PARCC, Inc. v. Commission on Hospitals and Health Care

• Citation: 663 A.2d 992,235 Conn. 128
• Decision Date: 15 August 1995
• Docket Number: No. 15100,15100
• Parties: PARCC, INC. v. COMMISSION ON HOSPITALS AND HEALTH CARE.
• Court: Supreme Court of Connecticut

Page 992

663 A.2d 992

235 Conn. 128

PARCC, INC. v. COMMISSION ON HOSPITALS AND HEALTH CARE.

No. 15100.

Supreme Court of Connecticut.

Argued May 30, 1995.

Decided Aug. 15, 1995.

Mark R. Kravitz, with whom were Maureen Weaver, New Haven, Eric P. Neff and, on the brief, R. Jeffrey Sands, Hartford, for appellant (plaintiff).

Jane S. Scholl, Associate Attorney General, with whom, on the brief, was Richard Blumenthal, Attorney General, for appellee (defendant).

Before PETERS, C.J., and CALLAHAN, BORDEN, BERDON and PALMER, JJ.

BORDEN, Associate Justice.

The dispositive issue in this appeal is whether the denial by the defendant, the commission on hospitals and health care, of the request by the plaintiff, PARCC, Inc., for reauthorization of the construction of a planned ten bed expansion of its nursing home facility (facility) was a final decision of an administrative agency in a contested case under the Uniform Administrative Procedure Act (UAPA), General Statutes § 4-166 et seq. The plaintiff appeals ¹ from the trial court's dismissal of its appeal from the defendant's denial of reauthorization. The trial court determined that the defendant's decision was not a final decision in a contested case, and, therefore, was not appealable. The plaintiff claims that the defendant's denial of its request for reauthorization constituted the revocation of a license, as that term is defined in the UAPA. The plaintiff further contends that the revocation of a license is, again by statutory definition in the UAPA, a final decision of an agency in a contested case. Accordingly, the plaintiff claims that the trial court improperly granted the defendant's motion to dismiss. We agree, and we therefore reverse the judgment of the trial court.

The following facts and procedural history are undisputed. Prior to July 1, 1989, any health care facility that sought to increase its capacity ² was required first to apply to the defendant for a certificate of need. The governing statute authorized the defendant to consider such an application by "ascertaining the availability of such service or function at other inpatient rehabilitation facilities, health care facilities or institutions or state health care facilities or institutions within the area to be served, the need for such service or function within such area and any other factors which the commission deems relevant to a determination of whether the facility or institution is justified in introducing such additional functions or services into its program or increasing its staff...." General Statutes (Rev. to 1989) § 19a-154. If the defendant determined that the proposed expansion would fulfill a demonstrated public need, it would issue a certificate of need. Thereafter, the facility was required to apply for final licensure from the state department of public health and addiction services (health and addiction services). Final licensure by health and addiction services would not be issued "except upon application for, receipt of, and compliance with all limitations and conditions required by the [defendant] in accordance with Connecticut General Statutes, sections [19a-147 through 19a-155,] inclusive." Regs., Conn. State Agencies § 19-13-D8t(b)(1). No facility could operate the expanded portion of the facility until it had obtained final licensure from health and addiction services.

In 1989, the legislature enacted legislation permitting nursing homes participating in Medicaid (Title XIX) or Medicare (Title XVIII) "on a one-time basis, [to] increase [their] licensed bed capacity and implement a capital construction project to accomplish such an increase without being required to request or obtain approval of the increase in services, licensed bed capacity or the capital expenditures program from the commission on hospitals and health care provided that the project (1) shall not require licensure by the department of health services of more than ten additional nursing home beds and (2) the total capital cost of said program shall not exceed thirty thousand dollars per bed, adjusted for inflation annually by said commission." Public Acts 1989, No. 89-325, § 3 (P.A. 89-325, § 3), effective July 1, 1989, codified at General Statutes (Rev. to 1991) § 19a-155a, now § 17b-351.

