The state health commissioner’s office, which backed claims by hospital conglomerate Sentara against Chesapeake Regional Medical Center (CRMC), erred in rejecting Chesapeake’s attempts to start an open-heart surgery center, the Virginia Supreme Court ruled Thursday.

The court’s unanimous opinion said the health commissioner at the time, Dr. Marissa Levine, erred in two ways according to the Court. First was accepting Sentara’s description of the cardiac services CRMC wanted to provide in its new center. The second was by “misinterpreting the SMFP (state medical facilities plan)” when rejecting CRMC’s application.

By sending the matter back to the health commissioner, the court has struck another blow against Sentara, the $7 billion conglomerate that has long used its lobbying muscle to dominate Virginia’s Certificate of Public Need (COPN) process. Health care organizations that want to make significant changes or advancements in their operations have to get those changes approved via a COPN application.

In March, the health commissioner ruled in favor of another Sentara rival, Riverside, by allowing Riverside to open a new hospital in Isle of Wight County in the Hampton Roads area. Sentara had long opposed Riverside’s expansion efforts as well.

The court’s opinion said the health commissioner misinterpreted what is considered a health care “service,” which means the courts that ruled on the case should have sent CRMC’s back to the health commissioner for a new review.

Both the commissioner and Sentara have acknowledged that the commissioner misinterpreted what is a service as part of the SMFP. Instead, they argued that misinterpretation was a “harmless error” that had no bearing on the merits of CRMC’s application. The court disagreed.

Chesapeake’s application

CRMC first applied to the health commissioner in July 2017 for permission to start the open-heart surgery center. The commissioner’s staff initially ruled in favor of the application, a decision Sentara appealed in November 2017.

After a public hearing, the commissioner ruled in Sentara’s favor and rejected CRMC’s application. CRMC sued in circuit court, which ruled that while the commissioner had misinterpreted part of the SMFP, the misinterpretation was a harmless error.

A state appeals court upheld the original ruling, which CRMC appealed to the supreme court. That led to Thursday’s ruling.

Since February 2021, Checks and Balances Project has reported on Sentara’s control of the COPN process and conflicts of interest in this particular case.

First, Mary Jane Hall, the Norfolk judge who ruled in Sentara’s favor in 2019 was a former Sentara lawyer on COPN cases before she became a judge. Second, Hall and Sentara’s current outside COPN counsel, Jamie Baskerville Martin, had represented Sentara together on COPN cases while Hall was in private practice.

Martin was also the chief legal adviser for a 2015 panel created by the General Assembly to study possible reforms of the COPN process, but she never informed the public of her ties to Sentara while recommending changes to state laws that would have benefited Sentara.

Next steps

Tuesday’s ruling means CRMC’s initial application goes back to Health Commissioner Colin Greene, who took office in April, for a new review.

“We will reverse the judgment of the Court of Appeals and remand the case to the Commissioner to reconsider CRMC’s COPN application consistent with the views expressed in this opinion,” said the opinion written by Senior Justice Lawrence Koontz Jr.

Given the multiple citations in the court’s ruling to mistakes made by the health commissioner in rejecting CRMC’s application, a new review “consistent with the views expressed in this opinion” appears likely to be made in CRMC’s favor.

Ray Locker is executive director of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.

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