Princeton Community Hosp. v. State Health Planning, No. 16353

CourtSupreme Court of West Virginia
Writing for the CourtMcGRAW
Citation328 S.E.2d 164,174 W.Va. 558
PartiesPRINCETON COMMUNITY HOSPITAL v. STATE HEALTH PLANNING, etc. BLUEFIELD COMMUNITY HOSPITAL v. STATE HEALTH PLANNING, etc.
Decision Date22 March 1985
Docket NumberNo. 16353

Page 164

328 S.E.2d 164
174 W.Va. 558
PRINCETON COMMUNITY HOSPITAL

v.
STATE HEALTH PLANNING, etc.
BLUEFIELD COMMUNITY HOSPITAL
v.
STATE HEALTH PLANNING, etc.
No. 16353.
Supreme Court of Appeals of West Virginia.
March 22, 1985.

Page 166

[174 W.Va. 559] Syllabus by the Court

1. "Upon judicial review of a contested case under the West Virginia Administrative Procedure Act, Chapter 29A, Article 5, Section 4(g), the circuit court may affirm the order or decision of the agency or remand the case for further proceedings. The circuit court shall reverse, vacate or modify the order or decision of the agency if the substantial rights of the petitioner or petitioners have been prejudiced because the administrative findings, inferences, conclusions, decisions or order are: '(1) In violation of constitutional or statutory provisions; or (2) In excess of the statutory authority or jurisdiction of the agency; or (3) Made upon unlawful procedures; or (4) Affected by other error of law; or (5) Clearly wrong in view of the reliable, probative and substantial evidence on the whole record; or (6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.' " Syl. pt. 2, Shepherdstown Volunteer Fire Department v. Human Rights Commission, 309 S.E.2d 342 (W.Va.1983).

2. Under West Virginia Code § 16-2D-9(b) (Supp.1984), the legislature has provided that a certificate of need may only be issued upon a finding that the proposed health service is both needed and consistent with the State Health Plan. Neither the State Health Planning and Development Agency nor a reviewing tribunal is statutorily empowered to issue a certificate of need without clear findings and conclusions of compliance with both requirements. Accordingly, once it has been determined that denial of a certificate of need application is clearly mandated by the absence of one of these requirements, a determination regarding the other is unnecessary.

Charles G. Brown, Charleston, for Blue Cross.

[174 W.Va. 560] Robert E. Holroyd, Princeton, for Princeton Community Hosp.

Guy W. Perkins and Debra Archer, Katz, Kantor & Perkins, Bluefield, for Bluefield Community Hosp.

J. Bradley Russell, Asst. Atty. Gen., Charleston, for State Health Planning, etc.

McGRAW, Justice:

This is an appeal from the judgment of the Circuit Court of Mercer County which granted certificates of need to the appellees, Bluefield Community Hospital, Inc. and Princeton Community Hospital Association, Inc. Prior to the circuit court's decision, these certificates of need had been denied by both appellants, the State Health Planning and Development Agency and the State Tax Department, the agency charged with administrative review of certificate of need determinations. The appellants, assigning several points of error to the circuit court's final determination, seek reversal of that court's judgment and affirmation of the underlying agency and administrative review decisions.

I

Bluefield Community Hospital is a 265-bed hospital located in Bluefield, Mercer County. It is owned and operated by the Bluefield Community Hospital, Inc. (hereafter BCH), a private, nonprofit corporation. The facility housing Bluefield Community Hospital was built in 1979. Citing a number of factors, including the addition of several new medical services, increased patient loads, growth of the medical staff, and design deficiencies in the hospital's physical plant which exacerbate the resulting space shortages, BCH proposed a construction and renovation project for the facility. Pursuant to the requirements of West Virginia Code § 16-2D-1 et seq. (1979 Replacement Vol. & Supp.1984), BCH, on April 8, 1982, submitted a certificate of need application to the State Health Planning and Development Agency (hereafter SHPDA) seeking approval for a construction and renovation program involving the addition of fifty general acute care beds as well as the relocation and expansion of

Page 167

ancillary and support services. The total project cost was estimated to be approximately 12 million dollars.

The Princeton Community Hospital Association, Inc. (hereafter PCH) owns and operates the Princeton Community Hospital, a 215-bed facility located in Princeton, also in Mercer County. On June 17, 1982, PCH also submitted an application for a certificate of need from SHPDA. PCH sought approval for a construction and renovation project which would involve the addition of sixty-eight medical/surgical, pediatric, and psychiatric acute care beds, as well as an addition of thirteen substance abuse beds. Total cost of this project was set at approximately 4.5 million dollars.

