Judge affirms certificate of need for hospital merger

By Kyla Asbury | Apr 21, 2017

CHARLESTON – Kanawha Circuit Judge James C. Stucky affirmed West Virginia Health Care Authority’s decision to grant a certificate of need in the hospital merger between Cabell Huntington Hospital and St. Mary’s Medical Center.

Steel of West Virginia has been very vocal of its disapproval of the merger and argued that WVHCA made an error of law by not considering alternatives in terms of cost, efficiency and appropriateness to the proposed acquisition, per state code and previous precedent.

SWVA has opposed the merger since it was announced three years ago. It filed an appeal after the certificate of need was granted last year.

SWVA argued that the WVHCA failed to consider alternatives to the hospital merger and that the merger would eliminate competition and raise healthcare costs in the city.

Stucky ruled that other bids are not "practicable" because they have already been rejected by St. Mary's and that the bid information is not relevant.

He wrote that the certificate of need law was not intended to serve as a legal review process over how a private corporation conducts the sale of its own property.

Cooperative agreements involving mergers require approval by the West Virginia Health Care Authority and the West Virginia attorney general. Cabell was awarded a cooperative agreement last year.

The hospitals still need Vatican approval to complete the $165 million transaction.

In 2014, the Pallottine Sisters announced plans to sell the hospital. Cabell began the acquisition then.

In November 2014, a transfer agreement was signed between the two hospitals. The WVHCA approved the hospital’s certificate of need in January 2016 and approved the cooperative agreement last June.

Steel of West Virginia listed six “errors of fact and law” it alleges the WVHCA made when it approved the cooperative agreement in its appeal of the merger.

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