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Reston Hospital Center, LLC v. Remley

Court of Appeals of Virginia

September 30, 2014

RESTON HOSPITAL CENTER, LLC
v.
KAREN REMLEY, M.D., M.B.A., F.A.A.P., FORMER STATE HEALTH COMMISSIONER, [1] INOVA HEALTH CARE SERVICES, D/B/A INOVA FAIR OAKS HOSPITAL

Page 239

[Copyrighted Material Omitted]

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FROM THE CIRCUIT COURT OF FAIRFAX COUNTY. Pamela S. Baskervill, Judge Designate.

Robert L. Hodges (Nathan A. Kottkamp; Thomas J. Stallings, Jeffrey D. McMahan, Jr.; McGuire Woods LLP, on briefs), for appellant.

Ishneila G. Moore, Assistant Attorney General (Kenneth T. Cuccinelli, II, Attorney General; Rita W. Beale, Deputy Attorney General; Allyson K. Tysinger, Senior Assistant Attorney General, on briefs), for appellee Karen Remley, former State Health Commissioner.

Amandeep S. Sidhu (M. Miller Baker; H. Guy Collier; Mary D. Hallerman; McDermott Will & Emery LLP, on briefs), for appellee Inova Health Care Services, d/b/a Inova Fair Oaks Hospital.

Present: Chief Judge Felton, Judges Humphreys and Kelsey.

OPINION

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[63 Va.App. 760] D. ARTHUR KELSEY, JUDGE

The State Health Commissioner issued a certificate of public need (COPN) to Inova Health Care Services authorizing it to relocate a medical radiation therapy service from Inova Fairfax Hospital to Inova Fair Oaks Hospital, both situated in Fairfax County. A competitor, Reston Hospital Center, LLC, objected to the relocation during the administrative process and on appeal to the circuit court. The circuit court held that the Commissioner acted within her authority when she issued the COPN. We agree and affirm the circuit court's ruling.

I. Background

A. The Administrative Regulatory System

A comprehensive regulatory system governs nearly every aspect of medical care facilities in the Commonwealth.[2] Article [63 Va.App. 761] 1.1, Chapter 4 of Title 32.1 requires a " certificate of public need" for various types of projects conducted by medical care facilities. Code § 32.1-102.1. " No person shall commence any project without first obtaining a certificate issued by the Commissioner. No certificate may be issued unless the Commissioner has determined that a public need for the project has been demonstrated." Code § 32.1-102.3(A). The statute directs the Board of Health to establish " regional health planning agencies," which manage the " health planning regions" in the Commonwealth and assist the Board in a number of

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ways, including by " reviewing applications for certificates of public need and making recommendations to the Department." Code § 32.1-122.05. The Board of Health must also prepare a " State Medical Facilities Plan" to guide planning and forecasting efforts. Code § 32.1-102.1.

B. The Dispute over the Location of a Single Linear Accelerator

Several hospitals are located in Health Planning Region II (HPR II), which encompasses the same area as Planning District 8 (PD 8) and includes Fairfax County. Multiple hospitals in HPR II utilize radiation therapy machines, called linear accelerators, to provide cancer treatment services. Inova Fairfax has four linear accelerators, and Reston has two. Although Inova Fair Oaks provides extensive cancer treatment services, it does not have a linear accelerator.

In 2008, Inova applied for a COPN to add a linear accelerator to Inova Fair Oaks. The Commissioner denied the application for a number of reasons, including because there was no demonstrable need for a new linear accelerator in that area of service. The Commissioner had previously authorized the operation of thirteen linear accelerators in HPR II, and she determined that there was no need for one more.

A few months later, Inova submitted a new application -- the one at issue in this case -- for a COPN authorizing a " proposed project . . . to move one of four existing linear accelerators from the campus of Inova Fairfax Hospital to the campus of Fair Oaks Hospital." App. at 1441. The project would involve [63 Va.App. 762] the decommissioning of one of Inova Fairfax's older linear accelerators, thereby reducing the number of such machines at Inova Fairfax from four to three, and the relocation of that service (with the installation of a new linear accelerator) to Inova Fair Oaks. With its proposed change, Inova pointed out, HPR II would still have thirteen linear accelerators.

During the administrative process, Reston intervened as a " good cause" party. Id. at 635. Reston asserted various reasons why the Commissioner should not issue the COPN to Inova. The Commissioner rejected Reston's objections and issued the COPN on August 26, 2009, designating it COPN No. VA-04223. Reston appealed to the circuit court under the Virginia Administrative Process Act (VAPA), Code § § 2.2-4000 through -4033. The circuit court held that Reston did not have standing and dismissed the appeal. On appeal to our Court, we reversed and remanded the case to the circuit court for a decision on the merits. See Reston Hosp. Ctr., LLC v. Remley, 59 Va.App. 96, 717 S.E.2d 417 (2011). On remand, the circuit court upheld the Commissioner's decision to issue the COPN to Inova. Reston again appealed to us. Over Inova's objection, the circuit court extended Reston's time to file its notice of appeal pursuant to Code § 8.01-428(C).

While the case has been on appeal, the Commissioner issued another certificate, designated COPN No. VA-04386 (issued April 19, 2013). It authorized the " [r]elocation and replacement of the existing linear accelerator located in the satellite facility at 8503 Arlington Boulevard (in Fairfax County) to Inova Fair Oaks Hospital ...


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