author: MAIN, Justice.

text:
    EX PARTE SACRED HEART HEALTH SYSTEM, INC. (In re Infirmary Health System and South Baldwin Regional Medical Center v. Sacred Heart Health System, Inc.).
    1091788.
    Supreme Court of Alabama.
    Nov. 21, 2012.

      Robert D. Segall and J. David Martin of Copeland, Franco, Screws & Gill, P.A., Montgomery; and G. Dennis Nabors and David E. Belser of Nabors, Belser & De-bray, LLC, Montgomery, for petitioner.
    James E. Williams, J. Flynn Mozingo, and C. Mark Bain of Melton, Espy & Williams, PC, Montgomery, for respondent Infirmary Health System.
    Laurence J. McDuff of Adams & Reese, LLP, Birmingham, for respondent South Baldwin Regional Medical Center.
    Les Hayes III, Montgomery, for amicus curiae the Medical Association of the State of Alabama, in support of the petitioner.
    Lenora W. Pate and Charles R. Drig-gars of Sirote & Permutt, P.C., Birmingham, for amici curiae Johnson Development, LLC, and Colonial Pinnacle MOB, LLC, in support of the petitioner.
    C. Gregory Locklier, Alabama Hospital Association, Montgomery; and Gregg B. Everett of Gilpin Givhan, PC, Montgomery, for amicus curiae Alabama Hospital Association, in support of the respondents on application for rehearing.
    Mark D. Wilkerson and Dana H. Bill-ingsley of Wilkerson & Bryan, P.C., Montgomery, for amicus curiae Alabama State Health Planning and Development Agency.

       Although Justice Parker was not present at oral argument in this case, he has listened to the audiotape of the oral argument.

   On Application for Rehearing

MAIN, Justice.

The opinion of March 2, 2012, is withdrawn, and the following is substituted therefor.

Sacred Heart Health System, Inc. (“Sacred Heart”), the defendant in a declaratory-judgment action filed by Infirmary Health System, Inc. (“IHS”), and South Baldwin Regional Medical Center (“South Baldwin”), appealed to this Court from one aspect of a final judgment entered by the Montgomery Circuit Court in favor of IHS and South Baldwin. IHS and South Baldwin cross-appealed from another aspect of the trial court’s judgment in favor of Sacred Heart. This Court transferred the appeal and cross-appeal to the Court of Civil Appeals; that court reversed the judgment of the trial court. Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So.3d 969 (Ala.Civ.App.2010). Sacred Heart then filed a petition for certiorari review with this Court, which we granted. We now reverse and remand.

I. Facts and Procedural History

Sacred Heart is an out-of-state, charitable, nonprofit corporation that provides health-care services in the panhandle of Florida and in southern Baldwin County. Sacred Heart also owns Sacred Heart Medical Group (“SHMG”), consisting of 143 multi-specialty physicians who practice in the area served by Sacred Heart. SHMG is not a separate legal entity. All SHMG physicians have uniform employment contracts with SHMG; billing for all patients is consolidated and handled by SHMG employees; third-party providers consider SHMG a medical group; and its physicians share the same billing number.

Six SHMG physicians practice in southern Baldwin County. When their practices increased and it was not feasible to expand their existing offices, Sacred Heart executed a preconstruction contract with Colonial Pinnacle MOB, LLC, the wholly owned subsidiary of Johnson Development, LLC, a developer and builder of medical-office buildings throughout Alabama (both entities are hereinafter referred to jointly as “Johnson Development”). The contract dealt with Sacred Heart’s proposed lease of a portion of a building to be constructed primarily for medical purposes (hereinafter referred to as “the medical-building project”). Sacred Heart has no ownership interest in the medical-building project or the land on which the medical-building project is located. Johnson Development’s initial plans for the medical-building project called for a 44,000-square-foot building that would include an outpatient surgery center, medical-office suites for SHMG physicians, time-share space for use by non-SHMG physicians, a diagnostic center, a laboratory, and a rehabilitation center, all of which would be leased to various entities including Sacred Heart. Sacred Heart intends for the SHMG physicians practicing in the medical-building project to provide a family practice, walk-in care, and laboratory and diagnostic facilities. Sacred Heart also plans to recruit an oncologist to offer services to include mammography and CT scans who would have an office and diagnostic facilities in the medical-building project.

Three SHMG physicians already use the leased space in the medical-building project as their primary office; there is space for eight physicians. The area intended for the surgery center was to have been leased to and operated by Pleasure Island Ambulatory Surgery Center, LLC, a group of non-SHMG physicians. Pleasure Island applied for a certificate of need (“CON”) to operate the surgery center, but the State Health Planning and Development Agency (“SHPDA”) denied its application. The Court of Civil Appeals affirmed, without opinion, the trial court’s judgment upholding SHPDA’s decision. Pleasure Island Ambulatory Surgery Ctr., LLC v. State Health Planning & Dev. Agency (No. 2080953, April 16, 2010), 82 So.3d 17 (Ala.Civ.App.2010) (table). Therefore, the medical-building project will not contain a surgery center, nor will it contain a rehabilitation center. The initial plan to lease space for a rehabilitation center was abandoned before Johnson Development completed the medical-building project.

The contested issue between the parties is whether the portion of the medical-building project Sacred Heart has leased for its Baldwin County physicians to use (“the SHMG leased space”) is subject to Sacred Heart’s first obtaining a CON from SHPDA. Section 22-21-260 et seq., Ala. Code 1975, sets out the law concerning the regulation of health-care facilities.

Section 22-21-265, Ala.Code 1975, requires that any person furnishing a “new institutional health service” must first obtain a CON from SHPDA:

“(a) On or after July 30, 1979, no person to which this article applies shall acquire, construct, or operate a new institutional health service, as defined in this article, or furnish or offer, or purport to furnish a new institutional health service, as defined in this article, or make an arrangement or commitment for financing the offering of a new institutional health service, unless the person shall first obtain from the SHPDA a certificate of need therefor.... ”

Section 22-21-263, Ala.Code 1975, prohibits institutional health services that are inconsistent with the “State Health Plan”:

“(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall be subject to review under this article. No institutional health services which are subject -to this article shall be permitted which are inconsistent with the State Health Plan. For the purposes of this article, new institutional health services shall include any of the following:
“(1) The construction, development, acquisition through lease or purchase, or other establishment of a new health care facility or health maintenance organization.”

The term “institutional health services” is defined at § 22-21-260(9), Ala. Code 1975, as “[hjealth services provided in or through health care facilities or health maintenance organizations, including the entities in or through which such services are provided.”

The emphasized language in § 22-21-260(8), Ala.Code 1975, defining “health services,” provides an exemption for a physician’s practice:

“(8) Health services. Clinically related (i.e., diagnostic, curative, or rehabilitative) services, including alcohol, drug abuse, and mental health services customarily furnished on either an in-patient or out-patient basis by health care facilities, but not including the lawful practice of any profession or vocation conducted independently of a health care facility and in accordance with applicable licensing laws of this state.”

(Emphasis added.)

Section 22-21-260(6), Ala.Code 1975, defines a “health care facility” as follows:

“(6) Health care facility. General and specialized hospitals, including tuberculosis, psychiatric, long-term care, and other types of hospitals, and related facilities such as, laboratories, out-patient clinics, and central service facilities operated in connection with hospitals; skilled nursing facilities; intermediate care facilities; skilled or intermediate care units operated in veterans’ nursing homes and veterans’ homes ...; rehabilitation centers; public health centers; facilities for surgical treatment of patients not requiring hospitalization; kidney disease treatment centers ...; community mental health centers and related facilities; alcohol and drug abuse facilities; facilities for the developmentally disabled; hospice service providers; and home health agencies and health maintenance organizations. The term health care facility shall not include the offices of private physicians or dentists, whether for individual or group practices and regardless of ownership. ...”

(Emphasis added.) The language emphasized above is referred to as the physician’s office exemption (“the POE”).

