                                                    FIRST DIVISION
                                                    March 31, 2008




No. 1-07-1952

PROVENA HEALTH and PROVENA HOSPITALS,     )    Appeal from the
                                          )    Circuit Court of
     Plaintiffs-Appellants,               )    Cook County.
                                          )
          v.                              )
                                          )
ILLINOIS HEALTH   FACILITIES PLANNING     )
BOARD, ILLINOIS   DEPARTMENT OF PUBLIC    )
HEALTH, SHERMAN   HOSPITAL, SHERMAN       )
HEALTH SYSTEMS,   and REEVEN J. ELFMAN,   )    Honorable
                                          )    Peter J. Flynn,
     Defendants-Appellees.                )    Judge Presiding.

     JUSTICE WOLFSON delivered the opinion of the court:

     The Illinois Health Facilities Planning Board (Board)

approved a certificate of need (CON) permit for Sherman Hospital

and Sherman Health Systems (Sherman) to discontinue its old

hospital facility in east Elgin, Illinois, and construct a new

facility in west Elgin.    Provena Health and Provena Hospitals

(Provena) operate the only other hospital in the planning area,

located in west Elgin.    Provena filed a complaint for

administrative review opposing the construction of Sherman’s new

hospital, contending it would have a devastating impact on

Provena Saint Joseph Hospital (St. Joseph).    We are called on to

decide whether the Board’s decision to grant the permit was

clearly erroneous.    It was not.

FACTS

     On October 24, 2005, Sherman submitted to the Board its
1-07-1952

application for a permit to construct a new hospital at 1425

North Randall Road in Elgin.      The site for the proposed project

is approximately 4.5 miles from its current location at 934

Center Street in Elgin.    The new facility would contain all the

services offered at the existing hospital.         A small portion of

the old facility would remain open for scheduling, outpatient

testing, and immediate care; the older functionally obsolete

buildings would be demolished.     The Board treated the application

as a proposal for the discontinuation of the old hospital and

construction of a new hospital.     The estimated cost of the

project was $310,352,103.    Sherman proposed decreasing the total

number of beds from 363 in the old hospital to 263 in the new

hospital.    The beds would be divided as follows:

Service               Existing Beds     Proposed Beds

Medical/Surgical            293              196

Pediatrics                   18                9

Obstetrics                   24               28

Intensive Care               28               30

Total                       363              263

        Pursuant to the Illinois Health Facilities Planning Act

(Act), 20 ILCS 3960/8 (West 2004), Sherman requested a public

hearing, which was held on December 7, 2005.         Members of the

public, including local officials and representatives from

Sherman, Provena, and other hospitals, attended the hearing and

                                    2
1-07-1952

testified for and against the project.

     St. Joseph is located in west Elgin.   The Fox River

separates St. Joseph from Sherman’s current hospital in east

Elgin.   St. Joseph and Sherman Hospital are the only two

hospitals in the planning area.   The proposed site for Sherman’s

new hospital is in west Elgin, approximately 3.7 miles north of

St. Joseph, about the same distance between St. Joseph and the

current Sherman Hospital.

     On February 21, 2006, Provena submitted written letters and

reports opposing the project, including a study by Deloitte

Financial Advisory Services, LLP (Deloitte), concluding the

proposed relocation of Sherman would cause Provena to lose $8

million or more annually.   Other reports concluded the move would

affect patients’ access to Sherman and negatively impact the

ability of emergency responders to transport patients from east

Elgin to Sherman’s proposed new location in west Elgin.

     The Board considered the application at a meeting on March

14, 2006.   The Board members discussed area bed needs, the

suitability of alternate locations, the infeasibility of

renovating Sherman’s existing facility, and the impact of the

proposed project on Provena.   The Board also considered the State

Agency Report (SAR) prepared by the Illinois Department of Public

Health, which provides staff assistance to the Board.   The

Department reviewed Sherman’s application for compliance with the

                                  3
1-07-1952

general review criteria set out in the State regulations.   It

found the proposed project "did not appear to be in conformance"

with 7 of the 21 review criteria related to establishment of the

new hospital in part 1110 of the regulations.   77 Ill. Adm. Code

§ 1110 (2003).   It found conformance with the nine financial and

economic feasibility provisions in part 1120 of the regulations.

77 Ill. Adm. Code § 1120 (2003).

     Following the Board meeting, Sherman requested a deferral of

its application to address questions raised by Provena and by the

Board.   Sherman’s representatives met with Department staff on

April 5, 2006, for technical assistance.   Sherman submitted a

letter summarizing the discussions and proposed a reduction in

the number of beds from 263 to 255.    The new total included 189

medical/surgical beds, 8 pediatric beds, 28 obstetric beds, and

30 intensive care beds.   Both Sherman and Provena submitted

additional reports addressing the project’s financial impact on

Provena.    The Department submitted a supplemental report to the

Board but did not change its finding that the proposed project

did not appear to be in conformance with 7 of the 21 review

criteria for establishment of a new hospital in part 1110 of the

regulations.

     At its next meeting on June 7, 2006, the Board voted 3-0 to

approve Sherman’s application.   On June 15, 2006, the Board

issued a letter to Sherman, stating it approved the permit based

                                   4
1-07-1952

on the "project’s substantial conformance with the applicable

standards and criteria of Part 1110 and 1120."     The Board noted

it considered the Department’s findings, the application

materials, the public hearing report, and the testimony before

the Board.    It stated the project must be obligated by December

7, 2007, and completed by June 30, 2010.

