Court Opinion

ID: 6374085
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:51:16.770585+00
Date Added: 2024-06-11T15:50:06.202044
License: Public Domain

CRAIG, President Judge.
James H. Stewart, Jr. (objector) petitions for review of an order of the State Health Facility Hearing Board (board) that affirmed the decision of the Department of Health (department) granting a certificate of need (CON) to Grant-ham Woods, Inc. (applicant) pursuant to the Health Care Facilities Act (Act).1 We affirm the board’s decision.2
*404The applicant proposes to construct a continuing care retirement community (CCRC) adjacent to Messiah College in Cumberland County. The CCRC would include a 60 bed health care facility to provide skilled nursing care to its residents and, if beds are available, to individuals outside the community. The objector resides on land adjacent to the site of the applicant’s proposed project.
Section 701 of the Act provides that
[n]o person shall offer, develop, construct or otherwise establish or undertake to establish within the State a new institutional health service without first obtaining a certificate of need from the department.
Section 701(a), 35 P.S: § 448.701(a). (Emphasis added).
For purposes of CON review, new institutional health services include the construction, development or other establishment of a new health care facility or health maintenance organization. Section 701(a)(1), 35 P.S. § 448.-701(a)(1). Because the applicant’s proposal falls within the statutory definition of a “new institutional health service,” the applicant was required to obtain a CON from the department before proceeding with the project.
On September 13, 1985, the applicant submitted its CON application to both the department and to the local health systems agency (HSA). By letter dated November 13, 1985, the objector wrote to the HSA to enter his appearance as an objector to the applicant’s CON application. On February 18, 1986, the HSA conducted a public hearing on the application. The board of directors of the HSA voted on March 13, 1986 to recommend denial of the CON and forwarded the application to the department for its review. On December 24, 1986, the Secretary of Health approved the applicant’s CON application. The objector filed a notice of appeal with the board on January 26, 1987, challenging the department's grant of the CON to the applicant.
Both the department and the applicant filed preliminary motions requesting the board to quash or strike the objector’s appeal on the grounds that (1) the appeal was untimely *405filed and (2) the objector does not have standing to appeal. By order dated April 9, 1987, the board found that the objector’s appeal had not been timely and granted the motion to quash. The board did not address the issue of the objector’s standing to appeal.
The objector appealed the board’s order to this court, which determined that his appeal was timely and remanded the matter to the board for further proceedings. See, Stewart v. State Health Facility Hearing Board, 117 Pa. Commonwealth Ct. 552, 543 A.2d 1290 (1988). On May 25, 1989, the board conducted a hearing on the objector’s appeal. The board issued an opinion and order on August 29, 1989 which denied the applicant’s and department’s motions to strike the objector’s appeal, affirmed the decision of the department to grant the CON, and dismissed the objector’s appeal.
Stewart filed an appeal to this court (No. 1882 C.D.1989). The applicant, joined by the department, filed a cross appeal (No. 1964 C.D.1989) challenging the objector’s standing before the board in the first instance.
The applicant and department contend that the objector lacked standing to appeal the department’s grant of the CON application to the board and that this court should quash the objector’s appeal. In the alternative, the applicant and department argue that the objector lacks standing to challenge the application.
The objector argues that substantial evidence in the record does not support the department’s decision to grant the CON and that procedural and constitutional errors were committed during the application review process.
First, because the applicant and the department have appealed an interlocutory order of the board, that appeal (No. 1964 C.D.1989) must be quashed. Second, the objector has standing to challenge the department’s approval of the application for a certificate of need (CON). Third, the department’s decision to approve the CON application is *406supported by substantial evidence and no prejudicial errors were committed. The department’s decision is affirmed.
1. Nonappealable Order
The board’s denial of the applicant and department’s motion to strike Stewart’s appeal is an interlocutory order and hence not appealable to this court. Accordingly, we quash the cross appeal filed by the applicant and department challenging that denial.
Generally, a party may take an appeal only from an order that is final, rather than interlocutory, in nature. Pa.R.A.P. 341(a). Final orders, for purposes of appeal, are orders that end the litigation or dispose of the entire case, effectively put a litigant “out of court,” or preclude a party from presenting the merits of his claim. Sweener v. First Baptist Church, 516 Pa. 534, 533 A.2d 998 (1987); Peoples Natural Gas Co. v. Pa.PUC, 124 Pa. Commonwealth Ct. 59, 555 A.2d 288 (1989), aff'd, 523 Pa. 370, 567 A.2d 642 (1989).
In this case, the board’s order did not end the litigation between the applicant and objector or put the objector out of court. Because the order explicitly kept the objector in the proceedings, it was clearly interlocutory. Unless expressly provided for by statute or rule, no appeal may lie from such an order. Monzo v. Department of Transportation, 124 Pa Commonwealth Ct. 360, 556 A.2d 493 (1989). Further, although the objector failed to move to quash the applicant and department’s appeal from the interlocutory order, it is appropriate for this court to do so upon our own initiative. Id.
