Provena Health v. Illinois Health Facilities Planning Board

886 N.E.2d 1054, 382 Ill. App. 3d 34
Appellate Court of Illinois·Decided March 31, 2008·No. 1-07-1952·Published·Cited by 24 cases

Opinion

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 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 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 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 (Conway Greene CD-ROM June 2003). It found conformance with the nine financial and economic feasibility provisions in part 1120 of the regulations. 77 Ill. Adm. Code §1120 (Conway Greene CD-ROM June 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 to 0 to approve Sherman’s application. On June 15, 2006, the Board issued a letter to Sherman, stating it approved the permit based 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 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.

Free access — add to your briefcase to read the full text and ask questions with AI

Provena Health v. Illinois Health Facilities Planning Board, 886 N.E.2d 1054, 382 Ill. App. 3d 34 (Ill. Ct. App. 2008).

886 N.E.2d 1054 (Provena Health v. Illinois Health Facilities Planning Board) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Waukegan Potawatomi Casino, LLC v. Illinois Gaming Board
2025 IL 130036 (Illinois Supreme Court, 2025)
Waukegan Potawatomi Casino, LLC v. Illinois Gaming Board
2023 IL App (1st) 220883 (Appellate Court of Illinois, 2023)
Centegra Hospital-McHenry v. Mercy Crystal Lake Hospital & Medical Center, Inc.
2019 IL App (2d) 180731 (Appellate Court of Illinois, 2019)
In re Estate of Rivera
2018 IL App (1st) 171214 (Appellate Court of Illinois, 2018)
ManorCare Health Services, LLC v. Illinois Health Facilities & Services Review Board
2016 IL App (2d) 151214 (Appellate Court of Illinois, 2017)
ManorCare Health Services, LLC v. Illinois Health Facilities and Services Review Board
2016 IL App (2d) 151214 (Appellate Court of Illinois, 2016)
Larsen v. Provena Hospitals
2015 IL App (4th) 140255 (Appellate Court of Illinois, 2015)
Chamberlain v. The Civil Service Comm'n
2014 IL App (2d) 120884 (Appellate Court of Illinois, 2014)
Chamberlain v. The Civil Service Commission of the Village of Gurnee, Illinois
2014 IL App (2d) 120884 (Appellate Court of Illinois, 2014)
CBS Outdoor, Inc. v. The Department of Transportation
2012 IL App (1st) 111387 (Appellate Court of Illinois, 2012)
MELROSE PARK SUNDRIES, INC. v. Carlini
927 N.E.2d 132 (Appellate Court of Illinois, 2010)
Melrose Park Sundries v. Carlin
Appellate Court of Illinois, 2010
Philpott v. FIREFIGHTERS'PENSION FUND
931 N.E.2d 256 (Appellate Court of Illinois, 2010)
Quigg v. Walgreen Company
Appellate Court of Illinois, 2009
Quigg v. Walgreen Co.
905 N.E.2d 293 (Appellate Court of Illinois, 2009)
First Nat. Bank of Ottawa v. Dillinger
897 N.E.2d 358 (Appellate Court of Illinois, 2008)
First National Bank of Ottawa. v. Dillinger
Appellate Court of Illinois, 2008