State hospital group sues over merger rules

Association asks for rules effective Jan. 23 to be invalidated

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OLYMPIA (AP) — The Washington State Hospital Association sued the state Thursday over new rules for how proposed hospital mergers are reviewed, saying they go beyond what's allowed in state law and would be cumbersome to follow.

Gov. Jay Inslee last year directed the Department of Health to start reviewing such mergers or affiliations for how they might affect access to care.

At the time, some groups had raised concern about whether partnerships between Catholic and nonreligious hospitals would affect access to services such as abortion or end-of-life care.

The new rules took effect Jan. 23, and the hospital association, which represents 98 hospitals across the state, on Thursday asked a Thurston County Superior Court judge to invalidate them.

"State agencies can't redefine what the law means after 20 years of interpreting the law the same way," said association president Scott Bond. "The Department of Health has consistently said the law doesn't apply to mergers or affiliations. Reversing that position now is arbitrary and is beyond the authority granted to the department."

Historically, the Health Department has reviewed the sale, purchase, or lease of hospitals in deciding whether to grant "certificate of need," essentially a permit to add new services. The rules changes make clear that mergers and affiliations will also be reviewed.

The association also said the rule change means that even relatively small business decisions, such as the outsourcing of billing services or retaining a specialty oncologist to manage cancer care, would be subject to review — an expensive proposition, it said.

The American Civil Liberties Union of Washington, which has raised questions about hospital mergers in the state, said the changes are valid and necessary.

"Health system mergers have been occurring at an unprecedented pace in Washington state and, due to creative lawyering, have often evaded Department of Health review," ACLU policy counsel Leah Rutman said in an emailed statement. "These mergers can result in the reduction or denial of important health services."