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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Bridges v. Banner Health (12/19/2008) sp-6329
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| ROBERT L. BRIDGES, M.D., and | ) |
| ALASKA OPEN IMAGING, LLC, | ) Supreme Court No. S- 12559 |
| ) | |
| Appellants, | ) Superior Court No. 4FA-06-1377 CI |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| BANNER HEALTH d/b/a | ) No. 6329 December 19, 2008 |
| FAIRBANKS MEMORIAL | ) |
| HOSPITAL, and KARLEEN | ) |
| JACKSON, in her official capacity as | ) |
| Commissioner, STATE OF ALASKA, | ) |
| DEPARTMENT OF HEALTH AND | ) |
| SOCIAL SERVICES, | ) |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Niesje J. Steinkruger, Judge.
Appearances: Robert J. Gunther, Law Office
of Robert J. Gunther, Anchorage, and Mark S.
Bledsoe, Law Offices of Mark S. Bledsoe,
Anchorage, for Appellants. Peter J. Maassen,
Ingaldson, Maassen & Fitzgerald, Anchorage,
and Peter Gruenstein, Gruenstein & Hickey,
Anchorage, for Appellee Fairbanks Memorial
Hospital. Stacie L. Kraly, Assistant
Attorney General, and Talis J. Colberg,
Attorney General, Juneau, for Appellees State
of Alaska and Karleen Jackson.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, and Carpeneti, Justices. [Winfree,
Justice, not participating.]
EASTAUGH, Justice.
I. INTRODUCTION
The superior court enjoined Alaska Open Imaging Center
(AOIC) from operating its Fairbanks magnetic resonance imaging
(MRI) facility without first obtaining a certificate of need
(CON). Six weeks after the superior court issued the injunction
enjoining AOIC, AOICs medical director, Dr. Robert Bridges,
unsuccessfully moved to intervene in the superior court
proceeding. Dr. Bridges appeals the denial of his intervention
motion and AOIC appeals the injunction. Because the superior
court did not err in determining that Dr. Bridgess intervention
motion was untimely, we affirm its denial. As to AOICs appeal,
we also affirm in part. The CON statute does not violate the
Alaska Constitutions equal protection clause or prohibition
against special legislation. But because there appears to be an
unresolved genuine issue of material fact about whether AOICs
facility satisfies AS 18.07.111(8)(B)s exclusion for offices of
private physicians, we vacate the injunction and remand.
II. FACTS AND PROCEEDINGS
Alaskas certificate of need (CON) statute, AS
18.07.031, requires that a health care provider seeking to
construct a health care facility at a cost equaling or exceeding
the statutes monetary threshold obtain a CON from the Alaska
Department of Health and Social Services (DHSS).1 In 2004 the
Alaska Legislature enacted House Bill (H.B.) 511, amending the
CON statute.2 Among other changes, H.B. 511 added the term
independent diagnostic testing facility to the definition of
health care facility in AS 18.07.111(8).3
Banner Health owns and operates Fairbanks Memorial
Hospital.4 In October 2005 Mike Powers, the hospitals chief
executive officer, informed DHSS Commissioner Karleen Jackson
that Alaska Open Imaging Center (AOIC) had applied for a building
permit to open an MRI facility in Fairbanks without first
obtaining a CON; Powers asked DHSS to determine whether AS
18.07.031 required AOIC to obtain a CON.
In November 2005 Commissioner Jackson asked Jeff
Kinion, one of AOICs managers at the time, whether AOICs plans
were subject to the CON requirements. Kinion responded that
AOICs facility is not a health care facility under AS
18.07.111(8) because, per AS 18.07.111(8)(B), a health care
facility does not include the offices of private physicians
. . . whether in individual or group practice. Kinion asserted
that the CON requirement does not apply to AOIC because AOICs
facility is a private physicians office, not an independent
diagnostic testing facility.
