King County Public Hospital District No. 2 v. Washington State Department of Health

Summary

The Washington Supreme Court reviews the Department of Health's approval of a certificate of need for Odyssey Healthcare as part of a settlement of related federal litigation. The court holds that the health law judge properly exercised discretion in considering a later need calculation and did not act arbitrarily or capriciously in approving the certificate. The court affirms the Court of Appeals and reinstates the certificate of need.

Holdings

1. The health law judge did not abuse his discretion by considering the Department's 2008 need calculation in evaluating Odyssey's 2006 application because the unusual circumstances justified considering later evidence and interested entities were given notice and an opportunity to comment.
2. The Department did not act arbitrarily or capriciously by relying on the 2008 need analysis, excluding Kline Galland and Providence ElderPlace from the calculation, or finding that Odyssey satisfied the certificate-of-need criteria.
3. The competing providers' statutory and due process rights were not violated because they received notice and an opportunity to comment on the proposed settlement; they had no right to demand a separate full adjudicative proceeding before the health law judge after the Department chose to settle.

Questions Presented

1. Whether the health law judge abused his discretion by considering the 2008 hospice need calculation in evaluating Odyssey's 2006 certificate-of-need application.
2. Whether the Department's 2008 need analysis was arbitrary or capricious because it excluded certain providers or improperly projected need.
3. Whether the health law judge's finding that Odyssey satisfied the non-need certificate-of-need criteria was arbitrary or capricious.
4. Whether competing providers were entitled to a full adjudicative proceeding and whether denial of that proceeding violated statutory or constitutional due process rights.

Disposition

affirmed