Stonewall Jackson Memorial Hospital in Weston, W.Va.
CHARLESTON – The state Supreme Court has ruled Mon Health will require a Certificate of Need to build a new Stonewall Jackson Memorial Hospital in Weston.
Chief Justice Bill Wooton authored a November 13 opinion saying both the West Virginia Health Care Authority and the Intermediate Court of Appeals were wrong to say one wasn’t needed.
Another facility, St. Joseph’s Hospital in Buckhannon, has maintained Mon Health needed a CON to build the new hospital. St. Joseph’s, which is owned by WVU Medicine, would be affected by the nearby construction of a newer, larger hospital.
Stonewall filed an application with the HCA in 2023 asking if it needed a CON. The authority issued a final decision saying it wasn’t needed because of “an unwritten guideline that a Certificate of Need is unnecessary if a healthcare provider is merely ‘relocating’ from an existing building to a newly constructed one.” The ICA later affirmed that decision.
But the Supreme Court says that interpretation of the state’s CON statutes is wrong.
“The Legislature has mandated that health care entities must seek a Certificate of Need for the construction of a new hospital building,” Wooton wrote. “Accordingly, we remand the case to the authority for further proceedings consistent with the clear language of the statute.”
St. Joseph’s is a 25-bed hospital in Buckhannon, which is about 16 miles from the current location of Stonewall Jackson Hospital, which has 70 beds. The planned location of the new $56 million Stonewall Jackson Hospital would be about 12 miles from St. Joseph’s.
“Since 2014, St. Joseph’s has been designated as a ‘critical access hospital’ or ‘CAH’ by the federal Centers for Medicare & Medicaid Services,” Wooton wrote. “The CAH designation permits St. Joseph’s to receive a higher reimbursement rate for Medicare and Medicaid patients, which in turn allows it to maintain financial stability.
“For St. Joseph’s to preserve its CAH status, it must operate its rural facility further than 15 mountainous miles from other hospitals.”
In 2021, Stonewall applied to the HCA for a CON, but St. Joseph’s offered evidence of its loss of CAH status and likely financial hardship it would endure. The HCA denied that application in 2022.
But in March 2023, while Stonewall’s appeal was pending with the ICA, the Legislature amended CON statutes, including one that defined the phrase “capital expenditure” used in CON laws.
“Specifically, prior to the 2023 amendments, a Certificate of Need was required for certain specified capital expenditures made by or on behalf of a health care facility which exceeded $5 million,” Wooton wrote. “After the 2023 amendments, a Certificate of Need was required only for certain specified capital expenditures exceeding $100 million.”
Stonewall then filed a request for a determination of reviewability with the HCA, essentially claiming that because the project was expected to cost less than $100 million a Certificate of Need was no longer required. St. Joseph’s intervened again, saying a CON still was needed.
On July 12, 2023, the HCA said Stonewall didn’t need to apply for a CON. That was 15 days after the ICA affirmed the 2022 HCA decision denying Stonewall’s CON application.
In the 22-page opinion, Wooton notes the HCA has since altered its position and agrees with St. Joseph’s that its previous ruling and that of the ICA should be reversed.
Stonewall argues that a new hospital construction project doesn’t require a CON, saying the statute only applies to a newly established health care entity constructing a building.
“Given the plain meaning of the relevant terms, and in the context of this case, we hold that in West Virginia Code … the phrase ‘construction ... of a health care facility’ includes the erection or building of a structure for offering or providing health services,” Wooton wrote. “In the instant case, it is undisputed that Stonewall’s plans include the erection of a new hospital building for the provision of health services for its patients. (State code) by its clear and unambiguous terms, required Stonewall to seek a Certificate of Need from the authority for its new hospital project.
“Both the authority and the ICA erred by finding (state code) to be ambiguous and by applying the authority’s unsupportable, unwritten guideline that the relocation of services from an old building to a newly erected one is exempt from the Certificate of Need requirement.
“Stated simply, on this record, the authority exceeded its statutory authority in its (request for a determination of reviewability) assessment that Stonewall’s new hospital construction project did not require Certificate of Need review.”
West Virginia Supreme Court of Appeals case number 24-347
