IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
SWEDISH HEALTH SERVICES, a Washington nonprofit corporation, Respondent,

v. DEPARTMENT OF HEALTH OF THE STATE OF WASHINGTON, Appellant. NO. 71122-9-1 DIVISION ONE

UNPUBLISHED OPINION FILED: April 13, 2015



### Lau, J. —Swedish Health Services appeals theWashington State Department of Health's denial of its application to establish an elective percutaneous coronary 

### intervention (PCI) program at its Issaquah hospital. The parties dispute the proper interpretation ofthe minimum volume standard in WAC246-310-720(2)(b). That 

### standard requires each certificate ofneed approved program to perform a minimum of 300 PCI procedures per yearbefore the department may approve a new PCI program. Because Swedish's certificate ofneed application for a new PCI program failed to satisfyWAC 246-310-720(2)(b)'s requirementthat all existing programs must meetor 

### exceed the 300 PCI per year minimum volume standard, the superiorcourt properly affirmed the department's denial ofSwedish's application. We affirm.71122-9-1/2

BACKGROUND The material facts are not disputed. Certificate of Need Program 

### In 1979, Washington State began to regulate the numberofproviders entering the healthcare market. Univ. ofWash. Med. Ctr. v. Dep't ofHealth, 164 Wn.2d 95, 99, 

### 187 P.3d 243 (2008). The legislature enacted the State Health Planning and Resources DevelopmentAct, creating the certificate ofneed (CN) program. RCW 70.38.015(2). The Department of Health administers the CN program. RCW 70.38.105(1). Designed 

### to effectuate the goals and principles of the Act, the CN program controls the number and type ofhealthcare services that are provided in a specific planning area. The 

### program ensures that services and facilities are developed in a manner consistentwith the department priorities and avoids unnecessary duplication. Overlake Hosp. Ass'n v. Dep't of Health, 170 Wn.2d 43, 47, 239 P.3d 1095 (2010). Healthcare providers must 

### obtain a CN before establishing certain healthcare facilities or providing certain 

### procedures such as the elective percutaneous coronary intervention1 (PCI) program at issue here. The need for a particular healthcare service or facility inthat planning area 

### mustbe demonstrated by a healthcare provider. Specific criteria inthe statute and rules govern the evaluation of CN applications. Chapter70.38 RCW; WAC246-310.

1Apercutaneous coronary intervention is an invasive nonsurgical procedure 

### performed by a cardiologistforthe revascularization ofobstructed coronary arteries. See WAC 246-310-754(4).71122-9-1/3 During 2007 and 2008, the department solicited feedback from stakeholders and the public as itsoughtto draft new rules that governed requirements for hospitals seeking to perform elective PCI procedures. The department enacted new PCI rules that established the minimum volume standard of 300 PCI procedures peryearfor each CN approved program. Each licensed program must meet or exceed this minimum volume standard or otherwise no new PCI programs may be approved underthis standard. Swedish's Certificate of Need Application The department granted CNs for elective PCI programs to Overlake Hospital Medical Center, Valley Medical Center, EvergreenHealth, Auburn Regional Medical 

### Centerand St. Francis Hospital, all located inthe King East planning area. These are the only programs authorized by the departmentto perform elective PCI procedures in the King East planning area. Valley, Evergreen, Auburn and St. Francis performed fewer than 300 PCI procedures peryear in February 2011 when Swedish Health 

### Services submitted its CN application to perform elective PCIs at its Issaquah campus.2 These four programs also had not yet been open for three years.



### 2The parties disagree on the number of PCI procedures performed byeach program. Italso appears the Health Law Judge's findings offact on the number might be incorrect. But for purposes ofthis appeal, the parties agree on the main fact—four of the programs inthe King East planning area did not meetthe 300 PCI minimum volume standard. Auburn and St. Francis operate a joint PCI program. This accounts for why the Health Law Judge's conclusion of law 2.3 refers to "four PCI programs" performing less than 300 PCIs peryear but parties referto three PCI programs.
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The departmentdenied Swedish's CN application on several grounds including its failure to establish that all existing King East planning area providers met or exceeded the 300 PCI peryear minimum volume standard spelled out in WAC 246-310- 720.3 Swedish challenged the denial in an adjudicative proceeding presided over by a Health Law Judge. As statutory intervener, Overlake moved for summaryjudgment opposing Swedish's interpretation of WAC 246-310-720's minimum volume standard and application of WAC 246-310-745's need forecasting methodology. Swedish cross 

### moved for partial summaryjudgment arguing its interpretation should prevail. The Health Law Judge upheld the department's denial ofSwedish's CN application on the grounds WAC 246-310-720's minimum volume standard plainly requires that allexisting 

### programs meet or exceed the 300 PCI procedure minimum volume threshold.4 He found thatfour PCI programs inthe planning area were performing fewer than 300 procedures peryear. 