In response Commissioner Jackson informed Kinion that
DHSS had reviewed the documents Kinion had provided and concluded
that the facility will be constituted as an office of private
physicians in group practice and therefore in accordance with AS
18.07.111(8) is not considered a health care facility for the
purposes of the [CON] program.
In February 2006 Banner Health asked Commissioner
Jackson to reconsider her decision that AOICs facility did not
require a CON. She denied the request, determining that 7 Alaska
Administrative Code (AAC) 07.012 controls this question. This
regulation states that, for purposes of AS 18.07.111,
independent diagnostic testing facility means a fixed-location
facility or mobile facility that (1) performs diagnostic testing
using major diagnostic testing equipment . . . and (2) is, or
would be, required to enroll as an independent diagnostic testing
facility for purposes of Medicare or Medicaid reimbursement under
42 C.F.R. 410.33.5 Commissioner Jackson concluded that AOIC is
not an independent diagnostic testing facility because the Center
for Medicare and Medicaid Services does not characterize AOIC as
an independent diagnostic testing facility for billing purposes.
In March 2006 Banner Health filed a superior court
complaint for injunctive and declaratory relief, naming
Commissioner Jackson and AOIC as defendants. Banner Health
sought an injunction to enjoin DHSS from relying on 7 AAC 07.012
and a judicial declaration that 7 AAC 07.012 is void and
unenforceable because it unlawfully conflicts with both
legislative intent and the plain language of AS 18.07.111(8).
Banner Health asserted that if the regulation exempts entities
such as AOIC from the CON laws, the regulation would be
inconsistent with the statute because the regulation requires a
facility both to be an independent diagnostic testing facility
and to enroll as an independent diagnostic testing facility for
Medicare and Medicaid reimbursement purposes. Banner Health also
requested a preliminary injunction to enjoin AOIC from
constructing or operating its Fairbanks facility without a CON.
Commissioner Jackson and AOIC each opposed Banner
Healths motion. Commissioner Jackson argued that the statute
directed DHSS to include independent diagnostic testing
facilities in the CON process, but left DHSS free to define an
independent diagnostic testing facility. She asserted that the
regulation is valid because DHSSs adoption of the Center for
Medicare and Medicaid Services definition is consistent with the
statute. AOIC likewise argued that the DHSS regulation is
consistent with the statute. It also argued that a balancing of
equities did not support Banner Healths request for an injunction
and that granting injunctive relief to Banner Health would
violate the equal protection clause of the Alaska Constitution.6
AOIC cross-moved to dismiss the complaint, arguing that if H.B.
511 applied to AOIC it would be an unconstitutional special act.7
The superior court denied AOICs motion to dismiss in
July 2006. In August 2006 the court held a hearing on Banner
Healths motion. After concluding that 7 AAC 07.012 is
inconsistent with AS 18.07.111, the court, by order of September
7, 2006, declared the regulation void to the extent it negates
the legislatures intent to include AOIC and other like
independent diagnostic testing facilities within the definition
of health care facility, and thus subject to the requirements of
the [CON] program. The court also found that Banner Health would
face irreparable harm if the court did not grant injunctive
relief; it therefore enjoined AOIC from operating its facility.
Concerned whether AOIC could be adequately protected, the
superior court made the injunction conditional, giving AOIC 180
days until February 5, 2007 to obtain a CON before the
injunction would take effect. Commissioner Jackson provided AOIC
an expedited schedule that, if followed, would allow AOIC to
obtain a CON decision before the injunction became effective.
AOIC did not apply for a CON.
In October 2006, six weeks after the court granted the
injunction against AOIC, Dr. Robert Bridges, AOICs medical
director, moved to intervene in Banner Healths suit. He argued
that he is an equity owner of AOIC and the primary guarantor of
approximately $10,000,000 of AOICs debt and that he therefore has
important individual rights that the injunction impairs.
