void because its failure                                                                               



to include a cost estimate did not comply with the regulation.                                                                  



                            Alaska Spine appeals.                          The Department has not appealed.                                          



III.          STANDARD OF REVIEW                     



                            "When   the   superior   court   acts   as   an   intermediate   appellate   court,  we  



independently review the merits of the underlying administrative decision. The specific                                                                            

form our independent review takes is de novo review."                                                             12  



                                                                                                                                                       

                            We apply our independent judgment to review the agency's interpretation  



                                                13  

                                                                                                                                                                

of "same community."                                   Independent judgment is appropriate "where the agency's  



                                                                                                                                                                           

specialized  knowledge  and  experience  would  not  be  particularly  probative  on  the  



                                                  14  

                                                                                                                                                              

                                                        "[W]e 'look to the meaning of the language, the legislative  

meaning of the statute." 



                                                                                                                                                             

history, and the purpose of the statute and adopt the rule of law that is most persuasive  



                                                                                                                                                                               15  

                                                                                                                                                                                    

in light of precedent, reason, and policy' " when determining the meaning of a statute. 



When applying the plain meaning rule, we use "a sliding scale approach to statutory  

                                                                                                                                                                



interpretation, in which 'the plainer the statutory language is, the more convincing the  

                                                                                                                                                                            



              12           Heller v. State, Dep't of Revenue                                    , 314 P.3d 69, 72 (Alaska 2013).                      



              13           Mat-Su Valley Med. Ctr., LLC v. Advanced Pain Ctrs. of Alaska, Inc., 218  

                                                                                                                                                                           

P.3d 698, 700 (Alaska 2009) ("[I]nterpretation and application of a statute are questions  

                                                                                                                                                               

of law to which we apply our independent judgment.").  We review agency decisions  

                                                                                                                                                               

under the reasonable basis standard when they involve agency expertise or implicate  

                                                                                                                                                               

fundamental policies within the scope of the agency's function.  Matanuska-Susitna  

                                                                                                                                         

Borough v. Hammond, 726 P.2d 166, 175 (Alaska 1986).  Although it is not clear that  

                                                                                                                                                        

either is the case here given the dearth of previous applications for CON exemptions, our  

                                                                                                                                                                            

decision would be the same under the reasonable basis standard.  

                                                                                                                  



              14           Hammond, 726 P.2d at 175.  

                                                                             



              15           Mat-Su Valley Med. Ctr., LLC, 218 P.3d at 701 (quoting Enders v. Parker,  

                                                                                                                                                                   

66 P.3d 11, 13-14 (Alaska 2003)).  

                                                        



                                                                                      -8-                                                                               7349
  


----------------------- Page 9-----------------------

evidence of contrary legislative purpose or intent must be' " to overcome the plain                                                          



                16  

meaning.             



IV.	        DISCUSSION  



                                                                      

                       The relocation exemption to the CON requirement allows an ambulatory  



                                                                                                                                              

surgical facility to relocate, regardless of the cost, so long as the relocation is in the same  



                                                                                                                                     

community and does not increase the bed capacity or number of health service categories  



                 17  

provided.                                                                                                                                          

                     Alaska Spine's new facility will not increase its bed capacity or number of  



                                                                                                                                                   

health service categories.  At issue is whether Alaska Spine's move from Anchorage to  



                                                                                                                                          

Wasilla  satisfies  the  exemption's  requirement  that  it  relocate  within  the  "same  



                         

community."  



                                                                                                                                              

                       Anchorage and Wasilla are not in the "same community." Neither the plain  



                                                                                                                                               

language  nor  its  legislative  purpose  allows  for  a  determination  that  they  are.                                                      The  



                                                                                                                     

legislative history does not clearly support attaching a meaning to "same community"  



                                                                                                                                              

other than the plain language.  While we need not define "same community," it is clear  



                                                                                        

that Wasilla and Anchorage do not fall within the term's bounds.  We therefore affirm  



                                                                                                                                                

the superior court's grant of Mat-Su Medical's cross-motion for summary judgment and  



                                                                                                       18  

                                                                                      

its denial of Alaska Spine's motion for summary judgment. 



            A.	        The Meaning Of "Same Community" Is Clear Based On The Plain  

                                                                                                                                            

                       Language Of The Statute.  

                                                          



                       "When interpreting a statute, we construe its language 'in accordance with  

                                                                                                                                               



            16         Adamson v. Municipality of Anchorage                                  , 333 P.3d 5, 11 (Alaska 2014)                



(quoting McDonnell v. State Farm Mut. Auto. Ins. Co.                                               , 299 P.3d 715, 721 (Alaska           

2013)).  