### 2.3 With four PCI programs inthe planning area performing less than 300 

### PCIs peryear (the minimum number ofprocedures required by WAC 246-310- 720(1)), Swedish's application for a new [CN] program failed to satisfy the requirement in WAC 246-310-720(2)(b) that all programs be meeting or 

### exceeding the threshold. Thus, the Program properly denied Swedish's application.


### 3The onlyground relevantto the present appeal involves the minimum volume standard. 

### 4The Health LawJudge declined to address WAC 246-310-745's need assessment issue because the failure to meet the minimum volume standard was dispositive ofthe CN application question.71122-9-1/5
2.4 Swedish failed to show the existence of a genuine issue ofmaterial fact. The facts are not indispute. The conflict is inthe interpretation of WAC 246-310-720. AR1341 (CL 2.3, 2.4). He therefore concluded that Swedish's application under RCW 246-310-720(2)(b) must be denied. 

### The superior court affirmed the department's denial. The court reasoned thatthe statute's purpose is to promote patient safety by ensuring that new programs have the opportunity to "get up to speed." RP (October7, 2013) at 42. Itconcluded that policy and WAC 246-310-720's plain text, supports the department's denial ofthe CN application. Swedish appealed. ANALYSIS Standards of Review 

### The Administrative Procedure Act (APA), RCW 34.05 standard of review applies to CN cases. RCW 70.38.115(10)(a): Providence Hosp. ofEverett v. Dep't ofSoc. & 

### Health Servs., 112Wn.2d 353, 355, 770 P.2d 1040 (1989). On a petition for review 

### underthe APA, this court sits inthe same position as the superiorcourt and reviews the 

### validity ofthe contested administrative order. Wenatchee Sportsman Ass'n v. Chelan County, 141 Wn.2d 169, 176, 4 P.3d 123 (2000). The party seekingjudicial review has 

### the burden ofdemonstrating the invalidity of the contested administrative order. RCW 34.05.570(1 )(a). In CNcases, the agency decision is presumed correct and the 

### challengerbears the burden of overcoming the presumption. Overlake Hosp., 170 Wn.2d at 49-50.71122-9-1/6
We grant relief from an agency order in an adjudicative proceeding ifthe agency erroneously interpreted or applied the law, orthe order is inconsistentwith a rule ofthe agency unless the agency explains the inconsistency by stating facts and reasons to demonstrate a rational basis for the inconsistency. RCW 34.05.570(3)(d); RCW 34.05.570(3)(h). Courts must grant "substantial deference" to the department's 

### interpretation ofthe regulatory language given the agency's "expertise and insight gained from administering the regulation thatthe reviewing court does not possess." Overlake Hosp.. 170 Wn.2d at 56. Courts apply the rules ofstatutory construction in interpreting regulatory language. Overlake Hosp., 170 Wn.2d at 51-52. When construing the meaning ofthe law, the plain language ofthe law controls. Koenig v. City of Pes Moines. 158 Wn.2d 173, 181, 142 P.3d 162 (2006). Courts cannot rewrite or modify the language ofthe statute underthe guise ofstatutory interpretation or construction. Graham ThriftGrp.. Inc. v. Pierce County. 75 Wn. App. 263, 267, 877 P.2d 228 (1994) (citing State v. McAlpin. 108 Wn.2d 458, 465, 740 P.2d 824 (1987)). "Our fundamental purpose in construing statutes is to ascertain and carry outthe intent ofthe legislature. We 

### determine the intent ofthe legislature primarily from the statutory language." In re Marriage of Schneider. 173Wn.2d 353, 363, 268 P.3d 215 (2011) (citations omitted). Swedish assigns no errorto any factual findings. Unchallenged factual findings
are verities on appeal. Postema v. Pollution Control Hr'qs Bd.. 142 Wn.2d 68, 100, 11 P.3d 726 (2000).

