Wash. State Hosp. Ass’n v. Wash. State Dep’t of Health – July 2015 (Summary)

CERTIFICATE OF NEED

Wash. State Hosp. Ass’n v. Wash. State Dep’t of Health, No. 90486-3 (Wash. July 9, 2015)

The Washington Supreme Court held that the Department of Health impermissibly expanded the scope of its authority in approving certain types of hospital ownership changes. The Washington legislature’s certificate of need statute indicated a review was needed for any “sale, purchase, or lease of part or all of any existing hospital.”

In July 2013, the Department of Health proposed a new definition of “sale, purchase, or lease” which would include “any transaction in which the control, either directly or indirectly, of part or all of any existing hospital changes to a different person including, but not limited to, by contract, affiliation, corporate membership, restructuring, or any other transaction.” The court held the Department’s new rule interpreted the words “sale, purchase, or lease” in “a manner that departed too far from the plain meaning of those terms.”