Court Opinion

ID: 4743738
Source: CourtListenerOpinion
Date Created: 2021-08-12 17:38:05.258004+00
Date Added: 2024-06-11T08:08:30.379891
License: Public Domain

Bridgewater, J.
(dissenting)
I respectfully dissent. Multicare Health System owns and operates two Tacoma hospitals under one license and plans to construct an inpatient/outpatient facility in south King County. Multicare would transfer 80 beds from its Tacoma hospitals’ bed capacity to the new, satellite facility and operate it under its existing hospital license, as part of a single integrated system. The Department of Health (Department) determined that Multicare’s new facility would require Certificate of Need (CN) review. Multicare appeals from summary judgment in favor of the Department.
I would hold that the Department’s statutes and regulations permit new buildings to be licensed under a hospital’s existing license without CN review if the buildings are operated as a single integrated system with uniform gover*602nance and staffing, and with arrangements for the safe transport of patients between buildings.
Multicare, a Washington not-for-profit corporation, owns and operates two Tacoma hospitals, Tacoma General and Allenmore (TGAH). The Department issued TGAH a hospital license under chapter 70.41 RCW, permitting it to operate 521 total beds. In 1999, over 70,000 patients registered with, and more than 200,000 patients visited Multicare facilities in south King County. Also, Multicare employs approximately 75 physicians who provide primary care and specialty services in south King County facilities.
Multicare wants to construct an inpatient/outpatient facility (i.e., a hospital) in south King County and operate it under TGAH’s hospital license. TGAH would transfer 80 existing beds from the Tacoma hospitals to the new facility, leaving TGAH’s total licensed bed capacity unchanged. The new facility would be located in Auburn, 20 miles away from TGAH.
The issue before us is whether chapters 70.38 RCW and 246-320 WAC mandate a CN review when a hospital seeks to transfer existing beds to a new facility to be operated under the hospital’s existing license. We are not deciding whether there is a “need” and the issue is not the same as if the CN statute had been accessed to determine “need.” All parties acknowledge that multiple buildings can be operated under the same license; so the question becomes “is this one of those circumstances?”
I. CN Review
Under a provision of the CN statute, RCW 70.38.105(4)(a), the “construction, development, or other establishment of a new health care facility” requires CN review. (Emphasis added.) RCW 70.38.025(6) defines “[h]ealth care facility” to include “hospitals.”4 RCW 70.38.025(15) defines “[h]ospital” *603as “any health care institution which is required to qualify for a license under [former] RCW 70.41.020(2) [(1991)] .”* *5 (Emphasis added.) That statute provides in relevant part:
“Hospital” means any institution, place, building, or agency which provides accommodations, facilities and services over a continuous period of twenty-four hours or more, for observation, diagnosis, or care, of two or more individuals not related to the operator who are suffering from illness, injury, deformity, or abnormality, or from any other condition for which obstetrical, medical, or surgical services would be appropriate for care or diagnosis.
Thus, under chapter 70.38 RCW, the construction of a hospital — any health care institution that must qualify for a hospital license under chapter 70.41 RCW — requires CN review. And under chapter 70.41 RCW, no person can establish a hospital, as defined by RCW 70.41.020, without a hospital license.6 But, most importantly, a “hospital” is a “health care facility” for CN purposes only if it is required to qualify for a license under the hospital licensing statute, RCW 70.38.025(15).
Under WAC 246-320-085, the Department may issue a single hospital license to cover multiple buildings. The regulation provides:
The purpose of this section is to allow a single hospital license to cover more than one building.
The department may issue a single hospital license to include two or more buildings, provided:
(1) The applicant or hospital:
*604(a) Meets the licensure requirements of chapter 70.41 RCW and this chapter; and
(b) Operates the multiple buildings as a single integrated system with:
(1) Governance by a single authority or body over all buildings or portions of buildings under the single license; and
(ii) A single medical staff for all hospital facilities under the single license;
(2) The hospital arranges for safe, appropriate, and adequate transport of patients between buildings.[7]
Thus, under WAC 246-320-085, a single hospital license may cover multiple buildings (i.e., hospitals) if the applicant meets the licensure requirements, operates the buildings as a single integrated system, and arranges for sufficient transport of patients between buildings. Indeed, Multicare operates its two Tacoma hospitals and its Covington, King County campus under a single hospital license.
Multicare contends that the Department made an error of law in concluding that the transfer of beds to the proposed inpatient/outpatient facility is subject to CN review. It argues that CN review is not required because TGAH seeks to operate the new facility as part of a single integrated system under its existing hospital license. Multicare reasons as follows: (1) the construction of a hospital (a “health care facility’)7 8 requires CN review only if it must “qualify for a [hospital] license”;9 (2) a single hospital license can cover multiple hospitals;10 (3) the proposed hospital does not need to qualify for a license because Multicare will operate it under TGAH’s existing license in conformity with WAC 246-320-085; and (4) therefore, the proposed hospital is not subject to CN review.