In December 2006 the superior court denied the
intervention motion, concluding that Dr. Bridges had not
satisfied the requirements of Alaska Civil Rule 24. The court
determined that Dr. Bridgess motion was untimely because he had
been aware of and involved in litigation . . . since 3/06 and in
[the] administrative process long before that, and that he failed
to establish that AOIC did not adequately represent his
interests.
In January 2007 Dr. Bridges filed the present appeal in
this court and moved under Alaska Appellate Rule 205 for a stay
of the injunction pending appeal; we denied his motion.
AOIC closed its facility in February 2007. Dr. Bridges
then organized Aurora Diagnostic Imaging, LLC, a limited
liability company solely owned by Dr. Bridges, and asked
Commissioner Jackson to determine whether Aurora needed to obtain
a CON in order to purchase an MRI unit. Commissioner Jackson
initially determined that Aurora would be required to obtain a
CON, but she later vacated that determination and concluded that
Auroras facility is not a health care facility as that term is
defined in AS 18.07.111(8).
In March 2007 Banner Health moved for entry of final
judgment in its favor. AOIC opposed, and also moved for summary
judgment on six of AOICs affirmative defenses that the court had
not expressly discussed (equal protection, procedural due
process, substantive due process, unnecessary special
legislation, statutory exclusion for private physicians offices,
and failure to join an indispensable person). In April the
superior court entered judgment in favor of Banner Health. It
did not rule on AOICs motion for summary judgment.
Dr. Bridges appeals the superior courts denial of his
motion to intervene, arguing that he was entitled to intervention
as of right; he alternatively argues that he was entitled to
permissive intervention. AOIC successfully moved in this court
for permission to participate as an appellant with Dr. Bridges.
AOIC appeals the injunction, arguing that the CON statute, as
amended by H.B. 511, violates the Alaska Constitutions equal
protection and protection against unnecessary special legislation
provisions. It also argues that it is exempt from the CON
program because it is an office[] of private physicians, and that
the superior court erred in granting summary judgment to Banner
Health before ruling on AOICs motion for summary judgment and
adjudicating AOICs defenses.
III. DISCUSSION
A. Standard of Review
We apply our independent judgment to constitutional law
issues, and consider precedent, reason, and policy.8 We review
for abuse of discretion denials of motions for permissive
intervention9 and denials of motions to intervene as of right if
timeliness is at issue.10 We review entry of a preliminary
injunction for abuse of discretion.11 We will find an abuse of
discretion only when we are left with a definite and firm
conviction, after reviewing the whole record, that the trial
court erred in its ruling.12 We review de novo a superior courts
legal determinations in issuing a preliminary injunction.13
We review de novo grants of summary judgment and
dispositions that in essence have the effect of granting summary
judgments.14 Viewing the facts in the light most favorable to the
moving party,15 we affirm if there is no genuine factual dispute
and the moving party is entitled to judgment as a matter of law.16
B. AOICs and Dr. Bridgess Appeals Are Not Moot.
As an initial matter, Banner Health and Commissioner
Jackson argue that AOICs appeal should be dismissed as moot. If
AOICs appeal were moot, Dr. Bridgess appeal would also
necessarily be moot as there would be no case in which to
intervene.
Banner Health contends that AOICs appeal of the
injunction is moot because AOIC has stopped serving patients at
its Fairbanks location, because Dr. Bridges has formed a new
company to take over and operate the facility as a private
physicians office excluded from the CON requirement, and because
AOIC no longer has ownership interest in the Fairbanks office.
Commissioner Jackson asserts that any decision rendered in this
appeal would be purely advisory as there is no actual controversy
between the parties.
