Times West Virginian
By Justin McLaughlin
Wednesday, November 30, 2005
FAIRMONT – The Supreme Court cleared the way Tuesday for United Hospital Center to build a new hospital near Interstate 79 that will likely compete for patients with Fairmont General.
Albert Pilkington, FGH’s president, said the court’s decision isn’t bad news for Fairmont’s only hospital.
"We’re still going to be here. We’re going to get stronger and better," he said.
The hospital’s board always anticipated that UHC would eventually be allowed to build its hospital, either by winning in court or refiling its application with the state Health Care Authority, according to Pilkington.
It began planning for what he called "reality" a year and a half ago.
Still, that didn’t stop FGH from trying to block the new hospital’s construction in court, although, Pilkington said, it wasn’t for the obvious reason of keeping a competitor out of its market, but because of what he called an unbalanced mixing of "free enterprise" and "regulatory" health care by the Health Care Authority.
"It was never about us being afraid of competition," he said.
FGH, rather, believed the Health Care Authority violated its own standards when it issued UHC a permit to build a replacement hospital eight miles from the old one. Standards at the time required that replacement facilities be constructed within five miles of the hospitals they were replacing.
Bruce Carter, UHC’s president, disagreed. He believes that mix is necessary because hospitals aren’t just businesses, but public services, and that the authority does a good job of keeping it all in proper perspective.
"I don’t think it’s a black-and-white thing. It’s more a case of balance," he said.
UHC appealed to the Supreme Court after Marion County Circuit Judge Fred L. Fox II sided with Fairmont General and blocked the hospital’s permit in 2004. On Tuesday, Justice Brent Benjamin, who wrote the opinion for the 4-1 majority, said the geographic restriction rule is invalid. The court sent the case back to circuit court with instructions to allow the permitting – and construction – to proceed.
"It was a left turn," Thomas Casto, an attorney for FGH, said about the court’s decision. Both sides in the case had agreed that the only issue in the appeal was whether the new hospital’s location was generally consistent with the state health plan.
But the court never considered their arguments, finding the five-mile rule to be more important.
"We must first consider the legal validity of the underlying mileage limitation which itself is at the heart of this appeal," Benjamin wrote.
The decision voids the five-mile rule, finding a half-dozen reasons why it violates other state laws and conflicts with West Virginia’s overall healthcare policies. The court called it "arbitrary and capricious" and said it was inconsistent with current legislative policy.
Justice Larry Starcher disagreed with the ruling and may file a separate opinion. Justice Robin Davis reserved the right to issue a separate opinion concurring with the majority’s findings.
The governor’s office said it was reviewing the court’s decision Tuesday evening and said it would have no immediate comment.
With a green light from the Supreme Court, Carter said the hospital will pick up where it left off several years ago.
"This puts some finality to it…we’ll put our design team back together…We’ll have the site work completed this summer," he said, hoping to move into the new 318-bed facility by November 2009.
Fairmont General had planned to build a new, $100 million hospital also along I-79 and not far from UHC’s proposed site. That project lost Triad, a key partner, and was scuttled after the HCA approved UHC’s replacement hospital plan in October 2003.
What the Supreme Court said:
The Health Care Authority’s requirement that replacement hospitals be built within five miles (currently 15 miles or in the same county) of the old facility is invalid because, among other things, it "bespeaks capriciousness and arbitrariness."
Though the parties "accepted the validity of the limitation without discussion," the court did not. "We must first consider the legal validity of the underlying mileage limitation which itself is at the heart of this appeal and which serves as the necessary predicate to any (other) consideration."
In addition to being arbitrary and capricious, the court said its "review of applicable West Virginia law reveals that the five-mile limitation does, indeed, conflict with a statute."
Later, it said "limiting the construction of a replacement hospital to within five miles of the existing hospital may diminish the ability of the described person to obtain needed health care."
It also noted that it is "a criterion not included within the criteria for certificate-of-need reviews" set by state law, but rather from rules made by an executive department of state government.
And, in a move that FGH’s attorney said could have ramifications for other Health Care Authority rules and standards, the court said that its "research indicates the Legislature has not specified any clear public policy objectives or guidelines that would have authorized the five-mile limitation."
Ultimately, Judge Fox’s original decision in 2004 to block UHC’s permit "is reversed and this case is remanded for issuance of a certificate of need (permit) consistent with the West Virginia Health Care Authority’s (original) decision."
