XUN Imaging Associates, Ltd. v. Department of Health, Div. of Need Review

• Decision Date: 16 June 1994
• Citation: XUN Imaging Associates, Ltd. v. Department of Health, Div. of Need Review, 644 A.2d 255, 165 Pa.Cmwlth. 112 (Pa. Commw. Ct. 1994)
• Parties: XUN IMAGING ASSOCIATES, LTD., and Xun Diagnostic Associates, Ltd., Petitioners, v. DEPARTMENT OF HEALTH, DIVISION OF NEED REVIEW, Respondent.
• Court: Pennsylvania Commonwealth Court

Page 255

644 A.2d 255

165 Pa.Cmwlth. 112

XUN IMAGING ASSOCIATES, LTD., and Xun Diagnostic Associates Ltd., Petitioners, v. DEPARTMENT OF HEALTH, DIVISION OF NEED REVIEW, Respondent.

Commonwealth Court of Pennsylvania.

Argued March 1, 1994.

Decided June 16, 1994.

David W. Thomas, for petitioners.

James T. Steele, Jr., for respondent.

Before CRAIG, President Judge, KELLEY, J., and RODGERS, Senior Judge.

KELLEY, Judge.

XUN Diagnostic Associates, Ltd. (XUN) appeals from the Pennsylvania Department of Health's, Division of Need Review, denial of XUN's petition to intervene and amended petition to intervene.

The facts of this case are as follows. On October 23, 1992, Rudolph L. Buck, M.D., sent a letter of intent to the Department of Health (Department), Division of Need Review, requesting a determination of non-reviewability on his proposal to establish a business entity to acquire an MRI unit to be located in a free-standing facility. Reproduced Record (R.) at 1a-2a.

A letter of intent is required under the Certificate of Need Program pursuant to the Health Care Facilities Act ¹ (Act) and its accompanying regulations. The regulations set forth the requirements regarding information to be provided to the Department before any person enters into a contractual arrangement to acquire major medical equipment. See 28 Pa.Code § 401.3(c).

In accordance with the regulations, Dr. Buck informed the Department that he believed that his purchase of the major medical equipment was not a new institutional health service requiring a certificate of need as defined in section 701 of the Act ², 35 P.S. § 448.701, in that he proposed to establish a business entity to acquire an MRI unit to be located in a freestanding facility; the project was to cost approximately $1,050,000.00; it would not be located in a health care facility; nor would the services be offered to inpatients of a health facility.

By letter dated November 16, 1992, the Department responded to Dr. Buck's letter of intent requesting a determination of reviewability under the certificate of need program by issuing a determination of non-reviewability. The department determined that Dr. Buck's project did not require certificate of need review "because no capital expenditure will be made by or on behalf of a health care facility, it will not result in the addition of a new health service by or on behalf of a health care facility or in or through a health care facility, and the equipment will not be used to service inpatients of any health care facility." R. at 3a. The Department's response to Dr. Buck stated further that "[i]t is necessary to notify the Division of Need Review in writing of any change in the proposed project's scope or cost" before proceeding with the project. Id.

Thereafter, extensive amendments were enacted to the Act by the General Assembly effective December 18, 1992. Consequently, the requirements for the Certificate of Need Program changed significantly in that an acquisition of major medical equipment after December 18, 1992, is now reviewable and subject to a certificate of need. See 35 P.S. § 448.701.

On February 12, 1993, counsel for Dr. Buck wrote a letter to the Department requesting confirmation that Dr. Buck's acquisition of an MRI did not require certificate of need review based on the Department's letter of non-reviewability issued November 16, 1992. R. at 5a. In addition, Dr. Buck's letter of February 12 informed the Department that due to financing arrangements and the status of renovations, the actual operational date of the project had been delayed but that the facility would be in service in the near future. Id.

A representative of the Department informed Dr. Buck's counsel orally on March 23, 1993 that the project remained non-reviewable. R. at 6a. This oral confirmation was followed by a written confirmation, dated March 24, 1993, from the Department to Dr. Buck's counsel. The March 24, 1993 written confirmation stated that "all proposed projects which the Department of Health determined to be not subject to Certificate of Need review prior to the effective date (December 18, 1992) of the amendments to the ... Act remain not reviewable, providing there is no change in the project as originally proposed." R. at 20a.

On May 11, 1993, counsel for XUN formally requested an appointment to examine and copy the application and materials relating to Dr. Buck's request for determination of reviewability. R. at 7a. At the time of XUN's examination of the materials, the March 24, 1993 letter from the Department to Dr. Buck's counsel was not contained in the Department's file.

