War Memorial Hospital v. The West Virginia Health Care Authority

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2023 Term FILED
_____________________ March 27, 2023
released at 3:00 p.m.
No. 21-0901 EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
_____________________ OF WEST VIRGINIA
WAR MEMORIAL HOSPITAL, INC.,
Petitioner Below, Petitioner,
v.
THE WEST VIRGINIA HEALTH CARE AUTHORITY,
Respondent Below, Respondent.
___________________________________________________________
Appeal from the Circuit Court of Kanawha County
The Honorable Jennifer F. Bailey, Judge
Civil Action No. 20-AA-69
REVERSED AND REMANDED
WITH DIRECTIONS.
_________________________________________________________
Submitted: January 31, 2023
Filed: March 27, 2023
Caleb P. Knight, Esq. Patrick Morrisey, Esq.
Robert L. Coffield, Esq. Attorney General
Flaherty Sensabaugh Bonasso PLLC Lindsay S. See, Esq.
Charleston, West Virginia Solicitor General
Counsel for the Petitioner Katherine A. Campbell, Esq.
Senior Assistant Attorney General
Counsel for the Respondent
JUSTICE WOOTON delivered the Opinion of the Court.
CHIEF JUSTICE WALKER and JUSTICE BUNN dissent and reserve the right to file
dissenting opinions.
SYLLABUS BY THE COURT
1. “Upon judicial review of a contested case under the West Virginia
Administrative Procedure Act, Chapter 29A, Article 5, Section 4(g), the circuit court may
affirm the order or decision of the agency or remand the case for further proceedings. The
circuit court shall reverse, vacate or modify the order or decision of the agency if the
substantial rights of the petitioner or petitioners have been prejudiced because the
administrative findings, inferences, conclusions, decisions or order are: ‘(1) In violation of
constitutional or statutory provisions; or (2) In excess of the statutory authority or
jurisdiction of the agency; or (3) Made upon unlawful procedures; or (4) Affected by other
error of law; or (5) Clearly wrong in view of the reliable, probative and substantial evidence
on the whole record; or (6) Arbitrary or capricious or characterized by abuse of discretion
or clearly unwarranted exercise of discretion.’” Syl. Pt. 3, Shepherdstown Volunteer Fire
Dep’t v. State ex rel. W. Va. Hum. Rights Comm’n, 172 W. Va. 627, 309 S.E.2d 342 (1983).
2. “Interpreting a statute or an administrative rule or regulation presents
a purely legal question subject to de novo review.” Syl. Pt. 1, Appalachian Power Co. v.
State Tax Dep’t, 195 W.Va. 573, 466 S.E.2d 424 (1995).
3. “The judiciary is the final authority on issues of statutory construction,
and we are obliged to reject administrative constructions that are contrary to the clear
i
language of a statute.” Syl. Pt. 5, CNG Transmission Corp. v. Craig, 211 W.Va. 170, 564
S.E.2d 167 (2002).
4. “A statutory provision which is clear and unambiguous and plainly
expresses the legislative intent will not be interpreted by the courts but will be given full
force and effect.” Syl. Pt. 2, State v. Epperly, 135 W.Va. 877, 65 S.E.2d 488 (1951).
5. “If the language of an enactment is clear and within the constitutional
authority of the law-making body which passed it, courts must read the relevant law
according to is unvarnished meaning, without any judicial embroidery.” Syl. Pt. 3, in part,
W. Va. Health Care Cost Rev. Auth. v. Boone Mem’l Hosp., 196 W. Va. 326, 472 S.E.2d
411 (1996).
