Sinai Hosp. of Baltimore, Inc. v. Maryland Health Resources Planning Com'n, 103

• Decision Date: 01 September 1985
• Docket Number: No. 103,103
• Parties: SINAI HOSPITAL OF BALTIMORE, INC. et al. v. MARYLAND HEALTH RESOURCES PLANNING COMMISSION et al. ,
• Court: Maryland Court of Appeals

Page 472

306 Md. 472

509 A.2d 1202

SINAI HOSPITAL OF BALTIMORE, INC. et al. v. MARYLAND HEALTH RESOURCES PLANNING COMMISSION et al.

No. 103, Sept. Term, 1985.

Court of Appeals of Maryland.

June 10, 1986.

Richard G. McAlee and Stephen J. Sfekas, Baltimore, for appellant.

Jack P. Hartog and John J. Eller, Baltimore, for appellee.

Argued before SMITH, ELDRIDGE, COLE, RODOWSKY, COUCH, McAULIFFE, JJ., and CHARLES E. ORTH, Jr., Associate Judge of the Court of Appeals (retired, Specially Assigned).

RODOWSKY, Judge.

Appellants, Sinai Hospital of Baltimore, Inc. (Sinai) and North Charles General Hospital (North Charles), appeal from a judgment of the Circuit Court for Baltimore City affirming an order of the Maryland Health Resources Planning Commission (Commission) which had denied each hospital's separate application for a certificate of need (CON) to perform open heart surgery. Sinai and North Charles argue, in essence, that the Commission failed to give controlling effect to the State Health Plan which they contend determines need under the circumstances here. For the reasons set forth below we shall affirm.

Md.Code (1982, 1985 Cum.Supp.), §§ 19-101 to -125 of the Health-General Article comprise the subtitle "Comprehensive Health Planning" of the title, "Health Care Facilities." ¹ A priority of this State is "to promote the development of a health care system that provides, for all citizens, financial and geographic access to quality health care at a reasonable cost." § 19-102. The Commission is an independent commission that functions within the Department of Health and Mental Hygiene. § 19-103. One of the Commission's duties is to adopt, at least every five years, a State Health Plan (SHP). Section 19-114(a)(2) in relevant part states that

[t]he plan shall include:

(i) A description of the components that should comprise the health care system;

(ii) The goals and policies for Maryland's health care system;

(iii) Identification of unmet needs, excess services, minimum access criteria, and services to be regionalized;

(iv) An assessment of the financial resources required and available for the health care system; [and] (v) The methodologies, standards, and criteria for certificate of need review[.]

We are concerned in this case with the 1983-88 SHP which consists of two volumes. Volume I, containing the Commission's policies, standards, and need projection methodologies, is a regulation which became effective September 10, 1984. COMAR 10.24.07.01, 11 Maryland Register 1584-85, August 31 (1984). Volume II amplifies and explains the substance of Volume I but is not part of the regulation. The SHP sets policies and standards specifically relating to the availability, accessibility, cost, and quality of cardiac surgery (CS), and the SHP establishes a need methodology for authorizing additional CS programs.

Before a person can develop, operate, or participate in certain health care projects the Commission must issue a CON. § 19-115. The purpose of this requirement, as explained in the SHP, is "to ensure that changes in service capacity and major expenditures for health care facilities are needed and affordable, and consistent with the Commission's policies." Code § 19-115(c) directs the Commission "to adopt rules and regulations for applying for and issuing [CONs]." The rules and regulations, entitled "Procedures for Application Review," which governed the CON applications in the instant case were COMAR 10.24.01.07, 10 Maryland Register 541-46, March 18 (1983) (Reg. 07). ²

In September 1983, each appellant applied for a CON to conduct an open heart surgery program in the Central Maryland Health Service Area. Only Johns Hopkins, University of Maryland, and Saint Joseph hospitals offer open heart surgery programs in Central Maryland. Because both applications sought approval for similar projects in the same area, they were subject to a comparative review. See Reg. 07B(1). After the Central Maryland Health Systems Agency, a local health planning agency, had recommended Sinai, and the Commission's staff had recommended North Charles, the Commission designated one of its members to hold a hearing pursuant to § 19-118(d)(2). Appellee Saint Joseph Hospital (St. Joseph) participated in that hearing. During the pendency of these proceedings before the Commission, on September 10, 1984, the 1983-88 SHP went into effect and became the SHP applicable to this case. In a proposed decision of October 26, 1984, the hearing officer-commissioner recommended awarding the CON to Sinai. Despite her serious concern over the lack of excessive waiting times for CS procedures, she felt compelled under the SHP need methodology to find a need for one program.