     Provena filed its complaint for administrative review on

July 13, 2006.    Its standing was based on section 11 of the Act,

which allows any person who is adversely affected by a final

decision of the Board to seek judicial review of the Board’s

decision.    20 ILCS 3960/11 (West 2004).   Provena contended the

Board’s decision to award Sherman a permit would reduce Provena’s

net income by $8.7 million to $17.7 million per year and

potentially cause the closure of St. Joseph Hospital.     Provena

noted it had begun a $97 million expansion and modernization

project that had been approved by the Board in August 2005.

     The circuit court remanded the matter for the Board to

explain its decision to grant the permit to Sherman

"notwithstanding noncompliance with seven of the eight pertinent

regulatory criteria as reflected in the State Agency Reports."

The court ordered the permit would remain "in full force and

effect."

     Provena filed a request that the Board consider additional

information, conduct further proceedings, and reconsider its

                                  5
1-07-1952

grant of a permit, in light of data that Sherman’s average daily

census of medical/surgical patients dropped from 137.6 in 2004 to

117.2 in 2005.   In approving the project, the Board had relied on

Sherman’s projections that its average daily census of

medical/surgical patients would increase from 137.6 in 2004 to

159.8 in 2011, which would support 188 medical/surgical beds at

an 85% utilization rate.

     At a Board meeting on December 21, 2006, Chairperson Lopatka

read into the record a detailed statement explaining the Board’s

reasons for granting the permit.       The Board voted to adopt the

statement.

     On March 19, 2007, the circuit court remanded the matter to

the Board to determine whether it wished to consider Provena’s

submission of information about Sherman’s 2005 utilization rates

or updated ratings by a bond-rating agency.       At its meeting on

March 27, 2007, the Board acknowledged having read the materials

and directed its staff to consider whether Sherman should have

submitted the information.   On May 2, 2007, the Department

informed the Board that Sherman had complied with the rules on

the submission of data and there was no evidence Sherman had

concealed any information.   The Board voted not to revisit its

decision or pursue further proceedings.

     On July 5, 2007, the circuit court issued a memorandum order

and final decision affirming the Board’s issuance of the permit.

                                   6
1-07-1952

Provena filed a timely notice of appeal.

DECISION

I. Review of Board’s Decision

     On review, an administrative agency’s factual findings are

considered to be prima facie true and correct.       735 ILCS 5/3-110

(West 2004); Dimensions Medical Center, Ltd. v. Suburban

Endoscopy Center, 298 Ill. App. 3d 93, 99, 697 N.E.2d 1231

(1998); Springwood Associates v. Health Facilities Planning

Board, 269 Ill. App. 3d 944, 947, 646 N.E.2d 1374 (1995).

     We believe this case presents mixed questions of law and

fact.   A mixed question of law and fact "involves an examination

of the legal effect of a given set of facts."       City of Belvidere

v. Illinois State Labor Relations Board, 181 Ill. 2d 191, 205,

692 N.E.2d 295 (1998).   The Board’s decision is, in part, factual

because it involves deciding whether the facts support the

issuance of a permit to Sherman.       The Board also had to determine

the legal effect of its regulations and resolve the potential

conflict between the statute and the regulations.      Accordingly,

we apply a clearly erroneous standard of review.       City of

Belvidere, 181 Ill. 2d at 205.

     Under this standard, while the agency’s decision is accorded

deference, a reviewing court will reverse the decision where

there is evidence supporting reversal and the court "is left with

the definite and firm conviction that a mistake has been

                                   7
1-07-1952

committed."   AFM Messenger Service, Inc. v. Department of

Employment Security, 198 Ill. 2d 380, 393, 763 N.E.2d 272 (2001),

quoting United States v. United States Gypsum Co., 333 U.S. 364,

395, 92 L. Ed. 2d 746, 766, 68 S. Ct. 525, 542 (1948).      We review

the decision of the Board, not that of the circuit court.

Illinois Health Maintenance Organization Guaranty Ass’n v.

Department of Insurance, 372 Ill. App. 3d 24, 31, 864 N.E.2d 798

(2007).

     The purpose of the Act is "to establish a procedure designed

to reverse the trends of increasing costs of health care

resulting from unnecessary construction or modification of health

care facilities."   20 ILCS 3960/2 (West 2004).   Under the Act, no

person may construct, modify, or establish a health care facility

without first obtaining a permit or exemption from the Board.     20

ILCS 3960/5 (West 2004).

     The Board has the power to prescribe rules and regulations

to carry out the purpose of the Act and to develop criteria and

standards for health care facilities planning.    20 ILCS

3960/12(1),(4) (West 2004).   The Department shall "review

applications for permits and exemptions in accordance with the

standards, criteria, and plans of need established by the State

Board under this Act and certify its finding to the State Board."

20 ILCS 3960/12.2(1) (West 2004).    As the CON applicant, Sherman

has the burden of proof on all issues pertaining to its

                                 8
1-07-1952

application.   77 Ill. Adm. Code § 1130.130(a) (2006).

