Opinion ID: 1706003
Heading Depth: 2
Heading Rank: 2

Heading: Whether the Department's Decision to Deny Fox Eye's CON Application was Unreasonable.

Text: Alternatively, Fox Eye argues the Department's decision to deny Fox Eye's CON application was unreasonable. On review, we will reverse the Department's decision to deny a CON only if the decision was unreasonable, arbitrary, capricious, or an abuse of discretion. Iowa Code § 17A.19(10)( n ); Greenwood Manor, 641 N.W.2d at 831. Iowa Code section 135.64(1) provides a list of eighteen factors the Department shall consider when reviewing a CON application. Additionally, the Department shall grant a CON for a new or changed institutional health service only if it finds: a. Less costly, more efficient, or more appropriate alternatives to the proposed institutional health service are not available and the development of such alternatives is not practicable; b. Any existing facilities providing institutional health services similar to those proposed are being used in an appropriate and efficient manner; c. In the case of new construction, alternatives including but not limited to modernization or sharing arrangements have been considered and have been implemented to the maximum extent practicable; d. Patients will experience serious problems in obtaining care of the type which will be furnished by the proposed new institutional health service or changed institutional health service, in the absence of that proposed new service. Iowa Code § 135.64(2). The Department found none of these four criteria existed in the Cedar Rapids area. It concluded two local hospitals and an existing surgery center (Surgery Center of Cedar Rapids) had sufficient operating room capacity to accommodate the procedures that had been performed at the H Avenue location for the past six years. Specifically, it found patients would not be affected by a denial of Fox Eye's CON application because the Surgery Center of Cedar Rapids provided a similar atmosphere to Fox Eye's proposed facility at similar costs. Fox Eye does not dispute these findings. Instead, Fox Eye argues the Department should not have based its decision in part on the existence of the Surgery Center of Cedar Rapids because that facility came into existence after St. Luke's opened its surgery center on H Avenue. Even more offputting to Fox Eye is the fact the Surgery Center of Cedar Rapids was a joint venture between St. Luke's and approximately eighty medical practitioners. It did not require a CON. Fox Eye argues St. Luke's should not be able to block competitors by artificially munipulat[ing] the market. While we understand Fox Eye's frustration, there is nothing unlawful about St. Luke's participating in the Surgery Center of Cedar Rapids. Based on the aforementioned criteria, the Department acted reasonably when it denied Fox Eye's CON application.