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08/12/96 ACCESS CENTER FOR HEALTH v. HEALTH

August 12, 1996

ACCESS CENTER FOR HEALTH, LTD., PLAINTIFF-APPELLANT,
v.
HEALTH FACILITIES PLANNING BOARD; THE DEPARTMENT OF PUBLIC HEALTH; HINSDALE SURGICAL CENTER INC.; AND HINSDALE HOSPITAL, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Du Page County. No. 94--MR--562. Honorable John W. Darrah, Judge, Presiding. This Opinion Substituted for Withdrawn Rule 23 Order.

Released for Publication September 17, 1996.

The Honorable Justice Doyle delivered the opinion of the court. Colwell and Rathje, JJ., concur.

The opinion of the court was delivered by: Doyle

JUSTICE DOYLE delivered the opinion of the court:

Plaintiff, Access Center for Health, Ltd., appeals from an order of the circuit court of Du Page County which confirmed a decision of the Illinois Health Facilities Planning Board (Board). The Board approved the application of an ambulatory surgical treatment center (ASTC) for a permit, known as a certificate of need (CON), to relocate the center.

Defendants, Hinsdale Surgical Center, Inc. (Hinsdale Surgical), which operates the ASTC, and Hinsdale Hospital (Hospital), with which Hinsdale Surgical is affiliated, submitted the application for the CON to the Board as coapplicants. We will refer to Hinsdale Surgical and the Hospital collectively as Hinsdale. Plaintiff's complaint for administrative review named as defendants Hinsdale Surgical, the Hospital, the Board, and the Illinois Department of Public Health (Department). Plaintiff operates a limited service medical/surgical facility providing abortions. Plaintiff's facility is located in the same health services area as Hinsdale Surgical's facility. On October 22, 1993, plaintiff filed its own application for a CON with the Board. Plaintiff sought permission to begin operating an ASTC. Plaintiff proposed to modify and expand its existing facility to provide medical services in addition to abortions.

On January 13, 1994, the Board denied plaintiff's application for a CON on the ground, inter alia, of excess surgical capacity in the health services area. The Board subsequently reconsidered the matter and denied plaintiff's application for a second time. After an administrative hearing which supported the Board's decisions, the Board denied plaintiff's application for a final time on December 4, 1994.

On October 28, 1993, Hinsdale filed its application for a CON with the Board. Hinsdale sought permission to relocate an existing ASTC operated by Hinsdale Surgical. The relocated ASTC would be about two miles northeast of the existing facility and about one-half mile farther away from the Hospital than the existing facility. The estimated cost to relocate the facility was $3,325,154.

Hinsdale had determined that it was necessary to relocate after the Department found fire safety deficiencies in Hinsdale's existing facility. In Hinsdale's view, it was necessary to relocate despite its landlord's apparent willingness to renovate the existing facility. Hinsdale concluded that no amount of renovation could correct all of the fire safety deficiencies in its existing facility.

Hinsdale's landlord, Clay Venture, intervened in the circuit court proceedings. During the circuit court proceedings, Clay Venture took the position that it could cost-effectively renovate Hinsdale's existing facility to correct the safety deficiencies. However, Clay Venture has not appealed from the circuit court order and is not a party to this appeal.

On June 12, 1994, pursuant to the Illinois Health Facilities Planning Act (Planning Act) (20 ILCS 3960/1 et seq. (West 1994)), plaintiff requested a public hearing regarding Hinsdale's proposed relocation. On June 30, 1994, the Department conducted a public hearing on the matter. A representative for plaintiff attended the public hearing. Plaintiff also presented written objections to Hinsdale's application. Plaintiff objected to Hinsdale's application on the basis of the Board's prior denials of other applications for a CON, including plaintiff's. Plaintiff pointed out that the Board had denied these applications on the grounds of underutilization of surgical capacity in the health services area.