     The Board is to approve and authorize the issuance of a

permit if it finds (1) the applicant is fit, willing, and able to

provide a proper standard of health care service for the

community, (2) economic feasibility is demonstrated, (3)

safeguards are provided assuring that the establishment or

construction of the health care facility is consistent with the

public interest, and (4) the proposed project is consistent with

the orderly and economic development of such facilities and

equipment and is in accord with standards, criteria, or plans of

need adopted and approved pursuant to the provisions of Section

12 of this Act.   (Emphasis added.)   20 ILCS 3960/6(d) (West

2004).

     Provena contends the Board’s decision was clearly erroneous

because the Board ignored the Department’s findings that the

application did not conform to seven criteria.1   Those criteria

contain mandatory language--i.e., "shall not exceed *** unless"

"must document,"--which Provena says the Board was bound to

follow.

     In its two reports, the Department found the proposed

     1
      Provena refers to seven of eight "pertinent criteria." We
cannot tell which eight criteria Provena considers to be
"pertinent." However, the Department found Sherman met 14
criteria in part 1110 and failed to meet 7 criteria. Provena
cites no authority to support the contention that one criterion
is more pertinent than any other.

                                 9
1-07-1952

project did "not appear to be in conformance" with seven review

criteria for the establishment of a new hospital.

     Under the criterion for allocation of additional beds, the

applicant "must document that access to the service will be

improved."    77 Ill. Adm. Code § 1110.320(b) (2001).   The

Department found Sherman was proposing 39 more beds than the

historical utilization would justify.    Based on the 2005 data,

216 beds were needed to reduce the applicant to the Board’s

target occupancy, 39 fewer beds than the 255 beds proposed by

Sherman.

     Under section 1110.530(a)(3), the minimum size for a

pediatric unit is 16 beds, 8 more beds than the 8 beds proposed

by Sherman.    77 Ill. Adm. Code § 1110.530(a)(3) (2001).

     Under the criterion for variances to bed need, an applicant

(1) "must document that the applicant facility has experienced

high occupancy," (2) "must also document that the number of beds

proposed will not exceed the number needed to reduce the

facility’s high occupancy to the target occupancy," and (3) "must

also demonstrate that the proposed number of beds will not exceed

the number of beds needed to meet the target occupancy rate over

the next 5 years."    77 Ill. Adm. Code § 1110.530(b)(1) (2001).

The Department found the historical utilization for the prior 24

months was 40.5% for medical/surgical beds, below the target

occupancy of 85%, and 59% for ICU beds, below the target

                                 10
1-07-1952

occupancy of 60%.

     Under the location criterion, an applicant "must document"

(1) that the primary purpose of the project will be to provide

care to the residents of the planning area, and (2) that the

location of the project will not create a maldistribution of beds

and services.    77 Ill. Adm. Code § 1110.230(a) (2003).    The

Department found the number of beds in excess of the Board’s

target occupancy "appears to maintain a maldistribution to care

and is not necessary to improve or maintain access."

     In its Supplemental Report, the Department addressed the

location criterion in reference to the Deloitte report submitted

by Provena:

            "The State Agency reviewed the Deloitte Study

            and notes it is possible that patients

            currently served by PSJH could find it more

            convenient to utilize the proposed Sherman

            facility.   It is also true, as stated by the

            applicants, that the old campus will be used

            as a portal for the new hospital.   However,

            the State Agency finds it compelling to note

            that both hospitals have operated in close

            proximity to each other for over 100 years

            without financial disaster.   It is also true

            that 37% of the patient days generated at

                                  11
1-07-1952

            [St. Joseph] are for services that Sherman

            Hospital does not provide (based on 2004

            profile data).   It also appears that it would

            take changes in physician patient

            relationships to cause the changes envisioned

            by the Deloitte report.      Finally, the State

            Agency notes it is not the responsibility of

            the State Board to maintain market share of

            individual providers.    However, it is the

            State Board’s purview to determine whether

            access for the residents of the planning area

            will be improved by the proposed new

            construction."

     Under the criterion for alternatives to the proposed

project, an applicant "must document" that the proposed project

is the most effective or least costly alternative.        77 Ill. Adm.

Code § 1110.230(c) (2003).     The Department found, even with the

reduction in proposed beds from 263 to 255, "[i]t still appears

that a smaller hospital and a smaller number of beds would be a

better choice than the alternative proposed."

     Under the criterion for need for the project, "[i]f the

State Board has determined need pursuant to Part 1100, the

proposed project shall not exceed additional need determined

unless the applicant meets the criterion for a variance."       77

                                    12
1-07-1952

Ill. Adm. Code § 1110.230(d)(1) (2003).    If the Board has not

determined need, "the applicant must document that it will serve

a population group in need of the services proposed and that

insufficient service exists to meet the need."    77 Ill. Adm. Code

§ 1110.230(d)(2) (2003).    The Department found the applicants

were unsuccessful in addressing the variances to bed-need because

the historical utilization was below the target occupancy for the

prior 24 months.   Using the 2.3% annual growth factor submitted

by Sherman indicated a need for 6 fewer beds in 2012 (the second

full year after project completion) than what was proposed.

While the Department found Sherman did not meet this criterion,

the Board is not bound by the Department’s findings.    Cathedral

Rock of Granite City, Inc. v. Illinois Health Facilities Planning

Board, 308 Ill. App. 3d 529, 543, 720 N.E.2d 1113 (1999).

