War Memorial Hospital, Inc. v. The West Virginia Health Care Authority ( 2023 )

No. 21-0901 — War Memorial Hospital, Inc. v. The West Virginia Health Care Authority
FILED
April 12, 2023
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
BUNN, JUSTICE, dissenting, joined by Chief Justice Walker: SUPREME COURT OF APPEALS
OF WEST VIRGINIA
The majority decision in this case allows petitioner War Memorial Hospital,
Inc., to place a magnetic resonance imaging (“MRI”) scanner at an outpatient facility
owned by its parent company and located twenty miles from the hospital in another county
without obtaining a Certificate of Need (“CON”). The majority ignores the defined term
“hospital” in the CON article of the West Virginia Code. This erroneous interpretation
allows a hospital to acquire and utilize an MRI scanner costing up to $750,000 without
seeking a CON and to place it anywhere in West Virginia, even next door to its competitor.
See W. Va. Code §§ 16-2D-2(21) and 16-2D-11(c)(27) (eff. 2017). 1
The Legislature created a process requiring approval and receipt of a CON
before certain health services are acquired, offered, or developed. See W. Va. Code
§ 16-2D-8 (eff. 2016). The Legislature declared that “the offering or development of all
health services” must be accomplished, among other things, in a way that “avoid[s]
unnecessary duplication of health services,” and “contain[s] or reduce[s] increases in the
1
Like the majority, I also refer to the 2017 version of the exemption.
However, I later discuss the 2023 amendments to the CON article that reinforce my
objections to the majority’s conclusion.
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cost of delivering health services.” W. Va. Code § 16-2D-1(1) (eff. 2016) (noting the
legislative findings of the CON article). See also Amedisys W. Va., LLC v. Pers. Touch
Home Care of W. Va., Inc., 245 W. Va. 398, 408, 859 S.E.2d 341, 351 (2021) (explaining
purpose of CON legislation). Still, the Legislature determined that some services are
exempt from the formal CON process. See W. Va. Code §§ 16-2D-10, -11 (eff. 2017).
The West Virginia Health Care Authority (“WVHCA”) denied the
petitioner’s request for a CON exemption, pursuant West Virginia Code § 16-2D-11(c)(27)
(eff. 2017), to place an MRI scanner in an outpatient facility without a CON, explaining
that the WVCHA already granted a CON to the hospital’s parent company to develop a
medical office building at the proposed location. The WVHCA reasoned that “the
acquisition and utilization of a . . . MRI scanner by a hospital which the hospital does not
intend to use at its primary location is not exempt from [CON] review.” The Office of
Judges affirmed the WVHCA, and circuit court ultimately affirmed the Office of Judges,
explaining that the petitioner’s proposed interpretation of the exemption “would allow a
hospital to acquire and utilize MRI scanners in any location without regard to whether there
is a need for the service or considering the impact such additional services would have on
existing MRI services located at other hospitals already established in an area.” The circuit
court concluded that “it is clear that the Legislative intent of the exemption was that the
MRI device would be acquired and used by the hospital in the acquiring hospital’s facility.”
I would have affirmed the circuit court’s decision on other grounds. Specifically, based on
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the definition of the term “hospital” and the plain language of the statutory scheme at issue.
Because the majority’s conclusion erroneously dismisses this plain language, I respectfully
dissent.
The basis for the majority’s decision is simply that “[c]learly” the petitioner
met every statutory requirement because (1) petitioner was a hospital that met the definition
of the term hospital, and (2) it sought “the acquisition and utilization” of an MRI scanner
within the relevant price range. The majority further maintains that because the Legislature
put in geographic-specific language in some CON exemptions, but not the one at issue
here, then no limit exists on where a hospital may place a MRI scanner within the relevant
price range so long as the hospital is the entity utilizing and acquiring it. This interpretation
improperly expands the Legislature’s precise definition of the term hospital for the purpose
of the CON statutory scheme in article 2D of chapter 16 and ignores a basic rule of statutory
analysis: apply statutory definitions.
West Virginia Code § 16-2d-11(c)(27) contains a CON exemption for “[t]he
acquisition and utilization of one computed tomography scanner and/or one magnetic
resonance imaging scanner with a purchase price of up to $750,000 by a hospital.” W. Va.
Code § 16-2D-11(c)(27) (eff. 2017) (emphasis added). The Legislature defined the term
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“hospital” for the entire CON article. See W. Va. Code § 16-2D-2 (eff. 2017) (beginning
with the phrase “[a]s used in this article:” then defining terms). The statute states:
(21) “Hospital” means a facility licensed pursuant to
the provisions of article five-b of this chapter and any acute
care facility operated by the state government, that primarily
provides inpatient diagnostic, treatment or rehabilitative
services to injured, disabled or sick persons under the
supervision of physicians.