ii
WOOTON, Justice:
The petitioner, War Memorial Hospital, Inc. (“the Hospital”), appeals the
October 5, 2021, order entered by the Circuit Court of Kanawha County, West Virginia,
affirming the rulings of the respondent, The West Virginia Health Care Authority (“the
WVHCA”). The WVHCA denied the Hospital’s certificate of need (“CON”) exemption
application that would have allowed the Hospital to acquire and utilize a fixed magnetic
resonance imagining (“MRI”) scanner that cost less than $750,000 at its medical office
building. See W. Va. Code § 16-2D-11(c)(27) (2017) (discussed infra in greater detail). 1
The Hospital argues 2 that the circuit court and the WVHCA erred: 1) in failing to approve
its exemption application because it met all the requisite statutory criteria; and 2) in
imposing an additional criteria restricting the acquisition and utilization of the MRI scanner
by the Hospital to its “primary hospital location” as there is no location-specific
requirement in the statute. See id. Upon our careful review of the briefs, the parties’
arguments, the appendix record, the applicable law, and all other matters before the Court,
we reverse the circuit court’s decision and remand the case directing the court to enter an
1
We use the 2017 version of West Virginia Code section 16-2D-11(c)(27), because
it was in effect at the time the Hospital filed its application for the exemption. The statute
was amended by the Legislature in 2020; however, the amendments do not affect this case.
2
The Hospital’s assigned errors are redundant and fail to align with the specific
substantive arguments it makes in its brief. Accordingly, the assignments of error have
been rephrased to address the two primary issues before the Court.
1
order approving the Hospital’s requested exemption application in regard to the subject
MRI scanner.
I. Facts and Procedural Background
On December 18, 2019, the WVHCA received an application from the
Hospital, a West Virginia licensed critical access hospital located on Health Way in
Berkeley Springs, Morgan County, West Virginia, for an exemption from CON review for
acquisition of an MRI scanner to be used in a medical office building located on
Williamsport Pike, Martinsburg, Berkeley County, West Virginia. 3 The request for an
exemption was based on the provisions of West Virginia Code section 16-2D-11(c)(27),
which provide:
Notwithstanding section eight and ten and except as provided
in section nine of this article, the Legislature finds that a need
exists, and these health services are exempt from the certificate
of need process:
....
(27) The acquisition and utilization of one computed
tomography scanner and/or magnetic resonance imaging
scanner with a purchase price up to $750.000 by a hospital. 4
3
The Hospital represented and the circuit court found that this location would be
staffed by the Hospital’s employees. Further, it was undisputed that the WVHCA “had
granted a CON on September 5, 2018, to East Mountain Health Advantage [the Hospital’s
parent corporation] to develop a commercial office building at 5524 Williamsport Pike,
Martinsburg, Berkeley County, West Virginia.”
4
See W. Va. Code § 16-2D-8 (2021) (“(a) Except as provided in § 16-2D-9, § 16-
2D-10, and § 16-2D-11 of this code, the following proposed health services may not be
2
Id. (emphasis and footnote added). The WVHCA denied the Hospital’s exemption
application in a decision dated February 3, 2020. Specifically, the WVHCA found that the
Hospital did not “intend to acquire and utilize a CT 5 scanner at its facility located at 1
Healthy Way, Berkeley Springs, Morgan County, West Virginia.” Instead, the petitioner
intended to “utilize” the MRI scanner at its medical office building owned by the Hospital’s
parent corporation and staffed by the Hospital employees but located in Martinsburg, West
Virginia. The WVHCA determined that
in creating W. Va. Code § 16-2D-11(c)(27), the Legislature
intended to create an exemption for a hospital to acquire and
utilize a [MRI] scanner at its primary hospital location. The
Legislature did not intend for hospitals to purchase and utilize
[MRI] scanners in medical office buildings that are not part of
a hospital’s primary location. Such an interpretation would
lead to absurd results.
If, as the applicant asserts, W. Va. Code § 16-2D-11(c)(27)
allows a hospital to acquire a [MRI] scanner and utilize it in
any random location, then all hospitals could acquire and
utilize a CT scanner or MRI scanner adjacent to every existing
hospital without regard to the need for the devices. Indeed, the
proposed location for the [MRI] scanner in WMH’s application
is in the vicinity of Berkeley Medical Center. The Authority
does not find it credible that the Legislature intended an
exemption that would result in such an unchecked duplication
acquired, offered, or developed within this state except upon approval of and receipt of a
certificate of need as provided by this article: . . . (b) The following health services are
required to obtain a certificate of need regardless of the minimum expenditure: . . . (6)
Providing fixed magnetic resonance imaging; . . .”).
