HERITAGE GROVE, a Washington not-for-profit corporation; PRESTIGE CARE, INC., a Washington corporation; CARE CENTER (YAKIMA), INC., a Washington corporation; and YAKIMA VALLEY VENTURES, LLC, a Washington limited liability company. Appellants,
DEPARTMENT OF HEALTH; STATE OF WASHINGTON and SELAH CARE AND REHABILITATION; LANDMARK CARE AND REHABILITATION; EMERALD CARE; GOOD SAMARITAN HEALTH CARE CENTER; WILLOW SPRINGS CARE AND REHABILITATION; CRESCENT HEALTH CARE, INC.; and SUMMITVIEW HEALTHCARE CENTER, Respondents.
Grove submitted a certificate of need (CN) application to the
Department of Health (DOH). DOH initially approved the
application, but a group of nursing homes in Yakima
(collectively Respondent Nursing Homes) administratively
challenged the CN. At the conclusion of the administrative
proceedings, DOH issued findings of fact, conclusions of law,
and final order (Final Order) denying it. Heritage Grove and
others petitioned for judicial review of the
Final Order. The superior court affirmed the Final Order and
also dismissed the petition for judicial review on mootness
that the case is moot, we affirm.
Overview of the CN Application Process
created the CN program (the Program) to "promote,
maintain, and assure the health of all citizens in the state,
provide accessible health services, health manpower, health
facilities, and other resources while controlling increases
in costs, and recognize prevention as a high priority in
health programs." RCW 70.38.015(1). DOH administers the
Program. RCW 70.38.105(1). Health care providers may open
certain health care facilities, including nursing homes, only
after receiving a CN from DOH. RCW 70.38.025(6), .105(4)(a).
determining whether to issue a CN for a new health care
facility, DOH usually considers the following four criteria:
(1) need, (2) financial feasibility, (3) structure and
process of care, and (4) cost containment. WAC
246-310-200(1); see WAC 246-310-210 to -240.
However, RCW 70.38.115(13)(b) provides that "[w]hen an
entire nursing home ceases operation, the licensee or any
other party who has secured an interest in the beds may
reserve his or her interest in the beds for eight years or
until a [CN] to replace them is issued, whichever occurs
first." This procedure is referred to as
"banking" beds. The statute and regulations then
allow the party who has banked their beds to
"unbank" them in a new facility. For providers
filing a CN application seeking to unbank beds, assuming
certain conditions are met including that the new beds are
located in the same planning area where they were before they
were banked, the applicant does not need to prove the
"need" criterion, WAC 246-310-210, in their CN
application. RCW 70.38.115(13)(b); WAC 246-310-396.
Heritage Grove's Application
October 15, 2009, Heritage Grove operated a 97-bed nursing
home facility in Yakima County. The facility closed, and
Heritage Grove sent a letter to DOH requesting to bank its
beds. DOH granted Heritage Grove's request and stated
that Heritage Grove's reservation of the beds would
expire on October 15, 2017, unless it issued a CN before
December 2014, Heritage Grove submitted an application for a
CN. Heritage Grove sought to build a facility focused on
post-acute care and sought to unbank its 97 beds. The
application stated that the facility would open as Heritage
Grove but would be managed by Prestige Care, Inc. It also
stated that Prestige had "a Purchase and Sale Agreement
with the current owners of the property . . . [which]
allow[ed] for the purchase to be finalized once certain
contingencies [were] met, including the approval of the [CN]
application." Admin. Record (AR) at 2494.
one round of screening questions, the Program began its
review of Heritage Grove's application. It received
public comments, including those by Respondent Nursing Homes,
and rebuttal comments. The Program also held a public
15, 2015, the Program completed review of the proposed
facility. The Program conditionally approved Heritage
Grove's CN application, provided that Heritage Grove
agreed to five conditions. Heritage Grove accepted all five
conditions, and shortly thereafter, in August, the Program
approved Heritage Grove's CN application. The document it
sent stated: "ISSUANCE OF THIS CERTIFICATE OF NEED IS
BASED ON THE DEPARTMENT'S RECORD AND EVALUATION." AR
at 3153. The Director of the Office of Community Health
Systems authored the approval.
Nursing Homes then requested an adjudicative proceeding to
contest the CN approval. After a hearing, a health law judge
affirmed the Program's approval of the CN. Respondent
Nursing Homes then administratively appealed the decision.
August 25, 2017, at the end of the administrative appeal
process, the Secretary of DOH, via a designee, issued the
Final Order denying the CN because the application failed
both the financial feasibility and cost containment criteria.
Heritage Grove did not petition the secretary's designee
to stay the Final Order.
September 21, 2017, Heritage Grove sought judicial review of
the Final Order in superior court. Heritage Grove did not
file a petition to stay the Final Order before October 15,
2017, which was ...