An issue is moot if it is no longer a present, live
controversy, and the party bringing the action would not be
entitled to relief, even if it prevails.17 Because AS
22.05.010(b) allows parties to appeal to this court judgments
entered in civil actions commenced in the superior court, we do
not need to consider whether the establishment of Dr. Bridgess
new business moots AOICs appeal of the injunction. In LaMoureaux
v. Totem Ocean Trailer Express, Inc. we said that AS 22.05.010(b)
draws no distinctions between judgments which are adverse because
a party has been required to pay money for costs and attorneys
fees and those which are adverse because a party has been
required to pay money as damages. In each case, an appeal is a
matter of right.18 Here, the superior court awarded a total of
$12,870.54 in attorneys fees against AOIC; AOIC therefore has the
right to appeal the lower court ruling. And Dr. Bridges
therefore may appeal the denial of his motion to intervene in
AOICs suit.
C. The Superior Court Did Not Abuse Its Discretion in
Denying Dr. Bridgess Motion To Intervene.
Dr. Bridges first moved to intervene in the superior
court in October 2006. He argued that he was entitled to
intervene as of right under Alaska Civil Rule 24(a)19 and
alternatively argued that he was entitled to permissive
intervention under Civil Rule 24(b).20 He contended that he was
an equity owner of AOIC and the primary guarantor of
approximately $10,000,000 of AOICs debt and that he therefore had
important individual rights that the injunction impaired. He
asserted below that the injunction impinged on his constitutional
rights to equal protection and procedural and substantive due
process, and violated the constitutional bar against unnecessary
special acts. He also argued that the injunction denied him his
right to the statutory exclusion for offices of private
physicians.
A four-part test determines whether a party is entitled
to intervene as a matter of right:
(1) the motion must be timely; (2) the
applicant must show an interest in the
subject matter of the action; (3) it must be
shown that this interest may be impaired as a
consequence of the action; and (4) it must be
shown that the interest is not adequately
represented by an existing party.[21]
The superior court denied Dr. Bridgess motion after
concluding that Dr. Bridges failed to meet the first and fourth
parts. Because a party must meet all four requirements to
intervene as a matter of right, we may affirm the superior courts
decision if the record supports either ground for denial.22 We
focus here on the timeliness of the intervention motion.
In Scammon Bay Assn v. Ulak we adopted the four-part
inquiry used by federal courts to determine whether a motion to
intervene meets Rule 24s timeliness standard:
(1) the length of time the applicant knew or
reasonably should have known that its
interest was imperilled before it moved to
intervene;
(2) the foreseeable prejudice to existing
parties if intervention is granted;
(3) the foreseeable prejudice to the
applicant if intervention is denied; and
(4) idiocratic circumstances which, fairly
viewed, militate for or against
intervention.[23]
As to the first factor, Dr. Bridges argues that it was
entirely reasonable for him to expect that the superior court
would address his individual rights if it imposed an injunctive
order. This argument is without merit. Dr. Bridges did not file
his motion to intervene until October 26, 2006 a month and a
half after the superior court issued the injunction on September
7, 2006. Dr. Bridges was a founder and part owner of AOIC, and
described his positions with AOIC as its Medical Director and
Manager. He was therefore aware or on notice from the time
Banner Health first sued AOIC in March 2006 that his individual
rights might be impaired by entry of an injunction. Banner
Healths March 2006 complaint requested both declaratory and
injunctive relief against AOIC. The crux of Dr. Bridgess
argument is that he had no reason to intervene sooner because he
could not have reasonably foreseen that the superior court would
rule against AOIC on its defenses asserting deprivation of
individual rights. But a potential party to a cause of action
may not delay intervening simply because it wishes to wait to see
if an existing party will prevail, or because it assumes that the
existing party will prevail. Allowing this delay would
effectively grant potentially interested parties the right to
what the superior court appropriately termed a do over.