5
Presumably the WVHCA’s reference to a “CT scanner” was a scrivener’s error, as
the Hospital sought to acquire an MRI scanner, not a CT scanner. Accordingly, we
substitute “MRI” for “CT” throughout this opinion. Regardless of this error, it should be
noted that both types of scanners are the subject of the exemption set forth in West Virginia
section 16-2D-11(c)(27).
3
of services. Rather, the more plausible interpretation is the
Legislature intended hospitals to be able to purchase and
utilize CT scanners and MRI scanners in their own facilities
without the necessity of having to go through full CON review.
(Emphasis added). The petitioner appealed, and following a hearing the WVHCA Office
of Judges affirmed the denial of the exemption application in a decision dated August 17,
2020. 6
On September 16, 2020, the Hospital appealed the decision of the WVHCA
Office of Judges to the circuit court. By order entered October 5, 2021, the court also
affirmed the decisions of the WVHCA and its Office of Judges. The court determined
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. . . . In order for the exemption
to apply, [the Hospital] would need to acquire and utilize the
device at [the Hospital’s] facilities. However, this is not the
case. [The Hospital] intends to acquire an MRI device and
place it in a medical office building in another county that is
owned by its parent corporation.
(Emphasis added). The court found that although the Hospital contended that the location
where the MRI scanner was to be located would have been staffed by its employees and
treated as the Hospital’s outpatient department, “this is not what the exemption statute
requires.” It is from this order that the Hospital appeals.
The Office of Judges upheld the WVHCA’s decision based on the standard of
6
review, concluding that “the Decision at issue is not clearly wrong in view of the reliable,
probative and substantial evidence of the whole record and not arbitrary, capricious,
characterized by abuse of discretion or a clearly unwarranted exercise of discretion.”
4
II. Standard of Review
In syllabus point two of Shepherdstown Volunteer Fire Department v. State
ex rel. West Virginia Human Rights Commission, 172 W. Va. 627, 309 S.E.2d 342 (1983),
we held:
Upon judicial review of a contested case under the West
Virginia Administrative Procedure Act, Chapter 29A, Article
5, Section 4(g), the circuit court may affirm the order or
decision of the agency or remand the case for further
proceedings. The circuit court shall reverse, vacate or modify
the order or decision of the agency if the substantial rights of
the petitioner or petitioners have been prejudiced because the
administrative findings, inferences, conclusions, decisions or
order are: “(1) In violation of constitutional or statutory
provisions; or (2) In excess of the statutory authority or
jurisdiction of the agency; or (3) Made upon unlawful
procedures; or (4) Affected by other error of law; or (5) Clearly
wrong in view of the reliable, probative and substantial
evidence on the whole record; or (6) Arbitrary or capricious or
characterized by abuse of discretion or clearly unwarranted
exercise of discretion.”
Accord W. Va. Code § 29A-5-4(g) (2018 & Supp 2022) (setting forth same statutory
language). 7 With respect to the issues raised in this case, “[i]nterpreting a statute or an
administrative rule or regulation presents a purely legal question subject to de novo
review.” Syl. Pt. 1, Appalachian Power Co. v. State Tax Dep’t, 195 W.Va. 573, 466 S.E.2d
424 (1995). Further, “[t]he judiciary is the final authority on issues of statutory
construction, and we are obliged to reject administrative constructions that are contrary to
the clear language of a statute.” Syl. Pt. 5, CNG Transmission Corp. v. Craig, 211 W. Va.
The Legislature amended West Virginia Code section 29A-5-4 in 2021; however,
7
the amendments do not affect this case.
5
170, 564 S.E.2d 167 (2002); see Syl. Pt. 2, Domestic Violence Survivors’ Support Grp.,
Inc. v. W. Va. Dep’t of Health & Hum. Res., 238 W. Va. 566, 569, 797 S.E.2d 543, 546
(2017). With these standards in mind, we examine the issue before us.
III. Discussion
The narrow issue before us is whether the Hospital met the requisite statutory
requirements for the exemption set forth in West Virginia Code section 16-2D-11(c)(27)
for its proposed acquisition and utilization of an MRI scanner. The Hospital argues that it
complied with the requirements because it is a licensed critical access hospital that had
planned to acquire and utilize an MRI scanner with a purchase price of less than $750,000.
