Q. What is a certificate of need?
A. Like more than a dozen other states, Alabama requires state approval for significant changes in medical services. The State Health Planning & Development Agency's Certificate of Need Review Board reviews applications and issues certificates of need, allowing hospitals to expand, move or add services.
One year after state regulators approved Trinity Medical Center's plans to leave its Montclair Road campus and move into the unfinished HealthSouth hospital on U.S. 280, three hospitals have spent millions of dollars fighting over the proposal and lawyers are preparing for a very public showdown.
The Alabama Court of Civil Appeals next month will hear oral arguments in the case in an auditorium at Samford University, likely before a large crowd of students, lawyers and the curious public.
Health care management experts and some attorneys associated with the case said they believe it to be the most protracted certificate of need battle in Alabama history, and among the most lengthy ever nationally.
That's really saying something, said John Lowe III, director of the graduate program in health care administration at Simmons College in Boston.
"CON seems a bigger deal in Alabama than other states," he said. "But only because competitors in some growing markets can use the CON process to stymie competition and subvert the marketplace."
While the fight over Trinity's plan has gone on for about three years, it's not clear whether an end is in sight.
At issue in the Oct. 6 hearing at Samford's Cumberland School of Law will be a fight over evidence, said St. Vincent's Medical Center attorney David Hunt and Brookwood Medical Center attorney Jim Williams.
St. Vincent's and Brookwood have argued that Trinity improperly withheld evidence in the case, and in March a special Circuit Court judge appointed specifically to hear the case ordered it sent back to regulators so the evidence could be considered.
Trinity's attorneys, who appealed to the Court of Civil Appeals, have argued that the evidence was considered and have said the battle over it is a delaying tactic. That's a charge the opposition calls ironic.
"They're really the ones causing the delays," said St. Vincent's Hunt. "If they'd just turned over the evidence, I think we'd be done with this."
Trinity first announced plans to relocate in 2006, when it said it intended to build a $316 million hospital in Irondale. Two years later it shifted gears, announcing that it instead wanted to move into the unfinished HealthSouth hospital on U.S. 280, a move it said would cost it about $36 million less and put it in the heart of the fast-growing 280 corridor. HealthSouth stopped construction on the facility in 2005, after its billion-dollar accounting scandal came to light.
The state's Certificate of Need Review Board, the regulatory agency that must approve major hospital projects, overruled objections lodged by Brookwood and St. Vincent's and granted Trinity permission to proceed on Sept. 15 of last year.
Brookwood and St. Vincent's took the fight to court last December, arguing that the new U.S. 280 Trinity would cost them tens of millions of dollars in lost business and that Trinity misled regulators by pursuing the U.S. 280 site even as they finalized the deal for an Irondale hospital.
The evidence at issue in next month's hearing is related to the Irondale deal, Brookwood and St. Vincent's attorneys have said.
Keith Granger, Trinity chief executive officer, argues that the opposition to the relocation plan has no real merit and is taking advantage of a CON system that lacks safeguards implemented in some other states. Some states with a CON system require project opponents to post large bonds before they can be heard. Some also automatically send appeals to higher courts in an attempt to speed up the process.
"It certainly feels like the delay has been prolonged due to the actions of our opponents on this project," Granger said.
He said he doesn't know how much Trinity has spent on litigation as the case has risen through the courts. But those costs ultimately come from just one place, he said.
"Those costs have to be borne out of the revenues that are being generated. There's no question that .¤.¤. it is a cost for each of the facilities," Granger said of the cost of litigation to Trinity, Brookwood Medical Center and St. Vincent's Medical Center.
Williams, the Brookwood attorney, said the Oct. 6 hearing could have any number of outcomes. Should a panel of judges rule in favor of Brookwood and St. Vincent's, the case likely will be sent back to an administrative law judge, to hear more evidence. That judge then would make another recommendation to regulators.
Whatever the ruling, said Trinity attorney Colin Luke, the case is likely to ultimately end up before the Alabama Supreme Court, where a decision likely would definitively end a dispute that Trinity has said is costing it $1 million a month, has delayed the creation of "thousands" of construction jobs and created an avalanche of legal filings, including 160 in the last year.
While nobody knows how the case will play out before the appeals court and before the Supreme Court should it end up there, Simmons College's Lowe said he believes one side has a clear advantage.
"It's likely Trinity will prevail in the long run and will have spent plenty to get there," he said.
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