Appeal of New Hampshire Catholic Charities

546 A.2d 1085, 130 N.H. 822, 1988 N.H. LEXIS 58
CourtSupreme Court of New Hampshire
DecidedAugust 10, 1988
DocketNo. 87-365
StatusPublished
Cited by5 cases

This text of 546 A.2d 1085 (Appeal of New Hampshire Catholic Charities) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Appeal of New Hampshire Catholic Charities, 546 A.2d 1085, 130 N.H. 822, 1988 N.H. LEXIS 58 (N.H. 1988).

Opinion

Johnson, J.

The plaintiff, New Hampshire Catholic Charities (Catholic Charities), appeals from a denial by the State Health Services Planning and Review Board (the board) of a motion filed by Catholic Charities for reconsideration or rehearing of the board’s earlier decision denying Catholic Charities a certificate of need (CON), RSA 151-C:2, VIII, for the establishment of an 82-bed nursing home in the Keene area. We reverse and remand.

Catholic Charities was one of seven applicants who sought to obtain a CON to satisfy a need for 82 additional nursing home beds in Region 9, the Keene-Peterborough area. RSA 151-C:4 (Supp. 1987) states that no new “institutional health service,” including a nursing home, can be established in New Hampshire unless the service provider has first secured a CON from the board.

Having determined that there was a need for 82 additional nursing home beds in Region 9, the board, on September 1, 1986, issued a request for proposals for new facilities to satisfy that need. [824]*824As of December 1, 1986, the deadline for submission of proposals, seven applicants, including Catholic Charities, had responded to the board’s request. Catholic Charities proposed to build an 82-bed facility in West Swanzey. Among its competitors were Richard and Gail Courville (Courville), who proposed a 50-bed facility for West Swanzey, and Dwight Sowerby (Sowerby), who filed two separate proposals, one for 47 beds in Peterborough and one for 35 beds in Winchester.

■ The board’s staff analyzed the data and projections that had been submitted with the proposals, and then ranked the proposals and submitted its recommendations to the board. The staff ranked the Catholic Charities proposal first among the seven submitted and recommended to the board that Catholic Charities be awarded a CON for 82 beds.

After circulating and reviewing the staff’s summary and recommendations, the board held a public hearing on May 15,1987. Each of the now six applicants (Beverly Enterprises, one of the original applicants, had withdrawn its proposal prior to the hearing) was allotted 50 minutes in which to present arguments and additional evidence in support of its proposal. Members of the public were also permitted to comment.

On May 22, 1987, the board met to discuss the respective proposals and to make a preliminary decision. The board decided, by a 6-1 vote, not to award an 82-bed CON to Catholic Charities. It subsequently decided, by a 5-2 vote, to award a 35-bed CON to Sowerby’s Monadnock Nursing Home in Winchester and a 50-bed CON to the Courvilles’ Homestead Nursing Home in West Swanzey. Thus, the board awarded CON’s for a total of 85 beds despite the fact that it had earlier determined, and had informed all applicants, that the unmet bed need in Region 9 was 82.

On July 10, 1987, the board published a written notice of its final decision to award CON’s to Sowerby and Courville. Catholic Charities thereupon filed a motion for reconsideration or rehearing, which was denied on August 21, 1987. Catholic Charities then appealed to this court. Catholic Charities does not contest the 35-bed CON awarded to Sowerby, but does contest the 50-bed CON awarded to Courville.

This case presents three questions. First, was the board’s decision to award a CON for 50 beds to Courville unreasonable and arbitrary because it was based upon considerations that were largely immaterial to a proper CON review? Second, did the board’s decision to award CON’s for 85 beds, despite the fact that the predetermined need was for 82 beds, violate N.H. Admin. [825]*825Rules, He-Hea 906.01, a New Hampshire Department of Health and Human Services regulation that states that the board shall not approve a CON for more beds than are needed? Third, was the board’s decision unreasonable because the board did not inform the applicants at the beginning of the application process or during the statutorily prescribed amendment period, RSA 151-C:8, XII(a) (Supp. 1987), that it would consider awarding CON’s to more than one applicant?

Under our standard of review in administrative appeals, we will affirm the decision of the board unless we find the board’s decision to be arbitrary or capricious or not made in compliance with applicable law. RSA 151-C:10, III (Supp. 1987), 541:13.

“[T]he burden of proof shall be upon the party seeking to set aside any order or decision of the [board] to show that the same is clearly unreasonable or unlawful, and all findings of the [board] upon all questions of fact properly before it shall be deemed to be prima facie lawful and reasonable; and the order or decision appealed from shall not be set aside or vacated except for errors of law, unless the court is satisfied, by a clear preponderance of the evidence before it, that such order is unjust or unreasonable.”

RSA 541:13; see appeal of Lemire-Courville Associates, 127 N.H. 21, 23, 499 A.2d 1328, 1330 (1985).

Catholic Charities argues, first, that the board’s decision to award a 50-bed CON to Courville and a 35-bed CON to Sowerby was arbitrary and unreasonable because the board made the award on the basis of criteria that are of minor significance to a CON review. We agree.

RSA 151-C:9, II (Supp. 1987) articulates the general standard that the board should employ when considering competing applications for a CON. RSA 151-C:9, II (Supp. 1987) states that “[t]he board shall consider competing applicants in relationship to each other. The decision shall be based on the applicant who demonstrates superiority in cost effectiveness, quality, and affordability and who will best meet the specifications and criteria outlined in the standard.” RSA 151-C:7 (Supp. 1987) identifies the “criteria outlined in the standard,” which are the minimal requirements that an applicant must meet in order to be awarded a CON. The applicant must demonstrate: (1) the immediate and long-range feasibility of the proposed project; (2) the availability of financial and human resources to complete the project and to [826]*826deliver services upon its completion; (3) the accessibility of the proposed services to medically underserviced persons, including the handicapped and indigent; and (4) that the proposed services will feature high-quality medical care. RSA 151-C:7,1-IV (Supp. 1987).

The board’s staff evaluated the six proposals submitted for the Region 9 CON and concluded that the proposal submitted by Catholic Charities best met the need for nursing home services in the region. The board, however, did not base its evaluation on the standard and criteria contained in RSA 151-C:9, II (Supp. 1987) and RSA 151-C:7, I-IV (Supp. 1987), but instead relied heavily on erroneous interpretations of two State Department of Health and Human Services regulations that, even when correctly interpreted, are only marginally important to a CON review.

One of those regulations, He-Hea 903.01(e), requires a CON applicant to demonstrate that its proposed project can be integrated into the existing health care system of the area in which the new facility will be located. The board relied upon this regulation in concluding that the proximity of Courville’s proposed facility to an existing retirement home favored the Courville proposal. The board erred in its reliance upon He-Hea 903.01(e) because that regulation bears only a limited relationship to the quality or cost effectiveness of nursing home care.

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Bluebook (online)
546 A.2d 1085, 130 N.H. 822, 1988 N.H. LEXIS 58, Counsel Stack Legal Research, https://law.counselstack.com/opinion/appeal-of-new-hampshire-catholic-charities-nh-1988.