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Hospitals going to court over CON rule

ATLANTA - A group of Georgia hospitals filed a lawsuit Monday challenging a recent state Board of Community Health vote allowing general surgeons to open outpatient centers.

The suit, brought in Dougherty County Superior Court, claims that only the legislature has the power to change the rules governing how health care facilities and services are distributed in Georgia.

"The new general surgery rule flies in the face of multiple court decisions and is a naked and illegal attempt to override the will of the General Assembly," said Monty Veazey, president of the Georgia Alliance of Community Hospitals, which filed the suit on behalf of the nearly five dozen hospitals it represents.

Albany's Phoebe Putney Memorial Hospital is listed separately as a co-plaintiff.

The Board of Community Health voted unanimously last month to declare general surgery a single specialty in Georgia, a change that will give general surgeons the same exemption from the state's Certificate of Need law that other single specialty physicians enjoy.

It means general surgeons will be able to own and operate outpatient centers without seeking state approval, a step supporters say will give patients access to quality health care at lower costs than hospitals. But hospital administrators say a proliferation of new outpatient surgical centers - with no legal obligation to serve poor patients - will siphon away paying patients, threatening hospitals already operating on financial thin ice with bankruptcy.

The board's vote came six months after a senior assistant attorney general warned board members that they lacked the legal authority to modify the CON law and just two days after a House committee went on record objecting to the board acting on the issue without the legislature's blessing.

But Dr. Chris Smith, president of Albany Surgical, which is named as a co-defendant in the lawsuit along with the Department of Community Health, said state agency boards have routinely adopted or amended rules affecting policies under their jurisdiction without seeking legislative approval.

"If a regulatory agency can't make or change regulations, it paralyzes the state," he said.

Albany Surgical tried throughout the 1990s to open a general-surgical outpatient center but was thwarted by the DCH's predecessor agency.

Smith said his company finally lost their case in 1998 on a court ruling that upheld the agency's authority to classify general surgery as a multiple specialty.

"Now, they're going to have to argue against what they argued last time," he said.

The suit seeks to block the new rule and asks the court to enforce the previous decisions against Albany Surgical.

"We have been attempting to negotiate this issue in good faith throughout the summer and fall," Veazey said. "But the attempted rule change ... disrupted the negotiations (and) unnecessarily escalated the issue."

Kathy Browning, executive director of the Georgia Society of General Surgeons, predicted that the DCH will prevail but only after a delay that will hurt Georgia patients.

"We believe the DCH is absolutely entitled to change this rule," she said. "Courts have said they are the experts in health policy planning."