The Washington State Hospital Association, representing 98 hospitals around the state, has sued the state over new rules that add state scrutiny of hospital affiliations and mergers to a law that previously allowed the state to review only hospital “sales, purchase or lease” arrangements.
The lawsuit, filed Thursday in Thurston County Superior Court, asks the court to invalidate the recently adopted Certificate of Need (CON) rules, and asserts that the new rules don’t have a basis in the law.
“We know the new rules go too far because the Department of Health has consistently said the law doesn’t apply to mergers or affiliations,” said hospital association President and CEO Scott Bond.
WSHA said the rules, as written, mean that even relatively small business decisions — even those that don’t affect patient care, such as outsourcing billing services – would have to go through an “extensive and expensive review.” Currently, WSHA said, a CON application requires a $40,000 filing fee and typically takes months or years to complete.
Critics of religious restrictions on patients options took issue with the WSHA’s position. “Health system mergers have been occurring at an unprecedented pace in Washington state and, due to creative lawyering, have often evaded Department of Health review,” said Leah Rutman, policy counsel for the ACLU of Washington. “These mergers can result in the reduction or denial of important health services.”
Rutman said the health department correctly recognized that “the CON process needs to include oversight of these mergers which affect the availability of a full range of health care services.”
The rule change, effective as of Jan. 23, means the state will now review any kind of “change of control” of a hospital.
The rules were changed after Gov. Jay Inslee responded to a flurry of concern that hospitals were changing patient-care policies based on new arrangements, often termed simply “affiliations.” In June, Inslee directed the Department of Health to review the rules.
Inslee said the CON process had “not kept current with the changes in the health-care delivery system,” because often such affiliations, mergers and other arrangements result in outcomes similar to sales, purchasing and leasing, and affect the control of hospitals and patient access.
The lawsuit will not affect the new requirement that hospitals post their policies on reproductive and end-of-life care, non-discrimination and admissions. That provision was moved to other rules which affect hospital licensing.
The CON requires providers to get state approval for changes such as building certain types of new facilities, offering new or expanded services, adding beds or opening new high-level health care services, such as organ transplantation or open-heart surgery. The Washington State Department of Health says the law is intended to make sure new services or facilities are needed for quality patient care.