2. Standing
The applicant and department preserved the issue of Stewart’s standing by arguing, in their brief on his appeal from the board’s CON approval decision, that he lacked standing to appeal the department’s decision.
For the reasons stated below, Stewart has standing to challenge the department's approval of the CON.
With respect to a decision of the department on an application for certificate of need, section 506(a) of the Act *407provides that “any party ... who is involved in the proceeding” may appeal the department’s decision to the board. Likewise, “any party ... who is involved in the proceeding” may appeal the hearing board’s decision to this court. Section 507, 35 P.S. § 448.507.
Section 703(a) of the Act, 35 P.S. § 448.703(a), provides that persons who are “directly affected ... may file objections within 15 days of [publication of the notice of completed CON applications] with the local health systems agency setting forth specifically the reasons such objections were filed.”
The board found that the objector filed timely and specific objections and that, because § 103 of the Act, 35 P.S. § 448.103, defines the phrase “persons directly affected” to include “members of the public who are to be served by the proposed new institutional health services,” the sole issue was whether the objector was a member of the public to be served by the applicant’s facility.
In this case, the department published a notice of the completed CON application in the Pennsylvania Bulletin on November 27, 1985. The objector filed his objections on January 31, 1986, more than 60 days later. Although we disagree with the board’s finding with respect to the timeliness of the objections, the fact that the objector did not file timely objections is not controlling.
In IFIDA Health Care v. Pennsylvania Department of Health, 128 Pa. Commonwealth Ct. 634, 564 A.2d 535 (1989), this court held that the failure to file written objections within 15 days of publication did not prevent an objector from obtaining standing to challenge a CON application.
The IFIDA court first noted that the notice published in the Pennsylvania Bulletin merely indicated that the applicant proposed “to construct a new 120 long term care bed [sic] nursing home in Delaware County at an estimated cost of $5,714,704,” but that the CON application was more than 155 pages in length. The court concluded therefore that the objector did not have sufficient information to file *408objections within 15 days and that, while “early input is desirable ... if it is offered at the public hearing this is soon enough for the information to be seriously considered.” Id., 128 Pa. Commonwealth Ct. at 639, 564 A.2d at 538.
In this case, the notice stated only that Grantham Woods intends to construct a 60-bed long term care facility as part of a life care community at an estimated cost of $1,098,000. The application was more than 170 pages long. As in IFIDA, the notice published in the Pennsylvania Bulletin did not provide the objector with sufficient information to file meaningful objections within 15 days.
Although this objector did not file objections within 15 days, he did file objections before the February 18, 1986 public hearing. Under the IFIDA analysis, the objections in this case were filed soon enough before the public hearing for them to be properly considered.
Therefore, although the board’s approach here differed from the IFIDA analysis, the board was ultimately correct in concluding that the sole remaining issue is whether the objector is a member of the public to be served by the applicant’s proposed facility.
This court has not yet had the opportunity to interpret the phrase, “members of the public who are to be served by the proposed new institutional health services.” However, in doing so, we must construe the words of the statute according to their plain meaning. “Words and phrases shall be construed according to the rules of grammar and according to their common and approved usage.” 1 Pa.C.S.A. § 1903(a) (Statutory Construction Act of 1972); O’Neill v. Borough of Yardley, 129 Pa. Commonwealth Ct. 270, 565 A.2d 502 (1989).
Black’s Law Dictionary defines “member” as “one of the persons constituting a family, association, corporation, guild, court, legislature, or the like.” 887 5th Ed.1979. Black’s defines “public” as “the inhabitants of a particular place; all the inhabitants of a particular place; the people *409of the neighborhood.” 1104 5th Ed.1979. Combining these two terms, “member of the public” means one of the persons inhabiting a particular place. When applying this definition in the context of this case, the objector is indeed a member of the public to be served by the applicant’s proposed facility.
In its application for the CON, the applicant referred repeatedly to the Cumberland County area, noting that the number of persons over sixty years of age has increased dramatically in recent years (R. 44a-45a). In fact, thirty-one percent of those persons on the applicant’s mailing list (R. 67a) and sixty-nine percent of its applicants (R. 67a) reside in Cumberland County. The application also includes several charts listing the county’s retirement centers and their populations as evidence of the need for the facility in the area (R. 69a-70a).
The objector resides in Cumberland County, immediately adjacent to the proposed facility. He is sixty years of age, an age which the applicant uses in many of its tables to determine the area’s need for another retirement facility. Although the objector is in good health, the applicant’s scheme for its facility specifically provides that most of its residents will be in good health when they move to the facility and, as the need arises, utilize its skilled long term facility.
