UPDATED: HCA, State Mull Appeal over Spring Hill CON Ruling


UPDATED: HCA, State Mull Appeal over Spring Hill CON Ruling | HCA, Spring Hill Hospital, Maury Regional Medical Center, Williamson Medical Center, Robert Otwell, Tennessee Health Services and Development Agency, certificate of need, MRMC

Robert Otwell, Mary Regional CEO

Oct. 3 is the Deadline

When Chancery Court Judge Claudia C. Bonnyman ruled on Sept. 3 to throw out HCA's hard-won certificate of need for Spring Hill Hospital, she did something that hadn't been done before: she tossed out a CON granted by the Health Services and Development Agency (HSDA).

HCA will not appeal second ruling

A statement issued October 1st by Maury Regional Medical Center CEO Robert Otwell applauds HCA for abandoning plans to build a new hospital. MRMC extended an offer of arbitration in the summer of 2006, though HCA chose to utilize the court system; they are pleased HCA is not pursing further appeal.
Administrative law judges have denied CONs before, and ALJ Leonard Pogue had already done that in 2007 with regard to the Spring Hill project, but no chancellor has ever overturned a CON. That means that not only does HCA have the option to appeal the decision to the Court of Appeals, but the state attorney general could decide to do the same thing. According to Jim Christoffersen, HSDA deputy general counsel, "one, both or neither" could appeal before the Oct. 3 deadline. "We're assessing our options right now. … If HCA doesn't appeal, the state can appeal it," he confirmed.

A Little History

HCA originally applied for a CON in 2006 for a hospital in the Spring Hill community, which straddles the Williamson and Maury county lines. The 56-bed Spring Hill Hospital, which would be part of HCA's TriStar network, would feature a 24-hour emergency department with 13 beds, general surgery, intensive care, cardiology, obstetrics/pediatrics, outpatient surgery, cancer care and diagnostic services. The proposed location is about five miles from Interstate 65.
The issue was immediately contentious, with nonprofits Maury Regional Medical Center and Williamson Medical Center opposing the plan. In fact, a grassroots citizens' organization called Voices4Care sprung up in support of Maury Regional and in opposition to HCA's proposal. Another opposition group, called Coalition4Care, was made up of healthcare providers opposed to the HCA plan. Nonetheless, HSDA approved the CON.
Maury and Williamson asked for a hearing in front of an administrative law judge, who ruled in their favor. Then HCA went back to the HSDA, which again granted the CON. As the next step in the process, Maury and Williamson appealed to Chancery Court. Bonnyman's CON denial was the result of that appeal.
One thing's for certain: the case has been an employment boon for lawyers and bad news for trees. According to Bonnyman's own reckoning, the case's technical record is 23 volumes, each about 1,000 pages. The transcribed contested case hearing fills 10 additional volumes. "I've never been through a process like this, and I've been in healthcare for 37 years," said Maury Regional CEO Robert Otwell, who added, "I have to say that the process worked." Otwell estimated that the legal battle so far has cost his nonprofit facility between $800,000 and $900,000.

Where Things Now Stand

When this story was filed in mid-September, neither HCA nor the state had announced whether it would appeal Bonnyman's ruling. In a prepared statement, Tim Scarvey, TriStar vice president of Strategic Business Development, said, "We are extremely disappointed that the Chancery Court of Davidson County has not agreed with the decision made twice by the Tennessee Health Services and Development Agency to grant the certificate of need for the Spring Hill Hospital. We are currently still evaluating our options for next steps."
Meanwhile, the Maury and Williamson hospitals are on pins and needles. Both claim that a for-profit hospital in the same market would siphon off patients and, therefore, cause major damage to the bottom line.
"We're in a county of 80,000 people with a 265-bed hospital that serves our county, and we get admissions from outside the county. Yet, we're running 60 percent utilization. The idea that an organization is going to spend $110 million to build a second hospital in your county … it's kind of hard to imagine that that is in the best interests of the people in the region," Otwell said. He noted that Maury Regional began investing in the Spring Hill area in 1998, and its satellite campus on Main Street currently boasts primary care and specialty physicians, urgent care and an imaging center with MRI, CT scan, ultrasound and mammography.
"The most prominent response to the healthcare needs of that community have come from Maury Regional, and we've taken an approach to meet those needs on an incremental basis as they develop," Otwell said. "We felt, obviously from day one, that jumping way, way ahead and putting a hospital in that community that would be 14 miles from our facility and 16 or 17 miles from Williamson Medical Center was the wrong thing to do."
In her decision, Bonnyman chided the HSDA for ignoring the Tennessee Health Guidelines for Growth and the CON process's own review of hospital-bed needs in granting the Spring Hill CON. She also questioned some findings of fact, including HCA's assertion that Spring Hill Hospital would attract primary care physicians to the community.
"The court finds that the Agency came to its decision to grant the certificate to SHH (Spring Hill Hospital) without a reasonably sound factual basis and made a clear error in judgment. Thus, the Court must reverse the Agency decision as arbitrary and capricious and unsupported in the record by substantial and material evidence," the judge wrote.
Otwell concluded, "What was not said … and what was certainly planned … was to take patients away from Maury and Williamson. That has to be a strategy if you're going to spend $110 million."