In re ACTD LLC

• Decision Date: 02 October 2020
• Docket Number: No. 19-245,19-245
• Citation: 250 A.3d 590
• Parties: IN RE ACTD LLC, d/b/a The Green Mountain Surgery Center
• Court: Vermont Supreme Court

250 A.3d 590

IN RE ACTD LLC, d/b/a The Green Mountain Surgery Center

No. 19-245

Supreme Court of Vermont.

April Term, 2020

October 2, 2020

Karen Tyler of Dunkiel Saunders Elliott Raubvogel & Hand, PLLC, Burlington, and Eric Citron and Daniel Woofter of Goldstein & Russell, P.C., Bethesda, Maryland, for Appellant.

Thomas J. Donovan, Jr., Attorney General, and Benjamin D. Battles, Solicitor General, Montpelier, for Appellee.

Daniel P. Richardson of Tarrant, Gillies & Richardson, Montpelier, for Amicus Curiae Vermont Education Health Initiative.

PRESENT: Reiber, C.J., Eaton, Carroll and Cohen, JJ., and Pearson, Supr. J. (Ret.), Specially Assigned

EATON, J.

¶ 1. This appeal concerns a certificate of need (CON) granted by the Green Mountain Care Board to applicant ACTD, LLC, to operate the Green Mountain Surgery Center (GMSC), a for-profit multi-specialty ambulatory surgery center. During the CON application process, applicant indicated that it initially planned to offer surgical services in five identified specialties. After the CON was issued, applicant notified the Board that in addition to these five specialties, it planned to offer plastic surgery and ophthalmology procedures. The Board chose to review these changes and, after hearing, issued a decision clarifying that the original CON was limited in scope to the five specialties applicant had identified in its application and that the proposed addition of plastic surgery and ophthalmology procedures was a nonmaterial change to the project. The Board concluded that applicant had demonstrated a need for greater access to plastic surgery

and ophthalmology procedures currently performed in a hospital setting and approved the addition of these services. However, it rejected applicant's proposal to offer ophthalmology procedures already available at another ambulatory surgery center nearby. The Board also extended applicant's implementation reporting period for two additional years. Applicant argues that the Board improperly restricted the scope of the CON and lacked the power to extend the reporting requirement. We conclude that the Board acted within its authority and affirm.

I.

¶ 2. We find it helpful to begin by explaining the statutory framework applicable to this case. Under Vermont law, hospitals and health care facilities are required to obtain a CON from the Board before developing "a new health care project." 18 V.S.A. § 9434(a). The statute defines "a new health care project" to include "[t]he construction, development, purchase, lease, or other establishment of an ambulatory surgical center." Id. § 9434(a)(6). The purpose of the CON requirement is to ensure that new health care projects are "developed in a manner that avoids unnecessary duplication and contains or reduces increases in the cost of delivering services, while at the same time maintaining and improving the quality of and access to health care services, and promoting rational allocation of health care resources in the State." Id. § 9431(a).

¶ 3. To grant a CON, the Board must find that: the project is consistent with Vermont's Health Resource Allocation Plan; the cost of the project is reasonable because, among other reasons, the impact of the project on other health care providers' services, expenditures, and charges is outweighed by the benefit of the project to the public; "[t]here is an identifiable, existing, or reasonably anticipated need for the proposed project that is appropriate for the applicant to provide"; the project will improve the quality of or provide greater access to health care for Vermonters; and the project will serve the public good. Id. § 9437(1)-(4). It is the applicant's burden to show that these and other statutory criteria are satisfied. In re Cent. Vt. Med. Ctr., 174 Vt. 607, 611, 816 A.2d 531, 538 (2002) (mem.); Green Mountain Care Board Rule 4.000, Certificate of Need, § 4.302(3), Code of Vt. Rules 80 280 004 [hereinafter Green Mountain Care Board Rule], http://www.lexisnexis.com/hottopics/codeofvtrules.

¶ 4. The Board has broad authority to administer the CON program. See 18 V.S.A. § 9433(a) (stating Board "shall exercise such duties and powers as necessary for the implementation of the certificate of need program"). The Board may issue a CON approving a proposed project "in whole or in part ... subject to such conditions as the Board may impose." Id. § 9440(d)(4); Green Mountain Care Board Rule 4.500. The Board may revoke a CON for substantial noncompliance with the scope of the project as set forth in the application, or for failure to comply with conditions in the CON. 18 V.S.A. § 9444(a).