The objector also alleged, in his answer to the applicant and department’s original motion to dismiss his appeal to the board, that he was, in fact, solicited by the applicant as a prospective resident (R. 858a).
The applicant’s proposed project is intended to serve the local community. This is evident from its application and its emphasis on the need for this type of facility in Cumberland County. The evidence supports the board’s finding that the objector is a member of the public to be served by this project. Therefore, he has standing to challenge the application, and, hence, we will address the merits of his appeal.
*4103. Merits
Our scope of review in appeals from the Department of Health is defined in Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704. Section 704 requires that we affirm the adjudication of the board unless we find that the decision is not in accordance with law or that any of the agency’s necessary findings of fact are not supported by substantial evidence. See Department of Health v. Rehab Hospital Services Corp., 127 Pa. Commonwealth Ct. 185, 561 A.2d 342 (1989).
CCRC’s are a recent innovation in the health care industry. They are unique because they are designed to serve the CCRC’s own residents, rather than the general public. Accordingly, the need for a CCRC in a county or other limited geographical area is distinguishable from the need in the same area for another type of health care facility, such as a hospital. See Brief of Grantham Woods and the Department of Health at 8.
Because of this distinction, the department amended the State Health Plan (SHP) in 1986 by adopting Appendix 39-3A, “Standards and Criteria for Continuing Care Providers.” State Health Plan, Appendix 39-3A, 16 Pa.B. 2177 (June 14, 1986). See R. 1268a-69a.
The amendment provides in pertinent part:
1. Certificate of Need applications for proposed long-term care beds associated with continuing care communities will be reviewed by the same standards and criteria that apply to other Certificate of Need applications for long-term care beds.
2. Additional long-term care beds will not be approved in areas for which there is no need according to the State Health Plan unless the applicant can meet all of the criteria in this Appendix.
3. In order to be considered under this Appendix, continuing care providers must demonstrate to the Department’s satisfaction, that all of the following criteria are *411met. Such evidence should be presented as part of the CON application.
a. The provider will not seek Certification in the Medical Assistance Program. (Financial feasibility of the long-term care bed component must be demonstrated without the need to rely on Medical Assistance reimbursement.)
b. There is evidence substantiating the need for the continuing care community, such as project feasibility study (demand study) or such similar documentation.
c. The nursing home beds will be restricted to use according to a sliding scale for only those residents who have been admitted to the continuing care community. By year two, no more than eighty percent of the residents can be from outside the continuing care community. By year four, this percent is fifty percent; by year six, it is twenty-five percent; and by year eight, it is ten percent.
State Health Plan, Appendix 39-3A, 16 Pa.B. 2177 (June 14, 1986). See R. 1268a-69a.
First, the objector argues that the amendment was not properly enacted. However, we find that the amendment was properly promulgated and adopted. The department published notices in the Pennsylvania Bulletin that the Statewide Health Coordinating Council (SHCC) had released its proposed amendments to the SHP and that a public hearing would be held concerning the proposed amendment and its effect on CON applications filed by CCRC’s. The SHCC and the Governor subsequently approved the amendments. 16 Pa.B. 2177 (June 14, 1986). The procedure fully complied with Section 201(8) of the Act, 35 P.S. § 448.201(8).
Amendment 39-3A provides that, even if there is no need for additional long-term care beds in an area, as determined under the SHP, the department may approve a CON application filed by a proposed CCRC if the applicant satisfies the three specific criteria enumerated in the amendment. The department used the criteria in evaluating the applicant’s proposal and determined that it satisfied the requirements.
*412As indicated in the amendment set out above, the first criterion is that the applicant agree not to participate in the Medical Assistance Program and that the project be economically feasible. The record shows that the applicant has agreed not to seek certification in the Medical Assistance Program. See R. 827a. In addition, the board found that the proposed CCRC project would be financially feasible without reliance on Medical Assistance Program funds.
The objector argues that the feasibility of the long term care component of the CCRC is questionable and, accordingly, that the applicant has failed to satisfy this criteria. However, to evaluate the feasibility of the entire project, the department properly examined all of the components of the proposed CCRC, rather than the long term care facility alone. The long term care component of the facility is dependent upon the CCRC. Together, the two projects, which encompass the entire CCRC, are economically feasible without reliance upon Medical Assistance funds.
The department found that the costs of the proposed facility is comparable to the costs of similar projects and that the project will be financed through a bond issue and an equity contribution provided by Messiah College. Thus, the board's finding with respect to this criteria is based on substantial evidence.
The second factor the department must consider is the need for the proposed project. Under the amendment, the department is not required to use the SHP criteria for determining need. However, the department is still required to evaluate the proposal in accordance with the twenty criteria for determining need found in Section 707(a)(lH20) of the Act, 35 P.S. § 448.707(a)(l)-(20). The Act also provides that evidence substantiating the need for the continuing care community, such as a project feasibility study or such similar documentation, may also be used.
