WV Supreme Court Issues Decision in Fairmont General Hospital CON Matter

Yesterday the Supreme Court of Appeals of West Virginia released its decision in Fairmont General Hospital, Inc. v. United Hospital Center, Inc. and West Virginia United Health Systems, Inc and West Virginia Health Care Authority.

The case involved a consolidated appeal by United Hospital Center (UHC), West Virginia United Health System (WVUHS) and the West Virginia Health Care Authority (Authority) from a November 24, 2004 order issued by the Circuit Court of Marion County by Judge Fox reversing a previous administrative decision by the Office of Judges affirming the granting of a certificate of need to UHC and WVUHS to construct a replacement hospital facility in Bridgeport, West Virginia which would replace the existing UHC facility located in Clarksburg, West Virginia.

The Court's decision reversed Judge Fox's order and remanded the matter for issuance of a certificate of need consistent with the Authority's decision which granted UHC and WVUHS the right to construct the new facility. The decision invalidated the mile limitation outlined in the Renovation and Replacement of Acute Care Facilities and Services Standards under the State Health Plan.

The focus of the appeal involved the relocation of the new facility approximately 8 miles away from the present location when at the time of filing of the certificate of need application the Renovation and Replacement of Acute Care Facilities and Services Standards under the State Health Plan contained a limitation that replacement facilities be no more than 5 miles from the hospital facility being replaced. Ultimately, the question was whether or not the site (located 8 miles away) approved by the Authority for the construction of UHC's replacement hospital was consistent with the State Health Plan under WV Code 16-2D-9.

Interestingly, the Court focused much of its decision on the status of the Certificate of Need Standards under the State Health Plan, which the Court recognized are "not legislative rules," and the interplay between the Standards and the Certificate of Need Standards under WV CSR 65-7-1 et seq., which are legislative rules. The Court also addressed the conflicts that exist between the Certificate of Need Standards under the State Health Plan and the criteria under W.Va. Code 16-2D-6 which the Authority is required to use when analyzing whether to grant a particular certificate of need.

The Court took up a unique threshold question in the decision, stating "whether the five-mile limitation as imposed by the Authority and the Governor conflicts with provisions of W.Va. Code 16-2D-1 et seq., or is not authorized by legislative guidelines provided for the exercise of powers conferred upon the executive department." The Court asked the question, "is the limitation [five miles] a legally valid restriction?" As a result of the position taken by the Court on this point it appears that they have called into question not only the five mile limitation under the Renovation and Replacement Standards but possibly any other limitations imposed under any of the other Certificate of Need Standards outlined under the State Health Plan.

The Court found the five mile limitation defined under Section I(W) of the Renovation and Replacement of Acute Care Facilities and Services invalid insofar as the standards requirement that the replacement facility be within five miles of the original facility. The Court supports its finding that the five mile limitation is invalid by stating:

"The five mile limitation is invalid because it
(1) conflicts with W. Va. Code § 16-2D-6(d) (1999);
(2) is a criterion not included within the criteria for certificate of need reviews set forth in W. Va. Code § 16-2D-6(a) (1999) or in 65 C.S.R. § 7-12;
(3) was promulgated by the executive department of state government without clear legislative public policy objectives and guidelines;
(4) precludes a balanced consideration of the statutory criteria for certificate of need reviews as set forth in W. Va. Code § 16-2D-6 (1999);
(5) conflicts with, rather than supports, the findings and declarations of the Legislature set forth in W. Va. Code § 16-29B-1 (1997) and W. Va. Code § 16-2D-1 (1977); and
(6) is arbitrary and capricious."

For more information about this case you might want to check out my previous post which includes links to the briefs filed by the various parties.

Also, I haven't had time yet to compare this decision to another recent certificate of need decision issued by the Court in the Family Medical Imaging, Inc. v. West Virginia Health Care Authority where the Court recognized that the Certificate of Needs Standards under the State Health Plan as "interpretive rules," but did not invalidate the standards in that particular case.

The Charleston Daily Mail reports on the decision here.

Update: "UHC Can Build New Hospital," News articled from WBOY 12 by Juliet Terry.

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