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Swedish challenges the Health Law Judge's interpretation of WAC 246-310-720. That regulation provides: Hospital Volume Standards. (1) Hospitals with an elective PCI program must perform a minimum ofthree hundred adult PCIs peryear by the end ofthe third year ofoperation and each yearthereafter. (2) The department shall only grant a certificate ofneed to new programs within the identified planning area if: (a) The state need forecasting methodology projects unmet volumes sufficientto establish one or more programs within a planning area; and 

### (b) All existing PCI programs inthat planning area are meeting or exceeding the minimum volume standard. We must decide whetherthe Health Law Judge properly interpreted this rule. Swedish interprets WAC 246-310-720(2)(b) to mean that only those programs that have existed longerthan three years must meetthe 300 procedure minimum. In otherwords, a new program may be approved if all programs, except programs in existence for less than three years, meet or exceed the minimum volume standard. We disagree. Swedish's interpretation contradicts the plain text ofthis rule, contravenes the rule's intent, and rewrites the rule contrary to well settled principles of statutory interpretation. The parties agree thatWAC 246-310-720 is not ambiguous. There is only one reasonable interpretation ofthis rule that makes sense and avoids an illogical result. WAC 246-310-720(1) establishes a 300 minimum volume standard for PCI programs. The choice of a 300 minimum standard was the result of a comprehensive 

### study and extensive public vetting with stakeholders. See Yakima Valley Memorial Hosp. v. Washington State Dep't of Health. 731 F.3d 843 (9th Cir. 2013). The 300 PCI

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minimum standard enhances patient safety by assuring that physicians and staffof a 

### facilityhave sufficientpatientvolume to maintain their skilland competence. Yakima Valley, 731 F.3d at 849. By its terms, WAC 246-310-720(1) allows newly established programs three years to meet the minimum volume standard. This "ramp-up" period makes sense because itrecognizes that new programs need time to develop a volume of patients. WAC 246-310-720(2) governs the requirements that must be met by existing programs before a new program can be approved. WAC 246-310-720(2)(b) plainly states that no new program may be approved unless "all"existing programs meet or exceed the minimum volume standard. The use ofthe unambiguous term, "all" leaves
no doubt that itincludes all programs regardless of how long they have existed. We conclude the rule's plain language means that all programs including those inexistence for less than three years must be operating atthe 300 minimum volume standard before the department may approve a new PCI program. This interpretation is also consistentwith the rule's intent noted above. A newly established PCI program inevitably attracts new patients who otherwise would have 

### sought services from an existing program. This negative consequence to the existing programs is the reason WAC 246-310-720(2)(b) prohibits approval of a new program 

### unless allexisting programs, including programs inexistence for less than three years,
are performing at least 300 procedures peryear. Including all programs is logical since


### a program's ability to meetthe 300 PCI standard is critical to ensure patient safety no matter how long the program has existed. Yakima Valley, 731 F.3d at 849.

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### Swedish also contends thatthe Health Law Judge's orderdenying its CN 

### application iserroneous because it"requires existing providers to perform at least 300 

### PCIs per year even during theirfirstthree years..." Br. of Appellant at 15. That assertion is not supported bythe record. It is evidentthatthe Health LawJudge 

### recognized that new programs are permitted three years to meet the 300 standard. Swedish also relies on WAC 246-310-745's need forecasting methodology to 

### overrideWAC 246-301-720(2)(b)'s unambiguous prohibition against approval of new 

### programs ifexisting programs arebelowthe 300minimum volume standard. Swedish focuses on one methodologyprovision to argue thatWAC 246-310-720's minimum volumestandard should be measured by the definition of "current capacity" inWAC 

### 246-310-745's needforecasting methodology. We disagree. The "currentcapacity" definition has no bearing on the properinterpretation ofWAC 246-310-720's 

### requirementthat"all" programs including those in existencefor less than three years must be operating at the 300minimum volume standard before the department may approve a new PCI program. 

### The definition of "current capacity" has a "specific meaning" "forthe purposes of 

### the needforecasting method..." WAC 246-310-745. Swedish attempts tocombinetwo 

### distinctprocedures andconcepts—WAC 246-310-720's minimum volume standard and WAC 246-310-745's need forecasting methodology—to make itspoint. The minimum volume standard addresses the number ofprocedures actually performed while the 

### needforecasting methodology addressesthe number of procedures thatcould be 

### performed or that there iscapacitytoperform. WAC 246-310-745 is aplanning tool that71122-9-1/10 

### asks ifthe current capacity inthe planning area can meetthe demand. Inotherwords, the current capacity definition seeks to establish the procedures that could be performed inorderto forecast patient need. The plain reading ofthe regulations require 

### that all existing programs perform more than 300 PCI procedures. Because it is undisputed that St. Francis, Auburn, Valley and Evergreen are not performing 300 PCI procedures, we conclude the superiorcourt properly affirmed the department's denial of Swedish's CN application.

WE CONCUR: 

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