¶ 5. An applicant must notify the Board if it wishes to make changes to the project after a CON is issued. Id. § 9444(b). The Board must review material changes and has discretion to review nonmaterial changes. Id. We have held that the Board has the power to clarify an existing CON after it is issued. In re Prof'l Nurses Serv., Inc., 164 Vt. 529, 535, 671 A.2d 1289, 1293 (1996) [hereinafter Prof'l Nurses Serv. I ]. A CON expires when the Board accepts the final implementation report filed in connection with the project. 18 V.S.A. § 9443(c).

II.

¶ 6. With the above framework in mind, we turn to the facts of this case. In June 2015, applicant filed a letter of intent with the Board stating that it planned to apply for a CON to open and operate GMSC, a multi-specialty ambulatory surgical center in Colchester. Applicant proposed that GMSC would provide elective surgeries for patients who did not require hospitalization and in cases in which the expected duration of medical services did not exceed twenty-four hours following admission. Applicant stated that GMSC's scope of service would initially include gastroenterology, obstetrics and gynecology, pain medicine, general surgery, and orthopedics procedures

.

¶ 7. Applicant filed its CON application in July 2015. In the application, it reiterated that GMSC's initial scope of service would include gastroenterology, obstetrics and gynecology, pain medicine, general surgery, and orthopedics procedures

. Applicant stated that it expected the majority of procedures to be diagnostic and screening colonoscopies and endoscopies. It anticipated that "once [GMSC] is up and running, there will be strong demand to provide operating and procedure room time for physicians working in other specialties, including orthopedics, gynecology, and plastic surgery." To demonstrate that the proposed project met the CON criteria, applicant provided projections of anticipated caseloads by physician and specialty in the five specialties above. Applicant also provided a list of the specific procedures it might offer in each of the five specialties. In its discussion of the various CON criteria, applicant focused primarily on the benefits of expanding access to colonoscopies and pain-management procedures. The application did not list ophthalmology as a potential future service it planned to offer.

¶ 8. The Board subsequently requested and received extensive additional information from applicant regarding the CON criteria. In July 2016, GMSC provided the Board with an updated list of proposed procedures and surgeries by specialty. Ophthalmology and plastic surgery

were not on the list. GMSC indicated again that the majority of its procedures would be gastrointestinal and pain-management procedures, with other procedures in orthopedics, general surgery, and gynecology, although it stated that GMSC planned to perform procedures beyond what it included in its projections. When asked by the Board to clarify this latter statement, applicant stated that once GMSC began operating, it was likely that other providers "such as dentists, oral surgeons, or podiatrists" might want to use the facility. However, applicant went on to state that "while we cannot predict with certainty the entire universe of procedures that will be performed at the GMSC, we do have an expectation of what the initial procedures performed at [GMSC] will likely be," and provided a chart listing the five specialties above.

¶ 9. The Board granted GMSC a CON in July 2017. In its statement of decision, the Board found that the majority of surgeries at GMSC would be gastrointestinal procedures, most of which would be colonoscopies

. It found that GMSC also planned to offer pain management, obstetrics and gynecology, orthopedic, and general surgery. The Board acknowledged that "applicant expects that once [GMSC] is fully operational, there will be a strong demand for other specialties which may include oral surgery, podiatry, and plastic surgery." It concluded that applicant met the required criteria for a CON, but that it would "impose conditions today that limit the expansion of services."

¶ 10. The CON included the following conditions relevant to this appeal. Condition 10 stated that "applicant shall not offer services, procedures or surgeries without first demonstrating to the Board that such services, procedures or surgeries are evidence-based and fall within the scope of those approved in this [CON]." Condition 22 required applicant to file regular implementation reports with the Board for four years after the date of the CON. Condition 26 required applicant to notify the Board immediately of a potential or actual nonmaterial or material change to the scope or cost of the project, and required the Board to "review the proposed change and advise the applicant whether the proposed change is subject to review." The CON also provided that "[t]he Board may, after notice and an opportunity to be heard, make such further orders as are necessary or desirable to accomplish the purposes of this [CON], and to ensure compliance with the terms and conditions of this [CON]." Applicant did not appeal the 2017 CON.

¶ 11. In September 2018, applicant notified the Board that it planned to add new physician-owners who would perform surgeries in other specialties besides those stated in the CON—namely, ophthalmology and...