By Mark Hansel
NKyTribune managing editor
The Kentucky Court of Appeals ruled against The Christ Hospital’s request to overturn the Franklin Circuit Court’s denial of its Certificate of Need (CON) application.
The Drawbrige development site
In a 17-page decision released Friday, the Court of Appeals provided a detailed explanation of its ruling that, in a nutshell, stated that the Franklin Circuit Court decision followed the law governing a CON request:
“Finding no error in the order of the circuit court, we affirm.”
A ruling in favor of The Christ Hospital would have paved the way for it to build a $24 million ambulatory surgery center (ASC) in Fort Mitchell. This latest decision may be a death knell for that facility.
The ruling does not impact unrelated development at the site of the former Drawbridge Inn.
St. Elizabeth Healthcare President and CEO Garren Colvin sent the following statement to St. Elizabeth Healthcare stakeholders regarding the decision:
Dear Associates, Physicians and Volunteers,
I have some extremely good news to share today. The Kentucky Court of Appeals has ruled in St. Elizabeth Healthcare’s favor regarding The Christ Hospital’s Certificate of Need (CON) application to build a new surgery center in Ft. Mitchell.
As we have shared before, The Christ Hospital chose to appeal the decision of the Franklin County Circuit Court ruling that was in favor of St. Elizabeth Healthcare’s position. Now, the Kentucky Court of Appeals has agreed with the Franklin County Circuit Court and St. Elizabeth, ruling that The Christ Hospital’s application does not meet CON standards. As stated by the judge’s ruling, “The statute finds that the proliferation of unnecessary health-care facilities and health services results in ‘costly duplication and underuse of such facilities, services, and equipment’ and that this proliferation ‘increases the cost of quality health care within the Commonwealth’.”
Colvin
Kentucky’s CON is all about providing access to quality, cost-efficient care to all citizens of the Commonwealth. That’s what we do every day, right here at St. Elizabeth Healthcare. We have been committed to the Northern Kentucky community for 158 years and provide over $117 million in care each year to the uninsured and other valuable community benefits.
Enormous thanks to everyone who has supported our efforts. More importantly, thanks to all of you for the outstanding patient care you provide each and every day, and for your unwavering commitment to taking care of our community.
St. Elizabeth Healthcare officials have always maintained that The Christ Hospital attempted to use a temporary “loophole” in the ASC criteria to submit a CON application that would allow for the surgery center.
In August, 2015, the CON Ambulatory Surgery Center review criteria was amended, over the objection of hospitals in the state of Kentucky.
The amendment allowed outside entities to perform procedures without specific identification, and it was during this window that The Christ Hospital submitted its application. In September of 2016, the criteria was restored to its previous wording.
In June, 2017, an administrative law judge (ALJ) with the Kentucky Cabinet for Health and Family Services (CHFS) ruled in favor of The Christ Hospital CON application. That ruling, had it stood, would have allowed for construction of the Surgery Center-Fort Mitchell, as part of the development of the former Drawbridge Inn site.
St. Elizabeth Healthcare appealed the CHFS decision to the Franklin Circuit Court and Judge Thomas Wingate.
In an interview with the Northern Kentucky Tribune in August, 2017, Colvin explained St. Elizabeth’s opposition to The Christ Hospital’s request.
“The certificate of need process was developed to prevent oversupply of healthcare services, including ambulatory surgery centers,” Colvin said then. “With nine facilities in Northern Kentucky that are less than 50 percent occupied, of which we only operate six, that tells me there is not a need for another ASC.”
In June, 2018, Wingate reversed the CHFS decision and denied The Christ Hospital’s CON request.
In his decision, Wingate acknowledged that the ruling was based, in part, on evidence that the existing ASCs in Northern Kentucky are not being used to their capacity and that The Christ Hospital’s proposal did not meet a number of State Health Plan criteria.
The Kentucky Court of Appeals ruling, affirming the decision of the Franklin Circuit Court to deny a certificate of need application from the Christ Hospital (click to enlarge).
Wingate also determined that the hearing officer misapplied the law in the final order and improperly interpreted review criterion.
In its Friday ruling, the Court of Appeals addressed that issue in detail, and concurred with Wingate’s decision.
Its ruling stated, in part:
“The court held that the findings made by the ALJ were not supported by substantial evidence and that the ALJ erred in her legal conclusions. This appeal follows. Christ Hospital raises distinct issues on appeal. These issues can be narrowed down into three categories: (1) that the trial court impermissibly substituted its own facts for those of the ALJ; (2) that the revised CON regulation did not violate the Kentucky Constitution; and (3) that the revised CON regulation did not violate KRS 216B.010. Because we are affirming the trial court’s holdings that the ALJ erred, that the new CON regulation violates the Kentucky Constitution, and that the new regulation violates KRS 216B.010, we need not address every issue raised by Christ Hospital.
According to the CHFS website, the Kentucky certificate of need process prevents the proliferation of health care facilities, health services and major medical equipment that increase the cost of quality health care in the commonwealth.
In July 2018, then-Christ Hospital President and CEO Mike Keating stated its appeal was based on a desire to provide more healthcare options for Northern Kentucky residents.
“What we have learned by caring for and speaking with Northern Kentucky residents is that they prefer and are asking for more healthcare options in the communities where they live,” Keating stated. “So we have decided to appeal the court’s decision because we believe we can provide those needed healthcare options, notwithstanding the efforts of others to limit competition.”
The Court of Appeals ruling did not specifically address additional healthcare options residents may, or may not, have requested.
It did, however, state that Christ Hospital did not provide a complete picture of the surgical procedure options available to Northern Kentucky residents:
“Allowing Christ Hospital to only present evidence of outpatient surgical procedures and procedures performed at ASCs was erroneous. The exclusion states that Christ Hospital must present evidence of ‘surgical procedures’ not being performed at ‘facilities’ in the planning area. There is no limiting language. Christ Hospital should have presented evidence regarding outpatient and inpatient procedures, as well as procedures performed at ASCs, hospitals, emergency rooms, and doctor’s offices. Limiting the evidence would be adding words to the regulation. In addition, when looking at the CON regulation as a whole, the 85% surgical utilization condition states that it is in regard to inpatient and outpatient surgeries. The ALJ erred in finding that Christ Hospital met the ASC exception because Christ Hospital did not present a full picture of surgical procedures being performed in the area. As this was the primary issue to be determined at the administrative level, the ALJ’s allowing only outpatient data skewed the rest of her findings.”
Update:
Vic DiPilla, Vice President and Chief Business Development Officer, The Christ Hospital Health Network, provided the following statement to the NKyTribune Monday (August 26):
“Today (Friday) was another setback for the patients and residents of Northern Kentucky. (Friday) morning we received notice that our Certificate of Need application was denied by the Kentucky Court of Appeals. While disappointing, we remain committed to delivering on the desire of NKY residents to have more healthcare options. We will be assessing the current environment, and our commitment to serve NKY residents remains steadfast.
“In the meantime, we will continue to encourage the residents of NKY to visit our Ft. Wright and Burlington locations where we have a range of services including an urgent care, imaging, several primary care offices, physical therapy, orthopaedics, OB/GYN, oncology, heart & vascular, and the most preferred physicians in the region.”
Contact Mark Hansel at mark.hansel@nkytrib.com
