Dept. of Health v. Vna

Decision Date28 September 2007
Docket NumberNo. 526 September Term, 2005.,526 September Term, 2005.
Citation176 Md. App. 475,933 A.2d 512
PartiesDEPARTMENT OF HEALTH AND MENTAL HYGIENE, Office of Health Care Quality v. VNA HOSPICE OF MARYLAND.
CourtCourt of Special Appeals of Maryland

Kathleen A. Ellis (David Wagner, J. Joseph Curran, Jr., Atty. Gen., on the brief), Baltimore, for Appellant.

Stephen J. Sfekas, Baltimore, for Appellee.

Panel: KRAUSER, BARBERA, and CHARLES E. MOYLAN, JR. (Retired, specially assigned), JJ.

BARBERA, Judge.

We consider in this appeal the constitutionality of the law presently codified at Maryland Code (1982, 2005 Repl.Vol.), § 19-906 of the Health General Article ("HG"). That section sets forth the requirements for obtaining a license to provide home-based hospice services. Before 2003, VNA Hospice of Maryland ("VNA"), appellee, held a statewide license pursuant to the then-applicable version of HG § 19-906, to provide home-based hospice care service in Maryland. In 2003, the General Assembly substantially amended HG § 19-906, causing appellant, the Department of Health and Mental Hygiene ("the Department"), to amend VNA's license so that it could no longer provide hospice services in Carroll and Prince George's counties. VNA appealed the alteration of its license, challenging the constitutionality of the 2003 amendments.

Following a hearing on the matter, an Administrative Law Judge ("ALJ") issued a Proposed Decision upholding the amendments. VNA filed exceptions, and the designee of the Secretary of the Department issued a Final Decision adopting the proposed findings of fact and conclusions of law set forth in the ALJ's Proposed Decision. The Board of Review of the Department affirmed the decision of the Secretary's designee.

VNA filed a Petition for Judicial Review in the Circuit Court for Baltimore County. The court issued an opinion reversing the Department's decision. The court ruled that the license issued to VNA in 1982 was a vested property right afforded constitutional protection under Article 24 of the Maryland Declaration of Rights. Alternatively, the court ruled that HG § 19-906(c)(3), which restricts the licenses for home-based hospice providers to only those jurisdictions in which the providers had administered services within the 12-month period ending on December 31, 2001, was arbitrary. Finally, the court ruled that the State's failure to provide, or offer to provide, any financial compensation to VNA as a result of the amendment of VNA's license constituted a "taking" in violation of Article III, § 40, of the Maryland Constitution. The Department noted a timely appeal to this Court.

For the reasons that follow, we conclude that HG § 19-906(c)(3) is not unconstitutional on any of the grounds asserted by VNA. We therefore reverse the judgment of the circuit court with the direction that it affirm the Final Decision of the Department.

BACKGROUND

VNA offers home-based hospice and health care services in Maryland.1 Since 1982, hospice care providers have been included within the definition of "health care facility" under Title 19 of the Health-General Article. See HG § 19-114(d)(vii).

As health care facilities, hospice care providers are required to obtain a Certificate of Need ("CON"), issued by the Maryland Health Care Commission, before developing or operating a hospice care facility or participating in hospice care. HG § 19-120(e). A CON refers to a certification or finding of public need for a particular health care project. HG § 19-114(c). In Maryland, providers of hospice services must apply for a CON prior to developing, operating, or participating in these health care programs. See HG § 19-120(e). The general purpose of a CON is to ensure that new health care services and facilities are developed only as needed, based on the publicly developed measures of cost effectiveness, quality of care, and geographic and financial access to care.

By 1987 Md. Laws, ch. 670, the General Assembly amended HG § 19-906, entitled "Qualifications for License," to require home-based hospice care providers to obtain a license under that provision. The law also required that such programs obtain a CON. An uncodified section of the 1987 law, see 1987 Md. Laws, ch. 670, § 2, provided that hospice care programs in existence and delivering hospice care services before January 1, 1987, were exempt from the CON requirement.

Because VNA was in existence and delivering hospice care services before January 1, 1987, it was exempt from the CON requirement that was added to the law in that year. Before enactment of the 2003 amendments to HG § 19-906, VNA was licensed to provide home-based hospice care services and provided such services in Baltimore City and Anne Arundel, Baltimore, Cecil, Carroll, Harford, Howard, and Prince George's counties.

