Kennewick General Hospital officials celebrated a victory Thursday when they learned a health law judge had dismissed an attempt by Kadlec Regional Medical Center to revoke state approval for KGH's proposed Southridge hospital.
"It goes without saying that KGH is absolutely thrilled with the judge's decision," said Wanda Briggs, vice chairwoman of the Kennewick Public Hospital District board. "We really do believe it is a clear victory for KGH, for patients and for the Tri-Cities."
Kadlec's action was filed with the state Department of Health's Adjudicative Services Unit to appeal the issuance of a certificate of need for the Southridge project.
No hospital in Washington can expand without first getting a certificate of need from the state Department of Health and going through a process of justifying the growth.
Kadlec argued that because KGH also subsequently applied for a certificate of need to place an extra 25 beds at its Auburn Street campus after Southridge is built, and because that application depended on construction of the Southridge hospital, that KGH's original Southridge application had been improperly divided.
In turn, KGH filed documents asking to dismiss Kadlec's request. It argued Kadlec had waited too long to appeal and had never made any claims about how its interests might be affected by the Southridge project while the project was under consideration.
Health Law Judge John F. Kuntz agreed with KGH's argument and dismissed the appeal in a written order dated Monday.
"Kadlec was disappointed but not overly surprised by the ruling announced today," Kadlec Health Systems CEO Rand Wortman said in a written statement Thursday. "This is just another step in a long and complicated process. We recognized that the Department of Health could decline our motion to review its decision, simply based on the timing of the filing. But the overriding issue hasn't changed and Kadlec's position remains sound."
At the heart of the dispute are dueling requests to add beds to each hospital. Kadlec has asked to add 114 beds to its Richland hospital, while KGH has requested the extra 25 at its Auburn Street campus.
Those 25 beds wouldn't be added until after KGH builds Southridge and moves 74 of its allotted 101 beds there, leaving 27 in service at Auburn Street. The additional 25 would bring the bed count at a post-Southridge KGH to 74 at the new hospital and 52 at Auburn, for a total of 126.
Kadlec is licensed for 188 beds, but hospital officials want to build the remaining four floors of the 10-story River Pavilion tower and add 114 beds there, bringing the Richland hospital's total to 302 beds.
Kadlec cried foul when KGH asked for its 25 beds on the heels of Kadlec's 114-bed application because KGH officials hadn't disclosed expansion plans for Auburn Street when they applied to build Southridge.
Officials with the Richland hospital said it was clear the Southridge project and addition of beds at Auburn Street were part of one expansion plan and should have been on one application, not two.
So Kadlec protested the final certificate of need for Southridge when it was granted in March, and is arguing the state shouldn't have given final approval to that application in light of the subsequent application for 25 beds at Auburn Street.
Kadlec filed the appeal with the health department's Adjudicative Services Unit, as well as a court action in Thurston County. The Thurston County action still is pending.
KGH countered that it only applied for the 25 Auburn Street beds because Kadlec had proposed to grab all of the beds the community will need for the foreseeable future, thus preventing expansion by KGH down the road.
Kadlec also claimed in its appeal to the state that KGH had overstated admissions, occupancy rates and rates of growth in its certificate of need applications.
KGH has denied those allegations, saying Kadlec took the numbers out of context.
The judge's decision didn't settle the questions of whether KGH's application was improperly divided and relied on inaccurate data. Kuntz only ruled on the timeliness of Kadlec's appeal, and whether the Richland hospital had legal standing to challenge the Southridge approval.
Briggs said the ball now is in Kadlec's court whether to accept a settlement offer in which KGH proposed to drop its 25-bed application if Kadlec will withdraw the Thurston County action, as well as a March 17 letter to the certificate of need program challenging the Southridge approval and a public records request to the federal Department of Housing and Urban Development for documents related to KGH's efforts to obtain financing from the agency for the proposed hospital.
KGH officials have contended the public records request is intended to hold up financing for the new hospital.
"KGH again urges the Kadlec board to do what's right and do it without delay," Briggs said.
Wortman's statement said the Kadlec board will meet next week to determine what action the Richland hospital takes next.
-- Michelle Dupler: 582-1543; email@example.com