Noting that the second factor the foreseeable
prejudice to existing parties if intervention is granted is the
most important timeliness factor,24 Dr. Bridges next argues that
granting his motion would not have significantly prejudiced other
parties because it would have caused only a minor delay. He
similarly argues that the third factor the foreseeable prejudice
to the applicant if intervention is denied weighs in his favor
because the denial of intervention would lead to considerable
prejudice to himself and would subject him to financial,
professional, and reputational harm. But these arguments are
unpersuasive because Dr. Bridges has not presented evidence
showing that he lacked the opportunity to advance arguments
addressing his individual rights before the injunction was
entered. The record instead indicates that AOIC argued on behalf
of its owners and employees.25 It also indicates that, on AOICs
behalf, Dr. Bridges filed an extensive affidavit setting out
AOICs position.26 There is no indication that Dr. Bridges was
unable to advocate for his personal rights through AOIC and
therefore no reason to think that denying his intervention motion
prejudices him.
Dr. Bridges also argues that, under the fourth factor,
three idiocratic circumstances militate for intervention: the
superior courts failure to join Dr. Bridges under Alaska Civil
Rule 19(a);27 Banner Healths acts that divert[ed] the superior
court from considering the rights of the individual physician;
and the superior courts refusal to address AOICs affirmative
defenses. These arguments are unpersuasive. As to the first
two, Dr. Bridges was able to advocate for his personal rights
through AOIC. As to the third, the superior courts order,
entitled Preliminary and Permanent Conditional Injunction, and
Declaratory Judgment, fully resolved the merits of the underlying
action. The superior courts oral ruling also establishes that
the superior court fully resolved the merits of the underlying
case. As we explain in Part III.F, the superior court was not
required to explicitly address AOICs summary judgment motion and
affirmative defenses; it implicitly rejected them when it granted
the injunction to Banner Health.28
Finally, another idiocratic consideration here is that
Dr. Bridges first moved to intervene only after the superior
court had ruled on the merits and granted the injunction. As we
stated in Mundt v. Northwest Explorations, Inc., [a]pplications
[to intervene] made after the conclusion of litigation normally
are not timely, absent a showing of justification for the
litigants failure to act more promptly.29 In light of this
touchstone, and for the reasons we discussed above, the superior
court did not abuse its discretion in determining that Dr.
Bridgess motion was untimely.30
Dr. Bridges alternatively argues that the superior
court abused its discretion in denying his motion for permissive
intervention under Civil Rule 24(b). But permissive intervention
also requires timely application.31 [M]otions to intervene of
right are found to be untimely less often than are permissive
intervention motions due to the greater likelihood of prejudice
to the applicant.32 Because Dr. Bridgess motion for intervention
as of right was untimely, the superior court did not abuse its
discretion in denying for the same reason Dr. Bridgess motion for
permissive intervention.
D. The Superior Court Did Not Err in Refusing To Rule on
AOICs Summary Judgment Motion and in Granting Final
Judgment to Banner Health Before Adjudicating AOICs
Affirmative Defenses.
AOIC argues that the superior court erred in granting
injunctive relief to Banner Health before ruling on AOICs summary
judgment motion and addressing AOICs affirmative defenses. But
as AOIC recognizes,33 a ruling on one motion is an implicit denial
of another contradictory pending motion.34 Similarly, the
superior court was not required to explicitly address AOICs
affirmative defenses. The superior court, in issuing the
injunction, implicitly rejected AOICs constitutional arguments.
And, in determining that AOICs facility is an independent
diagnostic testing facility, it implicitly rejected AOICs
argument that its facility is a private physicians office.35 We
therefore next address the merits of AOICs arguments.
E. Alaska Statute 18.07.111(8), as Amended by H.B. 511,
Does Not Violate the Equal Protection or Special Acts
Provisions of the Alaska Constitution.
AOIC advances an equal protection argument,36 asserting
that AS 18.07.111(8), as amended by H.B. 511, is discriminatory
because it allows cardiologists at the Alaska Heart Institute,
urologists at the Alaska Urological Associates, and orthopedists
at the Alaska Spine Institute to expend funds beyond the CON
threshold to purchase such equipment for their private offices.
