Lifemark Corp. v. Guissinger
| Citation | 416 So.2d 1279 |
| Decision Date | 15 June 1982 |
| Docket Number | 82-C-1376,Nos. 82-C-1366,s. 82-C-1366 |
| Parties | LIFEMARK CORPORATION v. Roger GUISSINGER, Secretary, Department of Health and Human Resources, State of Louisiana, and Murray Forman, Director, Division of Health Planning and Development Department of Health and Human Resources, State of Louisiana. QUALICARE INC. v. DEPARTMENT OF HEALTH AND HUMAN RESOURCES, STATE OF LOUISIANA, et al. |
| Court | Louisiana Supreme Court |
Stewart E. Niles, Jr., Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, for relator.
Fritz Windhorst, Gretna, James A. Cobb, Jr., Stephen M. Sullivan, Emmett, Cobb, Waits & Kessenich, New Orleans, Joseph A. Donchess, Baton Rouge, Dorothy J. Kyle, Lafayette, for respondent and applicant.
Leon H. Rittenberg, Jr., Kenneth F. Sills, Polack, Rosenberg, Rittenberg & Edom, Stewart E. Niles, Jr., Jones, Walker, Waechter, Poitevent, Carrere & Dengre, New Orleans, for respondents.
Pursuant to Section 1122 of the Social Security Act, 42 U.S.C. § 1320a-1, the Secretary of the U. S. Department of Health and Human Services (DHHS) entered into a written agreement with the State of Louisiana, acting through the Division of Health, Planning and Development (DHPD) under which DHPD was named as the state designated planning agency (DPA). Section 1122 is a program designed to curb unnecessary capital expenditures by hospitals and other health care facilities. Health care providers are required to secure advance approval from state designated planning agencies for capital expenditures in order to be reimbursed with federal funds. Moreover, the Section 1122 review is designed to be a streamlined procedure and thus avoid delaying the construction of needed facilities.
Five health care providers, including Lifemark Corporation, Qualicare Inc. and National Medical Enterprises, Inc. (NME) made separate applications to DPA for advance approval of a hospital to be constructed in Slidell, Louisiana. In accordance with Section 1122 guidelines, DPA sent the applications to the local health systems agency, which, after performing an initial review of each application, recommended to DPA that the Lifemark application be approved and that the Qualicare and NME applications, as well as the others, be disapproved. 1 However, upon further review, DPA approved the application of NME and disapproved the others. Notice of its findings and recommendations were sent to each applicant, the Secretary of the U.S. Department of Health and Human Services (DHHS) as well as to other specified agencies.
Thereafter, Lifemark and Qualicare filed separate lawsuits in the state district court, each challenging the certificate of approval issued by DPA to NME and their respective notifications of disapproval. After a hearing in the Lifemark case, the trial judge rendered judgment in favor of Lifemark and ordered that the certificate of approval issued to NME be recalled and vacated and that DPA notify the Secretary of DHHS of said order and request that the certificate of approval be returned. It was further ordered that a hearing of Lifemark's appeal be commenced within thirty days and that the record and all conclusions of the hearing officer be forwarded to court within sixty days of said hearing. Subsequently, NME, who had not been made a party defendant, filed a petition to intervene as an indispensable party. Its right to intervene was denied. On the same day, the trial judge signed a stay order in the Qualicare suit which, in effect, granted Qualicare the same relief previously granted to Lifemark. On NME's application in the Lifemark suit, the court of appeal granted a writ of mandamus vacating and recalling the judgment of the district court and ordering that NME be joined as a party defendant. 2 Several days later, another panel of the same court of appeal denied NME's application for writs in the Qualicare case. 3 We granted Lifemark's application in the Lifemark case and NME's application in the Qualicare case, consolidated the cases for an expedited hearing, and ordered the stay orders issued by the trial judge in these cases recalled and vacated including notification to the Secretary of DHHS to return the certificate of approval issued to NME. All proceedings were stayed pending further orders of this court. 4
The threshold issues presented for our review are whether plaintiffs (Lifemark and Qualicare) are entitled to oppose the certificate of approval issued to NME and whether plaintiffs are entitled to judicial review of their respective notifications of disapproval prior to the exhaustion of their administrative remedies. We think not on each issue.
Under Section 1122 of the Social Security Act, Congress only required participating states to establish procedures by which adverse decisions of the DPA may be appealed by proponents of capital expenditures. The implementing federal regulations provide in pertinent part:
The request for a hearing must be made in writing, to the designated planning agency, within 30 days after the date on which the person proposing the capital expenditure receives notice of an adverse finding or recommendation of the designated planning agency. (Emphasis added.)
42 C.F.R. § 100.106(c)(1). The law does not require the establishment of such appeal procedures for opponents of proposals that have been approved and Louisiana has established none. 42 U.S.C. § 1320a-1(d)(1)(B)(ii)(II); Hollingsworth v. Schweiker, 664 F.2d 526 (5th Cir. 1981); Wilmington United Neighborhoods v. HEW, 615 F.2d 112 (3d Cir.), cert. denied, 449 U.S. 827, 101 S.Ct. 90, 66 L.Ed.2d 30 (1980). We consider the omission of such a procedure significant. As previously indicated, the Section 1122 review process is designed to be a streamlined procedure to avoid delays in the construction of needed facilities. 5 Providing a proponent whose capital expenditure has been disapproved a hearing does not conflict with this clear objective for streamlined proceedings because there has already been a finding that the proposed capital expenditure is unnecessary. On the other hand, providing a hearing to opponents of a proposed capital expenditure would make this objective unreachable for any number of opponents could seek a hearing on any number of grounds with the result that a capital expenditure found to be necessary could be delayed indefinitely. See Wilmington United Neighborhoods v. HEW, supra. Since federal law does not contemplate a procedure for the opponents of proposals that have been approved and Louisiana has not established one, we must conclude that plaintiffs are not entitled to oppose the certificate of approval issued to NME. Therefore, the trial judge erred in recalling and vacating the certificate of approval issued by DPA to NME.
The procedure for appeal in the case of an "adverse finding or recommendation" of the designated planning agency (DPA) is set forth in the federal regulations. 6 Generally it provides that a dissatisfied proponent who wishes to appeal may request a hearing before a hearing officer, whose decision, to the extent that it reverses or revises the findings or recommendations of the DPA, supersedes those findings or recommendations. 7 We do not consider that the scheme contemplates judicial review until such time as the hearing officer has rendered a decision. Plaintiffs, who concede that their lawsuits were filed prior to commencement of the hearings, attempt to rest their right for judicial review on the Administrative Procedure Act, La.R.S. 49:964(A), which provides that a preliminary, procedural or intermediate agency action or ruling is immediately reviewable if review of...
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...court found they possessed "no right and/or cause" of action pursuant to the rationale expressed by the court in Lifemark Corp. v. Guissinger, 416 So.2d 1279 (La.1982). The trial court also decreed all stay orders previously issued were recalled, vacated and set aside. The plaintiffs then s......
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