After Sacred Heart contracted to lease a portion of the medical-building project, South Baldwin filed a petition with SHPDA in which it requested that SHPDA declare that Sacred Heart’s plans to develop the medical-building project required that Sacred Heart obtain a CON from SHPDA. IHS intervened in support of South Baldwin’s petition. The administrative law judge assigned to hear the petition determined that SHPDA did not have jurisdiction and remanded the petition to the Certificate of Need Review Board (“the CONRB”). When the petition was not ruled on within 45 days, the petition was deemed denied pursuant to § 41-22-11, Ala.Code 1975. South Baldwin and IHS then filed a petition for judicial review in the Montgomery Circuit Court. The trial court denied summary-judgment motions filed by the parties and considered the case on a joint submission of the evidence. The trial court held that the SHMG leased space qualified for the POE available in § 22-21-260(6), Ala.Code 1975, and, therefore, that the SHMG leased space was not a health-care facility requiring CON review. South Baldwin and IHS filed a postjudgment motion. The trial court amended its judgment to hold that the SHMG leased space qualified for the POE only as to the three SHMG physicians who had relocated to the medical-building project from their south Baldwin County offices. The trial court also held that adding additional physicians or providing additional services in the medical-building project would require Sacred Heart to obtain a CON.

On appeal, the Court of Civil Appeals reversed the trial court’s judgment and remanded the case for the entry of a judgment declaring that “the MOB [medical-office-building] project, as developed as a whole,” does not qualify for the POE and requires CON review. 155 So.3d at 979. The Court of Civil Appeals also directed the trial court to enjoin Sacred Heart from offering health-care services in the medical-building project until it secures a CON.

Sacred Heart filed a petition for a writ of certiorari to this Court and asserted as a ground for review that this case presents the following material question of first impression: Whether the SHMG leased space and the health-care services proposed by Sacred Heart to be offered therein qualify for the POE so that Sacred Heart is not required to secure a CON.

II. Standard of Review

“Our standard of review of this case is governed by statute. Section 12-2-7(1), Ala.Code 1975, states:
“ ‘[I]n deciding appeals, no weight shall be given the decision of the trial judge upon the facts where the evidence is not taken orally before the judge, but in such cases the Supreme Court shall weigh the evidence and give judgment as it deems just.’
“In a case in which a trial court has not heard live testimony, this Court has held that ‘a reviewing court will not apply the presumption of correctness to a trial court’s findings of fact and that the reviewing court will review the evidence de novo.’ Eubanks v. Hale, 752 So.2d 1113, 1122 (Ala.1999). Our statutory obligation in a case such as this is to ‘weigh the evidence and give judgment as [we] deem[ ] just.’ ”

Bentley Sys., Inc. v. Intergraph Corp., 922 So.2d 61, 70-71 (Ala.2005). Moreover, we also review de novo a question of law involving statutory construction. Whitehurst v. Baker, 959 So.2d 69, 70 (Ala.2006).

III. Analysis

Section 22-21-265, Ala.Code 1975, requires that the provider of any new institutional health service must first obtain a CON from SHPDA. By definition, to be considered a new “institutional health service,” the provider of the service must offer “health services” in or through a “health care facility.” As defined in the applicable statutes, the terms “health services” and “health care facility” both include exemptions for a physician’s practice. “Health services” do not include “the lawful practice of any profession or vocation conducted independently of a health care facility and in accordance with applicable licensing laws.” § 22-21-260(8). A “health care facility” does not include “the offices of private physicians or dentists, whether for individual or group practices and regardless of ownership.” § 22-21-260(6).

The exemption for a physician’s practice contained in the definition of health services is broader than the POE contained in the definition of a health-care facility. It exempts a physician’s practice of his or her profession so long as it is conducted independently of a health-care facility. If our inquiry were limited to whether the SHMG physicians whose offices are located in the medical-building project are engaged in the lawful practice of their profession, the exemption in the definition of “health services” in § 22-21-260(8) would excuse Sacred Heart from obtaining a CON for the SHMG leased space. However, the exemption in § 22-21-260(8) also requires that the practice of the profession at issue be conducted “independently of a health care facility,” so we must also determine whether the POE in the definition of “health care facility” in § 22-21-260(6) for the “offices of private physicians” either individually or in a group practice, “regardless of ownership,” applies to the SHMG leased space.

Our inquiry is governed by settled principles of statutory construction.

“When interpreting a statute, a court must first give effect to the intent of the legislature. BP Exploration & Oil, Inc. v. Hopkins, 678 So.2d 1052 (Ala.1996).
“ ‘The fundamental rule of statutory construction is that this Court is to ascertain and effectuate the legislative intent as expressed in the statute. League of Women Voters v. Renfro, 292 Ala. 128, 290 So.2d 167 (1974). In this ascertainment, we must look to the entire Act instead of isolated phrases or clauses; Opinion of the Justices, 264 Ala. 176, 85 So.2d 391 (1956).’
“Darks Dairy, Inc. v. Alabama Dairy Comm’n, 367 So.2d 1378, 1380 (Ala.1979) (emphasis added). To discern the legislative intent, the Court must first look to the language of the statute. If, giving the statutory language its plain and ordinary meaning, we conclude that the language is unambiguous, there is no room for judicial construction. Ex parte Waddail, 827 So.2d 789, 794 (Ala.2001). If a literal construction would produce an absurd and unjust result that is clearly inconsistent with the purpose and policy of the statute, such a construction is to be avoided. Ex parte Meeks, 682 So.2d 423 (Ala.1996).”

City of Bessemer v. McClain, 957 So.2d 1061, 1074-75 (Ala.2006). “When a court construes a statute, ‘[w]ords used in [the] statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to intex-pret that language to mean exactly what it says.’ ” Ex parte Berryhill, 801 So.2d 7, 10 (Ala.2001) (quoting IMED Corp. v. Systems Eng’g Assocs. Corp., 602 So.2d 344, 346 (Ala.1992)). As we have repeatedly stated, the function of this Court is “ ‘to say what the law is, not to say what it should be.’ ” Ex parte Achenbach, 783 So.2d 4, 7 (Ala.2000) (quoting DeKalb Cnty. LP Gas Co. v. Suburban Gas, Inc., 729 So.2d 270, 276 (Ala.1998)).

“ ‘ “ ‘It is settled that courts should give great weight to any reasonable constraction of a regulatory statute adopted by the agency charged with the-enforcement of that statute.’ ” ’ ” QCC, Inc. v. Hall, 757 So.2d 1115, 1119 (Ala.2000) (quoting NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 256, 115 S.Ct. 810, 130 L.Ed.2d 740 (1995), quoting in turn Clarke v. Securities Indus. Ass’n, 479 U.S. 388, 403 (1987), quoting in turn Investment Co. Institute v. Camp, 401 U.S. 617, 626-27 (1971)). The CONRB has formulated a four-pai't test that it uses to determine whether the POE is applicable in a given situation. The test was first stated in CONRB Administrative Ruling Re: Heart-Lung Associates of America, P.C., DR-100 (August 29, 2001), at p. 3, ¶ 11, n. 3, and restated in CONRB Administrative Ruling( Re: East Alabama Health Care Authority d/b/a East Alabama Medical Center v. Institute for Advanced Cardiovascular Care & Community Medical Development, LLC, DR-110 (May 3, 2007), at p. 5 (“the Heart-Lung test”). Under the Heart-Lung test, the POE is applicable when it is shown:

“1. That the pi'oposed seiwices ai'e to be provided, and related equipment used, exclusively by the physicians identified as owners or employees of the physicians’ pi-actice for the eai'e of their patients.
“2. That the proposed seiwices are to be provided, and x’elated equipment used, at the primai-y office of such physicians.
“3. That all patient billings related to such services are thi'ough, or expressly on behalf of, the physicians’ practice, and not on behalf of a third party.
“4. That the equipment shall not be used for inpatient care, nor by, through or on behalf of a health care facility.”

Sacred Heart argues that the standard applied by the Court of Civil Appeals to determine whether the SHMG leased space qualifies for the POE is arbitrary, subjective, and unworkable and that that coui’t eri'ed when it held that the second factor - of the Heart-Lung test had not been satisfied. Sacred Heart further ai'-gues that the injunction dii*ected to be issued by the Coui't of Civil Appeals was based primarily on that court’s application of a subjective and arbitrary test that this Court should reject. The main opinion of the Court of Civil Appeals stated that the POE did not apply because “the scope of the MOB [medical-offiee-building] project, as originally designed and developed, reaches in our minds the point referred to by the CONRB in DR-116, ‘where an outpatient facility, even one developed and owned by physicians, goes beyond a common sense definition of a “physician’s office,” and is subject to review.’ ” 155 So.3d at 978. Sacred Heart contends that this standard does not provide the clarity or specificity necessary for predictable health-care planning and maintains that it should be replaced with the Heart-Lung test. Sacred Heart also argues that all four factors of the Heart-Lung test are met and that therefore the POE is applicable to the SHMG leased space.