(Emphasis added.) AOIC contends that H.B. 511s inclusion of
independent diagnostic testing facilities in the CON statutes
definition of health care facility has the effect of including
the offices of radiologists who use MRIs and CT scanners, while
excluding the offices of cardiologists, urologists, and
orthopedists who use the same equipment. AOIC contends that such
disparate treatment accorded the offices of radiologists vis a
vis the offices of other medical specialties using the same
equipment violates equal protection because the classification
chosen does not closely relate to a legitimate and important
governmental interest.
Equal protection claims are analyzed under a sliding
scale approach which places a greater or lesser burden on the
state to justify a classification depending on the importance of
the individual right involved.37 Banner Health concedes that the
right of an owner of an independent diagnostic testing facility
to construct an MRI facility is an important right for equal
protection purposes.38 Under the sliding scale approach,
burdening an important right must be justified by an important
governmental objective, and there must be a close nexus between
that objective and the means chosen to accomplish it.39
We do not need to consider whether the CON statute is
justified by an important governmental objective or whether there
is a close nexus between that objective and the means chosen to
accomplish it, because we conclude that the CON statute does not
treat similarly situated entities differently. The statute does
not distinguish between radiologists and other specialists; it is
facially neutral and classifies all independent diagnostic
testing facilities as health care facilities.40 Furthermore, the
exclusion for offices of private physicians excludes all private
physicians offices from the CON statute, regardless of medical
specialty.41 The DHSS regulations define independent diagnostic
testing facility based on the type of equipment used, and also
include types of equipment used by specialists other than
radiologists.42 It therefore appears that the medical groups AOIC
mentions are exempt from the CON requirement not because of their
specialities, but because they satisfy the exclusion for offices
of private physicians. AOIC has not argued that radiologists
cannot satisfy that exclusion.
AOIC also contends that the CON statutes definition of
health care facility is unconstitutional because it violates the
prohibition against special acts.43 This prohibition was adopted
to prevent abuse of the legislative process by picking favorites.44
A statute is unconstitutional special legislation if (1) it
creates [a] totally arbitrary and unreasonable method of
classification, or (2) it creates a permanently closed class.45
We evaluate challenges under this provision according to the test
applied to nonsuspect classifications in equal protection cases.46
Under this test, we examine the legislative goals and the means
used to advance them [to] determine whether the legislation bears
a fair and substantial relationship to legitimate purposes.47
On its face, H.B. 511 is a general act.48 But AOIC
argues that the superior court has concluded that the general
classification independent diagnostic testing facility must be
viewed as a special classification that creates a permanently
closed class that will forever and for all time include AOIC.
(Emphasis in original.) Because AOIC does not argue that H.B.
511 creates an arbitrary and unreasonable method of
classification, we focus solely on AOICs closed-class argument.
As the Nebraska Supreme Court stated, A closed class is
one that limits the application of the law to present condition,
and leaves no room or opportunity for an increase in the numbers
of the class by future growth or development . . . .49 Alaska
Statute 18.07.111(8), as amended by H.B. 511, applies uniformly
to any entity that seeks to construct an independent diagnostic
testing facility.50 It does not specifically target AOIC, and the
class covered by the statute will grow if additional health care
providers seek to construct independent diagnostic testing
facilities. The statute therefore does not create a closed class
potentially prohibited by the Alaska Constitution. It
consequently does not violate the constitutional prohibition
against special acts.
F. Whether AOIC Is a Private Physicians Office that Is
Exempt from the CON Program Presents a Genuine Issue of
Material Fact.
