WA Supreme Court: Court of Appeals has to Defer to ALJ on WAC Interpretation re: Need for Surgery Center
Swedish wanted to add a surgery center in East King County. The department of health agreed. Under the administrative code, to find a certificate of need for the surgery center, the department has to look at three factors: (a) the existing capacity of operating rooms in the planning area, (b) the anticipated number of surgeries in the area three years into the future, and (c) whether existing operating room capacity is sufficient to accommodate the projected number of future surgeries.
Well Swedish applied for a certificate of need. Overlake, being big-dog in the area opposed it, as did Evergreen Health. The health law judge said that the exempt facilities can't be counted for existing capacity, but can be used for the determination of future need. This seem off to you too? How about we include the capacity of every surgery facility read plainly under the WACs?
Overlake and Evergreen requested an adjudicative proceeding before a health law judge to determine whether the Department erred by issuing the CN to Swedish. They contended that the Department failed to properly apply WAC 246-310-270(9) and that, as a result of the alleged error, the need for an additional ASF in East King County was overstated. In upholding the Department's decision, the health law judge acknowledged that, in calculating existing capacity and future need, the applicable language in sections (a) and (b) of WAC 246-310-270(9) "appears to be all inclusive" of ASFs and exempt facilities. CP at 29. The health law judge went on to say, however, that the language of the WAC "cannot be read in isolation" and that its "plain meaning may be ascertained by an examination of the statute in which the provision is found, as well as related statutes or other provisions of the same act in which the provision is found." Id. (citing City of Olympia v. Drebick, 156 Wn.2d 289, 295, 126 P.3d 802 (2006)). Following that approach, the health law judge determined that exempt facilities should be excluded from the calculation of existing capacity under WAC 246-310-270(9)(a), but included in the calculation of future need under subsection (b) of that regulation. In holding that Swedish established need for an additional five operating room ASF in Bellevue, the health law judge took particular note of the legislature's emphasis on assuring "that all citizens have accessible health services" and indicated that "[i]f the more inclusive approach were followed, the calculation of available operating rooms would include [exempt facilities] that would not be available to many of the individuals within the health planning area." CP at 29 (emphasis added).
The Court of Appeals reversed, holding that the ALJ got it wrong in interpreting the WACs. Unfortunately, that's not the standard:
The standard of review in CN cases is that the agency decision is presumed correct and that the challengers have the burden of overcoming that presumption. Univ. of Wash. Med. Ctr. v. Dep't of Health, 164 Wn.2d 95, 102, 187 P.3d 243 (2008). Insofar as questions of law are concerned, we may substitute our interpretation of the law for that of the agency. We do, however, accord substantial deference to the agency's interpretation of law in matters involving the agency's special knowledge and expertise. An agency's decision is arbitrary and capricious if the decision is the result of willful and unreasoning disregard of the facts and circumstances.
Overlake contends that not counting exempted facilities led to an overestimate of need. However, the supreme court said, while not clear, that the ALJ's interpretation could be a valid one. They have to provide some deference on interpretation of the WACs to those within the agency. Here, the ALJ gave some good reasons as to why he was calculating like that, under a need for availability of centers for the general public. It may not be the best reason, but its definitely one within the agency's special knowledge. Swedish gets its CN.
That was the Chevron case, right? It's been a while since i graduated. But I definitely remember something about Chevron.