IHS and South Baldwin argue not only that the statutory requirement for CON review applies to the operation of a new health-care facility, but also that the statutory scheme prohibits developing, acquiring, constructing, or obtaining financing for institutional health services without first obtaining a CON. See § 22-21-263(a), Ala.Code 1975. IHS argues in its brief that, according to § 22-21-263(a), “Sacred Heart was obligated to obtain a CON prior to, and in order to, engage in the construction, development or lease of the new health care facility.” IHS’s brief, at 27. IHS maintains that Sacred Heart “executed leases for facilities comprising a ‘health care facility for which CON review is required.” IHS’s brief, at 28. South Baldwin argues in its brief that “Sacred Heart, with its three hospitals and various outpatient clinics all operating as a single legal entity, unquestionably qualifies as a ‘health care facility’ under [the Heart-Lung test].” South Baldwin’s brief, at 28. Therefore, South Baldwin argues, Sacred Heart cannot “exempt itself from the restrictions of the CON statute simply by employing physicians.” Id. SHPDA adopted the Heart-Lung test, IHS and South Baldwin say, to analyze whether a project is designed as the offices of private physicians or is a health-care facility subject to CON review. IHS and South Baldwin contend that the SHMG leased space triggered the CON requirement not only because it was designed as a new health-care facility, but also because Sacred Heart proposed new services at the facility that independently require CON review. IHS and South Baldwin argue that the SHMG leased space does not meet all the criteria to qualify for the POE and that, therefore, Sacred Heart must obtain a CON before it can use the SHMG leased space.

This Court has reviewed the Heartr-Lung test and given it great weight, has considered the problems with the application of the test that have arisen in this case, and has given the words in the POE “their natural, plain, ordinary, and commonly understood meaning.” IMED Corp., 602 So.2d at 346. We conclude that the Heart-Lung test is substantially sound but that it should be modified to be consistent with the purpose and policy of the POE and to reflect the legislative intent expressed in § 22-21-260(6). We hereby adopt a modified four-part test to be used to determine whether a proposed medical facility or project qualifies for the POE (hereinafter referred to as “the POE application test”):

(1) The proposed services are to be provided, and related equipment used, exclusively by the physicians identified as owners or employees of the physicians’ practice for the care of their patients.
(2) The proposed services are to be provided, and related equipment used, at any office of such physicians.
(3) All patient billings related to such services are through, or expressly on behalf of, the physicians’ practice.
(4) The equipment shall not be used for inpatient care, nor by, through, or on behalf of a health-care facility.

The POE application test is promulgated to provide clarification as to the exemption from the CON review process for the offices of licensed physicians, dentists, or group practices and should not be interpreted as circumventing the statutory language in §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265, Ala.Code 1975, or otherwise applicable statutes or administrative regulations pursuant to the “State Health Plan.” The POE application test will provide an objective standard that can be used to determine whether the POE applies to any medical practice, whether the practice is solo or group, large or small, specialized or general. Such an objective test will not only provide direction to SHPDA, the CONRB, and our courts, but will also provide the certainty needed by developers of medical office buildings in this State and its physicians at times when, for example, they consider relocating a practice, adding a new physician or specialty to an existing practice, purchasing a piece of new equipment, or offering a new service.

As to the SHMG leased space, the trial court did not have before it the POE application test we adopt today; therefore, we remand this case to the Court of Civil Appeals for it to remand the case to the trial court for consideration in light of the POE application test, including any further proceedings the trial court deems necessary. Because we today adopt the POE application test and remand the case, we pretermit consideration of the other arguments made by the parties.

IV. Conclusion

We reverse the judgment of the Court of Civil Appeals and remand this case for that court to remand the case to the trial court for any further proceedings it deems necessary and for the trial court to apply the POE application test to the SHMG leased space in the medical-building project in a manner consistent with this opinion.

APPLICATION GRANTED; OPINION OF MARCH 2, 2012, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED WITH INSTRUCTIONS.

MALONE, C.J., and WOODALL, STUART, BOLIN, PARKER, and MURDOCK, JJ., concur.

SHAW, J., concurs in the result.

WISE, J., recuses herself.

      . It is unclear from the record what type of entity South Baldwin is.

      . In examining the medical-building project as a whole, this Court does not refer to the entire building constructed by Johnson Development, which contains space for medical and non-medical uses, but to the portion of the building leased by the specific physicians' practice seeking to apply the physician’s office exemption to the CON requirement. In this case, we review the SHMG leased space because that is the only space to be used by the SHMG practice.

      . The "State Health Plan” is defined at § 22-21-260(13), Ala.Code 1975, as "[a] comprehensive plan which is prepared triennially and reviewed at least annually and revised as necessary....”

      . The Court of Civil Appeals’ opinion was authored by Judge Thomas. Presiding Judge Thompson and Judge Bryan concurred in the result; Judge Pittman and Judge Moore dissented.

      . We have changed the phrase "the primary office” to “any office” in the second part of the test and have struck the phrase "and not on behalf of a third party” in the third part because of a potential conflict with the phrase "regardless of ownership” in the statutory language of the POE. Ex parte McLeod, 718 So.2d 682, 690 (Ala.1997) ("An administrative agency's interpretation of a statute will not be given deference if it is contrary to the legislative intent.”). See also Ex parte Crestwood Hosp. & Nursing Home, Inc., 670 So.2d 45, 47 (Ala.1995) ("It is settled law that the provisions of a statute will prevail in any case in which there is a conflict between the statute and a state agency regulation.”)

      . See supra note 3.


source: Caselaw Access Project

author: THOMAS, Judge. THOMAS, Judge.

license: Public Domain

text:
    SACRED HEART HEALTH SYSTEM, INC. v. INFIRMARY HEALTH SYSTEM and South Baldwin Regional Medical Center. Infirmary Health System and South Baldwin Regional Medical Center v. Sacred Heart Health System, Inc. Sacred Heart Health System, Inc. v. Infirmary Health System and South Baldwin Regional Medical Center.
    2090239, and 2120658.
    Court of Civil Appeals of Alabama.
    Jan. 11, 2013.
    On Return to Remand March 7, 2014.

      Robert D. Segall and J. David Martin of Copeland, Franco, Screws & Gill, P.A., Montgomery; G. Dennis Nabors and David E. Belser of Nabors, Belser & DeBray, LLC, Montgomery (in case no. 2090239); and G. Dennis Nabors of Baker, Donelson, Bearman, Caldwell & Berkowitz, Montgomery (in case no. 2120658), for appellant/cross-appellee Sacred Heart Health System, Inc.
    James E. Williams, J. Flynn Mozingo, and C. Mark Bain of Melton, Espy & Williams, PC, Montgomery, for appel-lee/cross-appellant Infirmary Health System.
    Laurence J. McDuff of Adams & Reese LLP, Birmingham, for appellee/cross-ap-pellant South Baldwin Regional Medical Center.
    Lenora W. Pate and Charles R. Drig-gars of Sirote & Permutt, P.C., Birmingham, for amici curiae Johnson Development, LLC, and Colonial Pinnacle MOB, LLC, in support of the appellant/cross-appellee Sacred Heart Health System, Inc.
    Les Hayes III, gen. counsel, Montgomery (in case no. 2090239); and Cheairs M. Porter, gen. counsel, Montgomery (on original submission in case no. 2120658), for amicus curiae the Medical Association of the State of Alabama, in support of the appellant/cross-appellee Sacred Heart Health System, Inc.
    Michael L. Jackson, Albert L. Jordan, and Oscar M. Price III of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for amici curiae Associated Builders and Contractors of Alabama, Inc., and Alabama Associated General Contractors, Inc., in support of the appellant/cross-appellee Sacred Heart Health System, Inc.
   After Remand from the Alabama Supreme Court of Case No. 2090239

THOMAS, Judge.

This court’s prior judgment has been reversed and the cause remanded by the Alabama Supreme Court. Ex parte Sacred Heart Health Sys., Inc., 155 So.3d 980, 984 (Ala.2012). In compliance with the directive set out in that opinion, we remand the cause to the trial court for 90 days for that court to conduct “any further proceedings it deems necessary and for the trial court to apply the [physician’s office exemption] application test [set out in our supreme court’s opinion] to the [Sacred Heart Medical Group] leased space in the medical-building project in a manner consistent with [our supreme court’s] opinion.” 155 So.3d at 988.

