Opinion ID: 1059566
Heading Depth: 1
Heading Rank: 1

Heading: Commissioner's Statutory Authority

Text: In his letter denying the COPN, the Commissioner stated that the SMFP standard of 12 liver transplants per year was inaccurate and outdated and should not be applied in this case. The Commissioner directed that procedures for amending the SMFP standard be initiated. Sentara claims that, in making this determination, the Commissioner set aside the SMFP in order to impose a higher volume standard, rather than 5 a less strict standard as permitted by the statute. In doing so, Sentara asserts, the Commissioner exceeded his statutory authority because § 32.1-102.3(A) allows the Commissioner to set aside the SMFP if it is outdated and inaccurate only to grant a COPN application, not to deny an application. Agreeing with Sentara, the Court of Appeals held that [t]he plain language of the statute provides that the Commissioner 'may issue or approve' a petition that does not comply with an outdated or inaccurate SMFP but it does not provide that he may deny or disapprove a petition on this basis. Sentara, 30 Va. App. at 277, 516 S.E.2d at 695. Section 32.1-102.3(A) provides in relevant part: 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 . . . . Any decision to issue or approve the issuance of a certificate shall be consistent with the most recent applicable provisions of the State Medical Facilities Plan; however, if the Commissioner finds, upon presentation of appropriate evidence, that the provisions of such plan are not relevant to a rural locality's needs, inaccurate, outdated, inadequate or otherwise inapplicable, the Commissioner, consistent with such finding, may issue or approve the issuance of a certificate and shall initiate procedures to make appropriate amendments to such plan. This section clearly authorizes the Commissioner to conclude that provisions of the SMFP are outdated and directs the Commissioner to initiate the process for changing the 6 provisions found to be outdated. Thus, in this case, the Commissioner acted within his statutory authority when he determined that the existing SMFP requiring a minimum of 12 liver transplants was outdated and directed that procedures be instituted to adopt appropriate amendments. We agree with the Court of Appeals, however, that the section specifically authorizes the Commissioner to grant a COPN even if he finds provisions of the SMFP outdated or otherwise inapplicable, but does not contain similar specific authorization to deny a COPN under such circumstances. Denial of the COPN under such circumstances would allow the Commissioner to unilaterally impose new, and presumably higher, standards. The statute contemplates that new standards would be imposed as a result of amendment procedures initiated, not pursuant to unilateral adoption and application of new standards by the Commissioner in the course of the COPN process. Section 32.1-102.3(A) does not, however, require the Commissioner to grant a COPN simply because a COPN application complies with the provisions of the existing SMFP. The Commissioner correctly points out that compliance with the SMFP is only one factor in the decision. The statute provides that to grant a COPN, the Commissioner must conclude that a public need for the project has been demonstrated. 7 Subsection B of § 32.1-102.3 lists 20 factors which the Commissioner must consider in addition to compliance with the SMFP in determining whether a public need has been demonstrated. In this case, therefore, the Commissioner exceeded his authority under § 32.1-102.3(A) if the Commissioner denied Sentara's application solely on the basis that the SMFP regarding the average number of transplants was outdated and inapplicable. While the Court of Appeals opinion states that the Commissioner exceeded his authority to the extent he denied the COPN on the ground the SMFP was outdated, there is no discussion of the extent to which the denial was based on that ground. Sentara argues that the Commissioner exceeded his authority because, in setting aside the existing SMFP, he applied some higher, impromptu, unspecified standard as a basis for denying the COPN. The record, however, contains no evidence that the Commissioner required Sentara to satisfy some higher standard in order to secure the COPN. The Commissioner's only references to higher standards were those regarding the national average for annual liver transplantations. First, the Commissioner observed that it was reasonable to assume that over time there would be an increase in the number of liver transplants performed by Sentara and that this would reduce the number of procedures at 8 other existing transplant centers. This redistribution of patients, the Commissioner wrote, would place the Commonwealth's programs below the national average of 36 transplants per center. A second reference is contained within one of the three considerations cited in his conclusion: [a]pproval of another site could result in an excess of facilities lacking volume to meet the national average or to assure essential technical experience. These references to the national average were made in regard to future events, not requirements which the Commissioner imposed on Sentara as a prerequisite to securing a COPN in this proceeding. They are a reflection of the record evidence that the quality of transplant medical expertise is directly related to the number of procedures performed, and that the clinical outcome for liver transplants improves as the number of procedures performed in a facility increases. Thus, they cannot be the higher, impromptu, unspecified standard that Sentara argues the Commissioner applied as a basis for denying the COPN. Furthermore, although the Commissioner stated that the SMFP standard was outdated and would not be applied, he nevertheless relied on the provisions of the existing SMFP in support of his decision that no public need existed for Sentara's proposed project. Citing the portion of the SMFP 9 that states that transplantation programs are expected to perform substantially larger numbers of transplants annually and that meeting the minimum volume does not necessarily indicate a need for additional transplantation capacity or programs, the Commissioner concluded that the existing SMFP was not binding as to minimum acceptable volumes. The Commissioner also stated that even the existing SMFP does not support the grant of a COPN to Sentara at this time. In his letter denying Sentara's application, specifically in the section relating to the existing SMFP standards, the Commissioner made no statements which support the proposition that the COPN was denied solely on the basis of a determination that the existing SMFP was outdated and inapplicable. Rather, the statements as set out above indicate that the Commissioner found that even though Sentara complied with the existing SMFP, it had not demonstrated a public need for the project. This conclusion was within the discretion and authority of the Commissioner under both § 32.1-102.3 and the provisions of the SMFP. For these reasons, we hold that the Commissioner did not exceed his statutory authority in denying the COPN in this case.