Both applicants were proposing additional acute care beds which were potentially duplicative. Therefore, to facilitate a proper determination of the comparative and cumulative effects of these proposals, SHPDA consolidated the review of these two applications. 1 On September 28, 1982, SHPDA received a request from Blue Cross/Blue Shield of Southern West Virginia, Inc., for public hearings concerning these applications. In accordance with West Virginia Code § 16-2D-7(n) (Supp.1984), this request was granted and hearings were held in November of 1982. Blue Cross, a third-party payer of health care costs, was designated an "affected person" under West Virginia Code § 16-2D-2(a)(8) (Supp.1984) and subsequently participated [174 W.Va. 561] as an interested party throughout various stages of the review process. 2

On January 25, 1983, SHPDA denied the BCH and PCH certificate of need applications as being inconsistent with the State Health Plan. Following the denial of their applications, both BCH and PCH appealed to the designated review agency, the State Tax Department. Pursuant to the requirements of West Virginia Code § 16-2D-10 (Supp.1984), the review agency conducted a hearing in this matter and reviewed the record in light of the errors alleged by BCH and PCH regarding the denial of their applications by SHPDA. Upon examination of the record and the issues raised, the Tax Commissioner, on June 13, 1983, affirmed the decision of SHPDA denying both certificate of need applications.

Both applicants appealed the decision of the Tax Commissioner to the Circuit Court of Mercer County. On January 27, 1984, Circuit Judge William O. Bivens reversed the decisions of both SHPDA and the State Tax Commissioner and entered an order granting both certificates of need.

II

As part of the comprehensive and ongoing effort to address the national problem of spiraling health care costs, Congress, in 1975, enacted the National Health Planning and Resources Development Act. 3

Page 168

The Act encourages the establishment and integration of federal, state and local health planning administration. The primary focus of this legislation is to avoid the cost-inflating effects caused by overbedding and unrestrained acquisition of high-priced diagnostic equipment. 4 To combat the patterns of maldistribution in health care facilities and services, the fruits of the planning efforts under the Act are utilized by federal and state agencies to determine appropriateness of institutional health care proposals to ensure that only those additions actually needed in an area will be provided.

Each state develops its own detailed State Health Plan, drawing from a broad range of input sources. See 42 U.S.C. § 300m-3(c) (1982). Although state participation is not "required" by the Act, states not choosing to do so face significant losses in federal funding in health-related programs. See 42 U.S.C. § 300m(d) (1982). A major part of the expected role of each state is the establishment and administration of a review program to evaluate health institution proposals to avoid unnecessary and costly duplication of hospital beds and services in a particular area. See 42 U.S.C. § 300m-2(a)(4) (1982); see also 42 U.S.C. § 1320a-1 (1982).

In 1977, the West Virginia Legislature responded by enacting certificate of need legislation which satisfies the minimum requirements of the federal act. See West Virginia Code §§ 16-2D-1 et seq. (1979 Replacement Vol. & Supp.1984). 5 It is within the procedural and substantive context of these federal and state acts that the appellants now seek reversal of the grant of certificates of need to BCH and PCH by the Circuit Court of Mercer County.

[174 W.Va. 562] Administrative and judicial review of certificate of need decisions made by SHPDA is controlled by West Virginia Code § 16-2D-10 (Supp.1984). Under this statute, after any appeal to the designated review agency, the State Tax Department, 6 the decision of the Tax Department is to be considered the final decision of the state agency, SHPDA. Additionally, this statute mandates that review of SHPDA decisions, at both the administrative level and the circuit court level, is to be conducted in accordance with West Virginia Code § 29A-5-4 (1980 Replacement Vol.), the Administrative Procedures Act provision governing the review of contested decisions of most state agencies. 7 Accordingly, the

Page 169

review of the Tax Department's decision by the Circuit Court of Mercer County was limited to the parameters of subsection (g) of that statute. We recently summarized the directives of this subsection in Shepherdstown Volunteer Fire Department v. Human Rights Commission, 309 S.E.2d 342 (W.Va.1983), where, in Syllabus point 2, we stated that:

Upon judicial review of a contested case under the West Virginia Administrative Procedure Act, Chapter 29A, Article 5, Section 4(g), the circuit court may affirm the order or decision of the agency or remand the case for further proceedings. The circuit court shall reverse, vacate or modify the order or decision of the agency if the substantial rights of the petitioner or petitioners have been prejudiced because the administrative findings, inferences, conclusions, decisions or order are: "(1) In violation of constitutional or statutory...