The full Commission met on November 13 and voted to deny both applications. On November 26, 1984, a final written decision was issued setting forth the Commission's findings and conclusions. The Commission found that at the three hospitals authorized for CS programs the times from registration for surgery to actual surgery were reasonable. Based largely on that finding the Commission further found that there was no present need for an additional cardiac surgery program, although the Commission recognized that the methodology adopted in the SHP predicted a need in 1986. In rejecting both applications the Commission basically gave determinative weight to a review criterion in Reg. 07.

Sinai and North Charles appealed to the Circuit Court for Baltimore City which affirmed the Commission. We issued the writ of certiorari before consideration of the matter by the Court of Special Appeals.

Code § 19-118(c)(1) requires the Commission to consider both the SHP and Reg. 07.

All decisions of the Commission on an application for a certificate of need, except in emergency circumstances posing a threat to public health, shall be consistent with the State health plan and the standards for review established by the Commission. [Emphasis added.] The SHP provides a formula for estimating the future utilization of adult (age 15 and above) cardiac surgery procedures. The projections are made two calendar years into the future from the time a CON review takes place. Under the formula the most recent national use rates as issued by the National Center for Health Statistics are multiplied by the projected population of the health service area as reported by the Department of State Planning. The existing total CS capacity of the area is then subtracted from the total number of procedures estimated to be required two years into the future to determine whether additional services are needed. Before the Commission can certify a new program to fill the future need, it must also find that at least 350 CS procedures per year are performed in each existing program. At the time of the CON review for Sinai and North Charles, Johns Hopkins was performing 780 procedures per year, the University of Maryland was performing 527 procedures, and under the SHP methodology St. Joseph was performing 350. The result of the formula calculations was that 420 additional procedures would be required in 1986. Under the SHP the Commission may grant only one CON at a time for open heart surgery, in order to allow the new program to develop without competition until it reaches 350 procedures per year.

It is to be noted that the SHP employs as the use factor in the cardiac surgery need formula a national rate as opposed to the historic rate for Central Maryland. The 1983-88 SHP, which was in effect as of September 10, 1984, was the first SHP to employ a national use factor for CS need projections. As explained by the Commission in the present case the national rate was chosen over the local rate because the latter " 'was felt [to] have been constrained.' The basis for this feeling [was] reports of unacceptable waiting times."

Code § 19-118(c)(1) also requires a decision on a CON application to be consistent with "the standards for review established by the Commission." These are set forth in Reg. 07. Reg. 07D, entitled "Criteria for Review of Application," provides in relevant part that

(1) [i]n proceedings on a Certificate of Need application, the burden of proof that the project meets the applicable criteria for review rests with the applicant.

(2) ... the review shall include consideration of the following criteria:

....

....

(c) The need for the proposed health services of the population served or to be served, including an analysis of present and future utilization.... [Emphasis added.]

In considering "present ... utilization" in this case the Commission found that "current waiting times are reasonable when considered in light of the standard in the SHP. No additional need is currently shown when considering waiting times." The standard referred to by the Commission is thirty days from registration to surgery. The standard is based on a policy decision made by the Commission in the SHP and set forth in CS Standard 6, headed "Accessibility," which reads as follows:

The maximum waiting time for elective cardiac catheterization or cardiac surgery services should not exceed one month from the date of registration. Facilities seeking to expand or establish cardiac catheterization or cardiac surgery capacity on the basis of waiting times must demonstrate that the standard has been exceeded, on average, for at least 6 consecutive months. In no case can the waiting time standard serve as justification for additional cardiac surgery or catheterization capacity in the absence of need for such capacity as based on the need methodology contained in this Plan.

This standard does not exclusively discuss "Accessibility." The second sentence of the standard recognizes that extended waiting times are relevant to the issue of additional capacity. Consequently in applying Reg. 07D(2)(c), the Commission appropriately considered waiting times in analyzing present utilization. The Commission found that waiting times...