Case Title: In re Central Vermont Medical Center

Citation: 174 Vt. 607, 816 A.2d 531

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2002-12-16T00:00:00Z

Document:
In re Central Vermont Medical Center (2001-461); 174 Vt. 607; 816 A.2d 531

[Filed 16-Dec-2002]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-461

                               JUNE TERM, 2002


  In re Central Vermont Medical Center  }   APPEALED FROM:
                                        }
                                        }
                                        }   Commissioner of Banking, Insurance, 
                                        }   Securities and Health Care 
                                        }   Administration
                                        }   DOCKET NO. 00-013-H


             In the above-entitled cause, the Clerk will enter:

       ¶ 1.  Central Vermont Medical Center (CVMC) appeals the denial of
  its application for a Certificate of Need (CON) by the Commissioner of the
  Department of Banking, Insurance, Securities, and Health Care
  Administration (BISHCA).  CVMC applied for a CON in order to proceed with a
  renovation and expansion project for the Central Vermont Hospital ("the
  Hospital").  CVMC argues that the Commissioner erred (1) by not providing
  the required explanation for its decision; (2) by implementing a new
  standard without notice as required by Vermont law; (3) by violating CVMC's
  due process rights in not providing CVMC an opportunity to present
  information necessary to receive CON approval; and (4) by incorrectly
  concluding that a CON was not warranted given evidence to the contrary.  We
  affirm.

       ¶ 2.  In December 2000, CVMC filed a CON application related to its
  proposed project with BISHCA's Division of Health Care Administration ("the
  Division").  See 18 V.S.A. § 9434(a) ("No new institutional health service
  shall be . . . developed within this state . . . without a determination of
  need and issuance of a certificate of need by the commissioner.").  CVMC's
  proposal called for an approximately $12.5 million modernization project,
  which included upgrading hospital infrastructure, providing additional
  space for ambulatory patient care (i.e., outpatient care), and improving
  the birthing center with integrated labor, delivery, recovery and
  post-partum care rooms.  The project also included relocating the
  Hospital's laboratory and administrative functions to provide space for
  revisions to the ambulatory patient processing area.

       ¶ 3.  In May, after several supplemental filings, the Division
  ruled the application complete and scheduled a public hearing with the
  Public Oversight Commission (POC), which took place in June.  In July, the
  POC recommended approval of the application.
   
       ¶ 4.  Following this recommendation, in accordance with the CON
  statute and regulations, the Commissioner reviewed the application,
  considering numerous general and mandatory criteria.  See 18 V.S.A. §
  9440(c)(4).  In September, the Commissioner denied CVMC's CON application. 
  The Commissioner analyzed three of the "general criteria" listed in 18
  V.S.A. § 9436(a):  the need for the proposed project on the part of the
  population served, § 9436(a)(4); the availability of less costly or more
  effective alternatives, § 9436(a)(5); and the project's probable impact on
  the costs of 

 

  and charges for providing health services, § 9436(a)(6).  The Commissioner
  also found that four of the five "mandatory criteria" under 18 V.S.A. §
  9437 were relevant to CVMC's CON application.  In order for a CON to issue,
  the Commissioner was required to find that superior alternatives to the
  project in terms of cost, efficiency and appropriateness did not exist, §
  9437(1); that alternatives to new construction involved in the project,
  such as modernization or sharing arrangements, had been considered and
  implemented to the maximum extent possible, § 9437(2); that patients would
  experience serious problems in terms of costs, availability, or
  accessibility without the proposed project, § 9437(3); and the proposed
  project is consistent with the CON and within the portion of the unified
  health care budget applicable to the Hospital, § 9437(5).

       ¶ 5.  The Commissioner found that CVMC's application did not
  demonstrate the requisite need for the project, did not adequately explore
  less costly alternatives and understated the costliness of the project, and
  therefore, the application failed to meet the general and mandatory
  criteria set out by statute.  Specifically, the Commissioner found that
  while the infrastructure improvements were the primary goal of the overall
  project, CVMC had failed to provide adequate information about these
  improvements.  The Commissioner found that the proposed infrastructure
  improvements related only to the areas affected by the other project goals,
  such as the enhancements to ambulatory care and the improvements to the
  birthing center, and not to the vast portion of the hospital facility left
  untouched by the project, stating: "[t]hat the infrastructure appears to be
  worn out only in areas that CVMC wants to reconfigure is, perhaps, a
  coincidence."  The Commissioner also found that CVMC did not adequately
  assess how costly infrastructure improvements would be without the other
  goals of the project.  The Commissioner cited several recommendations by
  CVMC's engineering consultants that contradicted the need expressed in the
  application for some of the infrastructure improvements included in the
  proposal.  Finally, the Commissioner found that CVMC failed to account for
  the loss in investment income that would be incurred from spending its
  reserve fund on the project.  Following the Commissioner's decision, CVMC
  filed this appeal.

       ¶ 6.  Our standard of review on appeals from orders by the
  Commissioner is based on 8 V.S.A. § 16, which provides that we may disturb
  an order by the Commissioner if it: "(1) was issued pursuant to
  unconstitutional statutory provisions; (2) was in excess of statutory
  authority; (3) was issued on unlawful procedure; or (4) is not supported by
  substantial evidence in the record."  In general, we have granted
  administrative bodies a great deal of deference, both in regard to their
  findings of fact and to their interpretations of their governing statutes
  and regulations.  "[W]e will not set aside an administrative agency's
  findings unless clearly erroneous.  We view the evidence in the light most
  favorable to the prevailing party and exclude any modifying evidence.  So
  long as the findings are supported by credible evidence, we will not
  disturb them."  Bigelow v. Dep't of Taxes, 163 Vt. 33, 35,