     Under the project size criterion, the applicant "must

document" that the size of a proposed project is appropriate, and

utilization will meet or exceed the Board’s standards by the

second year of operation.    77 Ill. Adm. Code § 1110.230(e)

(2003).   The department found the proposed project exceeded the

size standards for all departments except diagnostic radiology,

MRI, nuclear medicine, laboratory, physical therapy, and

respiratory therapy, by a total excess of 63,058 gross square

feet (GSF).   It found, based on the average inpatient growth of

4.8% for 2000 to 2003, by the second year after project

                                 13
1-07-1952

completion, the applicants could justify 300 beds--45 more beds

than the 255 beds proposed by Sherman.

     At its meeting following the circuit court’s first remand,

the Board said it reviewed material addressing 21 criteria for

the establishment of a new hospital.    All the criteria for the

establishment of open heart surgery and catheterization,

background of the applicant, location, response to the

alternative, modernization, and financial and economic

feasibility were met.    The Board was aware the number of

pediatric beds was less than the minimum standard but said that

criterion "was reviewed by staff for possible revision."      The

criterion addressing size of the project was met in 11 of the 17

departments, subject to the standards set in the rules.      The

criteria for bed need, based on inventory, was met for

obstetrics, but not for intensive care, pediatrics, and

medical/surgical beds.    The Board said, "[t]his was mitigated,

however, by full compliance with our criterion regarding the

projected utilization of those beds in which the applicant was

fully compliant."   The proposed total number of beds was reduced

from 263 to 255, which fell between the 216 beds calculated under

the bed-need formula, and the 299 beds derived from the projected

utilization allowed under the size-of-project criterion.

     Generally, administrative agencies are bound to follow their

own rules as written, without making ad hoc exceptions or

                                 14
1-07-1952

departures.   Springwood, 269 Ill. App. 3d at 948; Albazzaz v.

Illinois Department of Professional Regulation, 314 Ill. App. 3d

97, 106, 731 N.E.2d 787 (2000).     However, section 1130.660 of the

regulations provides: "[t]he failure of a project to meet one or

more review criteria, as set forth in 77 Ill. Adm. Code 1110 and

1120, shall not prohibit the issuance of a permit***."     77 Ill.

Adm. Code § 1130.660 (2004).

     Provena contends section 1130.660 does not apply, relying on

Marion Hospital Corp. v. Illinois Health Facilities Planning

Board, 321 Ill. App. 3d 115, 746 N.E.2d 880 (2001) (Marion I),

vacated as moot, 201 Ill. 2d 465, 777 N.E.2d 924 (2002).      We note

the Marion I decision was vacated as moot by our supreme court

and held to be "wholly advisory."      Marion, 201 Ill. 2d at 475.

We give it no precedential value.

     The majority of courts have held section 1130.660 allows the

Board to issue a permit even though a proposed project fails to

meet all the applicable review criteria.     This is true even where

the applicant fails to comply with a criterion containing

"mandatory" language.

     In Marion Hospital Corp. v. Illinois Health Facilities

Planning Board, 324 Ill. App. 3d 451, 453, 753 N.E.2d 1104 (2001)

(Marion II), Marion challenged the Board’s approval of the

application of Southern Illinois Hospital Services d/b/a Memorial

Hospital of Carbondale (Carbondale) for a permit to add open

                                  15
1-07-1952

heart surgery service at its hospital.     The parties agreed

Carbondale did not meet the review criterion in section

1110.1230(d), which provides, "[t]he applicant must document that

a minimum of 200 open heart surgical procedures will be performed

during the second year of operation or that 750 cardiac

catheterizations were performed in the latest 12 month period for

which data is available."     (Emphasis added.)    77 Ill. Adm. Code §

1110.1230(b) (1998); Marion II, 324 Ill. App. 3d at 453.

     Marion contended the Board’s actions were arbitrary and

capricious because it did not follow its own mandatory regulation

when it approved Carbondale’s application.        Marion II, 324 Ill.

App. 3d at 455.    The court held it must read section 1110.230(b)

in conjunction with section 1130.660, which unambiguously states

that the failure to satisfy one or more of the criteria in part

1110 shall not prevent the issuance of a permit.       Marion II, 324

Ill. App. 3d at 456.    The court affirmed the Board’s approval of

Carbondale’s permit application, finding:

            "Although Carbondale’s application did not

            meet all of the review criteria, section

            1130.660 gives the Board the authority to

            issue a permit.   It is a necessary function

            of the Board that it have the discretion to

            make these types of decisions.   It cannot be

            said that the legislature intended for

                                  16
1-07-1952

            patients to leave the State in order to

            receive necessary medical treatment.   Here,

            section 1130.660 gives the Board the

            necessary discretion to bring much needed

            medical services to a part of the state that

            would otherwise have to do without those

            services."   Marion II, 324 Ill. App. 3d at

            457.

     In Dimensions, 298 Ill. App. 3d at 102, the objecting

hospitals argued the Board erred when it approved the application

where certain review criteria had not been met.     Three necessary

criteria were found unmet by both the Department and the circuit

court, including sections 1110.230(f) and 1110.1540(e), requiring

that the "applicant must" perform a certain action.        Dimensions,

298 Ill. App. 3d at 102.    The court held section 1130.660 gave

the Board the authority to approve an application where one or

more review criteria were not met.     Dimensions, 298 Ill. App. 3d

at 102.