            17         AS 18.07.031(c).  

                               



            18  

                                                                                              

                       Because we find Alaska Spine does not meet the requirements for "same  

                                                                                                                               

community," we do not otherwise address the validity of Alaska Spine's RFD.  



                                                                        -9-	                                                                 7349
  


----------------------- Page 10-----------------------

[its] common usage, unless the word or phrase in question has acquired a peculiar                                                           



                                                                                                                                       19  

meaning   by   virtue   of   a   statutory  definition   or   judicial   construction.'   "                                                   "Same  



                                                                                                                                                        

community" has not acquired any peculiar meaning in the CON context.  The phrase is  



                                                                                                                                          

not used in any other part of the CON statutes and regulations, nor is there a definition  



                                                                                                                                                             

in any other statute or regulation to which the CON program could look for guidance.  



                                                                                                                                                        

"Same community" is a non-technical term and does not require a statutory definition to  



                                                                                                                                                     

be understood.   The common usage of the term "community" does not support the  



                                                                                                                                  20  

                                                                                                                                       

determination that Anchorage and Wasilla are in the "same community." 



                        Alaska Spine and Mat-Su Medical argue for various dictionary definitions  

                                                                                                                                        



to support their interpretations of "same community." But there is no need to go beyond  

                                                                                                                                              

the common usage of the term:21   Wasilla and Anchorage are not commonly considered  

                                                                                                                                        



to be the "same community."  Neither Anchorage residents nor Wasilla residents would  

                                                                                                                                                



consider themselves to be members of the same local community.  The Municipality of  

                                                                                                                                                        



Anchorageandthe Matanuska-Susitna Borough (in which Wasillais located) aredistinct  

                                                                                                                                               

                                                                             22    Wasilla is located 44 miles northeast of  

boroughs with separate local governments.                                                                                                              

                                                      



            19          City of Valdez v. State                  , 372 P.3d 240, 251 (Alaska 2016) (alteration in                                      



original) (quoting              Municipalityof              Anchoragev.Suzuki                  , 41P.3d 147,           150 (Alaska2002)).   



            20          See Mat-Su Valley Med. Ctr., LLC, 218 P.3d at 703 (interpreting statute as  

                                                                                                                                                        

it would be "rationally read").  

                                          



            21          City of Valdez, 372 P.3d at 251; see also Mat-Su Valley Med. Ctr., LLC, 218  

                                                                                                                                                     

P.3d at 703-04 (interpreting statute based on what is grammatically correct, effect on  

                                                                                                                                                      

enforcement, and most rational reading of statute).  

                                                                             



            22          BoroughsinAlaska, BALLOTPEDIA.ORG, https://ballotpedia.org/Boroughs_  

                                                                                                

in_Alaska (last visited January 28, 2019); Matanuska-Susitna Borough, Incorporated  

                                                                                                                                   

City Parcel Maps, MATSUGOV.US, https://www.matsugov.us/maps/incorporated-city- 

                                                                 

parcel-maps  (last  visited  January  28,  2019)  (Certain  areas  of  Alaska  have  formed  

                                                                                                                                             

boroughs which act as political subdivisions of the state.).  

                                                                                                          



                                                                          -10-                                                                    7349
  


----------------------- Page 11-----------------------

                                                                                                                    23  

Anchorage   and   is   about   a   55   minute   drive   away.                                                             As   the   superior   court   noted,  



Anchorage and Wasilla have separate school districts, separate police forces, different   



elected state representatives, independent hospitals, and no overlapping taxation issues.                                                                                                       



                             The CON program coordinator looked at the definition of "service area" to                                                                                    



determine   whether   Wasilla   and   Anchorage   were   in   the   same   community.     But   the  



Department's regulations for the CON program suggest that the two terms are not                                                                                                        



interchangeable.   The regulations define "service area" as "the geographic area to be                                                                                                   



served by the proposed activity,                                        including the community                                 where the proposed activity                   

                                    24    The definition thus suggests that "service area" is a broader concept  

will be located."                                                                                                                                                            



than "community."  

            



                             Alaska Spine argues that defining community as the service area makes  

                                                                                                                                                                                



sense because service area is the unit used to calculate health service needs, so relocating  

                                                                                                                                                                         



within the same service area should not change the calculations of need done by the  

                                                                                                                                                                                       



Department. But the regulatory definition of service area treats community as its subset,  

                                                                                                                                                                               



and the use of different language shows these phrases are not synonymous.  Principles  

                                                                                                                                                                        



of statutory construction mandate that we assume the legislature meant to differentiate  

                                                                                                                       

between two concepts when it used two different terms.25  "Service area" is defined as  

                                                                                                                                                                   

an  area  "including  the  community  where  the  proposed  activity  will  be  located."26  

                                                                                                                                                                                                



"Including" suggests that a community fits within a service area, but is not its equivalent.  