In 2003, the General Assembly again amended HG § 19-906, by passing SB 732. See 2003 Md. Laws, ch. 404. As a result of those amendments, HG § 19-906(c) provides, in relevant part:

(2) The Secretary, in consultation with the Maryland Health Care Commission, shall specify those jurisdictions in which a general hospice is authorized to provide home-based hospice services.

(3) A general hospice may not be licensed to provide home-based hospice services in a jurisdiction unless the general hospice or an entity acquired by the general hospice provided home-based hospice services to a patient in the jurisdiction during the 12-month period ending December 31, 2001.

* * *

(5) Upon the notification by the Maryland Health Care Commission of the issuance of a certificate of need to a general hospice, the Secretary shall append to the general hospice license any additional jurisdictions in which the general hospice may provide home-based hospice services.

Pursuant to the 2003 amendments, the Secretary of the Maryland Health Care Commission is required to specify the jurisdictions or counties in which a general hospice is authorized to provide home-based hospice services. A general hospice may enlarge its license to include additional jurisdictions by applying for a CON. General hospices are exempt from the CON requirement, however, if they provided hospice care services in a jurisdiction within the 12-month period ending on December 31, 2001.

Following the enactment of the 2003 amendments to HG § 19-906, the Department of Health and Mental Hygiene Office of Health Care Quality ("OHCQ"), which issues licenses for hospice services in Maryland, reviewed a 2001 survey conducted by the Hospice Network of Maryland, Inc. OHCQ determined that VNA had not provided hospice care services in Carroll and Prince George's counties during the 2001 calendar year.

By letter dated August 18, 2003, OHCQ notified VNA that, pursuant to the 2003 amendments to HG § 19-906, its license was amended to limit its operations to the six jurisdictions in which it had served home-based hospice patients in 2001: Baltimore City and Anne Arundel, Baltimore, Cecil, Harford, and Howard counties. Under the amended license, VNA could not provide services in Carroll and Prince George's counties, unless it obtained a CON and became licensed to provide service in those counties.

VNA appealed the alteration of its license to the Office of Administrative Hearings. A hearing on VNA's appeal was conducted before an ALJ. VNA argued, inter alia,2 that the 2003 amendments to HG § 19-906 violated both the Maryland Declaration of Rights and the United States Constitution. VNA maintained that the 2003 amendments operated retroactively to abrogate its existing property right to provide hospice care services in Carroll and Prince George's counties.

The ALJ rendered a Proposed Decision declining to hold the 2003 amendments to HG § 19-906 unconstitutional as applied to VNA. The ALJ concluded that VNA did not have a vested property right in providing home-based hospice services. The ALJ therefore concluded that the 2003 amendments to HG § 19-906 did not deprive VNA of its due process rights under Article 24 of the Maryland Declaration of Rights or the Fourteenth Amendment to the Constitution of the United States. The ALJ also concluded that the 2003 amendments did not constitute a taking under Article III, § 40 of the Maryland Constitution or the Fifth Amendment (as incorporated through the due process clause of the Fourteenth Amendment), and those amendments did not create a monopoly in violation of Article 41 of the Maryland Declaration of Rights.

VNA filed exceptions to the Proposed Decision, and the designee of the Secretary of the Department held a hearing, at which the Secretary's designee heard argument of counsel. She later issued a Final Decision adopting the proposed findings of fact and conclusions of law set forth in the Proposed Decision and "upholding the Office of Health Care Quality's action to amend VNA's hospice care license to exclude VNA from providing home-based hospice services in Carroll and Prince George's counties pursuant to HG § 19-906(c)(3)."

VNA appealed the decision to the Department's Board of Review ("Board"). At the hearing before the Board, VNA argued, as it had before the ALJ, that the 2003 amendments to HG § 19-906(c)(3) retroactively divested VNA of its right to a license to provide hospice services in Carroll and Prince George's counties. The Board of Review disagreed and affirmed the Final Decision.

VNA filed a Petition for Judicial Review in the Circuit Court for Baltimore County. Following a hearing, the court issued an opinion reversing the decision adopted by the Board of Review. The court ruled that VNA had a vested property right in providing home-based hospice services that was abrogated by the 2003 amendments. The court further ruled that the provision of HG § 19-906 exempting from the CON requirement only general hospices that provided services in a jurisdiction in 2001 is arbitrary and unconstitutional under Article 24 of the Maryland Declaration of Rights and an improper exercise of the State's police...

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