*605Multicare’s reasoning is sound. Even though WAC 246--320-085 requires that a hospital meet “the licensure requirements of chapter 70.41 RCW” before the hospital may be operated under an existing license, it does allow a single license to cover multiple hospitals.
This requirement of compliance with chapter 70.41 RCW was the linchpin for the presiding officer’s decision. He reasoned that the proposed facility must first qualify for a license by itself before it could be added to TGAH’s license. In other words, before a hospital may be operated under an existing license, it must independently qualify for a license. That is, whenever a hospital is established, it must qualify for a license, regardless of whether it will be operated under an existing license. Consequently, because all hospitals must qualify for a license, all hospitals must also undergo CN review.
The presiding officer’s position was not sound. First, it would render useless the WAC that permits the operation of two buildings and even two hospitals under one license. Requiring a separate license and CN whenever there is new construction would be wasteful and useless. The operation of two or more buildings under one license is permitted under the WAC, which has not been challenged.
Second, any currently licensed hospital may “construct new facilities” under the hospital licensing statute and may amend its license to include the new facilities. RCW 70.41.120. Though a hospital must comply with licensing regulations any time it undertakes “new construction,” including “[a]Iterations to an existing hospital,”11 that does not mean that a hospital license expires or that CN review takes place every time new facilities are constructed or there is renovation. It simply means that hospitals must comply with the Department’s licensing regulations whenever they undertake any “new construction.”12 “New construction” is defined to include additions to existing hospi*606tais, conversions of existing buildings to hospital use, and “any change, addition, remodel or modification... to an existing hospital or a portion of an existing hospital.”13 The Department reviews all construction documents for compliance with Department standards. In those circumstances, the WAC provides for use of such new construction only after approval of the construction documents and after the local government has given approval for occupancy.14 Neither the Department nor the intervenors posit that any time there is new construction a CN process is required. For example, recently the Department refused to require CN review for the Auburn Regional Medical Center’s plan to build a 107,000 square foot patient tower: its justification was that the expansion was at an existing facility. Similarly, there should be no additional requirement, if TGAH complies with WAC 246-320-085, for the addition of a satellite facility.
Third, to understand how WAC 246-320-085 operates, it is instructive to examine its predecessor, former WAC 246-318-017(4) (1999). Before March 10, 1999, separate hospital buildings could be operated under a single license only if the buildings were located within 10 miles of one another: “Hospital buildings included under one license shall not be located more than ten surface miles apart.”15 That 10-mile limitation was eliminated when the Department promulgated the current version, WAC 246-320-085. Plainly, the strict geographic limitation was eliminated and governance, staffing, and safe transport were deemed the most important criteria.
Accordingly, the presiding officer erred in granting summary judgment in favor of the Department. I would reverse and hold that Multicare need not obtain a Certificate of Need for its satellite facility.
*607II. Attorney Fees
Finally, Multicare argues that it is entitled to its attorney fees and costs on appeal, should this court reverse.16 I agree. I would not find that the agency’s action was substantially justified. The very WAC provision that the Department adopted eliminated a geographic requirement; yet, the Department argued that there was some type of county-by-county restriction. Its position required the presiding officer to hold that it had erred because there is no statutory or regulatory provision imposing such a requirement. Similarly, the Department’s position here is just as arbitrary, based as it is on the fact that the new facility would be a “free standing” hospital. Again, this restriction is not found in the statutes or WAC, and Multicare has assured the Department that it will be operated as a satellite, not as an independent facility.
I would reverse.
Review denied at 151 Wn.2d 1023 (2004).

 RCW 70.38.025(6) provides in relevant part, “ ‘Health care facility* means hospices, hospice care centers, hospitals, psychiatric hospitals, nursing homes, *603kidney disease treatment centers, ambulatory surgical facilities, and home health agencies ....”

 Recodified as RCW 70.41.020(4) (2002) by Laws of 2002, ch. 116, § 2.

 RCW 70.41.090(1) provides in relevant part:
No person or governmental unit of the state of Washington, acting separately or jointly with any other person or governmental unit, shall establish, maintain, or conduct a hospital in this state, or use the word “hospital” to describe or identify an institution, without a license under this chapter ....
(Emphasis added.)

 WAC 246-320-085 (emphasis added).

 RCW 70.38.105(4)(a).

 RCW 70.38.025(15).

 WAC 246-320-085.

 WAC 246-320-500, -010(64).

 WAC 246-320-500.

 WAC 246-320-010(7)(a), (64).

 WAC 246-320-505(2).

 Former WAC 246-318-017(4) (1992).

 See RCW 4.84.340(5), .350(1).