REMANDED WITH INSTRUCTIONS.

THOMPSON, P.J., and PITTMAN, BRYAN, and MOORE, JJ., concur.

On Return to Remand in Case No. 2090239

THOMAS, Judge.

This is the second time these parties have appeared before this court. Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So.3d 969 (Ala.Civ.App.2010). Sacred Heart Health System, Inc. (“Sacred Heart”), again appeals from the trial court’s judgment in a declaratory-judgment action instituted by Infirmary Health System (“IHS”) and South Baldwin Regional Medical Center (“South Baldwin”).

As explained in our earlier opinion,

“[Sacred Heart] is an out-of-state, not-for-profit corporation that, among other things, provides medical services through three hospitals and other medical facilities located in the northwestern region of Florida. Sacred Heart is also the owner of a multi-specialty physician group known as Sacred Heart Medical Group (‘SHMG’). SHMG is made up of 143 physicians practicing in the northwestern area of Florida and the south Baldwin County area of Alabama. The record indicates that SHMG is not a separate legal entity; however, Sacred Heart has presented evidence indicating that the physicians of SHMG have employment contracts with SHMG, that SHMG employees perform consolidated billing for all the SHMG physicians’ patients, that third-party providers like insurers consider SHMG a medical group, and that SHMG physicians all share the same billing number.
“Six SHMG physicians provide healthcare services to patients in the south Baldwin County area of Alabama. Because the practices of three of those physicians had increased and an expansion of the physicians’ existing offices was not feasible, Sacred Heart began, as early as 2003, seeking a way to assist those physicians in locating more office space to provide better service to their patients.”

Sacred Heart Health Sys., 155 So.3d at 970-71. As part of its plan to provide more space to its Baldwin County physicians, Sacred Heart began working with a developer to develop a medical-office building (“the MOB”) in which, among other things, space for physicians’ offices would be leased by Sacred Heart. Id. at 971. Early in the development of the project, the plans for the MOB called for space for a rehabilitation clinic; the plans also called for space for an ambulatory, or outpatient, surgery center, a walk-in care clinic, and laboratory and diagnostic facilities. Id. at 971.

The procedural history of this case was, in large part, also set out in our earlier opinion:

“[South Baldwin], a health-care facility located in Baldwin County, filed a petition for a declaratory ruling with the State Health Planning and Development Agency (‘SHPDA’), requesting that SHPDA declare Sacred Heart’s plans to develop the MOB required Sacred Heart to obtain a certificate of need (‘CON’) from SHPDA. Infirmary Health System (THS’), another health-care facility that provides health services in the Mobile County/Baldwin County area, intervened in support of the petition. The administrative law judge (‘ALJ’) assigned to hear the petition determined that he lacked jurisdiction to decide the matter and remanded the petition to the CON Review Board (‘CONRB’). Because neither the CONRB nor the ALJ issued any ruling on the petition within 45 days, see Ala.Code 1975, § 41-22-11(b) (stating that an agency’s failure to rule on a request within 45 days constitutes a denial of the request), South Baldwin and IHS (hereinafter referred to collectively as ‘the opponents’) filed a petition for judicial review in the Montgomery Circuit Court. See Ala.Code 1975, § 41-22-20 (explaining the procedure to seek judicial review of an agency decision).
“In the petition for judicial review, as originally filed, the opponents sought an order directing that SHPDA conduct a fact-finding proceeding and issue a ruling on the merits of the petition for a declaratory ruling. The opponents later amended their petition, requesting that the circuit court declare that the MOB project that Sacred Heart was developing was reviewable under the statutes and regulations pertaining to SHPDA and thus required Sacred Heart to obtain a CON in order to offer health-care services in the MOB. Finally, in their final amended petition and complaint, the opponents sought declaratory and injunctive relief under the Alabama Administrative Procedure Act, Ala.Code 1975, § 41-22-1 et seq.; the Declaratory Judgment Act, Ala.Code 1975, § 6-6-220 et seq.; and § 22-21-276(a), one of the statutes relating to the regulation of health-care facilities, codified at Ala. Code 1975, § 22-21-260 et seq. The opponents specifically requested that the circuit court determine that a CON was required for Sacred Heart to offer health-care services in the MOB and that the circuit court enjoin Sacred Heart from offering those services in the MOB until it obtained a CON.
“Although both Sacred Heart and the opponents each sought a summary judgment in their respective favor, the circuit court denied both motions and set the case for trial. By agreement of the parties, the circuit court did not hold a bench trial; instead, it took the case under submission on a joint submission of evidence. The circuit court entered a judgment determining that the MOB project fell under ‘the physician’s office exemption’ contained in Ala.Code 1975, § 22-21-260(6), and, thus, that it was not the establishment of a new healthcare facility, which requires CON review under Ala.Code 1975, § 22-21-263(a)(l). Based on that determination, the circuit court concluded that Sacred Heart was not required to secure a CON to offer health-care services in the MOB. After consideration of a timely filed post-judgment motion, the circuit court amended its judgment to explain that the MOB project qualified for the physician’s office exemption only insofar as the three SHMG physicians who were relocating their south Baldwin County-area offices into the MOB were concerned; however, the circuit court further ruled that adding any additional physicians or providing additional services would require Sacred Heart to obtain a CON before adding such physicians or providing such services in the MOB. Sacred Heart appealed that judgment to the Alabama Supreme Court; the opponents cross-appealed. Our supreme court transferred the appeal and the cross-appeal to this court, pursuant to Ala.Code 1975, § 12-2-7(6). All the parties requested oral argument; this court granted those requests, and oral argument was held on April 21, 2010.”

Sacred Heart Health Sys., 155 So.3d at 972-73.

After oral argument, this court released our opinion reversing the trial court’s judgment and determining that “the MOB project, as developed as a whole, does not qualify for the physician’s office exemption because SHMG diagnostic equipment would be used by SHMG physicians whose primary offices are not located in the MOB, and, thus, that it requires CON review.” Id. at 979. This court relied on criteria the CONRB had utilized in determining whether the physician’s office exemption (“the POE”), which exempts certain entities from the CON process, see Ala.Code 1975, § 22-21-260(6), applied, which criteria had been set out in CONRB administrative rulings. Specifically, we relied on the test set out in the CONRB’s administrative ruling regarding The Institute for Advanced Cardiovascular Care; under that test, in order to show that the POE applies and that applying for a CON is unnecessary, the following criteria must be met:

“ 1. That the proposed services are to be provided, and related equipment used, exclusively by the physicians identified as the owners or employees of the physicians’ practice for the care of their patients.
“ ‘2. That the proposed services are to be provided, and related equipment used, at the primary office of such physicians.
“ ‘3. That all patient billings related to such services are through, or expressly on behalf of, the physicians’ practice, and not on behalf of a third party.
“ ‘4. That the equipment shall not be used for inpatient care, nor by, through or on behalf of a health care facility.’ ”

Sacred Heart Health Sys., 155 So.3d at 977 (quoting CONRB Administrative Ruling Regarding The Institute for Advanced Cardiovascular Care, DR-110 (May 3, 2007)).

Sacred Heart then sought certiorari review of our decision. Our supreme court stated the issue presented to it thusly:

“The contested issue between the parties is whether the portion of the medical-building project Sacred Heart has leased for its Baldwin County physicians to use (‘the SHMG leased space’) is subject to Sacred Heart’s first obtaining a CON from SHPDA.2
“2 In examining the medical-building project as a whole, this Court does not refer to the entire building constructed by Johnson Development, which contains space for medical and non-medical uses, but to the portion of the building leased by the specific physicians’ practice seeking to apply the physician’s office exemption to the CON requirement. In this case, we review the SHMG leased space because that is the only space to be used by the SHMG practice.”

