Judge Strikes Down Morgan County Ordinance on Health Care Facilities

The judge ruled in favor of the Sisters of St. Francis Health Service, Inc., the owner of St. Francis Hospital-Mooresville. The judge says the county does not have the authority to regulate the construction of health facilities because that responsibility falls under the Indiana Department of Health.

Source: Inside INdiana Business

Press Release

Judge David F. Hamilton issued a final judgment yesterday striking down a Morgan County Ordinance to regulate health facility construction and limit competition in the County. On April 18, 2005, the Morgan County Commissioners passed an Ordinance originally proposed by Morgan Hospital & Medical Center titled “Morgan County Ordinance for Health Facilities Planning and an Equitable Assessment for Uninsured Care”. The Ordinance imposed a limited moratorium on the construction of health care facilities within the county until December 31, 2005. After that date, the Ordinance required the Commissioners to approve construction of such facilities.

Judge Hamilton ruled in favor of the Sisters of St. Francis Health Services, Inc., the owner of St. Francis Hospital–Mooresville, finding that the Ordinance violated Indiana's Home Rule Act which allocates power between the State and local units of government. This ruling permits St. Francis to continue making healthcare improvement decisions in the best interest of the broad community of patients and their families.

The Judge found that the County simply does not have the authority to regulate the construction of health facilities because the State, through its Department of Health, "unambiguously and explicitly" has the responsibility to license and regulate hospitals. Further, the Indiana General Assembly repealed statewide certificate of need for hospitals in 1987 and replaced CON with a clear policy and preference to foster competition and encourage innovation in the financing and delivery systems of health care services in Indiana. Indiana law also calls on the State Department of Health to annually assess the competitive factors of the free enterprise system with the goal of encouraging competition and efficiency in the utilization of health resources. Judge Hamilton found that the Morgan County Ordinance undermines all of these statewide policies and, accordingly, issued a permanent injunction against application of the ordinance to St. Francis.

“We are pleased with the decision of the court. It allows for appropriate development of quality healthcare services that area residents say they want, and it provides a greater opportunity for economic growth in the county,” said Keith Jewell, Executive Director, St. Francis Hospital Mooresville. “We recognize that everyone involved in this process sincerely wants to assure the community’s continued access to high quality healthcare. It is our hope to work cooperatively with Morgan Hospital & Medical Center. We both serve the community as safety-net, not-for-profit hospitals. We look forward to opportunities for both hospitals to work together in partnership with the Morgan County Commissioners on important community health initiatives.

Robert J. Brody, President and CEO of St. Francis Hospital & Health Centers, said, "We believe there should be stricter parameters in place governing who is permitted to deliver inpatient hospital services in Indiana. However, we are in favor of a statewide solution that would create a more rational approach to this very real concern. The sustainability of not-for-profit, safety net hospitals are very much threatened by hospital entrepreneurs. In my opinion, the business interests of hospitals should be focused on improving and expanding services for the communities they serve rather than enriching private investors."

Source: St. Francis Hospital--Mooresville