Missouri Supreme Court Rules in Favor of Patients First in Hospital Dispute

The Missouri Supreme Court Tuesday affirmed a lower court decision that effectively allowed for the construction of Patients First’s three-bed hospital in Washington.

The decision was handed down on the same day that Patients First and Mercy announced they had signed a letter of intent to explore the possibility of merging.

St. John’s Mercy Health System (now called Mercy) had opposed the three-bed hospital on the grounds that Patients First’s application did not comply with the state’s Certificate of Need (CON) program.

In April of 2010, Patients First filed a letter of intent with the Missouri Health Facilities Review Committee (MHFRC) requesting a non-applicability CON letter to construct a new three-bed facility at an estimated cost of $953,750.

The MHFRC is the body that grants CON and the rules that relate to the process.

Patients First sought the non-applicability letter based on one of those rules — the New Hospital Rule — which exempts new hospitals costing less than $1 million from the requirement of obtaining a CON.

Mercy challenged Patients First’s application and the rule in St. Louis County Circuit Court before the MHFRC made a decision on its application.

St. Louis County Circuit Court Judge Richard Bresnahan dismissed the case without prejudice because it was “not ripe for judicial determination.” And while Missouri Court of Appeals Eastern District ultimately decided the case was ready for review, it then ruled “that the New Hospital Rule is consistent with the CON Law and the MHFRC was within its authority to promulgate the rule.”

In September 2010, the Missouri Health Facilities Review Committee (MHFRC) voted 4-3 to exempt Patients First from going through with the CON process to build a three-bed hospital in Washington.

Mercy appealed the decision to the Missouri Supreme Court.

Writing for the court, Chief Justice Judge Richard B. Teitelman ruled that Mercy had presented a ripe and justiciable controversy for review.

But he also upheld the validity of the New Hospital Rule ruling that Mercy’s arguments to the contrary are “without merit.”