                                                                                                                                                                                                



               23            Alaska Driving Map                           , A   LASKA.ORG, http://www.alaska.org/assets/content/   



maps/Alaska-Driving-Map.pdf (last visited January 28, 2019).                                                                



               24            7 AAC 07.900(36) (emphasis added).  

                                                                                                



               25            See Ganz v. Alaska Airlines, Inc., 963 P.2d 1015, 1018-19 (Alaska 1998)  

                                                                                                                                                                                 

(assuming if legislature meant the same type of restriction in both subsections then it  

                                                                                                                                                                                           

would have used similar language).  

                                                        



               26            7 AAC 07.900(36) (emphasis added).  

                                                                                                



                                                                                           -11-                                                                                    7349
  


----------------------- Page 12-----------------------

"Service area" is also used throughout CON regulations and application instructions;                                                                 27  



                                                                                                                                                

if the legislature meant "community" to be synonymous with "service area," a term  



                                                                                                                                                  

discussed by the legislature prior to passing the relocation exemption, it would have had  

                                                                                       28    We assume the legislature used a  

                                                                                                                                                      

                                                               

no reason to use the different term "community." 



different word because it meant a different thing, and that the Department complied with  

                                                                                                                                                 

legislative  intent  when  it  wrote  its  regulations.29                                       The  plain  meaning  of  "same  

                                                                                                                                            



community" is not equivalent to "service area."  

                                                                          



            B.	        The Legislative History Of AS 18.07.031 Is Not Contrary To The Plain  

                                                                                                                                               

                       Meaning Of "Same Community."  

                                                             



                       A party urging us to give statutory language a meaning other than its plain  

                                                                                                                                                



meaning bears the burden of demonstrating that legislative history is contrary to the plain  

                                                                                                                                                

meaning.30  

                                                                                                                                      

                      The clearer the plain language, the more persuasive contrary legislative  



                            31  

                                                                                                                                                     

history must be.                The relocation exemption plainly states that the relocation must be in  



                                                                                                                                  

the "same community." The legislative history surrounding this term is too inconclusive  



                                      

to disprove the plain meaning.  



            27         All of the following regulations use the term"service area": 7 AAC                                                 07.010,  



07.025, 07.032, 07.040, 07.042, 07.052, 07.070.                         



            28         See Minutes, House State Affairs Comm. Hearing on H.B. 297, 21st Leg.,  

                                                                                                                                               

 1st Sess. (Mar. 16, 2000) (statement of Rep. Jeannette James, Chair, House State Affairs  

                                                                                                                                            

Comm.).  



            29         See Alaska Ass'n of Naturopathic Physicians v. State, Dep't of Commerce,  

                                                                                                                                    

414 P.3d 630, 634-35 (Alaska 2018) (noting that the party challenging a regulation bears  

                                                                                                                                               

the burden of showing it is inconsistent with the statute).  

                                                                                      



            30         See State v. Fyfe, 370 P.3d 1092, 1095 (Alaska 2016).  

                                                                                                            



            31         Adamson v. Municipality of Anchorage , 333 P.3d 5, 11 (Alaska 2014).  

                                                                                                                                         



                                                                        -12-	                                                                  7349
  


----------------------- Page 13-----------------------

                    Thestatutory         amendmentallowed               ahealthcarefacility           to avoid theexpense   



and   delay   of   the   CON   process  if   it   relocated   within   the   same   community   without  

                                                 32   This legislative change was considered necessary  

increasing the services offered.                                                                                     



because "CON time frames are extensive" and  in  the past "the CON could  not be  

                                                                                                                                 

finished in the proper length of time."33                         Because there would be no change in the  

                                                                                                                                



facility's capacity or services offered, the legislature determined that a CON was not  

                                                                                                                                

required.34  

                  



                    The legislative history of the relocation statute provides little guidance, but  

                                                                                                                                



is not clearly contrary to the statute's plain language.  The legislative testimony and  

                                                                                                                               



discussion were conflicting. The hearing record included a statement that Fairbanks and  

                                                                                                                               



Delta Junction might be in the "same community" because they are in the same "service  

                                                                                                                        

         35  It contained statementsfromthecommitteechair that "communitymeans service  

area."                                                                                                                    

area."36      But the chair also stated that the "same community" exemption "would not  

                                                                                                                               



allow someone to move from Anchorage to the Matanuska-Susitna Borough or vice  

                                                                                                                              



versa," in part because facilities in Anchorage do not address the same community needs  

                                                                                                                            

as those in the Matanuska-Susitna Valley.37  

                                                                    



          32        Minutes,  House  State  Affairs  Comm.  Hearing  on  H.B.  297,  21st  Leg.,   1st  



Sess.  (Mar.   16,  2000)  (sponsor  statement  on  H.B.  297).  



