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The Opinion of the Court was delivered PER CURIAM.
JUSTICE STARCHER dissents and reserves the right to file a dissenting opinion.
1. “On
appeal of an administrative order from a circuit court, this Court is bound
by the statutory standards contained in W. Va. Code § 29A-5-4[g]
and reviews questions of law presented de novo; findings of fact by the administrative
officer are accorded deference unless the reviewing court believes the findings
to be clearly wrong.” Syllabus point 1, Muscatell v. Cline, 196
W. Va. 588, 474 S.E.2d 518 (1996).
2. “Interpreting
a statute or an administrative rule or regulation presents a purely legal question
subject to de novo review.” Syllabus point 1, Appalachian Power Co. v.
State Tax Department of West Virginia, 195 W. Va. 573, 466 S.E.2d 424
(1995).
Per Curiam:
Family
Medical Imaging, Dr. Gary L. Poling and Dr. Scott C. Lostetter (hereinafter
referred to as the “Appellants”), (See
footnote 1) appeal from an order of the Circuit Court of Raleigh
County that affirmed a decision of the West Virginia Health Care Authority
(hereinafter referred to as “the Authority”) (See
footnote 2) to deny the Appellants a certificate of need. (See
footnote 3) In this appeal the Appellants contend that the denial
of their request for a certificate of need was erroneous because the Authority
(1) applied the wrong standard for issuing a certificate of need, (2) improperly
found that the proposed service area was too large, and (3) erred in denying
their motion to exclude expert testimony. (See
footnote 4) After listening to the arguments of the parties and
carefully reviewing the record, we affirm the circuit court's order.
After
receiving the evidence, the Authority issued an order on October 9, 2003, denying
the Appellants application. Appellants thereafter filed a request for review
of the decision before an administrative law judge (hereinafter referred to as “the
ALJ”). The Appellants alleged that the Authority's decision should be reversed
because it was based upon the wrong standard for issuing a certificate of need,
improperly found that the proposed service area was too large, and because the
Authority erred in denying their motion to exclude expert testimony. The Hospital
subsequently filed a motion to dismiss the request for review as untimely filed.
The ALJ convened a hearing on January 12, 2004, to hear arguments on the motion
to dismiss, as well as the merits of the request for review. On February 20,
2004, the ALJ issued an order granting the Hospital's motion to dismiss without
making a ruling on the merits of the request for review.
The Appellants
then appealed the ALJ's decision to the circuit court. The circuit court, by
order entered April 14, 2004, reversed the ALJ's decision and remanded the case
for a determination on the merits of the request for review. The ALJ issued a
subsequent order dated May 26, 2004, affirming the Authority's decision. The
Appellants thereafter filed an appeal with the circuit court. The circuit court,
by order entered September 1, 2004, affirmed the ALJ's decision. From this ruling,
Appellants now appeal to this Court.
II.
GENERAL STANDARDS
The
following standards apply to all ambulatory care centers. Standards which apply
specifically to a particular type of ambulatory care center are listed in Section
III of this standard and supplement the general standards, unless otherwise noted.
A.
Need Methodology
For
ambulatory care centers for which no specific need methodology is set forth in
Section III, below, the following general need methodology shall be used. If
a need methodology is specified for a particular type of ambulatory care facility
in Section III of this standard, the general need methodology will apply only
to those portions of the need methodology which are not specified.
All
certificate of need applicants shall demonstrate, with specificity, that there
is an unmet need for the proposed ambulatory care services, that the proposed
services will not have a negative impact on the community by significantly limiting
the availability and viability of other services or providers, and that the proposed
services are the most cost effective alternative.
The
applicant shall delineate the service area by documenting the expected areas
around the ambulatory care facility from which the center is expected to draw
patients. The applicant may submit testimony or documentation on the expected
service area, based upon national data or statistics, or upon projections generally
relied upon by professionals engaged in health planning or the development of
health services.
The
applicant shall document expected utilization for the services to be provided
by the facility for the population within the service area. As used in this section, “expected
utilization”, in addition to the expected demand for the service, may be
expressed as the number of providers typically required to serve any given population,
or as the number of persons in a population that are typically served by a single
provider. Where a population is known to have specific characteristics, such
as age or disease rates, that affect utilization, then those characteristics
may be taken into consideration.
After
establishing expected utilization or demand, the applicant shall estimate or
document the number of existing providers within the service area and the extent
to which the demand is being met by existing providers located within the service
area. Where expected utilization is expressed as a number of providers typically
serving a given population, it shall be sufficient to show that the ratio of
providers to the population in the area is below the expected number. Providers
located outside the service area need not be considered, absent specific showing
that a provider located outside the service area is a major provider of services
to the population within the service
area. (See footnote 11)
The ALJ's
order clearly utilized the ambulatory care center protocol in evaluating the
Appellants' application. Thus, assuming for the sake of argument that the Authority
did, in fact, impose the 25/10 acute care requirements on the Appellants, this
error was rendered harmless by the ALJ's application of the appropriate standards
for ambulatory care centers.
Appellants
next contend that the Authority was wrong in finding that their proposed service
area of six counties was too large because they included two counties in which
they had an insignificant number of pre-existing clients. The Appellants contend
that under the standards for ambulatory care centers, there is no requirement
that an applicant show that a specific number of clients are served in each
county proposed. Consequently, the Appellants argue that they produced sufficient
evidence to show the need for the proposed service in the six counties.