W. Va. Code § 16-2D-2(21) (eff. 2017). Article 5B, chapter 16 cross-referenced in that
definition includes a definition of hospital, in relevant part, as follows:
A hospital or extended care facility operated in
connection with a hospital, within the meaning of this article,
shall mean any institution, place, building or agency in which
an accommodation of five or more beds is maintained,
furnished or offered for the hospitalization of the sick or
injured.
W. Va. Code § 16-5B-1 (eff. 1977). 2
When the Legislature defines terms in a statutory scheme, we apply those
definitions wherever the Legislature uses those terms. “Where the legislature . . . declare[s]
what a particular term ‘means,’ such definition is ordinarily binding upon the courts and
excludes any meaning that is not stated.” In re Greg H., 208 W. Va. 756, 760, 542 S.E.2d
2West Virginia Code § 16-5D-1 also provides for the licensure of ambulatory
health care facilities and ambulatory surgical facilities, and includes definitions for these
terms. However, these facilities are defined in the CON article separately.
4
919, 923 (2000) (per curiam) (footnote omitted). 3 See Tanzin v. Tanvir, ___ U.S. ___, ___,
141 S. Ct. 486, 490, 208 L. Ed. 2d 295, ___ (2020) (“When a statute includes an explicit
definition, we must follow that definition, even if it varies from a term’s ordinary
meaning.” (internal quotations omitted)); State v. Iowa Dist. Ct. for Scott Cnty., 889
N.W.2d 467, 471-72 (Iowa 2017) (“[W]hen a statute defines a term, the common law and
dictionary definitions which may not coincide with the legislative definition must yield to
the language of the legislature.” (internal quotations omitted)). By defining the meaning of
a word, the Legislature exercises legislative power “with the explicit goal to provide a
correct understanding of its intention, and thus to facilitate the primary judicial inquiry of
statutory interpretation.” Norman Singer & Shambie Singer, 2A Sutherland Statutory
Construction § 47:7 (7th ed. 2022). Only undefined words receive “‘their common,
ordinary and accepted meaning in the connection in which they are used.’” Nicole L. v.
Steven W., 241 W. Va. 466, 471, 825 S.E.2d 794, 799 (2019) (quoting Syl. pt. 1, Miners in
Gen. Group v. Hix, 123 W. Va. 637, 17 S.E.2d 810 (1941), overruled on other grounds by
Lee-Norse Co. v. Rutledge, 170 W. Va. 162, 291 S.E.2d 477 (1982)).
The Legislature, through its definition, placed a limit on the term hospital,
restricting its meaning to “a facility licensed pursuant to the provisions of [§§ 16-5D-1 et
3
The majority asserts that neither the parties nor the lower decisional bodies
rely on the definition of hospital in their briefing or decisions. Still, we should not ignore
the Legislature’s instructions as to the meaning of defined terms merely because the parties
or the lower court fail to explicitly use or analyze the words of the statute.
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seq.] . . . that primarily provides inpatient diagnostic, treatment or rehabilitative services to
injured, disabled or sick persons under the supervision of physicians.” W. Va. Code
§ 16-2D-2(21) (eff. 2017) (emphasis added). This definition is further refined and restricted
by the cross-reference to West Virginia Code §§ 16-5D-1 et seq., as the Legislature again
limits the definition of a hospital in § 16-5D-1 to a location where beds are maintained—
defining a hospital as “any institution, place, building or agency in which an
accommodation of five or more beds is maintained, furnished or offered for the
hospitalization of the sick or injured.” Practically, statutory definitions prevent statutes
from being too long. Still, if we replace the word “hospital” in the exemption with the
Legislature’s definition of “hospital,” the resulting sentence shows that the exemption
applies only to a facility: “[t]he acquisition and utilization of one computed tomography
scanner and/or one magnetic resonance imaging scanner with a purchase price of up to
$750,000 by a” “facility licensed pursuant to the provisions [§§ 16-5D-1 et seq.] . . . that
primarily provides inpatient diagnostic, treatment or rehabilitative services to injured,
disabled or sick persons under the supervision of physicians.” I disagree with the majority’s
conclusion because the petitioner ceased to be a hospital for the purpose of the CON
exemption when petitioner planned to locate the MRI outside of its facility in Berkeley
Springs.
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I agree with the majority that the WVHCA’s use of the phrase “primary
location” is not found within the CON statutory scheme or definitions in article 2D of
chapter 16. Still, while the WVHCA’s language may have been inartful, it came to the
correct result, as did the circuit court. The location limitation already exists through the
definition. The Legislature did not define “hospital” as the licensed entity, which may have
extended the CON exemptions to all actions undertaken by the hospital itself, but rather
chose to define it as a physical location. The Legislature constrained the term “hospital” to
a specific definition—a definition that certainly does not extend to a medical office
building twenty miles down the road, owned by a parent company with its own certificate
of need for that location, where the petitioner claimed it would acquire and offer outpatient
MRI services. 4 See W. Va. Code § 16-2D-2(21) (eff. 2017).