Ex parte Sacred Heart Health Sys., Inc., 155 So.3d 980, 983 (Ala.2012) (first and second emphasis added). After considering the arguments presented by Sacred Heart, our supreme court reversed the decision of this court, determining that the four-part test for determining the application of the POE set out by the CONRB, which the supreme court referred to as “the Heart-Lung test,” should be modified. Ex parte Sacred Heart, 155 So.3d at 987. Our supreme court explained:

“This Court has reviewed the Heart-Lung test and given it great weight, has considered the problems with the application of the test that have arisen in this case, and has given the words in the POE ‘their natural, plain, ordinary, and commonly understood meaning.’ IMED Corp.[ v. Systems Eng’g Assocs. Corp.], 602 So.2d [344,] 346 [(Ala.1992) ]. We conclude that the Heart-Lung test is substantially sound but that it should be modified to be consistent with the purpose and policy of the POE and to reflect the legislative intent expressed in § 22-21-260(6). We hereby adopt a modified four-part test to be used to determine whether a proposed medical facility or project qualifies for the POE (hereinafter referred to as ‘the POE application test’):
“(1) The proposed services are to be provided, and related equipment used, exclusively by the physicians identified as owners or employees of the physicians’ practice for the care of their patients.
“(2) The proposed services áre to be provided, and related equipment used, at any office of such physicians.
“(3) All patient billings related to such services are through, or expressly on behalf of, the physicians’ practice.
“(4) The equipment shall not be used for inpatient care, nor by, through, or on behalf of a health-care facility.
“5 We have changed the phrase ‘the primary office’ to ‘any office’ in the second part of the test and have struck the phrase ‘and not on behalf of a third party’ in the third part because of a potential conflict with the phrase ‘regardless of ownership’ in the statutory language of the POE. Ex parte McLeod, 718 So.2d 682, 690 (Ala.1997) (‘An administrative agency’s interpretation of a statute will not be given deference if it is contrary to the legislative intent.’). See also Ex parte Crestwood Hosp. & Nursing Home, Inc., 670 So.2d 45, 47 (Ala.1995) (‘It is settled law that the provisions of a statute will prevail in any case in which there is a conflict between the statute and a state agency regulation.’).”

Id. at 987-88. Our supreme court remanded the cause to this court for us to remand the cause to the trial court for it to apply the newly modified POE application test. Id. at 988. The specific remand instructions provided by our supreme court required the trial court to conduct “any further proceedings it deems necessary and for the trial court to apply the POE application test to the SHMG leased space in the medical-building project in a manner consistent with this opinion.” Id.

Following the remand order from this court, the trial court, at the request of the parties, permitted limited discovery and held a hearing. The trial court entered an order on April 10, 2013, in which it made the following findings and conclusions:

“The Sacred Heart medical park was developed per the joint agreement of Sacred Heart Health System Inc. and Colonial Pinnacle MOB, LLC, an affiliate of Johnson Development, LLC. Colonial Pinnacle owns the medical park but Sacred Heart is the major tenant and holds seven leases for a majority of the usable footage.
“Sacred Heart Health System Inc. is a Florida based operator of hospitals and other health care facilities. Sacred Heart Health System also employs approximately 143 physicians, including approximately six physicians who practice in Baldwin County. The physician practices operate under the moniker of the Sacred Heart Medical Group (‘SHMG’). However, the SHMG is not a legal entity but a unit of Sacred Heart Health System Inc., and all operating income and expenses of the SHMG are included in the consolidated financial statement for Sacred Heart Health System, Inc.
“The Sacred Heart medical park was developed to provide space for Sacred Heart’s physicians in Baldwin County, and to also offer the following services: outpatient surgery center, a diagnostic center, a laboratory, [] and a rehabilitation center. None of these services are presently offered by Sacred Heart’s physicians in Baldwin County.
“The Court concludes that the medical park contains leaseholds for multiple facilities that do not satisfy the POE application test. All seven leases, as amended, vary in the footage leased and the lease rate per square foot. For example, the Family Care lease where Drs. Eslava and Taylor practice is $23.46 a square foot as compared to $44.86 a square foot for the ambulatory surgery center; $33.80 a square foot for the diagnostic center; and $30.54 a square foot for Same Day Walk In. Sacred Heart clearly does not treat these facilities as one physician’s office, but as separate facilities.
“Focusing on the specific leases, the diagnostic center and ambulatory surgery center are not leased as physicians’ practices; and the leases are in the name of Sacred Heart Health System. From the evidence, it also appears that the Same Day Walk In clinic will be operated as an outpatient clinic as defined by [Ala.Code 1975,] § 22-21-260(8).[] Therefore, in focusing on the ‘specific physicians’ practice,’ the Court concludes that the medical park contains at least three facilities that are not per se physicians’ offices and that it would circumvent the CON law to apply the POE to a facility that is not a physician’s office.
“Based upon all of these findings, the Court therefore concludes that the POE does not apply to the leaseholds for the ambulatory surgery center, the diagnostic facility and the Same Day Walk In, and that a Certificate of Need is required for these facilities. Specifically, the Court finds and holds that these facilities and/or the services provided therein: (1) will not be used exclusively by the physicians identified as owners or employees of the physicians’ practices for the care of their patients; (2) the proposed services and related equipment will not be used at an office of the physician; (3) patient billing for services will not be through or on behalf of the physician’s practice; and (4) the equipment will be used by, through, and on behalf of a health care facility.
“In adopting the POE application test, the Alabama Supreme Court stated further: ‘The POE application test ... should not be interpreted as circumventing the statutory language in §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265, Ala. Code 1975, or otherwise applicable statutes or administrative regulations pursuant to the “State Health Plan,”’ [155 So.3d at 988]. The Court finds that upon viewing the project as a whole, including its initial development on behalf of Sacred Heart, applying the POE to the entire medical park would circumvent the statutory language in §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265.
“In addition, § 22-21-263(a)(2) provides that new institutional health services for which a CON must be obtained include new annual operating expenses by or on behalf of a health care facility in the amount of $800,000 adjusted annually for inflation. According to the evidence on remand, the annual operating costs to Sacred Heart for the leasehold interests now exceed the threshold in § 22-21-263(a)(2) by over $400,000. The Court therefore concludes that it would circumvent the statutory language to apply the POE to an entire medical park that will house multiple health care facilities as defined by Ala.Code [1975,] §§ 22-21-260(6) and 22-21-260(8), and the cost of which exceed the threshold in § 22-21-263(a)(2).
“Based on the above, the Court declares that Defendant Sacred Heart Health System must obtain a Certificate of Need from the State Health Planning and Development Agency. Accordingly, JUDGMENT is hereby entered in favor of [IHS and South Baldwin].”

(Capitalization in the original.)

We received the trial court’s order on return to remand in case no. 2090239. Because on remand the trial court reversed its earlier decision and held that the MOB, in its entirety, did not meet the four-part POE application test, Sacred Heart filed a new appeal from that order, which this court assigned case no. 2120658. We have consolidated the two appeals.

The first argument Sacred Heart makes on appeal is that the trial court exceeded the scope of the instructions on remand in making its determination that the MOB as a whole was subject to the requirement that Sacred Heart first seek and receive a CON. According to Sacred Heart, the trial court was limited by the remand instructions to consider only the “SHMG leased space,” which includes only that space in the MOB leased by Sacred Heart for its SHMG physicians in Baldwin County. Sacred Heart specifically relies on the language of note 2 in Ex parte Sacred Heart, in which our supreme court stated:

“In examining the medical-building project as a whole, this Court does not refer to the entire building constructed by Johnson Development, which contains space for medical and non-medical uses, but to the portion of the building leased by the specific physicians’ practice seeking to apply the physician’s office exemption to the CON requirement. In this case, we review the SHMG leased space because that is the only space to be used by the SHMG practice.”

Id. at 983 n. 2. Instead of following our supreme court’s instructions, contends Sacred Heart, the trial court considered all the portions of the MOB, including the space originally planned to house an outpatient surgery center, in determining whether the POE application test was satisfied. Sacred Heart points to the language used by our supreme court in its opinion in making the argument that, on remand, the trial court was limited to considering only those portions of the MOB that were leased to the SHMG physicians in its application of and analysis of the factors in the POE application test.

IHS argues that the trial court did not violate the remand instructions and that it carefully considered each separate leasehold in the MOB to determine whether each of them satisfied the POE application test; according to IHS, the trial court held, by omitting them from discussion, that four specific leaseholds — those leaseholds covered by what the parties refer to as the “primary-care” lease, the “medical oncology” lease, the “co-op timeshare”. lease, and the “community room” lease— satisfy the POE application test. Further, IHS contends that the trial court did not conclude that a CON is required for the MOB itself, just for certain leaseholds. Thus, under its analysis, IHS asserts that the trial court properly considered the issues on remand.

