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Manor Health. Corp. v. Nw. Comm. Hosp.

OPINION FILED NOVEMBER 28, 1984.

MANOR HEALTHCARE CORP., D/B/A AMERICANA HEALTHCARE CENTER, PLAINTIFF-APPELLANT,

v.

NORTHWEST COMMUNITY HOSPITAL ET AL., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.

JUSTICE WHITE DELIVERED THE OPINION OF THE COURT:

Manor Healthcare Corporation, plaintiff-appellant (Manor), appeals from an order of the circuit court of Cook County affirming the decision of the Illinois Health Facilities Planning Board, defendant-appellee (the Board), to grant a certificate of need to Central Health Care Corporation, defendant-appellee (Central), to construct a 200-bed nursing home in planning area 7-I. *fn1

On December 27, 1982, Central filed an application before the Board for a certificate of need to build a 200-bed skilled nursing facility adjacent to Northwest Community Hospital *fn2 in Arlington Heights. The application was deemed complete on January 21, 1983. On March 31, 1983, the Board held a public hearing on the desirability of the proposed nursing facility. At the hearing and thereafter, Manor voiced objections to the grant of a certificate of need to Central. On June 2, 1983, the Board considered Central's application for a certificate of need and took action indicating its intent to deny the application. The Board expressed concern about the proposed square footage in the private rooms and the possible use of empty rooms in Northwest Community Hospital. Subsequently, Central modified the plans for the nursing facility, and on August 23, 1983, the Board approved the application.

Central's application for a certificate of need was also reviewed by the Cook-Du Page County Health Systems Agency, the health planning agency for area 7. The agency recommended that the Board approve Central's application.

On August 11, 1983, the Board issued Central a permit for construction of the 200-bed nursing facility. On August 17, 1983, Manor requested that the Board reconsider its decision to approve Central's application. The Board denied Manor's request for reconsideration on the basis that "good cause does not exist." Manor then filed a complaint for judicial review seeking, inter alia, stay of the Board's decision and an injunction against further construction of the nursing facility. From the order of the circuit court affirming the decision of the Board, Manor appeals.

• 1 We first consider defendants' contention that Manor lacks standing to seek judicial review of the Board's decision to grant Central a certificate of need. Section 11 of the Illinois Health Facilities Planning Act (Planning Act) provides:

"Any person who is adversely affected by a final decision of the State Board may have such decision judicially reviewed." (Ill. Rev. Stat. 1983, ch. 111 1/2, par. 1161.)

Prior to May 1982 the section read:

"An applicant or areawide health planning organization who has exhausted all available administrative remedies and who is aggrieved by a final decision in a contested case may have such decision judicially reviewed." (Ill. Rev. Stat. 1981, ch. 111 1/2, par. 1161.)

The section was amended as part of an effort to bring the State of Illinois in compliance with new Federal rules and regulations regarding certificates of need. *fn3 (House of Representatives, 82d General Assembly, April 22, 1982, at 165.) The pertinent Federal regulations provide:

"(14) Judicial review. Provision that any person adversely affected by a final decision of a State Agency with respect to a certificate of need or an application for an exemption may, within a reasonable period of time after the decision is made (and any administrative review of it completed) obtain judicial review of it in an appropriate State court. * * *

(ii) For purposes of this paragraph, `person adversely affected' shall include the State Agency, any person who meets the definition of `affected person' in sec. 123.401, and any person who participated in the proceedings before the State Agency." (42 C.F.R. sec. 123.410(a)(14).)

"The term `affected persons' includes, at a minimum, the applicant; the health systems agency for the health service area in which the proposed project is to be located; * * * any person residing within the geographic area served or to be served by the applicant; * * * health care facilities and health maintenance organizations (HMO's) located in the health service area in which the project is proposed to be located which provide services similar to the services of the facility under review * * *." 42 C.F.R. sec. 123.401.

Manor owns and operates Americana Healthcare Center (Americana), a 151-bed nursing facility located in Arlington Heights. Americana provides services similar to the services Central intends to provide. We conclude that Manor will be adversely affected by construction of a 200-bed facility in the area. Accordingly, Manor has standing to seek ...


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