     See also Cathedral Rock, 308 Ill. App. 3d at 544 (section

1130.660 allowed Board to grant permit where applicant met 15 of

18 review criteria); Access Center For Health, Ltd. v. Health

Facilities Planning Board, 283 Ill. App. 3d 227, 236, 239, 669

N.E.2d 668 (1996) (applicant’s failure to comply with 3 of 13

review criteria in section 1110 could be excused by the Board

                                  17
1-07-1952

pursuant to section 1130.660).    But see Springwood, 269 Ill. App.

3d at 950 (court held Board’s action was arbitrary for failing to

follow its own regulations, but did not consider section

1130.660).

       Provena does not contend section 1130.660 is invalid.

Rather, it says the regulation must be read together with

sections 6(d) and 12 of the Act, and, to the extent there is a

conflict, the statutory provisions must control.

       Provena contends the Board erred in failing to find

Sherman’s project was "in accord" with the criteria in the

regulations, according to the language in section 6(d) of the

Act.    20 ILCS 3960/6(d) (West 2004).   Instead, the Board’s letter

issuing the permit indicated the project’s "substantial

conformance" with the applicable standards and criteria.

       First, this court has considered and rejected the contention

that the Board is required to make specific written findings when

it issues a permit.    In Charter Medical of Cook County v. HCA

Health Services of Midwest, Inc., 185 Ill. App. 3d 983, 991, 542

N.E.2d 82 (1989), the permit letters stated that the Board

considered the Department’s report, the application materials,

and the applicant’s testimony.    The letters stated the Board’s

approval was "based on the project’s substantial conformance with

the applicable standards and criteria," and that "the applicants

had documented and justified the need to establish freestanding

                                 18
1-07-1952

acute mental health facilities."       Charter Medical, 185 Ill. App.

3d at 991.   Charter argued the Board failed to make specific

findings regarding the application’s conformance with the

applicable review criteria.    The court held the explanation in

the letters was sufficient.    The regulations did not require a

detailed explanation for how and why certain review criteria were

applied.    Charter Medical, 185 Ill. App. 3d at 991.

     The Act and the regulations require the Board to explain its

decision and specify its "findings and conclusions" only when it

denies an application.     Access Center, 283 Ill. App. 3d at 237;

20 ILCS 3960/10 (West 2004); 77 Ill. Adm. Code § 1130.680 (2004).

In the transcript of the Board’s hearing following the circuit

court’s first remand, the Board explained how its criteria

related to its decision.

     Second, Provena contends "substantial conformance" is a less

stringent standard than "in accord with" and allows more leeway

to stray from pertinent criteria.      Neither the statute nor the

regulations define the phrase, "in accord with."      In the absence

of a statutory definition, words are to be given their ordinary

and commonly understood meaning.       Price v. Philip Morris, Inc.,

219 Ill. 2d 182, 243, 848 N.E.2d 1 (1994).      The dictionary can be

used as a resource to ascertain the ordinary meaning of words.

Price, 219 Ill. 2d at 243.

     The dictionary defines "substantial" as "consisting of,

                                  19
1-07-1952

relating to, sharing the nature of, or constituting substance,"

"being that specified to a large degree or in the main," "of or

relating to the main part of something."    Webster’s Third New

International Dictionary 2280 (1981).

     "Conformance" is "the act of conforming, conformity."

"Conformity" is "correspondence in form, manner or character: a

point of resemblance (as of tastes)," "harmony, agreement,

congruity," the "action or act of conforming to something

established (as law or fashion): compliance, acquiescence," or an

"action in accordance with some specified standard or authority."

Webster’s Third New International Dictionary 477 (1981).

     "Accord" means "to bring into agreement: reconcile,

harmonize," or "to arrive at an agreement: come to terms," or "to

be in harmony: be consistent."   Webster’s Third New International

Dictionary 12 (1981).

     We hold the Board’s decision that the project "substantially

conformed" with the criteria was equivalent to finding it was "in

accord with" the criteria.   The definition of "accord" does not

suggest complete compliance.   The definitions of "conformity" and

"accord" both contain the words "harmony" and "agreement,"

suggesting a distinction without a difference.    In Charter

Medical, 185 Ill. App. 3d at 991, the court held the Board’s

finding of "substantial conformance" with the applicable criteria

reasonably complied with the regulations.

                                 20
1-07-1952

     We further note that the Illinois legislature has not

amended section 6 to require that an applicant completely conform

to all of the applicable criteria.   The legislature made no

change even after Marion II, Dimensions, Cathedral Rock, and

Access Center held the Board may grant a permit where the

applicant has not met all the criteria.    The legislature is

presumed to know how courts have interpreted a statute and may

amend the statute if it intended a different construction.

People ex rel. Dept. of Labor v. Tri State Tours, Inc., 342 Ill.

App. 3d 842, 847, 795 N.E.2d 990 (2003).