See id. It contends that “[t]he WVHCA only denied the exemption application because it
created an additional condition – requiring that the acquired MRI be located at the
hospital’s primary hospital location once acquired.” The Hospital argues that this location-
specific requirement as to where the MRI scanner had to be utilized once the Hospital
acquired it was created in whole cloth by the WVHCA, as it plainly is not found in the
statutory exemption itself. See id. To the contrary, the statute by its terms allows the
exemption for “the acquisition and utilization of one computed tomography scanner and/or
magnetic resonance imaging scanner with a purchase price up to $750.000 by a hospital.”
Id.Conversely, the WVHCA argues that the Hospital, which is located in
Berkeley Springs, Morgan County, West Virginia, indicated in its application that it
6
intended to purchase an MRI scanner and utilize it at a medical office building owned by
its parent corporation 8 and located in Martinsburg, Berkeley County, West Virginia, which
is twenty miles away from the petitioner’s primary location. The WVHCA also contends
that the medical office building is located in the vicinity of Berkeley Medical Center which,
the WVHCA asserts, also offers MRI scanner services. According to the WVHCA, its
“rationale for the denial was that W. Va. Code § l6-2D-11(c)(27) provides an exemption
for hospitals to purchase an MRI scanner at its primary location, i.e., the hospital itself.”
The WVHCA contends that “the intent of the exemption was to save hospitals the time and
expense of going through CON review to purchase and utilize an MRI scanner at their
hospital.” 9 (Emphasis added).
8
The WVHCA’s suggestion that the use of the MRI scanner at a new medical office
building owned by the Hospital’s “parent non-profit corporation,” East Mountain Health
Advantage, Inc., is problematic in regard to the Hospital’s application, is a red herring.
Significantly, this fact was not a basis for denial of the Hospital’s exemption application
by the WVHCA, the Office of Judges, or the circuit court.
9
The WVHCA also argues that this Court’s adoption of the Hospital’s interpretation
of the statutory exemption, specifically, that there is no location-specific requirement that
governs where the Hospital utilizes the MRI scanner, “could create a profusion of MRI
devices without regard to the impact on existing services.” This is an overreaction at best
and ignores the express limitation in the language of the exemption which provides for
“[t]he acquisition and utilization of . . . one magnetic resonance imaging scanner. . . .” W.
Va. Code § 16-2D-11(c)(27) (emphasis added). It is difficult to comprehend how a
“profusion of MRI devices” will occur insofar as the exemption is limited to the purchase
of a single MRI scanner by a hospital. See id.7
The well-established precedent of this Court provides that “[a] statutory
provision which is clear and unambiguous and plainly expresses the legislative intent will
not be interpreted by the courts but will be given full force and effect.” Syl. Pt. 2, State v.
Epperly, 135 W.Va. 877, 65 S.E.2d 488 (1951); accord Syl. Pt. 1, State v. Jarvis, 199
W.Va. 635, 487 S.E.2d 293 (1997); Syl. Pt. 2, Mace v. Mylan Pharms., Inc., 227 W. Va.
666, 714 S.E.2d 223 (2011). Moreover, “a statute is open to construction only where the
language used requires interpretation because of ambiguity which renders it susceptible of
two or more constructions or of such doubtful or obscure meaning that reasonable minds
might be uncertain or disagree as to its meaning.” Hereford v. Meek, 132 W. Va. 373, 386,
52 S.E.2d 740, 747 (1949). “If the text, given its plain meaning, answers the interpretive
question, the language must prevail and further inquiry is foreclosed.” Appalachian Power
Co., 195 W. Va. at 587, 466 S.E.2d at 438. In this regard,
“[i]t is not for this Court arbitrarily to read into [a statute] that
which it does not say. Just as courts are not to eliminate
through judicial interpretation words that were purposely
included, we are obliged not to add to statutes something the
Legislature purposely omitted.” Banker v. Banker, 196 W.Va.
535, 546-47, 474 S.E.2d 465, 476-77 (1996) (citing Bullman v.
D & R Lumber Company, 195 W.Va. 129, 464 S.E.2d 771(1995); Donley v. Bracken, 192 W.Va. 383, 452 S.E.2d 699(1994)). See also, State ex rel. Frazier v. Meadows, 193 W.Va.
