Cabinet for Human Resources v. Jewish Hospital Healthcare Services

Jewish Hospital Healthcare Services (Jewish Hospital) (defendant) had five cardiac-catheterization laboratories in operation when it sought a certificate of need from the Interim Office of Health Planning and Certification (plaintiff) to add a sixth. Jewish Hospital requested expedited consideration of its application under Kentucky law, but the interim office denied that request. Jewish Hospital then withdrew its application and informed the interim office of its intention to proceed with the addition of the sixth cardiac-catheterization laboratory because the hospital did not need to obtain a certificate according to a Kentucky circuit court’s interpretation of the state’s statutes requiring it. The Kentucky statutes required that facilities obtain certificates of need when making substantial changes in health services offered or when adding health services. The interim office sent Jewish Hospital a notice to show cause, asserting that the hospital’s reliance on the court’s interpretation was misplaced because the decision was on appeal to the court of appeals. After a hearing, the interim office maintained its position, sending the hospital a cease-and-desist letter including a $10,000 fine for willfully violating the law. Jewish Hospital sought judicial review of the interim office’s decision. After construing the relevant statutes, the court ruled in favor of Jewish Hospital after concluding that the hospital had not made a substantial change in a health service triggering the need for a certificate. The interim office appealed.