- University of North Carolina Health Care and the state Department of Health and Human Services are appealing a certificate-of-need dispute to the North Carolina Supreme Court.
- The case involves UNC's fight with Duke Health over a new 40-bed hospital and two operating rooms for Durham County. DHHS chose UNC over Duke for a government-mandated CON.
- The state Appeals Court issued a 2-1 ruling in August blocking UNC from moving forward with its plans. Appellate judges voted to send the case back to an administrative law judge to address zoning concerns linked to UNC's proposed hospital site.
University of North Carolina Health Care and the state Department of Health and Human Services hope the state’s highest court will end legal roadblocks for UNC Health’s proposed 40-bed hospital in Research Triangle Park. An appeal filed Tuesday spells out their case.
A legal dispute pits UNC against Duke Health over a government-mandated certificate of need. DHHS chose UNC over Duke to win a CON for new hospital beds and operating rooms in Durham County.
A split 2-1 ruling in August from the state Court of Appeals stopped UNC’s proposed hospital from moving forward. The Appeals Court ruled that the case should return to an administrative law judge. That judge would determine whether the absence of zoning for a hospital in UNC’s chosen location would block the healthcare provider from securing a CON.
“This case centers on ensuring the public’s access to critical healthcare services and provider choice in North Carolina,” wrote private lawyers representing UNC and a state special deputy attorney general representing DHHS.
“Here, UNC seeks to construct and operationalize a new and needed 40-bed, two OR community hospital in southern Durham County that has been approved but undeveloped for about three years,” the court filing continued. “A competing application was filed by Respondent Duke University Health System, Inc. (‘Duke’) to add 40 additional beds and two ORs at its flagship hospital in central Durham County.”
“Significantly, UNC’s new hospital would be developed in an area where there are currently no acute care hospital beds or hospital-based ORs. In fact, there has not been a new hospital developed anywhere in Durham County in nearly 50 years,” UNC and DHHS lawyers wrote. “But a CON cannot be issued until all appeals fully disposing of a contested case have been exhausted.”
The appeal is based in part on a dissent from Appeals Court Judge Jefferson Griffin. He would have allowed UNC’s plans to move forward.
But UNC and DHHS ask the Supreme Court to tackle additional issues beyond Griffin’s dissent. “The majority opinion violated a cardinal rule of North Carolina appellate procedure by basing its decision on an argument that Appellant did not advance in its lone brief,” according to the court filing.
The Appeals Court “also misstated material facts” about the location of UNC’s planned hospital. “All three judges below mistakenly believed that an alternate site location was not included in UNC’s CON application, but a review of that application conclusively establishes that the alternate site was listed,” UNC and DHHS lawyers argued.
“Remand in this case will result in unnecessary delay, additional intermediate appeals, and substantial harm to the public,” according to the court filing. “Patient choice of beds and ORs will remain improperly limited in the Durham County community, and patients will continue to have only one choice of provider.”
The state Supreme Court “is best equipped to put this case quickly back on track in the fewest steps possible,” UNC and DHHS lawyers argued.
In the Appeals Court’s Aug. 6 ruling, Judges Hunter Murphy and Michael Stading upheld much of Administrative Law Judge Melissa Owens Lassiter’s decision favoring UNC Health. But Murphy and Stading agreed to send the case back to Lassiter to deal with one issue.
Current RTP zoning rules would prevent a new hospital. The Appeals Court majority questioned Lassiter’s treatment of that concern, including her consideration of an alternate hospital site not included in the original CON application.
“[M]uch of the ALJ’s reasoning was unsound insofar as it treated the presence of the zoning requirements and covenants as unproblematic and considered the alternative site in the determination of whether the CON should issue,” Murphy wrote.
“In particular, the ALJ should give due consideration to the possibility that a potential inability to change RTP’s applicable covenants could result in substantial cost being passed to patients,” he added. “While the ALJ appears to have been satisfied with the likelihood that both the zoning restrictions and applicable covenants could be amended as necessary to accommodate the proposed UNC facility given a recent history of amendments to permit the construction of a fire station and a school, the final decision makes no meaningful reference to the financial ramifications of a failure to amend either.”
Griffin agreed with Murphy and Stading in upholding the portions of Lassiter’s ruling favoring UNC Health. He dissented from the decision to send the case back to the ALJ.
“UNC provided drawings of its site plan and floor plan and explained how the construction was designed to be efficient for the provision of services based on ‘best practice methodologies’ while preventing unnecessary costs,” Griffin wrote. “UNC also explained that even though the project would be capital intensive, there was funding set aside to ensure the project could be completed without increasing costs.”
“Although UNC’s proposed site required rezoning, UNC anticipated having the property rezoned and indicated that it would work with Durham County and the Research Triangle Foundation to achieve the rezoning required,” Griffin added. “UNC also supplied a letter of support from the CEO of the Research Triangle Foundation. There was also testimony at the hearing indicating CON applications are almost never denied due to the fact that a site needs to be rezoned.”