     The Board did not apply an incorrect legal standard in its

decision to grant Sherman’s application.    We find section

1130.660 of the regulations allows the Board to grant a permit

application even where the Department has found the proposed

project not in conformance with all the pertinent review

criteria.   Both the Board’s adoption of regulations and its

interpretations of those regulations are presumptively valid and

are entitled to deference.   Charter Medical, 185 Ill. App. 3d at

987, 989; Manor Healthcare Corp. v. Northwest Community Hospital,

129 Ill. App. 3d 291, 295-96, 472 N.E.2d 492 (1984).

     We now turn to a discussion of whether the Board’s decision

was clearly erroneous.   The record contains substantial evidence

supporting the Board’s decision to grant the permit.    The

Department found Sherman’s reasons for discontinuation of the old

                                21
1-07-1952

hospital were valid based on the facility’s location and age.

The current hospital could not be expanded, and the cost to

modernize the facility was cost-prohibitive due to the age of the

buildings.   Other mechanical and environmental issues could no

longer accommodate the workload at the current facility.    The

Department found the discontinuation of the old facility created

a bed-need in the planning area, which would be addressed by the

new facility.   A representative from the Elgin Fire Department

testified the proposed relocation would in no way compromise

emergency services and would improve emergency service access for

residents of the planning area.

     The Department found Sherman met 14 of the general review

criteria and all of the economic and financial feasibility

criteria.    Most of the criteria where Sherman fell short related

to bed-need.    Sherman proposed reducing the number of beds from

363 at the current facility to 255 at the new facility.    See

Access Center, 283 Ill. App. 3d at 239-40 (applying section

1130.660 where applicant was not seeking permission to increase

the number of beds in its facility; relocation without expansion

is different from expansion alone).

     Provena contends the Board disregarded the mandatory

language in rule 1110.230(d)(1) by allowing 88 more beds than the

projected bed-need.   See 77 Ill. Adm. Code § 1110.230(d)(1)

(2003) ("the proposed project shall not exceed additional need

                                  22
1-07-1952

determined unless the applicant meets the criterion for a

variance.")2   In the portion of its report discussing the bed-

need criterion under section 1110.230(d), the Department found

that in 2012, the second full year after project completion,

there will be a need for 249 beds, only 6 fewer beds than the 255

beds proposed by Sherman.   As far as the allocation of additional

beds criterion in section 1110.320(b), Sherman proposed 39 more

beds than the utilization rates would justify.   The Board found

the difference to be permissible because the Department projected

future utilization rates of up to 299 beds.   The Board found 255

beds was an approximate midpoint between the 216 beds needed to

reduce the applicants to the Board’s target occupancy, and the

299 beds needed by 2012.

     The stated bed-need in a planning area is a projection made

by the Department.   It is well settled that the Board is not

bound by the Department’s findings; it must make its own decision

based on the evidence in the record.   Cathedral Rock, 308 Ill.

App. 3d at 543; Access Center, 283 Ill. App. 3d at 236.     The

stated bed-need in a planning area is a projection; it does not


     2
      After oral arguments members of this panel received a
letter from one of the Sherman Hospital lawyers. It referred to
a document that is not part of the record and it attached that
document. In addition, the letter contained further argument in
support of Sherman Hospital’s position. We consider the
communication inappropriate and unwarranted. It was not
considered by this Court.

                                23
1-07-1952

create a fixed pool of beds or bind the Board.      Charter Medical,

185 Ill. App. 3d at 988.    The Board has discretion to approve

projects for more beds than present figures might warrant, even

where underutilization exists.    Cathedral Rock, 308 Ill. App. 3d

at 544.

     Provena contends the Board ignored the decline in Sherman’s

use of medical/surgical beds in 2004 and 2005, including a 15%

drop in 2005 that Sherman failed to disclose.      The record shows

the Board was aware of the figures cited by Provena.      Following

the second remand by the circuit court, Chairperson Lopatka said:

            "Even though the data in 2005 showed fewer

            inpatient admission days, it also showed a

            significant increase in the actual numbers of

            clients who were accepted into med/surgery.

            So there was a change particularly in the

            length of stay, not in the number of people

            who are actually being served by the

            hospital."

     In Cathedral Rock, the plaintiff nursing care facility

contended the Board failed to consider more recent 1995 data on

bed need in the area, erroneously finding an 80-need bed existed,

when the need was only for 52 beds.    The court held the Board’s

decision was not arbitrary or capricious because the record

showed the Board "was keenly aware of the discrepancy in the

                                 24
1-07-1952

numbers and understood that it was a dilemma it needed to

resolve."   Cathedral Rock, 308 Ill. App. 3d at 544.

     Provena urges this court to find its interpretation of the

data and evidence is more correct than the Board’s.    We decline

to do so.   It is not this court’s function to reweigh the

evidence; our review is limited to determining whether the

Board’s decision is clearly erroneous.     Charter Medical, 185 Ill.

App. 3d at 990.   "The mere fact that an opposite conclusion is

reasonable or that a reviewing court might have ruled differently

will not justify reversal of the administrative findings."

Cathedral Rock, 308 Ill. App. 3d at 545.

     With regard to the impact of Sherman’s project on Provena,

the location of the new hospital is the same distance from

Provena as the old hospital.   The Department noted that 37% of

the patient days generated at Provena were for services not

provided by Sherman.   The dire consequences envisioned by

Provena’s Deloitte study did not take into account the likelihood

of changes in physician-patient relationships and third-party

coverage.

