An article in today's Charleston Daily Mail reports that the West Virginia Supreme Court of Appeals agreed to accept and hear arguments on an appeal of Judge Fred Fox's circuit court ruling reversing the West Virginia Health Care Authority's decision granting a certificate of need for United Hospital Center, Inc. to build a new $265M replacement hospital facility 8 miles from its current hospital location.
United Hospital Center, Inc., West Virginia United Health System, Inc., and the West Virginia Health Care Authority each filed separte petitions for appeal which were consolidated. The Supreme Court voted 3-1 (Albright voting not to grant and Starcher not participating) granting the petition for appeal.
Fairmont General Hospital appealed the original decision by the West Virginia Health Care Authority granting the certificate of need to United Hospital Center. Fairmont General Hospital appealed the decision to the Office of Judges, which upheld the decision, and then appealed the decision to the Circuit Court of Marion County.
Fairmont General Hospital had opposed the new facility from the beginning because the new site for the facility was 8 miles north of the current hospital location located along I-79, which was much closer to the current Fairmont General Hospital location. According to the Daily Mail article, as a result of the approval of the new hospital, Triad Hospital, Inc. decided not to purchase Fairmont General Hospital and construct a new $ 85 M hospital facility in Marion County.
The arguments on appeal revolve around the Certificate of Need Standards for Renovation-Replacement of Acute Care Facilities and Services which originally required that a replacement hospital be located no more than 5 miles from the exisiting facility and located in the same county. The Standards were subsequently changed to define "replacement" as, "a project for the erection, construction, creation other acquisition of a physical plant or facility. All beds in the replacement facility must be located within the same county or within fifteen (15) miles of the original facility." The new Standards were approved by Governor Wise on October 9, 2004.
In this case, the site for the new United Hospital Center hospital was located 8 miles from the existing facility. The West Virginia Health Care Authority's Decision issued on October 24, 2003, stated that the Cerficate of Need Rule does not require a CON application to be perfectly consistent with the State Health Plan (the State Health Plan is made up of a variety of Standards for particular services, including the Renovation-Replacement of Acute Care Facilities and Services). The Authority's decision also stated that a replacement hospital 8 miles rather than 5 miles from the existing hospital is not materially inconsistent with the definition of a "replacement" facility.
Judge Fox's November 24, 2004 Opinion and Order Reversing the Decision of the West Virginia Health Care Authority / Office of Judges recognized that the 8 mile distance between the current and proposed new facility exceeded the 5 mile regulatory limit. Judge Fox's Order also recognizd that one of the reasons for the mileage limit was to protect other area hospitals from the encroachment of new facilities into areas traditionally serviced by other area hospitals. Ultimately, Judge Fox found that the West Virginia Health Care Authority violated W.Va. Code 29A-5-4(g)(1) and exceeded its statutory authority.
For those interested in West Virginia certificate of need law this will be an interesting case to watch.