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Court Upholds COPN for Radiation Therapy Move

The Court of Appeals upholds a trial court decision affirming the state health commissioner’s issuance of a Certificate of Public Need authorizing Inova Health Care Services to relocate a medical radiation therapy service from its Fairfax hospital to its Fair Oaks hospital.

Under Virginia’s comprehensive regulatory system governing every aspect of medical care facilities, the law requires a Certificate of Public Need (COPN) from the state health commissioner for various types of projects conducted by medical care facilities. Here, the commissioner issued a COPN to Inova Health Care Services authorizing it to relocate a medical radiation therapy service from Inova Fairfax Hospital to Inova Fair Oaks Hospital, both in Fairfax County. A competitor, Reston Hospital Center LLC, objected to the relocation during the administrative process and on appeal to the circuit court. The circuit court held the commissioner acted within her authority when she issued the COPN.

We agree and, in the primary dispute in this case affirm the circuit court ruling.

Although Reston asserts four assignments of error, they can be synthesized into three substantive arguments: 1) the issuance of the 2009 COPN in this dispute was “inconsistent” with the State Medical Facilities Plan (SMFP); 2) the commissioner failed to explain sufficiently the basis for her decision or her departure from prior case decisions; and 3) the commissioner’s decision to issue the 2009 COPN was, on the merits, indefensible.

Reston argues that the SMFP provides that no new radiation therapy services should be approved unless existing radiation therapy machines located in the health planning district performed an average of 8,000 procedures per existing and approved radiation therapy machine in the relevant reporting period. Reston correctly points out that, for several years prior to the issuance of the 2009 COPN, PD 8 performed less than an average of 8,000 procedures per linear accelerator. For this reason alone, Reston concludes, the commissioner was without authority to authorize the new linear accelerator service at Inova Fair Oaks.

The flaw underlying Reston’s argument is the assumption that the phrase “new radiation therapy service,” as used in 12 Va. Admin. Code. § 5-230-290(A)(1), includes the mere relcoation of an existing service from one hospital to another hospital, which is owned and operated by the same company and serves patients within the same planning district. The ordinary understanding of the word “new” does not naturally lend itself to this interpretation. Though the linear accelerator service was new to Inova Fair Oaks, it was not new to Inova. It merely relocated the service from one hospital to another. Nor was the service new to the planning district. PD 8 had 13 linear accelerators before the relocation and 13 after. We reject Reston’s reading of “new radiation therapy service,” 12 VAC § 5-230-290(A)(1), to include the unique circumstances presented in COPN No. VA-04223.

Reston also argues the commissioner acted arbitrarily and capriciously by issuing the COPN to Inova under circumstances that have never been found previously by the commissioner to be acceptable. The nine examples Reston gives as precedent, however, all apparently involve requests for COPNs for truly new services, not the relocation of existing services – at least no one has suggested to us otherwise. Reston has not shown the commissioner made a “sudden and unexplained change” in administrative policy.

Finally, Reston contends the commissioner’s decision to issue the 2009 COPN should be judicially vacated because physicians at Inova Fair Oaks who previously have treated cancer patients have had to refer them, out of necessity, to other hospitals like Reston. If Inova Fair Oaks gets a linear accelerator, Reston worries that patients at Inova Fair Oaks may not need to travel to another hospital for radiation therapy and this would reduce Reston’s revenues. The commissioner conscientiously considered the effect Inova’s relocated service would likely have on Reston’s market share, and we conclude nothing in the administrative record as a whole persuades us that a reasonable mind would necessarily come to a different conclusion.

Judgment affirmed.

Reston Hospital Center LLC v. Remley, M.D. (Kelsey) No. 2301-12-4, Sept. 30, 2014; Fairfax Cir.Ct. (Baskervill, J.D.) Robert L. Hodges for appellant; Ishneila G. Moore, AAG; Amandeep S. Sidhu for Inova Fair Oaks. VLW 014-7-295, 18 pp.

VLW 014-7-295

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