     We reject Provena’s contention that the Board failed to hear

the testimony of key witnesses for Provena and ignored the

adverse impact on Provena.   It is not the Board’s responsibility

to protect market share of individual providers.    See Cathedral

Rock, 308 Ill. App. 3d at 540.   Nor does the Planning Act protect

                                 25
1-07-1952

jobs.   American Federation of State, County & Municipal

Employees, Council 31 v. Ryan, 347 Ill. App. 3d 732, 741, 807

N.E.2d 1235 (2004).

     The Board is required to consider the impact on another

provider only insofar as it affects "total health care

expenditures in the facility and community," that construction is

"consistent with the public interest," and the project is

"consistent with the orderly and economic development of such

facilities."   20 ILCS 3960/6(d) (West 2004).    The Board stated on

the record that it considered whether the financial impact on

Provena would affect the public’s access to health care, cost of

health care, visibility of services, and avoidance of unnecessary

duplicative services.   It was not required to consider the effect

on Provena’s market share or profitability.     To the extent that

Provena contends we should consider the impact on its own $97

million modernization project, the Act does not allow

"comparative review" of CON applications.     Access Center, 283

Ill. App. 3d at 240.

     In response to Provena’s contention that the Board erred in

failing to hear live testimony of Provena’s witnesses, the Act

and the regulations require only that interested parties have the

opportunity to attend a public hearing and make written

submissions.   20 ILCS 3960/8 (West 2004); 77 Ill. Adm. Code §§

1130.620, 1130.630 (2005).   Provena had that opportunity.   Only

                                26
1-07-1952

when an application is denied may the applicant choose to have an

administrative hearing in front of a hearing officer. (Emphasis

added.) 20 ILCS 3960/10 (West 2004); 77 Ill. Adm. Code § 1130.680

(2005).   Provena was not the applicant, and the application was

not denied.    Provena has no protectible right or constitutional

interest to maintain its market share or to be shielded from

competition.    Cathedral Rock, 308 Ill. App. 3d at 539-40.   "While

plaintiff’s market share may have been adversely affected by the

Board’s decision, plaintiff’s interest in such share is certainly

not akin to the types of property interests entitled to due

process protections."    Cathedral Rock, 308 Ill. App. 3d at 540.

     Provena was given a meaningful opportunity to present its

case under the Act and the regulations.   Provena presented

testimony at the public hearing, submitted written materials, and

sought judicial review of the Board’s decision.   The Board took

into account the impact on Provena in deciding to grant the

permit.   To allow a party adversely affected by a permit greater

participation opportunities "would risk unnecessarily prolonging

and complicating the CON application process."    Cathedral Rock,

308 Ill. App. 3d at 541.

     Finally, based on the extensive evidence in the record, we

hold the Board’s finding that Sherman’s proposed project was the

most effective or least costly alternative was not clearly

erroneous.

                                 27
1-07-1952

II. Ex Parte Communication

     Provena contends the April 2006 "technical assistance

meeting" attended by Sherman representatives, Department

personnel, and members of the Board, was a prohibited ex parte

communication in violation of the Act.    20 ILCS 3960/4.2 (West

2004).    Section 4.2 of the Act prohibits the Board, any Board

member, employee, or hearing officer from engaging in ex parte

communication "in connection with the substance of any pending or

impending application for a permit with any person or party or

the representative of any party."     20 ILCS 3960/4.2 (West 2004).

     Sherman submitted into the record a Technical Assistance

Letter dated April 17, 2006, from Sherman Hospital to the Board.

The letter states its purpose as documenting technical assistance

provided by Department staff at a meeting on Wednesday, April 5,

2006.    At the meeting, according to Sherman, Department staff

identified five areas for further explanation or clarification by

Sherman: (1) anticipated components of the campus at the site of

the old hospital; (2) clarification of the number of rooms in

ancillary departments; (3) additional justification for number of

inpatient beds; (4) physical access to proposed location; and (5)

financial impact on Provena.

     Provena contends the lack of a transcript or minutes of the

April 2006 meeting violated the rules and led the Board to

believe it could not consider the impact of Sherman’s project on

                                 28
1-07-1952

Provena unless it was severe enough to drive Provena out of

business.    Provena contends the Board failed to take action to

ensure the ex parte violation did not "prejudice any party or

adversely affect the fairness of the proceedings."     20 ILCS

3960/4.2(f) (West 2004).

     Provena forfeited this issue by failing to raise it before

the Board.    Provena was aware of the meeting and made no

objection to the meeting in the proceedings below.     Moreover,

William Brown, St. Joseph’s    president and CEO, referred to the

meeting as involving “technical assistance” and did not suggest

the meeting constituted a prohibited ex parte communication.

Where a party fails to assert a particular argument before an

administrative agency, the point is forfeited and should not be

considered on appeal.    Access Center, 283 Ill. App. 3d at 238-39.

     If the issue were not forfeited, we would find it lacks

merit.   The Board’s rules contemplate the type of technical

assistance provided in this case.     "Technical assistance with

respect to an application, not intended to influence any decision

on the application, may be provided by [Department] employees to

the applicant.    Any assistance shall be documented in writing by

the applicant and employees within 10 business days after the

assistance is provided."    2 Ill. Adm. Code § 1925.293(g) (2001).

