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CANONSBURG GENERAL HOSPITAL v. COMMONWEALTH PENNSYLVANIA (05/06/80)

decided: May 6, 1980.

CANONSBURG GENERAL HOSPITAL, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF HEALTH AND DONALD REID, M.D., ACTING SECRETARY OF HEALTH, RESPONDENTS



Original Jurisdiction in case of Canonsburg General Hospital, Petitioner v. Commonwealth of Pennsylvania, Department of Health and Donald Reid, M.D., Acting Secretary of Health.

COUNSEL

John S. Hoff, with him Clara L. Mattern, Horty, Springer & Mattern, for petitioner.

Reed Hamilton, Chief Counsel, with him Stephen D. Thompkins, and D. Galton Cabot Moss, Assistant Attorneys General, for respondents.

President Judge Crumlish and Judges Wilkinson, Jr., Mencer, Rogers, Craig, MacPhail and Williams, Jr. Judge Blatt did not participate. Opinion by Judge Craig.

Author: Craig

[ 51 Pa. Commw. Page 158]

Canonsburg General Hospital (hospital) presented a petition for review in the nature of an action in mandamus against the Pennsylvania Department of Health (department) and its acting secretary, addressed to our original jurisdiction, seeking a peremptory judgment to mandate that the department certify to the United States Department of Health, Education and Welfare (HEW) that the hospital's application for federal capital reimbursement for a hospital replacement project (project) is in conformity with standards of community need and other factors.

The hospital's position has been based upon provisions of law, discussed below, which provide that an application shall be legally deemed to be in conformity if the department has failed to act upon it within 90 days after its submission in a completed status.

The department opposed the petition on the merits and also filed preliminary objections questioning the

[ 51 Pa. Commw. Page 159]

    propriety of the subject matter jurisdiction in mandamus. After a hearing before one judge of this court, in which only documentary evidence and affidavits were presented, the hearing judge issued a peremptory order in favor of the hospital. The department thereafter filed its petition to open the peremptory judgment, which is now before the court en banc for disposition.

Throughout the proceedings, the case has involved two major issues, which we state at the outset.

The Basic Issues Stated

1. Is an action in mandamus appropriate to compel a certification to the federal government, by the designated state agency, that a hospital's application for capital project funding has been determined to be in conformity, under federal and state regulations which both provide that failure of the state agency to approve or disapprove within ninety days after receipt of the application "shall have the effect of a determination" of conformity?

2. Can the state agency seek to require "research efforts" of the hospital, in addition to existing information given by the hospital in answering the questions on the application, so that the starting date for the ninety-day consideration of the application is postponed until completion of the "research efforts"?

Concerning the above second question, it is significant that the department, in its statement of the questions involved, has itself straightforwardly used the characterization "research efforts" to describe what the state agency was demanding before the application could be approved or disapproved.

The Background of The Case

We must first review the law which establishes the legal premise for our consideration.

[ 51 Pa. Commw. Page 160]

Section 1122 of the statute clearly requires the state DPA to make its notification of conformity or nonconformity "within a reasonable period" after receiving the application. That time factor requirement is specifically implemented by 42 C.F.R. ยง 100.106(a)(3) and (4) (1979),*fn1 subsections which can be summarized as follows:

Subsection (3) refers to the application as a "notice". It requires the DPA, if the notice is incomplete, to notify the applicant "within 15 days of its receipt of such incomplete notice," advising as to the additional information required. "Where such timely notification

[ 51 Pa. Commw. Page 162]

    of incompleteness is provided," the ninety-day time limitation governing the DPA under Subsection (4) "shall run from the date of receipt by the agency of a notice containing such additional information."

Subsection (4) prescribes that the failure of the DPA to provide notification of conformity or nonconformity within "90 days after the receipt of such notice . . . shall have the effect of a determination" of conformity.

The parties do not differ with respect to the meaning and effect of those subsections, as summarized.

The parties also agree that the responsibilities of the department, as DPA, for thus reviewing the application

[ 51 Pa. Commw. Page 163]

    notices have been delegated to the HSA, so that the actions of the HSA can be considered as actions of the department.

General History

On April 16, 1979, the HSA received from the hospital its application for capital reimbursement to replace its present 108-bed facility with a 100-bed facility, at a cost of approximately $17,000,000. By letter of April 30, 1979, the HSA advised the hospital that the application was incomplete. The hospital, under date of May 22, submitted additional information, which the HSA received May 30, 1979. Thereafter, commencing with an additional request from the HSA on June 6, there followed considerable correspondence, which will be analyzed in detail below, in considering the merits.

In this proceeding, the hospital's position is that the ninety-day period began running with the HSA's receipt of additional information, as early as May 30 but not later than July, so that the deadline would have expired not later than October 31. Because neither the HSA nor the DPA have yet made any determination of conformity or nonconformity, the hospital claims approval by operation of law.

Preliminary Objections

As originally filed, the department's preliminary objection included: (1) the position that this court has no jurisdiction because the Pennsylvania Department of Health here has been acting "as a federal agency," and (2) the objection that HEW and the HSA were not joined as parties alleged to be necessary. The hearing judge denied those objections -- the first upon the basis that the state health department unquestionably has remained an agency of the Commonwealth

[ 51 Pa. Commw. Page 164]

    government subject to our jurisdiction,*fn2 and the second objection on the basis that no relief has been sought, or is needed, against HEW or the HSA*fn3 -- and those objections have not been renewed by the department.

[ 51 Pa. Commw. Page 165]

The Basic Issues Considered As To Facts and Law

With its petition to open, the department continues to raise the two questions first stated above at the outset, which constitute the remaining questions ...


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