The record reveals that, although the population in the United States is expected to increase by one-third between 1982 and 2050, the number of persons over fifty-five years *413of age is expected to grow at the rate of 113%. In addition, from 1970 to 1980, the number of persons over sixty-five years of age increased by 20.3% and the number of Cumberland County residents in that age range increased thirty-nine percent during that period. Additional evidence of need can be found at R. 69a-86a, R. 95a-99a, R. 445-448, R. 603a, R. 746a, and R. 839a-830a.
We have thoroughly reviewed the record in this case, including the diverse documentation submitted both in support of and in opposition to the applicant’s proposal, and conclude that substantial evidence supports the department’s finding that there is a need for the proposed facility.
Finally, the applicant must establish that its beds will be restricted to use according to a sliding scale, which requires that a higher percentage of beds be used by CCRC residents each year for five years. According to the applicant, by year two, only forty-one percent of its beds will be used by non-CCRC residents. The amendment requires that no more than eighty percent be non-residents. Evidence in the record indicates that by year four, only fourteen percent of the beds will be used by non-residents. The amendment allows up to fifty percent of the beds to be used by non-residents that year. See R. 828a, 833a and 840a. Accordingly, the applicant meets the third and final criterion required under the amendment.
As indicated above, in addition to the three criteria set out in the amendment, the department is required to examine twenty criteria for need, delineated by the legislature in the Act at section 707(a)(l)-(20), 35 P.S. § 448.-707(a)(l)-(20). Among those criteria which the department must examine is the relationship of the application with the applicable health systems plan and annual implementation plan, section 707(a)(1), 35 P.S. § 448.707(a)(1); whether the services are compatible with the applicant’s long-range development plan, section 707(a)(2), 35 P.S. § 448.707(a)(2); whether the proposed facility is compatible with existing health care systems in the area, section 707(a)(7), 35 P.S. *414§ 448.707(a)(7); whether the proposed facility will have appropriate ancillary and support services available to it, section 707(a)(10), 35 P.S. § 448.707(a)(10); factors which affect the effect of competition and the capacity of market conditions, section 707(a)(15), 35 P.S. § 448.707(a)(15); the quality of care delivered in the past by existing facilities, section 707(a)(18), 35 P.S. § 448.707(a)(18); and the contribution of the proposed facility in meeting the needs of members of medically underserved groups, Section 707(a)(19), 35 P.S. § 448.707(a)(19).
The department’s consideration of these and the other factors is clearly supported by the record. The documentation in the record constitutes substantial evidence in support of the board’s decision to grant the CON. Accordingly, unless we find some constitutional or prejudicial procedural error, we must affirm the board’s decision to issue the CON to the applicant.
The objector argues that he was denied due process because he was not provided an ample opportunity to present his arguments to either the department or the board. Review of the record shows that the objector was provided every opportunity to present his evidence and to participate in the application process.
Finally, the objector contends that there was an improper ex parte communication between the department’s secretary and two doctors who supported the application. Section 702(f)(2) of the Act, 35 P.S. § -448.702(f)(2), states that, “[n]o ex parte contact regarding the application between any employee of the department who exercises responsibilities respecting the application and the applicant, any person acting on behalf of the applicant or any person opposed to the issuance of the certificate of need shall occur after the commencement of a hearing on the application and before a decision is made by the department.” (Emphasis added).
In this case, there was no prohibited ex parte contact between the secretary and any person acting on the appli*415cant’s behalf because, as the objector concedes in his brief, the contact took place before the applicant submitted its application and not “after the commencement of a hearing on the application.” Accordingly, we need not address the objector’s argument that a departmental regulation3 “subverts” the Act’s provisions.
Having found that the department’s decision is supported by substantial evidence, and having found no constitutional or prejudicial procedural error, or violation of departmental regulations, the order of the board is affirmed.
ORDER
Now, June 7, 1991, the order of the State Health Facility Hearing Board at No. CN 87-007, dated August 29, 1989, is affirmed.
ORDER
Now, June 7, 1991, the appeal of Grantham Woods, Inc. and Commonwealth of Pennsylvania, Department of Health, from the order of the State Health Facility Hearing Board, No. CN-87-007, dated August 29, 1989, is quashed.

. Health Care Facilities Act, Act of July 19, 1979, P.L. 130, as amended, 35 P.S. §§ 448.101-448.904.

. This opinion was reassigned to the writer on April 12, 1991.

. 28 Pa.Code 401.5(g)(6)(i) provides: "A contact which is recorded as part of the official application file in accordance with paragraphs (ii) and (iv) shall not be considered an ex parte contact.” The objector argues that the provision "nullifies" § 702(f)(2) of the Act.