In Re Continental Medical Systems of Ohio, Inc.

627 N.E.2d 1018, 89 Ohio App. 3d 821, 1993 Ohio App. LEXIS 3970
CourtOhio Court of Appeals
DecidedAugust 12, 1993
DocketNos. 92AP-1532, 92AP-1545.
StatusPublished

This text of 627 N.E.2d 1018 (In Re Continental Medical Systems of Ohio, Inc.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Continental Medical Systems of Ohio, Inc., 627 N.E.2d 1018, 89 Ohio App. 3d 821, 1993 Ohio App. LEXIS 3970 (Ohio Ct. App. 1993).

Opinion

Bowman, Judge.

Appellant, Continental Medical Systems of Ohio, Inc. (“CMS”), sought a certificate of need (“CON”) from appellee, the Ohio Department of Health (“ODH”), for a fifty-one bed inpatient rehabilitation hospital to be located in Columbus, which is in Health Service Area V (“HSA V”). In September 1990, ODH denied the CON application of CMS. In October 1990, CMS appealed the denial of its CON application to the Certificate of Need Review Board (“CONRB”) and, in May 1991, a lengthy hearing was commenced before the CONRB hearing examiner.

On July 19, 1991, after presentation of testimony but prior to the closing of the record by the hearing examiner, CMS filed a “Motion for Ruling upon Potential Site Change” in which CMS sought a determination by the hearing examiner that CMS could alter its site for the project. Where previously CMS had indicated that the project would be a freestanding facility constructed at 1-270 and U.S. Route 23, in the Worthington area, CMS now proposed a plan whereby the facility would be constructed as a joint venture with and on the campus of Riverside Methodist Hospital (“Riverside”) near State Route 315 and West North Broadway. Both sites are located in HSA V and Franklin County.

*824 By order dated August 8,1991, the hearing examiner indicated that, during the course of ODH’s review of CMS’s application, the ODH consultant was made aware of a potential affiliation between CMS and Riverside regarding this project, but that this fact was not expressly made a factor in the ODH consultant’s recommendation or in ODH’s decision to deny CMS the CON. The hearing examiner concluded that nothing prevented CMS from altering its site plans at that time, since the proceedings before the CONRB were de novo, and ordered that further evidence would be considered if CMS and Riverside signed an affiliation agreement by August 31, 1991. The hearing examiner additionally stated that, if either party made a request on or before August 31, 1991 to present evidence on the proposed change of operation and site, the hearing examiner would permit such evidence.

On August 29, 1991, CMS apparently submitted a letter dated August 19, 1991, from Michael Gire, counsel for Riverside, to counsel for CMS, in which Gire indicated no affiliation agreement had been executed, because Riverside wanted to wait to do so until there was a decision on the CON application. Gire’s letter stated that CMS and Riverside had “reached substantive resolution of all major issues relating to their relationship in a joint venture to construct the proposed facility on the Turkey Run site adjacent to Riverside” but that the parties had wished to avoid the expense of preparing an actual affiliation agreement until it was clear whether a CON would, in fact, be granted for the project. In submitting the letter to the hearing examiner, CMS sought approval of the letter as a timely and suitable substitute for an affiliation agreement. 1

Also, on August 29, 1991, ODH filed what appears to be a motion in which ODH stated:

“In the event that CMS * * * requests on or before August 31,1991 to present evidence and/or testimony regarding ‘an affiliation agreement [which] has been signed and is effective August 31, 1991’ (Hearing Examiner’s Order of August 7, 1991), ODH requests the opportunity to present in response thereto additional evidence and testimony regarding the propriety of the attempted amendment as indicated by the Hearing Examiner in said Order.”

ODH sought a finding by the hearing examiner that the Gire letter, although submitted before August 31, 1991, did not constitute the required affiliation agreement, and so should be stricken. Thus, ODH urged that CMS should be *825 precluded from presenting any evidence as to the Riverside affiliation and the site change, since CMS had not properly raised that issue.

By order filed September 30, 1991, the hearing examiner determined that the Gire letter was acceptable in lieu of an affiliation agreement, and that this matter would proceed on the basis that, if CMS were granted a CON, the project would be undertaken in conjunction with Riverside and would be located on the Riverside campus. Also on September 30, 1991, the hearing examiner filed an order indicating that, barring a motion by either party requesting time to present additional witnesses or evidence on the change in site and affiliation issues, the record would be closed as of October 4, 1991.

On October 4, 1991, ODH moved for reconsideration of the hearing examiner’s order accepting the Gire letter, and moved for an order compelling CMS to go forward with evidence regarding the new affiliation and change in site. CMS responded that, because ODH had not moved to present evidence as to the site change prior to October 4, 1991, ODH had waived its opportunity to do so now. The hearing examiner also expressed doubt as to her authority to compel CMS to present evidence of its proposed affiliation and site changes.

On October 21, 1991, the hearing examiner issued an order denying ODH’s motion for reconsideration and indicated that, since neither party had requested a hearing on or before October 4, 1991, the record would be closed and the post-hearing briefing schedule would proceed as ordered. ODH then filed a motion to strike the Gire letter and the hearing examiner filed an order dated November 6, 1991, which overruled the motion to strike and admitted the letter into evidence, further indicating that ODH had lost its opportunity to obtain a hearing on the question of whether a CON should be issued for the new site.

Upon further argument by ODH that it had requested a hearing in its August 29, 1991 pleading, the hearing examiner issued an order on December 9, 1991, in which she indicated that it was her understanding that ODH only wanted the opportunity to present responsive evidence if CMS had requested a hearing, that CMS only wanted a hearing if she had failed to accept the Gire letter and that, since she had accepted that letter, there was no need for a hearing.

In her July 31, 1992 report and recommendation, the hearing examiner found that application of the rehabilitation-bed-need formula as set forth in Ohio Adm.Code 3701-12-216 indicated a need for at least fifty-one more inpatient rehabilitation beds in HSA V. The hearing examiner further stated additional evidence presented by the parties was considered, including current bed utilization in HSA V, local rehabilitation hospitals’ admission policies, the demographic make-up of HSA V in regard to the likelihood of the populations’ need for care, and the frequency of certain types of injuries or medical conditions likely to require inpatient rehabilitation services. The hearing examiner additionally *826 indicated that she considered the proposed facility’s financial impact upon the pre-existing inpatient rehabilitation facilities, and the ability of those facilities to maintain nursing and therapy staffing once the proposed facility was constructed.

The hearing examiner concluded that CMS should be granted a CON, finding that the evidence in favor of a CON outweighed evidence against a CON, particularly with regard to the application of the bed need formula.

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Bluebook (online)
627 N.E.2d 1018, 89 Ohio App. 3d 821, 1993 Ohio App. LEXIS 3970, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-continental-medical-systems-of-ohio-inc-ohioctapp-1993.