Court finds Washington State exceeded its authority in requiring a certificate of need for all hospital affiliations

A Thurston County Superior Court judge has invalidated a change in the Washington State Department of Health's Certificate of Need rules that would have required hospitals to first get approval from the state for all business relationships where there is “any change of control” in “any part” of a hospital. This would have included nearly all types of affiliations and partnerships, not just traditional mergers, and according to the Washington State Hospital Association, would have made it considerably harder for the state’s nearly 100 hospitals to change with the times.

The judge ruled that the Department of Health had overstepped its authority in expanding the requirement to obtain a certificate of need from the state for such a broad range of business partnerships. (Read the original petition to the court.)

"We are relieved to see the judge's ruling, and are glad that hospitals can efficiently form the partnerships necessary to preserve and expand health care services in their communities," said WSHA President and CEO Scott Bond in a press release. "We all share the goal of transforming health care to be more effective and cost-efficient, but an expanded, expensive, unpredictable certificate of need process is not the way for us to find the solutions we need."  
 
The Certificate of Need rule change came about after broad public concern was raised over access to reproductive health services and end-of-life care at hospitals that are acquired by Catholic health systems. In addition to obtaining a certificate of need for nearly all business agreements between health systems, the rule change would have required state hospitals to disclose their policies on admissions, nondiscrimination, end-of-life care and reproductive health care to the state. (Learn more...)

While the issues of concern in Washington State would likely be mainly confined to liberal leaning communities, the broader issue of local municipalities and state governments being concerned enough about unintended consequences of the current consolidation trend in healthcare to attempt to erect legislative barriers to consolidation is one all healthcare systems may relate to.