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11 practice notes
  • Appalachian Power Co. v. State Tax Dept. of West Virginia, No. 22795
    • United States
    • Supreme Court of West Virginia
    • December 8, 1995
    ...its obligation to make a searching and careful inquiry into the facts[.]" Princeton Community Hospital v. State Health Planning, 174 W.Va. 558, 564, 328 S.E.2d 164, 171 20 W.Va.Code, 11-13-2n, reads, in pertinent part: "(a) Rate of tax.--Upon every person engaging or continuing wi......
  • State ex rel. U.S. Fidelity and Guar. Co. v. Canady, No. 22867
    • United States
    • Supreme Court of West Virginia
    • July 11, 1995
    ...efforts to obtain disclosure of opinion work product should be evaluated with particular care. See In re Markle, 174 W.Va at 556-57, 328 S.E.2d at 164. A close look at the circuit court's order indicates the circuit court may have found the report of Mr. McKay within the definition of work ......
  • State ex rel. United Hosp. Center, Inc. v. Bedell, No. 23847
    • United States
    • Supreme Court of West Virginia
    • March 14, 1997
    ...131 F.R.D. 560, 571 n. 11 (S.D.Ind.1990). See also Canady, 194 W.Va. at 444, 460 S.E.2d at 690. 17 In In re Markle, 174 W.Va. at 557, 328 S.E.2d at 164, we concluded that certain investigative reports fell within the scope of Rule 26(b)(3) since the investigation and preparation of the repo......
  • Lenoir Memorial Hosp., Inc. v. North Carolina Dept. of Human Resources, Div. of Facility Services, Certificate of Need Section, No. 8910DHR766
    • United States
    • North Carolina Court of Appeal of North Carolina (US)
    • April 17, 1990
    ...v. Dep't of Health and Rehabilitative Services, 477 So.2d 576 (Fla.Dist.Ct.App.1985); Princeton Community Hosp. v. State Health Planning, 328 S.E.2d 164 (W.Va.1985). In distinguishing two cases on which the appellant relies, (Irvington and Sturman ) the Agency states; "[T]hese cases di......
  • Request a trial to view additional results
11 cases
  • Appalachian Power Co. v. State Tax Dept. of West Virginia, No. 22795
    • United States
    • Supreme Court of West Virginia
    • December 8, 1995
    ...shirk its obligation to make a searching and careful inquiry into the facts[.]" Princeton Community Hospital v. State Health Planning, 174 W.Va. 558, 564, 328 S.E.2d 164, 171 20 W.Va.Code, 11-13-2n, reads, in pertinent part: "(a) Rate of tax.--Upon every person engaging or continuing within......
  • State ex rel. U.S. Fidelity and Guar. Co. v. Canady, No. 22867
    • United States
    • Supreme Court of West Virginia
    • July 11, 1995
    ...efforts to obtain disclosure of opinion work product should be evaluated with particular care. See In re Markle, 174 W.Va at 556-57, 328 S.E.2d at 164. A close look at the circuit court's order indicates the circuit court may have found the report of Mr. McKay within the definition of work ......
  • State ex rel. United Hosp. Center, Inc. v. Bedell, No. 23847
    • United States
    • Supreme Court of West Virginia
    • March 14, 1997
    ...131 F.R.D. 560, 571 n. 11 (S.D.Ind.1990). See also Canady, 194 W.Va. at 444, 460 S.E.2d at 690. 17 In In re Markle, 174 W.Va. at 557, 328 S.E.2d at 164, we concluded that certain investigative reports fell within the scope of Rule 26(b)(3) since the investigation and preparation of the repo......
  • Lenoir Memorial Hosp., Inc. v. North Carolina Dept. of Human Resources, Div. of Facility Services, Certificate of Need Section, No. 8910DHR766
    • United States
    • North Carolina Court of Appeal of North Carolina (US)
    • April 17, 1990
    ...v. Dep't of Health and Rehabilitative Services, 477 So.2d 576 (Fla.Dist.Ct.App.1985); Princeton Community Hosp. v. State Health Planning, 328 S.E.2d 164 (W.Va.1985). In distinguishing two cases on which the appellant relies, (Irvington and Sturman ) the Agency states; "[T]hese cases did not......
  • Request a trial to view additional results

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