The circuit
court correctly found, and all parties agree, that there is “no express
definition contained in the Standards, or in any other regulation of what may
constitute a
proper service area for a new [diagnostic center].” (See
footnote 12) All that the ambulatory care center standards require
is that “[a]n applicant must delineate, through testimony or documentation,
the expected areas from which the diagnostic center will draw its patients.” The
circuit court addressed this matter as follows: “The Court observes that
there can be no brightline rule to specifically describe an appropriate service
area for a diagnostic center, but concedes that the [Authority] should be allowed
some leeway to interpret and apply the State Health Plan.” The Authority
has interpreted the ambulatory care standards as requiring a showing of significant
pre-existing clients in each county that is to be served.
The Authority's
interpretation of the ambulatory care center standard as requiring an applicant
to show a significant pre-existing client population in each proposed county
is an “interpretive rule.” This Court has held that “[i]nterpreting
a statute or an administrative rule or regulation presents a purely legal question
subject to de novo review.” Syl. pt. 1, Appalachian Power Co.
v. State Tax Dep't. of West Virginia, 195 W. Va. 573, 466 S.E.2d 424 (1995).
Justice Cleckley addressed the issue of interpretive rules in Appalachian Power as follows:
Interpretive
rules . . . do not create rights but merely clarify an existing statute
or regulation. Because they only clarify existing law, interpretive rules need
not go through the legislative authorization process. Although they are entitled
to some deference from the courts, interpretive rules do not have the force of
law nor are they irrevocably binding on the agency or the court. They are entitled
on judicial review only to the weight that their inherent persuasiveness commands.
Appalachian Power, 195 W. Va. at 583, 466 S.E.2d at 434 (internal citations
omitted). In a concurring opinion by Justice Starcher in Cookman Realty
Group, Inc. v. Taylor, 211 W. Va. 407, 566 S.E.2d 294 (2002) (per
curiam), he addressed the issue of interpretive rules as follows:
The
agency's construction, while not controlling upon the courts, nevertheless constitutes
a body of experience and informed judgment to which a reviewing court should
properly resort for guidance. The weight that must be accorded an administrative
judgment in a particular case will depend upon (1) the thoroughness evident in
its consideration, (2) the validity of its reasoning, (3) its consistency with
earlier and later pronouncements, and (4) all those factors which give it power
to persuade, if lacking power to control.
Cookman, 211 W. Va. at 417-418, 566 S.E.2d at 304-305 (Starcher, J.,
concurring).
The Authority
has provided the following reasons for interpreting the ambulatory care center
standards as requiring an applicant have significant pre-existing clients in
each proposed county:
The
Authority is entitled and, in fact, must critically evaluate [certificate of
need] applications in order to determine if they merit approval. If the Court
were to accept [Appellants'] argument, it would deprive the Authority of discretion
to critically evaluate [certificate of need] applications and eviscerate the
Authority's legislatively conferred powers. Essentially, adopting [Appellants']
argument would allow applicants to project need without restriction in all cases
before the Authority where no specific service area is defined. The Authority
could only rubber stamp such applications and not delve any deeper or perform
any analysis. This was clearly not the intent of the Legislature when it empowered
the Authority to administer the [certificate of need] program and it was likewise
not the intent of the Authority to allow unmet need to be manipulated under the
Ambulatory Care Standards, as [Appellants] did in this case.
It
is essential that the Authority has discretion to critically evaluate applications
or the entire mission of the Authority is in jeopardy. The Authority was created,
in part, to help restrain the costs of health care. This is accomplished, in
part, by not allowing the duplication of services in a service area. If the Authority
were deprived of the ability to critically evaluate applications, it would become
a rubber stamp approving anything that is filed. This would result in skyrocketing
health care costs and would not benefit the health care consumers that the Authority
is charged with protecting.
We find
the reasons articulated by the Authority for its interpretive rule to be persuasive.
Consequently, we must determine whether the Authority's interpretive rule was
applied arbitrarily to the facts of this case.
The Appellants assert that they provided evidence to show that they have patients that reside in all of the six proposed counties, in addition to documentation from other physicians that indicated they would refer patients to the Appellants. (See footnote 13) The lower tribunals considered this evidence, but found it insufficient. The ALJ's order, which was affirmed by the circuit court, addressed the matter as follows:
Dr.
Poling testified that he has three to five thousand patients of whom he sees
15 to 20 per day. The bulk of his clientele comes from Fayette and Raleigh counties.
The doctor serves two families from McDowell County and “several” families
from Nicholas County. No additional evidence was proffered by the applicant relating
to the inclusion of these two counties in the service area.
In
the Decision of October 9, 2003, the Authority noted that the entire population
of McDowell and Nicholas counties was included for the purpose of determining
unmet need although few of Dr. Poling's patients are from those particular counties.
By including these two counties, the applicant added a population of more than
50,000 people, to the proposed service area.
The
Raleigh County Circuit Court has previously addressed this issue and affirmed
the Authority's position that if an entity is serving an insignificant number
of people in a county, it is not reasonable to include that county in a need
methodology.
.
. . .
An
applicant is not free to create a service area as
expansive as necessary to satisfy the requirements of unmet need but must have
a reasonable basis for considering counties as a part of the expected area
to be served. To conclude otherwise would defy logic. (See
footnote 14)
In summary,
the lower tribunals correctly concluded that the Appellants' application should
be denied, because the Appellants included two counties in their proposed service
area in which they had an insignificant number of pre-existing clients. The evidence
supports this conclusion. Therefore, we must affirm the lowers tribunals' determination
that the Appellants failed to demonstrate a need for the proposed service. (See
footnote 15)