AOIC argues that the superior court erred in
determining that AOIC is not a private physicians office excluded
by AS 18.07.111(8)(B) from the definition of health care
facility. Although H.B. 511 amended the definition of health
care facility to include independent diagnostic testing
facilities, it did not alter the private physicians office
exclusion.51
Because the superior court did not conduct a trial or
evidentiary hearing, we review the grant of the injunction as a
grant of summary judgment. We consequently review the injunction
to determine whether the superior court was correct in concluding
that, as a matter of law, AOIC is not a private physicians office
exempt from the CON laws. In so doing, we view all factual
inferences in favor of AOIC, and view the facts in the light most
favorable to it.52
Commissioner Jackson argues that AOIC is not a private
physicians office because at the legislative hearing on H.B. 511,
AOIC identified itself as an independent diagnostic testing
facility. Dr. Bridges there testified that AOIC is the only
independent diagnostic testing facility in Alaska and AOICs then-
CEO, Sam Korsmo, answered affirmatively when a legislator asked
him whether H.B. 511 would affect AOIC. Korsmo answered that
[t]he bill will impact AOIC if it chooses to upgrade equipment or
expand services. It would be required to request a CON.
The superior court determined that AOIC was not
exempted by the private physicians office exclusion because the
legislative history establishes that it was the intent of the
legislature when HB-511 was passed to include Alaska Open Imaging
Center and similar imaging centers in the definition of health
care entities under independent diagnostic treatment facilities
for purposes of the certificate of need statute. But given that
independent diagnostic testing facility is a term of art that was
coined by the Center for Medicare and Medicaid Services and that
appears to have no general usage outside the Medicare
classification context,53 it is logical to conclude that the
legislature intended the term to have the same meaning given it
by the agency.
According to AOIC, it identified itself as an
independent diagnostic facility during the legislative hearing
because AOIC was then classified as such by the Center for
Medicare and Medicaid Services. At AOICs request, the agency
later conducted a review and determined that AOIC was a
physicians group practice rather than an independent diagnostic
testing facility. Taken in the light most favorable to AOIC,
this reclassification gives rise to a genuine issue of material
fact as to whether AOIC was an independent diagnostic testing
facility when the superior court ruled on AOICs defense. The
manual for the federal Medicare program describes the standards
the Center for Medicare and Medicaid Services uses to decide
whether an entity is an independent diagnostic testing facility.54
We accordingly remand to superior court with instructions to use
standards such as these to determine whether AOIC satisfied the
private physicians office exclusion at the time Banner Health
moved to enjoin its operation in Fairbanks.
No party has argued that we should allow the
commissioner to either interpret the controlling statute or make
additional fact findings, but given the basis for our remand, we
do not mean to foreclose the superior court from considering
whether a remand to the commissioner would be appropriate.
IV. CONCLUSION
We therefore AFFIRM the denial of the intervention
motion, VACATE the injunction, and REMAND for further proceedings
consistent with this opinion.
_______________________________
1 See AS 18.07.031. Subsection (d) mandates that
[b]eginning July 1, 2005, the $1,000,000 expenditure threshold in
(a) of this section is increased by $50,000 annually on July 1 of
each year up to and including July 1, 2014. When AOIC applied
for a building permit, the expenditure threshold was $1,050,000.
AOIC does not dispute that the cost of the MRI facility would
meet the monetary threshold.
2 Ch. 48, 7, SLA 2004.
3 AS 18.07.111(8) as amended in 2004 defines health care
facility as a private, municipal, state, or federal hospital,
psychiatric hospital, independent diagnostic testing facility,
residential psychiatric treatment center, tuberculosis hospital,
skilled nursing facility, kidney disease treatment center
(including freestanding hemodialysis units), intermediate care
facility, and ambulatory surgical facility.
4 We refer to Banner Health and Fairbanks Memorial
Hospital collectively as Banner Health unless context requires
otherwise.
5 7 AAC 07.012(b) (2006).
6 Alaska Const. art. I, 1.
7 Alaska Const. art. II, 19 (The legislature shall pass
no local or special act if a general act can be made applicable.
Whether a general act can be made applicable shall be subject to
judicial determination.).
8 Alaska Pub. Interest Research Group v. State, 167 P.3d
27, 34 (Alaska 2007); accord Alaska Legislative Council v.
Knowles, 21 P.3d 367, 370 (Alaska 2001).
