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Court Allows Challenge To Jacksonville Hospital Plan

Stethoscope and gavel against a white backdrop.
Wikimedia Commons
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Ruling against state health regulators, an appeals court Thursday said a Baker County hospital can challenge plans for a Jacksonville medical center that could become a competitor.

The 1st District Court of Appeal, in a 16-page ruling, sided with Baker County's Ed Fraser Memorial Hospital in a dispute that centers on a state decision in 2010 to issue what is known as a "certificate of need" for West Jacksonville Medical Center.

The certificate-of-need process, which is a critical regulatory step in building hospitals, often leads to litigation. In the West Jacksonville Medical Center case, the state Agency for Health Care Administration agreed to issue the certificate after a settlement was reached between West Jacksonville and St. Vincent's Hospital in Jacksonville, according to the ruling.

Under the settlement, the certificate would not become effective until mid-2013 and licensure of the new hospital could happen no earlier than December 2016. Ed Fraser Memorial Hospital, however, filed a lawsuit arguing that the Agency for Health Care Administration overstepped its legal authority in delaying the validity period of the certificate of need. A Leon County circuit judge dismissed the case, but a three-judge panel of the appeals court overturned that decision Thursday.

"We have no disagreement that AHCA's powers, express and implied, are bountiful; after all, its mission is to oversee one of the nation's largest health care marketplaces,'' said the ruling, written by appeals-court Judge Scott Makar and joined by judges Stephanie Ray and Ronald Swanson. "Yet we find no principle of law allowing an agency, even one with the gravity of AHCA's charge, to exceed its delegated statutory authority simply because private parties to a settlement agreement deem it mutually beneficial. This point is particularly important because agreements of competing health care companies raise antitrust concerns, making it important that a state's regulatory actions --- including issuance of certificates of need --- are pursuant to clearly articulated and affirmatively expressed legislative directives."

The judges noted, however, that the ruling does not mean Ed Fraser Memorial has won the overall case, because the dispute will return to circuit court.