South Baldwin contends that our supreme court did not exclude from the trial court’s consideration any portion of the MOB. According to South Baldwin, our supreme court stated that the MOB must be viewed as a whole, despite the language of note 2 in Ex parte Sacred Heart, which, as noted above, Sacred Heart insists limits review of the MOB to that area leased for the use of the SHMG physicians. South Baldwin appears to treat the term “SHMG leased space” as if it means “space in the MOB leased by Sacred Heart.” South Baldwin argues that our supreme court did not limit the space to be considered when applying the POE application test by use of the term “SHMG leased space.” Instead, South Baldwin contends, the term “SHMG leased space” was used merely to delineate between the space in the MOB retained by the developer and the space leased by Sacred Heart. We cannot agree.

As noted above, our supreme court stated the issue under consideration to be “whether the portion of the medical-building project Sacred Heart had leased for its Baldwin County physicians to use (‘the SHMG leased space’) is subject to Sacred Heart’s first obtaining a CON from SHPDA.” Ex parte Sacred Heart, 155 So.3d at 983. Before stating the issue, the opinion explained that the MOB had originally been designed to house a rehabilitation center and an outpatient surgery center. Id. at 982. However, our supreme court noted, Sacred Heart had abandoned the plan to lease space for a rehabilitation center before construction of the MOB had been completed and the entity that planned to lease and operate the area originally conceived of as an outpatient surgery center had not secured the required CON to provide outpatient surgery services. Id. at 994; see also supra note 7. Thus, Sacred Heart contends, our supreme court considered those particular aspects of the MOB to be irrelevant to the application of the POE application test. Furthermore, Sacred Heart points out, our supreme court stated that “Sacred Heart intends for the SHMG physicians practicing in the medical-building project to provide a family practice, walk-in care, and laboratory and diagnostic facilities.” Id. at 982. According to Sacred Heart, our supreme court intended for the POE application test to be applied to those spaces — the spaces intended to be used by the SHMG physicians to provide family practice, walk-in care, and laboratory and diagnostic services — and not to the outpatient surgery center or the rehabilitation center.

Our reading of the supreme court’s opinion convinces us that the space planned to house the proposed outpatient surgery center and the space originally planned to house the proposed rehabilitation center are not to be considered in applying the POE application test. The plans for those spaces in the MOB, according to our supreme court, were either abandoned or have not come to fruition because of a failure to secure a CON. Id. at 991. In addition, neither of those spaces was intended to be used by the SHMG physicians, the entity seeking application of the POE to the MOB. See id. at 988. Thus, we agree with Sacred Heart that the trial court erred in considering those spaces within the MOB when applying the POE application test on. remand. Our decision is fully supported by the specific language of note 2 in Ex parte Sacred Heart, in which our supreme court limited its review to that aspect of the trial court’s judgment that applied to “the SHMG leased space because that is the only space to be used by the SHMG practice.” Id. at 983.

However, despite our agreement with that argument presented by Sacred Heart, the error committed by the trial court in considering the outpatient-surgery-center space is, in the present case, an error that does not require reversal of the trial court’s order on remand. Because the trial court applied the POE application test to the portions of the MOB project to be utilized by the SHMG physicians, as required by the supreme court’s remand instructions, we will consider whether its conclusion that those areas fail to meet the POE application test is legally correct. As we will explain below, based on our review of the evidence submitted to the trial court, we hold that the trial court’s conclusion that the SHMG leased space does not meet the four-part POE application test is not supported by the evidence.

The trial court was required to determine whether the SHMG leased space met the four-part POE application test. The first factor of the POE application test required the trial court to decide, based on the evidence, whether the services proposed to be provided in the SHMG leased space were to be provided exclusively by SHMG physicians to their patients and whether the equipment to be used in providing those services was to be used exclusively by SHMG physicians for the care of their patients. We agree with Sacred Heart that the evidence does not support the trial court’s conclusion that SHMG physicians will not be the only physicians to provide the services and to use the equipment at the SHMG leased space in the MOB.

In presenting their view of the evidence, South Baldwin and IHS make much of press releases indicating that the plan for the MOB mirrored that of a similar Sacred Heart medical park in Pace, Florida, which houses physicians’ offices and a laboratory and diagnostic center that provides services as an outpatient diagnostic center operated by Sacred Heart. Indeed, the minutes of an April 27, 2006, meeting of the Sacred Heart board of directors indicates that the board discussed the MOB as being “like” the building in Pace. In excerpts of the August 29, 2008, deposition of Peter Heekathorn, the executive vice president of Sacred Heart and the president of SHMG, Heekathorn explained that the reference to the Pace facility in the minutes of the board-of-directors meeting was meant to indicate that the services being offered at the MOB would be similar to the services offered at the Pace facility. However, Heekathorn stated in that same deposition that the laboratory and diagnostic center in the MOB would not be used to offer outpatient services but would serve only the SHMG physicians practicing in Baldwin County. He testified that only SHMG physicians could use the laboratory and diagnostic center in the MOB and that non-SHMG physicians, including any timeshare physicians that might use office space in the MOB, would not be not be permitted to send patients to the laboratory and diagnostic center housed in the MOB. Many of those same statements are contained in an affidavit Heekathorn executed on October 10, 2008.

Tammy Nall, the administrative director of real-estate operations and corporate travel for Sacred Heart, likewise testified in her October 13, 2008, affidavit that the laboratory and diagnostic center in the MOB would be used solely by SHMG physicians. Nall’s and Heckathorn’s testimony is supported by Sacred Heart’s answers to interrogatories propounded to it on remand. In those answers, Sacred Heart states that “[a]U physicians, nurses, and support staff working in the [SHMG leased space in the] MOB are employed by SHMG.” Thus, other than comments at a board meeting referring to the MOB as being “like” a similar building in Pace, Florida, and some advertisements that might indicate that the MOB was a medical park operated by Sacred Heart, the evidence of record indicates that the SHMG leased space in the MOB and the equipment housed there will be used exclusively by SHMG physicians to diagnose and treat them patients.

The second factor of the POE application test required the trial court to consider whether the services to be provided would be provided and the equipment to be used would be used at “any office of such physicians.” Our supreme court specifically modified this factor of the test, changing the term “the primary office” to the term “any office,” stating that limiting a physician to providing services or using equipment only in his or her primary office might conflict with the phrase “regardless of ownership” contained in § 22-21-260(6) (creating the POE by excluding from the definition of “health care facility” “the offices of private physicians ..., whether for individual or group practices and regardless of ownership....”). See Ex parte Sacred Heart, 155 So.3d at 987 n. 5. The evidence relating to the SHMG physicians who planned to relocate to the MOB indicates that the MOB office would be their primary office. Furthermore, the evidence indicates that the equipment that the SHMG physicians had used in diagnosing and treating their patients had been housed either in the individual physician’s office or in a facility in Foley that was used by all the Baldwin County SHMG physicians. According to Heckathorn’s testimony, all the diagnostic equipment that had been housed in the Foley facility and in the physicians’ offices was to be moved into the MOB laboratory and diagnostic center for continued use by SHMG physicians. Thus, the question to be resolved is whether the fact that all the SHMG-owned diagnostic equipment would be housed in one location in the MOB meets the requirement that “related equipment [be] used[ ] at any office of such physicians.” Based on our review of the record, none of the evidence supports the conclusion that the laboratory and diagnostic center, by providing a localized space within the SHMG leased space of the MOB to house all the diagnostic equipment owned by the SHMG physicians, fails to meet the second factor of the POE application test.

The trial court also determined that the laboratory and diagnostic center and walk-in clinic area of the SHMG leased space in the MOB failed to meet the third factor of the POE application test, which requires all patient billings to be made “through, or expressly on behalf of, the physicians’ practice.” Heckathorn testified in his October 10, 2008, affidavit that all billing for SHMG physicians was done by SHMG and that the money received as a result of those billings is treated as the receipts of SHMG. In the excerpts from her deposition, Denise Barton, the vice president of business development for Sacred Heart, likewise testified that all billing for SHMG physician services was performed by a separate billing group for SHMG.

