St. Frances Hospital-Mooresville, Ind., won its legal challenge of a county certificate-of-need ordinance and hospital construction moratorium, a victory that allows the hospital to go forward with a $40 million expansion. A U.S. District judge in Indianapolis ruled that Morgan County commissioners had no authority to enact the ordinance protecting 86-bed Morgan Hospital and Medical Center, Martinsville, Ind., from competition. While the April 2005 ordinance violated the state's Home Rule Act and is clearly inconsistent with state policy fostering competition, it did not violate federal antitrust or state zoning laws, the judge ruled. Still uncertain is the legal status of similar laws regulating hospital construction passed by four other Indiana counties; some of the laws have been challenged by competing physicians or healthcare systems. Indiana repealed its CON law in 1987.
Morgan County's attorney, Joseph Chapelle of Barnes & Thornburg, Indianapolis, said the county had not decided whether to appeal. "They're disappointed," Chapelle said. The question is "whether the counties have the power to help their own hospitals address issues like cream-skimming the best-paying patients and indigent care," he said. St. Francis Executive Director Keith Jewell said the ruling "puts us back to a level playing field. The law put us at competitive disadvantage."-- by Mark Taylor