On July 28, 1994, the Board held a meeting. At the meeting, the Board addressed Hinsdale's application for a CON. The Board had before it Hinsdale's application, a report regarding the public hearing, and a report prepared by the Department entitled "State Agency Report." The State Agency Report consisted of two main parts. In one of the parts, the Department evaluated Hinsdale's application with respect to various financial review criteria set out in section 1120 of title 77 of the Illinois Administrative Code (the Code) (77 Ill. Adm. Code § 1120 (1994)). In the State Agency Report, the Department reported that Hinsdale's project was in conformance with the provisions of section 1120.

In the other part of the State Agency Report, the Department evaluated Hinsdale's application with respect to 13 general review criteria set out in section 1110 of title 77 of the Code (77 Ill. Adm. Code § 1110 (1994)). In the State Agency Report, the Department reported that Hinsdale's proposed project appeared to be in conformance with 10 of the 13 general review criteria. The Department also reported that Hinsdale's proposed project did not appear to conform with three of the criteria. These criteria were: (1) need assessment; (2) alternatives; and (3) need for the project. In the report, the Department summarized its findings as to the section 1110 criteria by stating that "the proposed project does not appear to be in conformance with the provisions of part 1110." (Emphasis in original).

At the Board meeting which addressed Hinsdale's application, a representative of the Department, Michael Copelin, spoke regarding the review criteria. Copelin stated:

"The [Department's] analysis of this project found three criteria for which a positive evaluation could not be made. First, under criterion 1110.1540.e., Need Assessment, it appears that there is adequate access to AST services within 30 minutes travel time to ensure that patients could obtain care with or without this facility. While it appears that the existing facility must be modernized to stay in conformance with licensure standards and it may be necessary to relocate to meet these standards, it does not appear that the applicant has documented that the other 23 outpatient surgery programs in the area could not handle the applicant's workload.

Second, under criterion 1110.230.e., Alternatives, it appears that the least costly alternative is to utilize other existing programs in the area to absorb the applicant's workload.

And finally, under criterion 1110.230.f., Need for the Project, it does not appear that the applicant has documented that the proposed facility is needed to serve the residents of the planning area."

After Copelin's statement, another Department representative, Peter Kaess, spoke. Kaess stated, "We've made a positive finding, Madam Chairman."

Representatives from Hinsdale then addressed the Board. Jorge Heyde, a vice-president of the Hospital, spoke briefly. He stated that Hinsdale's project was important not only to Hinsdale but also to the health system in the Hinsdale community because it offered an integrated health care delivery system which met patient and community needs for high quality, cost-efficient surgical services.

Hinsdale Surgical's administrator and nursing supervisor, Judy McCammon, then addressed the Board at some length. McCammon stated the following. Hinsdale Surgical was one of the first ASTCs established in Illinois and has consistently provided state-of-the-art service in a cost-effective and timely manner. Because of Hinsdale Surgical's affiliation with the Hospital, Hinsdale Surgical can stay on the leading edge of health care while giving quality care as a low-cost alternative to hospital care.

McCammon further stated the following. Hinsdale Surgical provides certain ophthalmology services not available at surrounding surgical centers. Hinsdale Surgical does not refuse service to any patient regardless of ability to pay and has provided free services to patients who would otherwise be unable to obtain treatment in a timely manner. Hinsdale Surgical is in discussion with representatives from the Illinois Department of Public Aid to develop a private program aimed at including surgical centers as providers for Illinois Department of Public Aid recipients. Hinsdale Surgical provides a disproportionate amount of care to the elderly and its Medicare utilization rate is 48%. These patients receive high quality care comparable to a hospital with less expense.

Board members then asked Hinsdale Surgical's representatives questions. The representatives' answers were as follows. Hinsdale Surgical has been in existence since 1976. In 1993, Hinsdale Surgical changed from a for-profit facility to a not-for-profit facility. The doctors, patients, and procedures at Hinsdale Surgical will all remain the same if Hinsdale Surgical is allowed to relocate. ...


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