The Missouri Supreme Court will hear oral arguments this week in a challenge by Mercy Health Systems to prevent Patients First Health Care from building a three-bed hospital in Washington without obtaining a certificate of need.

Arguments in the case are scheduled for 9 a.m. Thursday in Jefferson City.

The case involves the validity of a Missouri Health Facilities Review Committee rule that interprets the state certificate of need statute.

The certificate of need law was passed to prevent excessive amounts of health care facilities and to reduce costs of health care.

Under the law, proposed facilities must obtain a certificate acknowledging need for the facility from the Missouri Health Facilities Review Committee (Missouri Health). The law originally required many types of facilities to obtain certificates before offering new institutional health services.

To obtain approval for a certificate, applicants submit a letter of intent to Missouri Health Facilities Review Committee 30 days before they file for the certificate itself. The committee subsequently passed a rule that requires certificates for new acute care hospitals only if they cost more than $1 million.

Patients First filed a letter of intent with the committee to build a three-bed hospital adjacent to its facility in Washington. The doctors group requested an exemption from the certificate of need requirement — which was granted by the review committee on a 4-3 vote — because the cost to build the facility was less than $1 million.

Mercy later filed an action in St. Louis County circuit court requesting that the court determine whether the new hospital rule was valid.

A St. Louis County court dismissed the case in September 2008 holding that the case was not ripe for review because the committee hadn’t returned its decision on the original exemption request.

An appeals court later ruled that the case was ripe for review and that the rule exempting certificate of needs for new hospitals costing less than $1 million was valid.

Mercy later appealed the trial court’s decision to the Missouri Supreme Court.