Charter Medical-Dallas, Inc. v. Texas Health Facilities Com'n
| Decision Date | 20 July 1983 |
| Docket Number | MEDICAL-DALLA,No. 13608,INC,13608 |
| Citation | 656 S.W.2d 928 |
| Parties | CHARTER, Appellant, v. TEXAS HEALTH FACILITIES COMMISSION, et al., Appellees. |
| Court | Texas Court of Appeals |
Bruce Bigelow, Wood, Lucksinger & Epstein, Austin, Glen A. Reed, Trotter, Bondurant, Miller & Hishon, Atlanta, Ga., for appellant.
Mark White, Atty. Gen., Nancy N. Lynch, Asst. Atty. Gen., Austin, for Texas Health Facilities Com'n.
Dudley D. McCalla, Heath, Davis & McCalla, Austin, for Healthcare Intern., Inc., and Crow-Wright # 2.
Earl Luna, Dallas, for Memorial Hosp. of Garland.
Before PHILLIPS, C.J., and SHANNON and POWERS, JJ.
Charter Medical-Dallas, Inc., sued for judicial review of certain final orders issued by the Texas Health Facilities Commission in its administration of the licensing or "certificate of need" program established by the Health Planning and Development Act, Tex.Rev.Civ.Stat.Ann. art. 4418h, §§ 3.01-3.15 (1976 and Supp.1982). The orders deny Charter Medical's application for authority to construct a new psychiatric hospital to serve portions of Dallas and Collin Counties and grant authority to two other applicants to construct similar health facilities in the same vicinity. The trial court sustained the Commission's final order in all respects. We will reverse that judgment and remand to that court with instructions to remand the dispute to the Commission for further proceedings consistent with this opinion.
The central issues raised by Charter-Medical are: (1) whether the Commission's orders are supported by adequate underlying findings of basic fact which are, in turn, supported by substantial evidence, and (2) whether the Commission acted arbitrarily or capriciously in reaching various essential conclusions which are not supported by underlying findings of basic fact.
The statute governing the certificate-of-need program, with exceptions not material here, requires that persons wishing to establish or modify a health-care facility, or take other specified courses of action relating to such facilities, first obtain from the Commission a certificate of need that authorizes the contemplated action. Art. 4418h, § 3.01. Charter Medical, Memorial Hospital of Garland, Texas, and Healthcare International, Inc., each applied for such certificates.
Charter Medical proposed to erect a new hospital, to be named the "Dallas Psychiatric Hospital," having 75 beds and providing for adults and adolescents the following health care: inpatient and outpatient psychiatric services, emergency psychiatric services, and addictive disease treatment. Memorial proposed to convert 21 of the beds in its existing general hospital for use in a psychiatric and alcoholic rehabilitation unit. Healthcare proposed to erect a new hospital, to be named "Green Oaks, A Psychiatric Hospital," having 86 beds and providing for adults and adolescents the following health care: inpatient and outpatient psychiatric services, emergency and intensive psychiatric care, psychological casework services, together with speech, occupational, and "activities" therapy.
The Commission consolidated the three applications for the hearing required by art. 4418h, § 3.09. After such hearing, the Commission granted certificates of need authorizing the Memorial and Green Oaks projects but denied Charter Medical's application for a certificate authorizing the establishment of Dallas Psychiatric Hospital. Charter Medical brought suit for judicial review challenging the commission's actions. Art. 4418h, § 3.15; Tex.Rev.Civ.Stat.Ann. art. 6252-13a, Texas Administrative Procedure and Texas Register Act (APTRA), §§ 19, 20 (Supp.1982).
Charter Medical raises six points of error in this Court. The first four points assign the following errors:
(1) The Commission's findings of fact and conclusions of law, respecting the need in (2) The Commission's findings of fact and conclusions of law, respecting other specified criteria that govern the issuance of certificates of need under the Commission's rules, are arbitrary or capricious and not supported by substantial evidence.
the area for additional hospital beds, for psychiatric and addictive-disease purposes, are in certain particulars arbitrary or capricious and not supported by substantial evidence.
(3) The Commission applied to Charter Medical certain standards that differed significantly from those the Commission applied to other applicants similarly situated, in violation of the constitutional guarantees of equal protection of the laws.
(4) The Commission's findings of fact are insufficient to support its final orders because they are, in specified particulars, set forth in statutory language but not "accompanied by a concise and explicit statement of the underlying facts supporting the findings," in violation of APTRA § 16(b).
Each of the four points of error addresses in several ways the findings of fact and conclusions of law which ostensibly support the Commission's action in denying Charter Medical a certificate of need while granting such certificates to the other two applicants.