Regarding the walk-in clinic portion of the SHMG leased space, Heckathorn, in an affidavit he executed on October 23, 2008, explained that the walk-in clinic would not be a “freestanding emergency department,” that it would not operate 24 hours a day or 7 days a week, that it would not provide trauma care, and that it would not have access to “advanced technology.” In her August 26, 2008, deposition, Nall testified that the walk-in clinic space would provide same-day appointment care and not “urgent care,” although the term “urgent care” had been used interchangeably at some points during the planning for the MOB. Barton testified that Dr. Cynthia Harbaugh, an SHMG physician, had been providing same-day, walk-in care at her office in Orange Beach and that she and other SHMG physicians housed in the MOB would continue to provide that care in the MOB. Nall explained in her affidavit that the walk-in clinic area of the MOB would allow “the segregation of [walk-in clinic] patients, many of whom may have cold, fever, flu, and injuries, from patients seeking routine and chronic care.” Although the spaces housing the walk-in clinic, the laboratory and diagnostic center, and the family-practice area were “physically distinct,” Nall explained that “all of the space will function in a coordinated and integrated manner on behalf of SHMG patients.”

The evidence, therefore, does not support the conclusion that patients receiving treatment or diagnosis at either the laboratory and diagnostic center or the walk-in clinic area of the MOB would not be billed by or on behalf of SHMG. Because SHMG has its own billing department, which bills all SHMG-physician-provided services to SHMG patients, and because the record reflects that the walk-in clinic would be operated solely by SHMG physicians, as Dr. Harbaugh had always operated her office to treat persons in need of care for non-trauma ailments or injuries without an appointment, we cannot agree that these areas of the MOB do not meet the requirement that the patient billings for such services be “through, or expressly on behalf of,” SHMG.

Finally, we consider whether the trial court correctly determined that the SHMG leased space in the MOB fails to meet the fourth factor of the POE application test, which prohibits use of the equipment for inpatient care or by, through, or on behalf of a health-care facility. As noted above, the evidence contained in the record establishes that the equipment contained in the SHMG leased space will be used “exclusively by the physicians identified as owners or employees of the physicians’ practices for the care of their patients.” Ex parte Sacred Heart, 155 So.3d at 986. As we have already explained, Heckathorn testified that non-SHMG physicians would not be permitted to use the SHMG laboratory and diagnostic center.

Based on the evidence, we conclude' that the SHMG leased space, which consists of the family-practice area, the walk-in clinic, and a laboratory and diagnostic center, satisfies the POE application test. The evidence indicates that the SHMG leased space will be used “exclusively by the physicians identified as owners or employees of the physicians’ practices for the care of their patients” and that the services to be provided in the SHMG leased space in the MOB will be provided in the offices of SHMG physicians. Further, the evidence demonstrates that all patient billing will be done by SHMG or on its behalf and that the equipment housed in the SHMG leased space in the MOB will not be used for inpatient care or by a health-care facility.

In its order on remand, the trial court considered facts such as the different build-out costs of the various leases, which, it said, indicated that “Sacred Heart clearly does not treat these facilities as one physician’s office, but as separate facilities.” The POE application test does not contain a factor for which the build-out costs of the various leases would be a relevant consideration. Thus, we have not considered the build-out costs of the various leases in determining whether the evidence supported the trial court’s conclusion that the SHMG leased space does not qualify for the POE.

The trial court went further than applying the four factors of the POE application test, stating that “applying the POE to the entire medical park would circumvent the statutory language in §§ 21-22-260(6), 22-21-260(8), 22-221-263, and 22-21-265.” The trial court’s basis for doing so was our supreme court’s statement that “[t]he POE application test ... should not be interpreted as circumventing the statutory language in §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265, Ala.Code 1975...." Ex parte Sacred Heart, 155 So.3d at 988. However, we must agree with amicus curiae, The Medical Association of Alabama, that the trial court erred in considering our supreme court’s statement as adding a fifth factor that would override the four factors set out in the POE application test. Our reading of our supreme court’s opinion convinces us that our supreme court was merely stating that the POE application test, which provides an exemption from CON review for physicians’ offices, is not intended to circumvent the requirements in §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265, which require CON review for new institutional health services provided by healthcare facilities, because health-care facilities, by definition, do not include “the offices of private physicians or dentists.” § 22-21-260(6). The statement that the POE application test should not be construed as circumventing the statutes governing the necessity for a CON did not create an additional factor to be considered by the trial court in applying the POE application test. The trial court was not ordered to, and, in fact, should not have, determined whether applying the POE to the SHMG leased space in the MOB would “circumvent” the statutory language in §§ 22-21-260(6), 22-21-260(8), 22-21-268, and 22-21-265. By doing so, the trial court, much like this court in Sacred Heart Health System, injected a subjective factor into a test that our supreme court has indicated should be limited to the four objective factors set out in its opinion. The trial court’s only function on remand was to consider the POE application test set out in Ex parte Sacred Heart and to apply the factors of that test to the facts in the record or those facts developed in any proceedings held on remand.

As a final consideration in its order on remand, the trial court considered the application of § 21-22-263(a)(2), which prohibits “[a]ny expenditure by or on behalf of a health care facility ... which, under generally accepted accounting principles consistently applied, is ... in excess of eight hundred thousand dollars ($800,000) for new annual operating costs indexed annually for inflation.” Based on § 21-22-268(a)(2), the trial court concluded that Sacred Heart was required to apply for a CON because the cost of all the leaseholds it held in the MOB exceeded that statutory limit. Sacred Heart argues that the trial court erred by considering the cost of all the leaseholds as annual operating costs of Sacred Heart. Sacred Heart makes the same point we discussed above — that the trial court’s review on remand was limited to applying the POE application test to the specific SHMG leaseholds mentioned in our supreme court’s opinion. Indeed, our supreme court stated that, “[i]n examining the medical-building project as a whole, this Court does not refer to the entire ■ building constructed by Johnson Development, ... but to the portion of the building leased by the specific physicians’ practice seeking to apply the physician’s office exemption to the CON requirement.” Ex parte Sacred Heart, 155 So.3d at 983 n. 2. Thus, as we discussed above, we are constrained to agree with Sacred Heart, as discussed above, that the trial court was limited to considering those spaces in the MOB leased for use by SHMG physicians and that it was not to consider other areas of the MOB leased by Sacred Heart. Furthermore, because of our determination that the evidence supports a conclusion that the SHMG leased space in the MOB meets .the POE application test,- the SHMG leased space is not, by definition, a health-care facility. Therefore, we must reject the trial court’s application of § 22-21-263(a)(2) to the combined cost of all the Sacred Heart leaseholds in the MOB.

Our review of the record fails to support the trial court’s conclusion that the SHMG leased space fails to meet the four-factor POE application test set out in Ex parte Sacred Heart. The evidence supports a determination that the SHMG leased space, which consists of the family-practice area, the walk-in clinic, and a laboratory and diagnostic center in the MOB, meets the POE application test. Furthermore, the trial court’s decision to consider whether the application of the POE to the MOB as a whole would circumvent §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265, effectively, and inappropriately, added an additional factor to the POE application test. Thus, we must reject the trial court’s decision to require Sacred Heart to seek a CON for the MOB on the basis that allowing the SHMG leased space in the MOB to qualify for the POE would circumvent the CON statutes. Finally, we must also reject the trial court’s conclusion that Sacred Heart was required to seek and obtain a CON before operating in the MOB because the combined cost of all the leaseholds exceeded the threshold for new annual operating costs set out in § 22-21-263(a)(2). Our supreme court stated that it was proper to consider only those parts of the MOB leased for the SHMG physicians when applying the POE application test, because SHMG is the physicians’ office seeking the benefit of the POE. Accordingly, we reverse the judgment of the trial court, and we remand the cause to the trial court for the entry of a judgment consistent with this opinion.

2090239 — REVERSED AND REMANDED.

2120658 — REVERSED AND REMANDED.

PITTMAN, MOORE, and DONALDSON, JJ., concur.

THOMPSON, P.J., concurs in the result, without writing.

      . In this opinion, we will use the same defined terms and designations we used in Sacred Heart Health System.

      . See supra note 1.

      . In this opinion, we use the same defined terms and designations the supreme court used in Ex parte Sacred Heart.

      . See supra note 3.

      . The evidence on remand indicates that the laboratory and the diagnostic center, which were originally planned to be housed in separate areas of the MOB, are now being housed together in one part of the MOB. Thus, in the remainder of this opinion, we will refer to them collectively as "the laboratory and diagnostic center.”