20, 24, 454 S.E.2d 65, 69 (1994) (“Courts are not free to read
into the language what is not there, but rather should apply the
statute as written.”). Moreover, “[a] statute, or an
administrative rule, may not, under the guise of
‘interpretation,’ be modified, revised, amended or rewritten.”
Syllabus Point 1, Consumer Advocate Division v. Public
Service Commission, 182 W.Va. 152, 386 S.E.2d 650 (1989).
8
Phillips v. Larry’s Drive-In Pharmacy, Inc., 220 W. Va. 484, 491, 647 S.E.2d 920, 927
(2007). In other words, “[i]f the language of an enactment is clear and within the
constitutional authority of the law-making body which passed it, courts must read the
relevant law according to its unvarnished meaning, without any judicial embroidery.” Syl.
Pt. 3, in part, W. Va. Health Care Cost Rev. Auth. v. Boone Mem’l Hosp., 196 W. Va. 326,
472 S.E.2d 411 (1996).
Here, neither the Hospital nor the WVHCA argue that the statutory
exemption is ambiguous. Instead, both parties contend that the statute is plain and
unambiguous and therefore should be applied as written. In this regard, the plain language
of the statutory exemption specifies that the only requirements for the exemption to apply
are for a hospital, 10 to acquire and utilize an MRI scanner with a purchase price up to
10
There is no dispute that the Hospital met the statutory definition of a “hospital”
as defined in West Virginia Code section 16-2D-2(21). In that regard, “hospital” is defined
as “a facility licensed pursuant to the provisions of article five-b of this chapter[.]” Id. West
Virginia Code section 16-5B-1, entitled “Health facilities and certain other facilities
operated in connection therewith to obtain license; exemptions; meaning of hospital, etc.,”
further defines the term “hospital” 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[.]” Id.Significantly, absent from this statutory definition is any mention that a hospital has
a “primary location.” Instead, the Legislature contemplated that a hospital may be
comprised of multiple buildings, as reflected in the definition of “campus.” Id. § 16-2D-
2(6) (“the adjacent grounds and buildings, or grounds and buildings not separated by more
than a public right-of-way, of a health care facility”); Id. § 16-2D-2 (16) (defining “health
care facility” as “a publicly or privately owned facility, agency or entity that offers or
provides health services, whether a for-profit or nonprofit entity and whether or not
9
$750,000. W. Va. Code § 16-2D-11(c)(27). Clearly the Hospital met every statutory
requirement as its application indicated that it sought the “acquisition and utilization of . .
. one magnetic resonance imaging scanner with a purchase price of up to 750,000”; in that
regard, the MRI scanner it sought to acquire cost approximately $731,000. See id.Despite the fact that the Hospital’s application for an exemption met the
statutory requirements set forth in West Virginia section 16-2D-11(c)(27), the WVHCA
nonetheless denied the Hospital’s application because it found “that in creating W. Va.
Code § 16-2D-11(c)(27), the Legislature intended to create an exemption for a hospital to
acquire and utilize a [MRI] scanner at its primary hospital location” and that the Hospital
intended to utilize the MRI scanner at a medical office building that was not part of its
“primary location.” Both the Office of Judges and the circuit court agreed with the
WVHCA’s reasoning.
licensed, or required to be licensed, in whole or in part[.]”). Thus, the notion that a hospital
must be location-specific is simply not supported in any statutory definition. The use of
“health care facility,” “institution,” and “agency” all in the context of defining a “hospital”
expands, not restricts, the potential location of a hospital. Likewise, the location restriction
advanced by the WVHCA – that the MRI scanner must be located at a hospital’s primary
location – is not supported by the statutory definitions.
In this same vein, we further note that neither in the WVHCA’s brief nor any
rationale appearing in the decisions by the WVHCA, the Office of Judges, or the circuit
court, is there any reliance upon the aforementioned statutory definition of “hospital” or
any finding that the Hospital failed to meet this statutory definition in regard to the issues
raised herein.