Sherman’s letter complies with the requirements of section

1925.293(g).    The letter merely documents and lists specific

                                 29
1-07-1952

areas for which Sherman needed to provide additional

clarification and information to the Board.

III. Mootness

     The State contends Provena’s appeal is moot because Sherman

has begun construction of the new hospital and has spent $29

million in capital expenditures.      See Marion, 201 Ill. 2d at 472.

Sherman does not make the same argument in its brief.     Because no

stay of the CON was ordered, Sherman broke ground on June 27,

2006, several weeks after the Board granted the permit.

     "[W]hen the resolution of a question of law cannot affect

the result of a case as to the parties, or when events have

occurred which make it impossible for the reviewing court to

render effectual relief, a case is rendered moot."      Marion, 201

Ill. 2d at 471.

     In Marion, 201 Ill. 2d at 472, at the time the appellate

court filed its opinion, the ambulatory surgical treatment center

at issue had been built and the capital earmarked for the project

had been spent.   The capital expenditure had been made and could

not be undone.    Because the Board has no oversight of a medical

facility’s operations once it has been built (20 ILCS 3960/5

(West 1998)), any question concerning the propriety of that

expenditure--the issue addressed by the permit application

process--was moot.    Marion, 201 Ill. 2d at 472.   In addition, the

defendant had obtained an operating license for the ASTC, and a

                                 30
1-07-1952

valid permit was not required to obtain a renewal license.

Marion, 201 Ill. 2d at 474-75.    The supreme court vacated the

appellate decision as moot.    Marion, 201 Ill. 2d at 475-76.

     The State relies on the definition of a capital expenditure

in section 3 of the Act--an expenditure made by a health care

facility which exceeds the "capital expenditure minimum" of $6

million, adjusted for inflation.       20 ILCS 3960/3 (West 2004).

Because Sherman has spent more than the $6 million minimum, the

State contends, it has spent the "capital expenditure" referenced

in the Marion supreme court opinion.

     The appeal is not moot.   According to the State, Sherman has

spent $29 million of the approximately $310 million earmarked for

the project.   Unlike the applicant in Marion, Sherman has not

spent its total capital expenditure.       The resolution of this

appeal will directly affect the parties.       If we were to reverse

the Board’s decision, Sherman would not be allowed to proceed

with construction of the project or to obtain an operating

license without a valid permit.    Furthermore, both remand orders

by the circuit court stated further expenditures made by Sherman

were "at Sherman’s risk" and could not be used as arguments

against setting aside the CON.

CONCLUSION

     We affirm the circuit court’s order affirming the Board’s

decision to grant a CON to Sherman.       Provena forfeited its

                                  31
1-07-1952

contention regarding the alleged ex parte communication between

Sherman and the Board.   This appeal is not moot.

     Affirmed.

     CAHILL, P.J., and R. GORDON, J., concur.




                                32
1-07-1952
                  REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
                     (Front Sheet to be Attached to Each Case)

  Please use              PROVENA HEALTH and PROVENA HOSPITALS,
following form:
                                Plaintiffs-Appellants,

  Complete                            v.
    TITLE
   of Case                ILLINOIS HEALTH FACILITIES PLANNING BOARD, ILLINOIS
                          DEPARTMENT OF PUBLIC HEALTH, SHERMAN HOSPITAL,
                          SHERMAN HEALTH SYSTEMS, and REEVEN J. ELFMAN,

                                Defendants-Appellees.


  Docket Nos.                          No. 1-07-1952

    COURT                           Appellate Court of Illinois
                                    First District, 1st Division
   Opinion
    Filed                                  March 31, 2008


JUSTICES                  JUSTICE WOLFSON delivered the Opinion of the court:

                          CAHILL, P.J., and R. GORDON, J., concur.


APPEAL from the     Lower Court and Trial Judge(s) in form indicated in margin:
Circuit Court of
Cook County; the              Appeal from the Circuit Court of Cook County.
Hon.___________,
Judge Presiding.              The Hon. Peter J. Flynn, Judge Presiding.


For APPELLANTS,     Indicate if attorney represents APPELLANTS or APPELLEES and
John Doe, of        include attorneys of counsel. Indicate the word NONE if
Chicago.            not represented.

For APPELLEES,            For Plaintiffs-Appellants Provena Health and Provena Hospitals:
Smith and Smith,          Jeffrey R. Ladd, James W. Collins, and Lawrence M. Gavin,
of Chicago.               BELL, BOYD & LLOYD LLP, of Chicago.


(Joseph Brown, of         For Defendants-Appellees Sherman Hospital, Sherman Health
counsel).                 Systems and Reeven J. Elfman: Richard T. Greenberg, Kara
                          M. Friedman, Jeffrey C. Clark and Kelly A. Morgan, McGUIRE
                          WOODS LLP, of Chicago.
Also add attor-
neys for third-
party appellants          For Defendants-Appellees Illinois Health Facilities Planning
and/or appellees.         Board and Illinois Department of Public Health: Lisa Madigan,
                          Attorney General for the State of Illinois, Michael A. Scodro,
                          Solicitor General and Evan Siegel, Assistant Attorney General,
                          of Chicago.

                                (USE REVERSE SIDE IF NEEDED)




                                               33