In December, 1990, the plaintiff, a licensed skilled nursing facility with a capacity of approximately 130 beds, notified the defendant that it intended to add ten beds to its facility at a cost of no greater than $300,000 pursuant to P.A. 89-325, § 3. The defendant acknowledged receipt of the plaintiff's request in January, 1991. The defendant's letter to the plaintiff stated: "This is to acknowledge receipt of your letter dated December 6, 1990, in which you indicated that, pursuant to Section 3 of Public Act 89-325, you plan to add ten (10) nursing home beds ... at a total capital cost not to exceed $300,000. You also indicated that your facility currently participates in the Title XVIII and Title XIX programs and has not previously increased the number of beds at the facility pursuant to Section 3 of Public Act 89-325. Please be advised the [defendant] has reviewed your request and found that it is in compliance with the stipulations of Section 3 of Public Act 89-325. Therefore, it will not be necessary for you to obtain further permission from [the defendant] for you to proceed with your plans to add ten (10) nursing home beds.... Thank you for letting [the defendant] know of your plans."

The plaintiff's proposed addition of ten beds was to occur in two phases. Phase I involved the temporary addition of three beds to existing double occupancy rooms. Phase II would involve substantial renovations to the second floor of the facility, the addition of ten beds to the renovated section, and the removal of the three temporary beds. On May 4, 1992, health and addiction services approved the site construction plans for phase I of the project. On May 29, 1992, health and addiction services granted final licensure to the plaintiff for phase I of the project.

On February 24, 1993, the plaintiff submitted preliminary architectural plans and drawings for phase II to health and addiction services. That agency acknowledged receipt of the plans two days later, stating that the preliminary plans were acceptable, but not sufficiently specific to permit final review. Health and addiction services requested that more detailed plans be submitted and noted "the receipt of a letter dated January 3, 1991, issued by [the defendant] advising [the plaintiff] that it was found in compliance with the provisions of PA 89-325, Section 3, allowing the addition of ten (10) beds to the facility without further commission approval."

On June 29, 1993, Number 93-406, § 2, of the 1993 Public Acts ³ (P.A. 93-406) became effective. This act provided that, due to insufficient need for all of the nursing home beds that had been permitted pursuant to § 19a-155a, any nursing facility that had not submitted plans to health and addiction services on or before June 1, 1993, and had not expended at least 25 percent of the project costs, could no longer proceed with its planned additions.

The plaintiff claims that it had submitted its plans and drawings for final approval by health and addiction services on April 23, 1992. Thereafter, health and addiction services informed the plaintiff that it had not received the architectural plans. ⁴ In response to this notification, the plaintiff submitted a copy of the architectural plans on June 25, 1993. On July 8, 1993, health and addiction services issued a letter to the plaintiff indicating that certain changes were required before it would grant final approval. The next day, however, health and addiction services informed the plaintiff that because of the passage of P.A. 93-406, "plans for the [plaintiff's] project [were] required to have been approved by this department no later than June 1, 1993. We, therefore, are not permitted to continue the design review of your project unless it has been reauthorized to continue by the [defendant]."

On July 15, 1993, the plaintiff applied to the defendant for reauthorization pursuant to the requirements of P.A. 93-406. The plaintiff stated that "the total project cost associated with the 10-bed addition will approximate $227,249. The listing of project costs incurred ... as of June 9, 1993, totaled $56,076...." The defendant delegated to the department of social services the responsibility for making a preliminary determination as to whether the plaintiff was eligible for reauthorization. The department of social services reviewed the plaintiff's application and determined that, because the phase II plans had not been approved by health and addiction services prior to June 1, 1993, as required by P.A. 93-406, the plaintiff was not authorized to proceed with completion of the addition of ten beds. The department of social services also concluded that "there [was] no basis to waive the statutory requirement" that the plans be approved by health and addiction services prior to June 1, 1993, because there was "no evidence that the phase II plans were submitted to [health and addiction services] in April, 1993." On November 18, 1993, the defendant, without affording the plaintiff an opportunity for a hearing, accepted the recommendation of the department of social services and denied the plaintiff's application for reauthorization of phase II of its project.

On December 3, 1993, the plaintiff submitted to the defendant a request for reconsideration of its denial of the plaintiff's application for reauthorization. The defendant did not reply to the reconsideration request and, accordingly, it was deemed denied on December 28, 1993. See General Statutes § 4-181a. ⁵ The plaintiff thereafter appealed from the decision of the defendant to the trial court pursuant to General Statutes §§ 4-183(c) and 19a-158, ⁶ claiming that the defendant's refusal to grant...