APTRA § 19(e) provides that an administrative agency's decision may be reversed only if it is:
(1) in violation of constitutional or statutory provisions;
(2) in excess of the statutory authority of the agency;
(3) made upon unlawful procedure;
(4) affected by other error of law;
(5) not reasonably supported by substantial evidence in view of the reliable and probative evidence in the record as a whole; or
(6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
Because Charter Medical's points of error represent an assault on a rather large front against the sufficiency of the Commission's findings of fact and conclusions of law, we should set forth what the material facts and conclusions of law are, under the certificate-of-need program, and the sources from which they derive.
Section 3.10 of art. 4418h directs that the Commission shall "promulgate rules establishing criteria to determine whether an applicant is to be issued a certificate of need" that authorizes the health-care facility he proposes to establish. The criteria must, under that section, "include at least the following:"
(1) whether a proposed project is necessary to meet the health care needs of the community or population to be served;
(2) whether a proposed project can be adequately staffed and operated when completed;
(3) whether the cost of a proposed project is economically feasible;
(4) if applicable, whether a proposed project meets the special needs and circumstances for rural or sparsely populated areas; and
(5) if applicable, whether the proposed project meets special needs for special services or special facilities.
Pursuant to such legislative direction, and utilizing its administrative expertise, the Commission has promulgated rules which govern the issuance of certificates of need. Texas Health Facilities Comm., Rules 315.19.01.010-.130, 3 Tex.Reg. 1362-64 (1978), as amended 4 Tex.Reg. 2949 (1979); now codified, as amended, as 25 TAC § 513.1-.21. 1 At the times pertinent to the present case, those rules required
proof of the following before a certificate could issue to authorize a project for which application had been made:
(1) the project is "necessary to meet the health care requirements of the community or population to be served";
(2) "[t]he medical service area for the project must contain sufficient current and future population to require the additional facility or service";
(3) the project will "not adversely affect existing facilities, existing services, or existing elements of the health care system in the medical service area";
(4) the project does "not create an uneconomical or unnecessary duplication of services and facilities in the medical service area";
(5) the project "integrate[s] with the existing health care facilities and services in the medical service area";
(6) "[t]he project's [sic] approach to providing health care services [is] less costly, or more effective or more appropriate than other methods which are available,
or which have been approved to be developed";
(7) "[t]he applicant [has] the capability of adequately staffing and operating the project";
(8) the "project [will] not have a material adverse effect on the staffing of existing facilities and services in the medical service area."; and
(9) the project is "economically feasible."
These broadly stated proof requirements are, in almost every instance, accompanied by instructions that the applicant must "address" certain specified factual matters set out below the more general requirements stated in the opening sentences of the rule.
In applying the above criteria, derived first from the statute and elaborated in the Commission's rules, the Commission made findings of "fact" roughly categorized under the nine headings taken from its rules and quoted in part above. Footnotes four through eight illustrate that many of these findings of "fact" amount merely to recitals or summations of documentary and testimonial evidence adduced in the hearing. Nevertheless, from the findings of "fact" included under each of the nine headings, the Commission concluded that the Memorial and Green Oaks proposals satisfied all the statutory and rule-based criteria while the Dallas Psychiatric Hospital, proposed by Charter Medical, satisfied almost none of them.
In order that we may intelligently assess Charter Medical's contentions that the Commission's conclusions of law are arbitrary or capricious, and its findings of fact not supported by substantial evidence, we should first delineate the proper scope and force of these standards for judicial review, set out in APTRA § 19(e), it being apparent that there is some confusion in that regard.
Whether originating in a constitutive st...
To continue reading
Request your trial
-
Texas Health Facilities Com'n v. Charter Medical-Dallas, Inc.
...judgment of the trial court and remanded the cause to the Commission for further proceedings. Charter Medical-Dallas, Ins. v. Texas Health Facilities Com'n, 656 S.W.2d 928. We reverse the judgment of the court of appeals and affirm the judgment of the trial The Texas Health Facilities Commi......
-
Presbyterian Hosp. North v. Texas Health Facilities Com'n
...case is controlled squarely by the principles discussed and applied in our opinion in Charter Medical-Dallas, Inc. v. Texas Health Facilities Commission, 656 S.W.2d 928 (Tex.App.1983, writ pending). The final order now under review, issued by the same administrative agency, is invalid for t......
-
Goeke v. Houston Lighting & Power Co.
...by the drafters of the model act from which APTRA § 16(b) was taken almost verbatim. Charter Medical Dallas, Inc. v. Texas Health Facilities Commission, 656 S.W.2d 928, 937-38 (Tex.App.1983), rev'd, 665 S.W.2d 446 (Tex.1984); See Powers, Judicial Review of the Findings of Fact Made by Texas......
-
Amtel Communications, Inc. v. Public Utility Com'n of Texas, s. 350,669
...existed less expensive, more effective, or more appropriate alternatives to the proposed facility. See Charter Medical-Dallas v. Texas Health Fac., 656 S.W.2d 928, 931-34 (Tex.App.1983), rev'd 665 S.W.2d 446 The agency determined that the facilities proposed by two of the applicants satisfi......