          33        Id.  (statement  of  Rep.  Jeannette  James,  Chair,  House  State  Affairs  Comm.).  



          34        Id.  



          35        Id.  (testimony   of  Rick   Soley,  Dir.  of  Community  Relations  &  Planning,  



Fairbanks  Mem'l  Hosp.  &  Denali  Ctr.).  



          36        Id. (statement of Rep. Jeannette James, Chair, House State Affairs Comm.).  

                                                                                                                        



          37        Id.  



                                                               -13-                                                         7349
  


----------------------- Page 14-----------------------

                                The committee also alternated between leaving the "same community"                                                                          



 determination to theDepartment's                                               expertise and defining the termitself. Thechair                                                             ended  



 the discussion of whether Fairbanks and Delta Junction were the same community by                                                                                                                  



 declaring that the determination would be up to the Department, but then independently                                                                                  



 determined that Anchorage and the Matanuska-Susitna Borough were not in the same                                                                                                             



                             38  

 community.                       



                                Alaska Spine argues that this legislative history supports deference to the  

                                                                                                                                                                                                   



 Department's interpretation of "same community."  Mat-Su Medical argues that it does  

                                                                                                                                                                                              



 not,  but  urges  us  to  focus  on  the  statement  that  a  move  from  Anchorage  to  the  

                                                                                                                                                                                                  



 Matanuska-Susitna Borough - as Alaska Spine proposes - would not be allowed.  

                                                                                                                                                                                                      



                                We are not persuaded by either argument. To overcome the plain meaning  

                                                                                                                                                                                      



 of the statute,  Alaska  Spine must demonstrate that the legislative history is clearly  

                                                                                                                                                                                         



 contrary to it. It has not done so. The legislative history is contradictory and ambiguous,  

                                                                                                                                                                                



 and does not overcome the presumption in favor of the statute's plain language.  

                                                                                                                                                                    



                 C.	            The Legislative Purpose Of AS 18.07.031 Supports The Plain Meaning  

                                                                                                                                                                                     

                                Of "Same Community."  

                                                                                              



                                "[W]hen engaging in statutory interpretation, we aim to 'construe a statute  

                                                                                                                                                                                          

 in light of its purpose.' "39   We look to the intent of the legislature and prior applications  

                                                                                                                                                                              

 of the statute by the agency when determining legislative purpose.40  

                                                                                                                                                                 



                 38             Id.  (statement of Rep. Jeannette James, Chair, House State Affairs Comm.;                                                                              



 testimony of Sharon Anderson, Alaska State Hosp. & Nursing Home Ass'n).                                                                                           



                 39             City of Valdez v. State, 372 P.3d 240, 254 (Alaska 2016) (quoting Alaskans  

                                                                                                                                                                                     

for a Common Language, Inc. v. Kritz , 170 P.3d 183, 193 (Alaska 2007)).  

                                                                                                                                                             



                 40             See id. at 254-55; N. Alaska Envtl. Ctr. v. State, Dep't of Nat. Res., 2 P.3d  

                                                                                                                                                                                              

 629, 634 (Alaska 2000).  

                                           



                                                                                                 -14-	                                                                                        7349
  


----------------------- Page 15-----------------------

                        1.	         The relocation exemption's purpose                     



                        The CON program was established to ensure that there was "a need for the                                                        



                                                                                                                                                 41  

proposed service" before authorizing the construction of newhealth care facilities.                                                                   The  



                                                                                                                                        

later addition of an  exemption for a facility relocating within the same community  



                                                                                                                                                   

allowed the Department to waive completion of a CON, but did not alter the CON  



                                     

program's purpose.  



                                                                                                                                             

                        When a facility providing the same amount and type of service relocates  



                                                                                                                                                       

within the same community, the CON calculations of need in that service area are not  



                                                                                                                                                       

affected.           The  relocation  exemption  was  intended  to  allow facilities  which  are  not  



                                                                                                                                                      

expanding their services to avoid the delays and expenses of the full CON process.  The  



                                                                                                                                                           

relocation exemption's purpose of streamlining the process for such facilities creates a  



                                                                                                                                                   

narrow exception for a small number of applicants; it works in concert with the CON  



                                                                                      

statute to achieve the legislature's overarching purpose.  