      . We note that § 22-21-260(8) does not define "outpatient clinic.”

      . As explained in our original opinion, Sacred Heart had planned to sublease the area intended to house an outpatient surgery center to another entity, Pleasure Island Ambulatory Surgery Center, LLC (“PIASC"). Sacred Heart Health Sys., 155 So.3d at 971. PIASC. sought a CON for an outpatient surgery center, but its request was denied; PIASC’s appeal from the denial of a CON to operate the outpatient surgery center was affirmed by this court without an opinion. Pleasure Island Ambulatory Surgery Ctr., LLC v. State Health Planning & Dev. Agency, 82 So.3d 17 (Ala.Civ.App.2010) (table).

      . South Baldwin and IHS mention that SHMG is not a separate legal entity and that, in the end, the money billed for the services of SHMG physicians would be income for Sacred Heart. However, because § 22-21-260(6) clearly exempts physicians’ offices from the definition of health-care facilities and expressly notes that a physician’s office is entitled to this exemption "regardless of ownership,” the fact that SHMG is essentially owned by Sacred Heart is of no consequence.


author: MAIN, Justice. STUART, Justice

text:
    Ex parte SOUTH BALDWIN REGIONAL MEDICAL CENTER. (In re Sacred Heart Health System, Inc. v. Infirmary Health System, Inc., and South Baldwin Regional Medical Center).
    1130665.
    Supreme Court of Alabama.
    April 18, 2014.
    Laurence J. McDuff and Emilie S. Kraft of Adams and Reese LLP, Birmingham, for petitioner.

       Justice Bryan was a member of the Court of Civil Appeals when that court considered this case.

   MAIN, Justice.

WRIT DENIED. NO OPINION.

MOORE, C.J., and BOLIN, PARKER, MURDOCK, and SHAW, JJ, concur.

STUART, J, concurs specially.

WISE and BRYAN, JJ, recuse themselves.

STUART, Justice

(concurring specially).

I concur with this Court’s decision to deny the writ of certiorari requested by South Baldwin Regional Medical Center. This case concerns whether a physicians group planning the construction of an office building, which would include an ambulatory surgery center, outpatient diagnostic services, and physician offices, was required to obtain a certificate of need from the State Health Planning and Development Agency before leasing the medipal-office building. In Ex parte Sacred Heart Health System, Inc., 155 So.3d 980 (Ala.2012), this Court conducted a thorough review of the facts and the issues presented in this case and issued an extensive opinion, which included a revised test for determining whether such a project fell under the “physician’s office exemption” in § 22-21-260(6), Ala.Code 1975. We reversed the judgment of the Court of Civil Appeals and remanded the case for that court to remand the case for the trial court to apply the revised test set forth in our opinion to the facts of the case. The petition for a writ of certiorari before us asks us to review the judgment of the Court of Civil Appeals reviewing the trial court’s judgment on remand. See Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So.3d 989 (Ala.Civ.App.2013).

A reading of the grounds pleaded in the petition clearly indicates that South Baldwin Regional Medical Center is asking this Court to reconsider arguments we rejected or decided adversely to it in Ex parte Sacred Heart Health System and to consider questions that are not material and do not require an answer at this time.

First, South Baldwin Regional Medical Center alleges a ground of conflict, see Rule 39(a)(1)(D), Ala. R.App. P., arguing:

“Although this Court’s modification of the [physician’s-office-exemption] test did not include .a ruling that the test should no longer be applied to a ‘proposed facility, as a whole’ [quoting from a certificate-of-need review board] ruling addressing the [physician’s office exemption], the Court of Appeals nevertheless improperly narrowed the scope of this Court’s remand: ‘Our reading of the supreme court’s opinion convinces us that the space planned to house the proposed outpatient surgery center and the space originally planned to house the proposed rehabilitation center are not to be considered in applying the [physician’s-office-exemption] application test.’ 155 So.3d at 997. The Court of Appeals reversed the trial court after erroneously applying the [physician’s-office-exemption] test to only a portion of Sacred Heart’s leased space.
“Moreover, the Court of Civil Appeals improperly limited the trial court’s consideration of (1) Sacred Heart’s initial development of the project, 155 So.3d at 1001 (‘The trial court was not ordered to, and, in fact, should not have, determined whether applying the [physician’s office exemption] to the [Sacred Heart Medical Group’s] leased space in the [medical-office building] would “circumvent” the statutory language in ... §§ 22-21-263, and 22-21-265.’), and (2) the expenditure thresholds in the [certificate-of-need] law based on its mistaken reading of this Court’s Remand Decision. 155 So.3d at 1001 (‘[W]e are constrained to agree with Sacred Heart ... that the trial court was limited to considering those spaces in the [medical-office building] leased for use by [Sacred Heart Medical Group] physicians and that it was not to consider other areas of the [medical-office building] leased by Sacred Heart [in applying § 22-21-263(a)(2) ].’).”

(South Baldwin Regional Medical Center’s petition at pp. 2-4 (footnotes omitted).)

In Ex parte Sacred Heart Health System, we stated:

“The contested issue between the parties is whether the portion of the medical-building project Sacred Heart has leased for its Baldwin County physicians to use (‘the [Sacred Heart Medical Group] leased space’) is subject to Sacred Heart’s first obtaining a [certificate of need] from [the State Health Planning & Development Agency].2 Section 22-21-260 et seq., Ala.Code 1975, sets out the law concerning the regulation of health-care facilities.
“.. . The [physician’s-office-exemption] application test is promulgated to provide clarification as to the exemption from the [certificate-of-need] review process for the offices of licensed physicians, dentists, or group practices and should not be interpreted as circumventing the statutory language in §§ 22-21-260(6), 22-21-260(8), 22-21-263, and 22-21-265, Ala.Code 1975, or otherwise applicable statutes or administrative regulations pursuant to the ‘State Health Plan.’ ...
“2 In examining the medical-building project as a whole, this Court does not refer to the entire building constructed by Johnson Development, which contains space for medical and non-medical uses, but to the portion of the building leased by the specific physicians’ practice seeking to apply the physician’s office exemption to the [certificate-of-need] requirement. In this case, we review the [Sacred Heart Medical Group] leased space because that is the only space to be used by the [Sacred Heart Medical Group] practice.”

155 So.3d at 983-88.

The Court of Civil Appeals properly interpreted our holding in Ex parte Sacred Heart Health System and applied that holding to the facts of this case. There is no conflict between Ex parte Sacred Heart Health System and the decision of the Court of Civil Appeals here.

Additionally, alleging that it pleads “material questions] requiring decisions] ... of first impression for the Supreme Court of Alabama,” see Rule 39(a)(1)(C), Ala. RApp. P., South Baldwin Regional Medical Center asks this Court to determine:

“I. Whether the [physician’s office exemption] may be selectively applied to only part of a health care facility’s proposed project which includes both physicians’ offices and an ambulatory surgery center, diagnostic center, and timeshare space for unaffiliated physicians.
“II. Whether the [certificate-of-need] statute allows a health care facility to develop and lease space for an ambulatory surgery center prior to obtaining a [certificate of need].
“III. Whether a health care facility may circumvent the [certificate-of-need] expenditure law merely by employing physicians and including some space for them in a project.”

(South Baldwin Regional Medical Center’s petition at p. 4.)

The questions South Baldwin Regional Medical Center alleges require a decision of first impression, however, are not material and do not require answers. South Baldwin Regional Medical Center’s question as to whether the physician’s office exemption can be selectively applied to a portion of a health-care facility’s proposed project was addressed and answered in Ex parte Sacred Heart Health System. Because judicial records establish that the entity that was to have operated a proposed ambulatory surgical center in the building requested a certificate of need for that portion of the building and the certificate of need was denied, whether the certificate-of-need statutes allow a health-care facility to develop and lease space for an ambulatory surgery center before obtaining a certificate of need is not a question presented in the facts of this case and, consequently, is not material and does not require resolution at this time. Likewise, the question whether a health-care facility can circumvent the “[certificate-of-need] expenditure law” by employing physicians and including some space for them in a project is not presented by the facts in this case, is not material to this case, and does not require an answer.

Because the grounds pleaded by South Baldwin Regional Medical Center in its petition do not merit additional consideration by this Court, the denial of the petition for the writ of certiorari is proper.