Thereafter, on or about June 8, 1993, XUN filed with the Department a petition to intervene. R. at 9a-18a. XUN alleged in its petition to intervene that Dr. Buck's letter of February 12, 1993 was a request for a determination of non-reviewability subject to the provisions of the amended Act to which the Department had not yet rendered an adjudication. Id. Dr. Buck filed a response to XUN's petition on June 11, 1993. R. at 21a-27a.

On or about June 18, 1993, XUN filed an amended petition to intervene requesting, inter alia, leave to intervene nunc pro tunc as an interested party in Dr. Buck's February 12, 1993 application for a determination of reviewability. R. at 28a-63a. Dr. Buck filed a response to XUN's amended petition on June 23, 1993. R. at 64a-70a.

The Department denied XUN's petitions to intervene by letter dated June 25, 1993. R. at 71a-73a. The Department determined that there was no current request for non-reviewability before the Division of Need Review. In reaching this determination, the Department found that (1) its letter of November 16, 1992 was its decision in this matter; (2) Dr. Buck's letter of February 12, 1993 was not a new request for a determination of non-reviewability subject to the amended provisions of the Act effective December 18, 1992, but merely a request to confirm the Department's decision of November 16, 1992; and (3) its response to Dr. Buck's February 12, 1993 letter in March 1993 was not a new or different decision. Id.

On appeal to this court from the Department's June 25, 1993 determination, XUN raises the following issues for review:

1. Does jurisdiction of an appeal from the denial of petitions to intervene in an application for a determination of reviewability properly lie in the State Health Facility Hearing Board or in the Commonwealth Court;

2. Is a change of circumstances letter, which an applicant is required to submit and which permits the Department to re-evaluate a previous decision as to whether or not a proposed project is reviewable, an application for a determination of reviewability within the meaning of 35 P.S. § 448.506(a);

3. Do the amendments to the Act require the Department to provide: (a) notice to interested persons that an application for a determination of reviewability has been filed, and (b) notice to interested persons of the mailing of any written decision on such an application;

4. Does the failure by the Department to provide notice that an application for a determination of reviewability has been filed constitute a breakdown in the administrative process, the equivalent of fraud, requiring the Department to grant XUN leave to intervene nunc pro tunc; and

5. Does the failure by the Department to provide notice of a written decision on an application for a determination of reviewability and/or the failure to place a copy of such a written decision in the docket file constitute a breakdown in the administrative process, the equivalent of fraud, requiring the Department to grant XUN leave to intervene nunc pro tunc.

This court will first address the issue of jurisdiction. XUN contends that jurisdiction of its appeal from the Department's denial of its petitions to intervene properly lies with this court and not the State Health Facilities Hearing Board (board). The Department does not dispute this specific contention. ³

The jurisdiction of the board is governed by sections 502 and 506 of the Act, as amended, effective December 18, 1992. 35 P.S. § 448.502; 35 P.S. § 448.506. Section 502(a)(1) provides that the hearing board shall have the power and duty "[t]o hear appeals by the applicant or interested persons from departmental decisions on applications for certificates of need or amendments thereto and from determinations of reviewability." 35 P.S. § 448.502(a)(1).

Section 506(a), appeals to the hearing board, provides that:

(a) A decision of the department on an application for a certificate of need or amendment thereto or a determination of reviewability may be appealed within 30 days of the mailing date of the decision by the applicant or by any interested person who requested a public meeting on the application and participated in the public meeting or can fully document and make available material information which is relevant to the review and which was not available during the period when the department completed its review....

35 P.S. § 448.506(a).

XUN, citing Southern Chester County Medical Center v. Department of Health, 90 Pa.Commonwealth Ct. 284, 494 A.2d 885 (1985), argues that the clear language of the Act cannot be disregarded to enlarge the jurisdiction of the board. In Southern Chester, this court examined the language of section 502 of the Act which clearly omitted appeals from Department determinations of non-reviewability and determined that jurisdiction of such an appeal was in this court and not the board. The Southern Chester court stated that "[w]e find that the statutory provision for the Board's authority is clear, and we will not disregard that clear language...." Southern Chester at 287-88, 494 A.2d at 887.

Likewise, in determining whether jurisdiction of an appeal from a departmental determination denying petitions to intervene lies with the board, this court must abide by the clear language of the Act. Sections 502(a)(1) and 5...