Facts: After Swedish Health Services was issued a certificate of need by the petitioner Department of Health permitting it to open an ambulatory surgical facility in eastern King County, respondent Overlake Hospital Association filed suit against the Department of Health in the Superior Court for King County, asserting that the formula that the Department of Health had relied upon in estimating the need for an additional ambulatory surgical facility had been erroneous. The trial court affirmed the Department of Health’s decision, ruling that excluding existing facilities exempt from the statutory definition of an ambulatory surgical facility (those that do not extend the privilege of using the facility to physicians outside the individual or group practice) in calculating existing capacity but including surgeries performed in such facilities in calculating future need was a reasonable interpretation of the legislative mandate of Washington Revised Code §70.38.015(2), which delegates control of the number and types of healthcare services provided in a given planning area to the Department of Health. The Washington Court of Appeals reversed the trial court’s decision, holding that the formula relied upon to calculate the need for an additional facility had been arbitrary and capricious and inconsistent with §70.38.015(2). The Department of Health appealed this decision to the Supreme Court of Washington.

Question(s): Was the formula relied upon by the Department of Health in calculating the need for an additional ambulatory surgical facility in eastern King County arbitrary and capricious?

Conclusion: Justice Alexander’s opinion for a unanimous Court reversed the decision of the Washington Court of Appeals, concluding that the Department of Health had reasonably and in a manner consistent with the mandate of §70.38.015(2) excluded exempt facilities from its calculation of existing capacity in order to ensure that the total number of needed surgeries could be performed at facilities that are open and generally available to all. Thus, the Court affirmed the Department of Health’s decision to issue the certificate of need to Swedish Health Services.

Docket No. 82728-1 (from Court of Appeals Division I Case No. 60554-2)

Petitioner: Department of Health

(Counsel: Peter Scott Ehrlichman, Brian William Grimm, Richard Arthur McCartan, Anne Elizabeth Egeler, and Michael Steven Tribble)

Respondent: Overlake Hospital Association

(Counsel: Donald W. Black, E. Ross Farr, Jeffrey Duane Dunbar, James Scott Fitzgerald, and Gregory A. McBroom)

Briefs:

Argument: Thursday, May 20, 2010 10:00am

[Source: TVW, http://tvw.org]

Decided: Thursday, September 23rd, 2010

Prevailing Party: Department of Health (Petitioner)

Vote: 9-0

Citation: Pending

Court: Madsen1 Court (2010-2011)

Madsen

Johnson

Alexander
(Majority)

Sanders

Chambers

Owens

Fairhurst

Johnson

Stephens