                                                                                                                                                               

                        2.	         Past  applications  of  the  relocation  exemption  and  the  term  

                                    "community"  



                                                                                                                                                               

                        Alaska Spine argues that determining that it was eligible for the exemption  



                                                                                                                                   

aligns  with  the  purpose  of  the  statute.                                   It  urges  us  to  uphold  the  Department's  



                                                                                                                                                      

determination that "community" and "service area" are equivalent, arguing that this  



                                                                                                                                         

"perfectly fits the purpose of the statute" because both are considered when calculating  



                                                              

the need for a given service area.  



                                                                                                                                             

                        But not all regions of a service area are equivalent:  while some residents  



                                                                                                                                                        

of the Matanuska-Susitna Borough travel to Anchorage for health services, that does not  



                                                                                                                                                     

mean similar numbers from Anchorage travel to the Matanuska-Susitna Borough. Mat- 



            41          STATEOF           ALASKA, D          EP'TOF        HEALTH &S             OC.S    ERVS.,A        LASKA  CERTIFICATE  



          N EED           REVIEW               STANDARDS                      AND          METHODOLOGIES                              1      (2005),  

OF                                                                                                                                 

http://www.dhss.alaska.gov/dhcs/Documents/CertificateOfNeed/Standards.pdf.   



                                                                           -15-	                                                                   7349
  


----------------------- Page 16-----------------------

                                                                                                                            

Su Medical presented evidence that only 1.6% of Mat-Su Regional's outpatients come  



                                                                                                                        

from Anchorage.               It  is  similarly  likely  that the majority  of Alaska Spine's current  



                                                                                                                              

Anchorage patients will not travel to a relocated facility in Wasilla.  This illustrates that  



                                                                                                                       

facilities in the Matanuska-Susitna Borough serve a different community than facilities  



                                                                                                                    

in Anchorage, despite being in the same service area. Treating these terms as equivalent  



                                                                                                                                

would undermine the CON program's purpose of ensuring an appropriate balance of  



services.  



                                                                                                             

                    Since its adoption in 2000, there have only been two prior determinations  



                                                                                                                               

of eligibility for the relocation exemption.  Both of them were for relocations within the  



                                                                                                                            

same municipality:  the first was a two-block move in Anchorage; the second a move  



                                                                                                                                 

within  the  city  of  Wasilla.              There  has  never  been  an  application  for  or  grant  of  a  



                                                                                                                      

relocation exemption for a move from one municipality to another, and no previous  



                                                                                                      

consideration of whether Anchorage and Wasilla are in the "same community."  



                                                                                                                         

                    TheDepartment has, however,explicitlyreferredtoAnchorageand Wasilla  



                                                                                                                 

as  separate  communities  in  another  related  context.                              In  approving  a  2016  CON  



                                                                                                                  

applicationfor long-termcarefacilitiesin theMatanuska-SusitnaValley, theDepartment  



                                                                                                                        

noted that "[t]he CON Program considers the three communities of Anchorage, Wasilla  



                                                                                                                       

and Palmer to be a single service area.  The CON Program, in the history of its practice,  



                                                                                                                          

hasnever excluded onecommunity or divided theAnchorage/Matanuska-SusitnaValley  



                                                                                                                  

service area when calculating need [for long-term care facilities]."   The Department  



                                                                                                                   

distinguished community fromservicearea,treating Anchorageas aseparatecommunity  



                                                                                                                           

from Wasilla.            Consistent  with  the  regulatory  definition  of  service  area  that  treats  



                                                                                                                      

"community"  as  a  subset  within  a  "service  area,"  the  Department's  CON  program  



                                                                                                                        

identified multiple communities within the service area. The Department's past practice  



                                                                                                                   

in administering the CON program does not support its determination that Anchorage  



                                        

and Wasilla are the same community.  



                                                              -16-                                                         7349
  


----------------------- Page 17-----------------------

 V.                           CONCLUSION  



                                                           The Department's grant of the exemption was incorrect.                                                                                                                                                                                                We accordingly   



 AFFIRM the superior court's grant of Mat-Su Medical's cross-motion for summary                                                                                                                                                                                                                                                                  



judgment and its denial of Alaska Spine's motion for summary judgment.                                                                                                                                                                                                                                                                



                                                                                                                                                                                                   -17-                                                                                                                                                             7349
  

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