10
The Hospital argues that there is no statutory location-specific requirement
that the MRI scanner it sought to acquire be utilized at its “primary hospital location,” and
that if the Legislature had intended to include such a requirement in the statute, it could
have easily done so. We agree for two basic reasons.
First, a review of the relevant statutory provisions pertaining not only to the
CON process but also to the statutory exemption set forth in West Virginia Code section
16-2D-11(c)(27) demonstrates the complete absence of any mention of a “hospital’s
primary location.” See id. §§ 16-2D-1 to -20 (2021). Further, there is no mention of a
“hospital’s primary location” in the legislative rule which “establishes the general criteria
and procedures for applying for an exemption from Certificate of Need.” W. Va. Code R.
§ 65-29-1 to -9 (2017). 11
Second, the Legislature has expressly established location-specific
requirements for certain other health services that are exempt from the CON process. See
W. Va. Code § 16-2D-11(c)(1) (providing for exemption from CON for tomography
scanner that “is installed in a private office practice where at minimum seventy-five
percent of the scans are performed on the patients of the practice private office practice. . .
. If a physician owns or operates a private office practice in more than one location, this
11
We use the legislative rule in effect at the time the Hospital’s application was filed
in this action. We note that the rule was amended, effective April 30, 2021; however, the
amendments do not affect this case.
11
exemption shall only apply to the physician’s primary place of business and if a physician
wants to expand the offering of this service to include more than one computed topography
scanner, he or she shall be required to obtain a certificate of need prior to expanding this
service.”) (emphasis added)); see also id. § 16-2D-11(10) (limiting certain renovations
“within a hospital” without first obtaining a certificate of need) (emphasis added)); id. §
16-2D-10(9)(7) (providing that “a person may provide the following health services
without obtaining a certificate of need or applying to the authority for approval . . . [t]he
acquisition by a qualified hospital which is party to an approved cooperative agreement as
provided in section twenty-eight, article twenty-nine-b, chapter sixteen of this code, of a
hospital located within a distance of twenty highway miles of the main campus of the
qualified hospital[.]” (emphasis added)). Yet, despite the lack of any location-specific
requirement language in the exemption at issue in this case, this Court is being asked by
the WVHCA to read such a requirement into section 16-2D-11(c)(27). We decline to do
so. Succinctly stated, this Court is not free to read into a statute words that do not exist;
rather, we are required to apply the statute as written. See Phillips, 220 W. Va. at 491, 647
S.E.2d at 927. Consequently, we find that the circuit court erred in upholding the
WVHCA’s determination that the exemption set forth in section 16-2D-11(c)(27) applies
only if the acquisition and utilization of an MRI scanner by a hospital occurs at the
hospital’s primary location. 12
12
To the extent the Legislature intended a location-specific requirement in regard
to the exemption set forth in West Virginia Code section 16-2D-11(c)(27), it is within its
prerogative to add such a requirement to the statute.
12
In summary, we find that the clear language of West Virginia Code section
16-2D-11(c)(27), which contains no location-specific requirement applicable to the
exemption therein, reflects the intention of the Legislature to omit any such requirement.
Because the WVHCA’s decision in this case was predicated upon that agency’s
interpretation of section 16-2D-11(c)(27) – an interpretation that was in reality a rewriting
of the statute to include language that the Legislature purposefully omitted – its denial of
the Hospital’s exemption application violated the statute. Therefore, the WVHCA’s
decision was clearly wrong, arbitrary and capricious and entitled to no deference. See W.
Va. Health Care Cost Rev. Auth., 196 W. Va. at 328, 472 S.E.2d at 413, Syl. Pt. 4
(providing that “‘[i]f the intention of the Legislature is clear, that is the end of the matter,
and the agency’s position only can be upheld if it conforms to the Legislature’s intent. No
deference is due the agency’s interpretation at this stage.’”) (quoting Syl. Pt. 3, Appalachia
Power Co. v. State Tax Dep’t, 195 W. Va. 573, 466 S.E.2d 424 (1995)).
IV. Conclusion
For the foregoing reasons, we reverse the circuit court’s October 5, 2021, order and
remand the case to the circuit court directing that an order approving the Hospital’s
requested exemption in regard to the subject MRI scanner be entered.
Reversed and
Remanded with Directions.
13