West Virginia Health Care Cost Review Authority v. Boone Memorial Hospital

472 S.E.2d 411, 196 W. Va. 326, 1996 W. Va. LEXIS 49
CourtWest Virginia Supreme Court
DecidedMay 17, 1996
Docket23035
StatusPublished
Cited by114 cases

This text of 472 S.E.2d 411 (West Virginia Health Care Cost Review Authority v. Boone Memorial Hospital) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
West Virginia Health Care Cost Review Authority v. Boone Memorial Hospital, 472 S.E.2d 411, 196 W. Va. 326, 1996 W. Va. LEXIS 49 (W. Va. 1996).

Opinion

CLECKLEY, Justice.

The appellant herein, Boone Memorial Hospital (Hospital), appeals the December 29, 1994, order of the Circuit Court of Kana-wha County which held the Hospital’s proposed stationary computerized tomography (CT) service is subject to Certificate of Need (CON) review. In so determining, the circuit court reversed the June 9, 1994, administrative decision of the Office of Hearings and Appeals of the West Virginia Department of Tax and Revenue (OHA) which held the proposal is not subject to CON review. OHA had reversed the November 16, 1993, decision of the West Virginia Health Care Cost *330 Review Authority (HCCRA), 1 the appellee herein, and held HCCRA exceeded its statutory authority by finding the proposal is subject to CON review. The primary issue on appeal is whether HCCRA has jurisdiction over the proposed CT service. For the following reasons, we affirm.

I.

FACTUAL AND PROCEDURAL HISTORY

By letter dated October 14,1993, 2 the Hospital requested a determination of reviewability for a proposed stationary CT unit. See 65 W.Va. C.S.R. 7, § 25.2 (1992). 3 In its letter, the Hospital stated that since 1985 it had contracted for a mobile CT unit which provided its patients CT services one day per week. In August of 1993, the Hospital was notified by its vendor that its mobile services would be discontinued. After mobile services ceased, it became necessary to transfer patients in need of CT services to Charleston Area Medical Center which the Hospital asserted was significantly more expensive than on-site services. Thus, the Hospital proposed to enter into a purchased services agreement with US Medical Management II(USM) for a stationary CT unit.

The Hospital stated it would provide staffing, board certified CT radiology services, and all medical supplies for the unit’s operation. It also would purchase the CT services for a flat fee per scan. In turn, USM would be responsible for the total capital expenditure for the stationary unit at a cost of $296,800. The Hospital emphasized this amount is less than the $300,000 threshold to constitute the acquisition of major medical equipment as defined in W. Va.Code, 16-2D-2(q) (1991), 4 and the acquisition did not constitute a “new institutional health service” as set forth in W. Va.Code, 16-2D-3 (1993), specifically W. Va.Code, 16-2D-3(e) and -3(h), 5 and 65 W. Va.C.S.R. 7, § 2.14 (1992). 6 *331 Furthermore, the Hospital argued the projected annual operating expenses of $93,-930.64 associated with the CT services are below the $300,000 threshold contained within 66 W. Va.C.S.R. 7, § 2.9 (1992). 7 Therefore, the Hospital requested HCCRA find the proposal not subject to CON review because the project did not meet the regulatory requirements for CON reviewability and it did not require an exemption review.

In its decision dated November 16, 1993, HCCRA disagreed. It relied upon the State Health Plan Standards for Certificate of Need (State Health Plan Standards) approved on October 5, 1992, to determine “that new/additional stationary CT services meet certain criteria.” HCCRA determined “the intent of these Standards is that proposals for new/additional stationary CT units will be viewed as new institutional health services under W. Va.Code § 16-2D-3(e).” 8 Thus, HCCRA found the proposal to be subject to CON review. The Hospital appealed this decision to OHA See W. Va.Code, 16-29B-13 (1983).

The Hospital argued before OHA, as it also does in the present appeal, that the CT services are not being offered as a “new institutional health service” under the plain language of W. Va.Code, 16-2D-3(e). “[W]hen used in connection with health services,” to “offer” is defined as a “health care facility or health maintenance organization hold[ing] itself out as capable of providing, or as having the means for the provision of, specified health services.” W. Va.Code, 16-2D-2(t) (1991). In addition, W. Va.Code, 16-2D-2© (1991), defines “health services” as “clinically related preventive, diagnostic, treatment or rehabilitative services[.]” The Hospital states it is beyond dispute that CT services were offered at the Hospital during the preceding twelve-month period.

The Hospital also asserted below, as it does here, “that the State Health Plan Standards fail to confer jurisdiction or authority for HCCRA’s decision.” On the other hand, HCCRA argued that CON review was necessary under “current law” and W. Va.Code, 16-2D-3(e), because the Hospital was switching from a mobile part-time unit which had not undergone CON review to a stationary full-time unit. Relying upon the State Health Plan Standards, HCCRA points to the fact that the State Health Plan Standards define stationary and mobile CT services differently. 9 It also quotes other language it argues evidences a distinction between mobile and stationary CT services. 10 The Hospital not only claims HCCRA cannot obtain its jurisdiction from another agency’s promulgation of the State Health Plan Standards but, regardless of that fact, “[t]he State Health Plan exists to define criteria for *332 otherwise reviewable transactions, not to define reviewability in the first instance.”

The State Health Plan Standards were created by the West Virginia Health Care Planning Commission (Commission) which the Legislature gave “all powers necessary or appropriate to carry out the health planning purposes of this article [W. Va.Code, 16-1A-1, et seq.], said powers being related to developing a comprehensive state health plan.” W. Va.Code, 16-1A-3 (1991). The Commission was created within the Governor’s office, and the Governor was given the power to designate and appoint its members. W. Va.Code, 16-1A-3. Among other things, the Commission was charged with the responsibility to develop and present to the Governor before July 1, 1992, “proposed amendments and modifications to the certificate of need standards contained in the state health plan heretofore approved by the governor.” W. Va.Code, 16-lA-5(c) (1991). The Governor has the authority to then approve or disapprove of the amendments and modifications. W. Va.Code, 16-lA-5(c).

In its decision, OHA found HCCRA never cited “current law” and never quoted subsection 3(e) but, instead, HCCRA relied upon the State Health Plan Standards for CT services to support its position that CON review was necessary for the Hospital’s proposed CT services. OHA determined the State Health Plan Standards could not confer jurisdiction or authority to HCCRA because “an administrative agency, being a creature of statute, has no authority except as conferred by statute enacted by the West Virginia Legislature.” Therefore, OHA concluded “[t]he statutory authority and jurisdiction of an agency cannot be expanded by the actions of another agency.... Standards developed by the ...

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Bluebook (online)
472 S.E.2d 411, 196 W. Va. 326, 1996 W. Va. LEXIS 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/west-virginia-health-care-cost-review-authority-v-boone-memorial-hospital-wva-1996.