State May Get Its First Freestanding Emergency Department

By Kelli F. Robinson, Sirote & Permutt, PC

In 2008, Brookwood Medical Center filed a Certificate of Need (CON) Application with the State Health Planning and Development Agency (SHPDA) to build a $19 million, 19,598-square foot freestanding emergency department on U.S. 280 in Shelby County. A freestanding emergency department is a fully functioning emergency department separately located from its hospital. Currently, there are no freestanding emergency departments in Alabama. The freestanding emergency department proposed by Brookwood will be located approximately eight miles from the hospital it owns and operates in Homewood.

Both Trinity and St. Vincent’s Health Systems intervened in opposition to Brookwood’s CON Application.  Trinity and St. Vincent’s requested a contested case hearing, and SHPDA appointed an administrative law judge (ALJ) to conduct the contested case hearing. Trinity moved the ALJ to dismiss Brookwood’s CON Application on the ground that Brookwood had failed to comply with SHPDA’s publication rule. Under SHPDA’s rules in effect at the time Brookwood’s CON Application was filed, an applicant was required to provide to SHPDA, within thirty days of filing the CON Application, proof of publication of notice of the CON Application for two consecutive weeks in a newspaper of general circulation in the areas affected.    

The ALJ denied Trinity’s motion to dismiss Brookwood’s CON Application and a contested case hearing was subsequently held. Following the hearing, the ALJ issued a recommended order concluding that Brookwood should be granted the CON. SHPDA’s CON Review Board adopted the ALJ’s recommended order and issued the CON to Brookwood. Trinity appealed to the Montgomery Circuit Court.

On June 3, 2011, the circuit court ruled that Brookwood committed a “fatal flaw” when it failed to comply with SHPDA’s publication rule and reversed the CON Review Board’s decision to issue Brookwood the CON. Brookwood appealed to the Alabama Court of Civil Appeals.  Trinity filed a cross-appeal, challenging the circuit court’s judgment insofar as it purported to affirm the CON Review Board’s decision “with respect to the merits” of the CON Application.

After hearing oral arguments in July 2012, the Court unanimously decided that Brookwood’s failure to publish notice of the CON Application in a newspaper of general circulation was harmless error. The Court found no indication that Brookwood’s noncompliance with the publication rule had the effect of silencing opposition to the CON Application from any member of the general public. The Court also concluded that Trinity was not prejudiced by Brookwood’s noncompliance because Trinity automatically received notice of Brookwood’s CON Application from SHPDA as an affected party providing similar services in the same area where the project was proposed to be located. 

Hence, the Court reversed the circuit court’s judgment reversing the CON Review Board’s decision to issue Brookwood the CON and remanded the case back to the circuit court for further consideration of Trinity’s appeal from the decision to issue the CON to Brookwood. The court also dismissed the cross-appeal filed by Trinity regarding the statement in the circuit court’s decision indicating that the Brookwood CON Application was valid on its merits. On remand, the circuit court was instructed to enter a judgment regarding the merits of the decision to issue Brookwood the CON. 

On September 12, 2012, the circuit court issued its opinion affirming the CON Review Board’s decision to issue Brookwood the CON which will allow Brookwood to build the first freestanding emergency department in Alabama. Trinity, however, could still appeal the circuit court’s ruling.

In addition, two more freestanding emergency department projects were approved by the CON Review Board on September 19, 2012. CON Applications filed by Princeton Baptist Medical Center and Medical West, an affiliate of UAB Health System, which would allow both hospitals to build freestanding emergency departments in Hoover, were approved despite an ALJ’s recommended order that only Princeton Baptist’s CON Application be approved. Both hospitals have until November 3, 2012, to appeal the rulings of the CON Review Board.