Case Title: Brattleboro Memorial Hospital v. Dept. of Banking, Insurance, Securities & Health Care Admin.

Citation: 172 Vt. 630, 782 A.2d 1217

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2001-09-19T00:00:00Z

Document:
Brattleboro Mem. Hospital v. Dept. of Banking, Insurance, Securities & Health
Care Admin. (2000-181); 172 Vt. 630; 782 A.2d 1217

[Filed 19-Sep-2001]

                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2000-181

                               JUNE TERM, 2001

Brattleboro Memorial Hospital	       }	APPEALED FROM:
                                       }
                                       }	Commissioner of Banking,  
     v.	                               }	Insurance, Securities and
                                       }        Health Care Administration.
Department of Banking, Insurance,      }
Securities and Health Care	       }  	  
Administration	                       }	DOCKET NO. 00-021-H

             In the above-entitled cause, the Clerk will enter:

       Plaintiff Brattleboro Memorial Hospital ("the Hospital") appeals a
  final determination of the  Department of Banking, Insurance, Securities
  and Health Care Administration ("BISHCA") asserting  Certificate of Need
  ("CON") jurisdiction over the Hospital's mobile magnetic resonance imaging 
  ("MRI") service.  The Hospital argues that the relevant jurisdictional
  definition of "new institutional  health service" does not allow BISHCA to
  require a certificate of need unless: (1) the service has not  been offered
  through the hospital on a regular basis in the previous twelve months and
  (2) the annual  operating expense in the service's first year of operation
  exceeds $300,000.  See 18 V.S.A. § 9434  (a)(5).  We agree with the
  Hospital's claim that BISHCA's assertion of CON jurisdiction erroneously 
  relied exclusively on a projected annual operating expenditure in excess of
  the $300,000 threshold  and therefore, we reverse and remand.  

       The Hospital initiated a mobile MRI service in February 1997.  It
  began by offering the service  one day per week and in 1998, increased the
  service to include a second day every other week.  It  continues to provide
  this same level of service.  In its first two years of operation, the
  service's  annual operating expenditures were $143,000 and $276,000.  In
  1999, despite lower projections, its  annual operating expenditures were
  $304,000.

       All Vermont hospitals, including Brattleboro Memorial Hospital,
  annually submit proposed  budgets to BISHCA for review, pursuant to 18
  V.S.A. §§ 9451-9458.  BISHCA retains CON  jurisdiction over new
  institutional health services with annual budgets exceeding $300,000.  In
  July  1999, the Hospital submitted a budget for the fiscal year 2000, which
  included a projected annual  operating expense for its mobile MRI service
  in the amount of $342,000.  BISHCA advised the  Hospital that because the
  projected expenditures of the service exceeded the $300,000 threshold 
  level, it would be considered a new service, and consequently that the
  Hospital was required to  submit a CON application, pursuant to 18 V.S.A. §
  9434(a)(5).

       In a letter dated January 11, 2001, the Hospital refused to submit a
  CON application for the  mobile MRI service, arguing that the statutory
  criteria granting  BISHCA jurisdiction had not been  met.  Specifically,
  the Hospital claimed that its mobile MRI service was not a "new
  institutional 

 

  health service" within the meaning of the statute because it had been
  offered on a regular basis since  1997. 	

       On March 23, 2000, the Commissioner of BISHCA issued its final
  determination, asserting  jurisdiction over the MRI service, pursuant to 18
  V.S.A. § 9434-9445.  According to the  Commissioner, § 9434 includes those
  services that "creep" over the threshold amount.

       On appeal, the Hospital contends that the statute's terms
  unambiguously limit CON review to  new services that meet all of the
  statutory criteria, not only the financial threshold, and that the  statute
  does not extend jurisdiction to services that operated below the threshold
  level in their first  year.  The Hospital argues that because the MRI
  service has been offered on a regular basis for more  than twelve months
  prior to the time its annual operating expenses exceeded $300,000, it does
  not  satisfy the threshold criteria triggering BISHCA's CON jurisdiction.

       A "new institutional health service" includes:

    the offering of health services in or through a health care
    facility which  were not offered on a regular basis in or through
    such health care facility  within the twelve-month period prior to
    the time such services would be  offered if such services have an
    annual operating expense in excess of  $300,000.

  Id.  § 9434(a)(5).  The statute defines "annual operating expense" as "that
  expense which, by  generally accepted accounting principles, is incurred by
  a new health care service during the fiscal  year in which the service is
  in full operation after completion of the project."  Id.  § 9432(13).

       Thus, in order to fit within the statutory description, the service
  must: (1) have not been  offered through a hospital on a regular basis
  within the previous twelve month period, and (2) its  annual operating
  expense in its first year of operation must be in excess of $300,000.

       We note that although both the Hospital and BISHCA vigorously contest
  on appeal the  operative effect of the "facts" asserted in their briefs, we
  do not have before us a record developed in  a contested case.  See 3
  V.S.A. § 809 (e).  In essence, the parties ask us to apply their respective 
  conflicting statutory interpretations of relevant portions of 18 V.S.A. §
  9434 to a record devoid of the  evidence necessary to meaningful
  application of the law to the facts.  Furthermore, the fact that the  case
  was not contested does not excuse BISHCA from considering evidence that
  bears on the  relevant statutory criteria.   See In re AssureCare of
  Vermont, Inc., 165 Vt. 535, 541,