Court: UMMC subject to CON law, with exceptions

University of Mississippi Medical Center

A June 14 decision from the Mississippi Supreme Court pulled off the nearly impossible task of satisfying the opposing sides.

There is a catch, though.

The high court found that the law governing the certificate of need process — which the Mississippi State Department of Health uses to approve or disapprove medically related projects – does apply to University Medical Center in Jackson.

That was what St. Dominic-Jackson Memorial Hospital, Mississippi Baptist Medical Center and the parent company of Central Mississippi Medical Center had sought. But, the court found in the same opinion that MSDH can create a “teaching” exception for UMMC, thereby exempting the hospital from the CON process in certain instances.

Exactly what those instances are and how they will be applied by the MSDH is something that has the private hospitals concerned.

The hospitals sued MSDH in 2009 in Hinds County Chancery court, asking that a chancellor find that UMMC is not exempt from the CON law.

The suit was in response to UMMC’s plans to buy an Elekta Synergy Platform Linear Accelerator System. The accelerator, the hospital said, would help fill the void left by the state’s lack of a National Cancer Institute-designated cancer center; would help create the state’s first specialized radiation oncology training program; and would allow the hospital to conduct total bone marrow irradiation.

The IHL had approved the project, which would have been funded by self-generated patient revenue. After MSDH recommended approval of the project in June 2009, St. Dominic and Health Management Associates filed a request for a public hearing.

Health Department officials then asked for an attorney general’s opinion as to whether the CON statute applied to UMMC. Two separate opinions said that the CON laws did not apply to UMMC, even though there was no express exemption for the hospital, but that the MSDH could make determinations of reviewability under the CON statute and/or enact related regulations under the state health plan. The state health plan, developed by MSDH every three years, takes into consideration UMMC’s status as a teaching hospital and allows exceptions for equipment and services that are necessary for the hospital to carry out that mission.

UMMC then withdrew its CON application and asked the MSDH for determination of reviewability, which is a procedure by which an entity subject to the CON law can seek clarification of whether a particular project requires a CON. MSDH ruled, without a public hearing, that the project was not subject to the CON process, finding that the latest state health plan from 2010 allowed the hospital to acquire equipment like the accelerator if it advanced UMMC’s teaching and/or research mission.

That prompted the litigation by the private hospitals.

St. Dominic, Baptist and HMA asked the trial court to review MSDH’s determination of nonreviewability, and argued the lack of a public hearing on the matter violated due process rights.

During the course of the litigation at the chancery court level, UMMC argued that IHL has exclusive authority to manage and control the hospital, making it exempt from the CON law.

St. Dominic and HMA countered in their own motion for summary judgment that the CON law does apply to UMMC. When Hinds County Chancery Judge Patricia Wise denied the competing motions, the parties appealed to the high court.

The Supreme Court ruled that the CON statute does apply to UMMC, but that MSDH can create a “teaching” exception when UMMC is required to obtain a CON. Because of that exception, the court left unaddressed whether the College Board has exclusive authority over UMMC.

UMMC spokesperson Patrice Guilfoyle said the high court’s decision confirms that hospital as operating under a unique arrangement as Mississippi’s only academic health science center.

“We believe that the teaching mission of the Medical Center should not be subject to the influence of outside interests,” she said in a statement, referring to the CON process and the forum it gives an applicant’s competitors.

What the court’s ruling leaves unclear, say officials at St. Dominic, is how far that exception would reach. There are also no guidelines included on how MSDH should apply the exception – specifically, the court does not address if the exception applies only to equipment similar to the accelerator, or if it applies to different types of equipment.

“We are concerned for St. Dominic and every other hospital across the state that this part of the ruling will undermine the purpose of the CON law and will result in unfair and inconsistent decisions,” said Paul Arrington, vice president of business development and marketing at St. Dominic.

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