No one disputes that the petitioner, at its current facility, is a hospital in
accordance with the statutory definition for the purposes of the CON article. And because
4
While the majority declares that petitioner represented, and the circuit court
found, that the location would be staffed by its employees, the record contains no evidence
that the petitioner mentioned staffing in the exemption application to the WVHCA. At the
hearing before the Office of Judges, after the petitioner appealed the WVHCA’s decision,
counsel proffered that information to the reviewing body and included that information in
its submissions to the circuit court. The circuit court merely stated that the petitioner asserts
that the location “would have been staffed by [petitioner’s] employees.” Furthermore, to
the extent that the majority relies, in part, on the fact that the outpatient facility purportedly
will be staffed with hospital employees, the definition of “hospital” is not based upon the
source of its staff.
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the petitioner is a hospital in a general, commonly used sense of the term, the majority
appears to ascribe that general term to the exemption. Certainly colloquially, society
discusses hospitals in general terms, as opposed to entities limited by statutory definitions
that depend on context. Still, when the Legislature decides to define a term, we must cast
aside its common usage and instead use the Legislature’s circumscribed definition. Only
undefined words retain their common and ordinary meanings. See State v. Edmonds, 226
W. Va. 464, 469, 702 S.E.2d 408, 413 (2010) (per curiam) (“Absent a statutory definition
of these terms, we will necessarily defer to the ‘common, ordinary, and accepted meanings
of the terms in the connection in which they are used.’” (quoting In re Clifford K., 217
W. Va. 625, 640, 619 S.E.2d 138, 153 (2005)).
The purpose of the CON article is inherently one of limitation and efficient
health care delivery, including “to avoid unnecessary duplication of health services, and to
contain or reduce increases in the cost of delivering health services.” See W. Va. Code
§ 16-2D-1(1) (eff. 2016) (regarding legislative findings). This Court’s “starting point” in
an analysis of legislative intent is the “language of the statute.” W. Va. Hum. Rts. Comm’n
v. Garretson, 196 W. Va. 118, 123, 468 S.E.2d 733, 738 (1996) (“Our starting point, of
course, is the language of the statute.”). By ignoring the plain language of the definition of
hospital, the majority creates a result where “no location-specific requirement [is]
applicable to the exemption therein,” so a hospital can place an MRI scanner anywhere
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without a CON, so long as the MRI is within the purchase price and the hospital somehow
plans to “acquire and utilize” it. Nothing prevents a hospital from placing an MRI costing
$750,000 or less anywhere in West Virginia—including a few counties over, next door to
a competitor hospital, in an effort to cut its competitor’s profit margins and patient base. I
agree with the Court’s prior holdings that
“‘It is the duty of a court to construe a statute according
to its true intent, and give to it such construction as will uphold
the law and further justice. It is as well the duty of a court to
disregard a construction, though apparently warranted by the
literal sense of the words in a statute, when such construction
would lead to injustice and absurdity.’ Syllabus Point 2, Click
v. Click, 98 W. Va. 419, 127 S.E. 194 (1925).” Syl. Pt. 2,
Conseco Fin. Serv’g Corp. v. Myers, 211 W. Va. 631, 567
S.E.2d 641 (2002).
Syl. pt. 8, Vanderpool v. Hunt, 241 W. Va. 254, 823 S.E.2d 526 (2019). I am concerned
that the majority’s construction of the statute “result[s] in an absurdity” when another
“reasonable construction” should be made. See Syl. pt. 9, id. (quoting Syl. pt. 2, Newhart
v. Pennybacker, 120 W. Va. 774, 200 S.E. 350 (1938)). The majority’s result is at odds
with both the plain language and the purpose of the statute and allows the petitioner to
manipulate the exemption and circumvent the intent of the Legislature. 5
5
My view of the statutory scheme is further supported by recent amendments
to the definition of the term “campus.” This legislation further limits the defined term
campus to regard only hospitals, and constrains a hospital’s campus to areas “within 250
yards of the main buildings.” W. Va. Code § 16-2D-2(9) (eff. 2023) (“‘Campus’ means the
physical area immediately adjacent to the hospital’s main buildings, other areas, and
structures that are not strictly contiguous to the main buildings, but are located within 250
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The plain language of the CON article provides that the exemption at issue
should apply only to a hospital at the hospital facility, not twenty miles away at a related
entity’s outpatient center. I respectfully dissent.
yards of the main buildings.”). Furthermore, nothing in either the prior or current definition
of the term “campus” means that the defined term “hospital” lacks a geographic limitation.
The plain language of the definition of hospital limits it to a particular facility.
Other 2023 amendments to the CON article illustrate the legislative intent
that “hospital” be a facility. The newly defined term “hospital services” means “services
provided primarily to an inpatient,” and lists some included services provided “in various
departments on a hospital’s campus.” W. Va. Code § 16-2D-2(22) (eff. 2023). The new
legislation also exempts from the CON requirement “[h]ospital services performed at a
hospital.” W. Va. Code § 16-2D-10(9) (eff. 2023).
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