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Rhode Island Court Rules Department Of Health May Consider Community's Future Needs In CON


Rhode Island Court Rules Department Of Health May Consider Community's Future Needs In CON

The Rhode Island Department of Health (DOH) properly granted a Certificate of Need (CON) for two endoscopy rooms at a freestanding ambulatory surgery center, a court in that state has ruled. In its ruling, the appeals court declined to credit a hospital's arguments that the DOH erred by considering the state's future need (as opposed to current need), that the decision was tainted by prohibited ex parte contact, and that substantial evidence did not support the DOH�s decision.

The court first established the standard of review, explaining that it could not substitute its judgment for that of the DOH, but could only reverse or modify the CON if substantial rights of the hospital were prejudiced, or if the hospital demonstrated a failure enumerated in the CON regulations. Additional deference is due, the court cautioned, for a two-tier administrative decision, such as that granting the CON.

Addressing the hospital's argument that the DOH exceeded its statutory authority by considering future need, rather than current need, for endoscopy facilities, the court noted that the legislature granted the DOH broad authority to impose its own conditions on CON approval. Pursuant to that authority, the DOH promulgated a number of regulations, including a list of factors that may be considered, one of which is "any other factors deemed relevant." Finding no legislative language or statutory construction countervening the consideration of future need, the court deferred to the DOH's statement that "sensible and intelligent planning absolutely requires considerations involving projections in the future," and found that the DOH did not exceed its statutory authority.

The court next considered the hospital's argument that an error of law requiring reversal occurred when the DOH engaged in an ex parte communication with the endoscopy center. Specifically, when the endoscopy center received a memorandum from the DOH's expert witness, counsel for the endoscopy center telephoned counsel for the DOH to object, and was informed that the issue would be addressed that afternoon at a scheduled public meeting. The court granted deference to the DOH interpretation of what constitutes an ex parte contact, finding a concept of reasonableness that excludes contacts of an insubstantial nature. Even if the DOH interpretation was clearly erroneous, the court continued, the challenged conduct in this instance did not prejudice the hospital's substantial rights, and thus did not warrant reversal.

As to the hospital's contention that the CON must be revoked because it was not supported by substantial evidence, the court warned that an agency decision must be "completely devoid of competent evidence" to be reversed�that is "more than a scintilla, but less than a preponderance." Reviewing the record, the court concluded that the evidence supporting the DOH's decision to grant the CON was more than a scintilla, and affirmed the DOH approval of the CON.

KentCounty Mem'l Hosp. v. Rhode Island, No. C.A. 05-2089 (R.I. Super. Ct. Jan. 31, 2006). To read this case, go to

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