9 Reust v. Alaska Petroleum Contractors, Inc., 127 P.3d
807, 825 (Alaska 2005).
10 Alaskans for a Common Language, Inc. v. Kritz, 3 P.3d
906, 912 (Alaska 2000).
11 City of Kenai v. Friends of Recreation Ctr., Inc., 129
P.3d 452, 455 (Alaska 2006).
12 Id. at 455 (internal quotations and citation omitted).
13 Id.
14 Alaska Trademark Shellfish, LLC v. State, 172 P.3d 764,
766 (Alaska 2007). No party seems to suggest that the superior
court proceeding was effectively an administrative appeal from
agency decisions. Because we view the entry of the injunction as
having in essence granted summary judgment to Banner Health,
there is no need to consider sua sponte whether this appeal
should be treated as an administrative appeal.
15 McCormick v. Reliance Ins. Co., 46 P.3d 1009, 1011
(Alaska 2002).
16 Alaska Trademark Shellfish, 172 P.3d at 766.
17 Wetherhorn v. Alaska Psychiatric Inst., 156 P.3d 371,
380 (Alaska 2007) (quoting Fairbanks Fire Fighters Assn, Local
1324 v. City of Fairbanks, 48 P.3d 1165, 1167 (Alaska 2002)).
18 LaMoureaux v. Totem Ocean Trailer Express, Inc., 651
P.2d 839, 840 n.1 (Alaska 1982).
19 Alaska R. Civ. P. 24(a) (Upon timely application anyone
shall be permitted to intervene in an action when the applicant
claims an interest relating to the property or transaction which
is the subject of the action and the applicant is so situated
that the disposition of the action may as a practical matter
impair or impede the applicants ability to protect that interest,
unless the applicants interest is adequately represented by
existing parties.).
20 Alaska R. Civ. P. 24(b) (Upon timely application anyone
may be permitted to intervene in an action when an applicants
claim or defense and the main action have a question of law or
fact in common. . . . In exercising its discretion the court
shall consider whether the intervention will unduly delay or
prejudice the adjudication of the rights of the original
parties.).
21 State v. Weidner, 684 P.2d 103, 113 (Alaska 1984)
(adopting four-part test from Foster v. Gueory, 655 F.2d 1319,
1324-25 (D.C. Cir. 1981)).
22 Harvey v. Cook, 172 P.3d 794, 799 (Alaska 2007).
23 Scammon Bay Assn v. Ulak, 126 P.3d 138, 143 (Alaska
2005) (citing Banco Popular de Puerto Rico v. Greenblatt, 964
F.2d 1227, 1231 (1st Cir. 1992)); see also Kirk v. Demientieff,
145 P.3d 512, 520 (Alaska 2006) (holding attorneys motion to
intervene in former clients tort suit untimely because attorney
had clear and early notice that former client would not
adequately represent his interests).
24 Ulak, 126 P.3d at 143.
25 AOICs May 1, 2006 memorandum opposing Banner Healths
motion for a preliminary injunction recognized that Banner Health
sought injunctive relief enjoining the radiologists at [AOIC]
from treating their patients; argued that the reputations and
future economic interests of AOIC and its staff radiologists
would be severely and irreparably damaged; and asserted that the
immediate economic effect on AOIC and its radiologists caused by
an injunctive order would far outweigh any small economic harm
that Banner [Health] may suffer.
26 See Red Top Mining, Inc. v. Anthony, 983 P.2d 743, 746-
47 (Alaska 1999) (denying companys motion to intervene as
untimely because, among other things, two shareholders had been
involved and filed affidavits in underlying dispute).
27 Civil Rule 19(a) states in pertinent part:
A person who is subject to service of process
and whose joinder will not deprive the court
of jurisdiction over the subject matter of
the action shall be joined as a party in the
action if . . . the person claims an interest
relating to the subject of the action and is
so situated that the disposition of the
action in the persons absence may . . . as a
practical matter impair or impede the persons
ability to protect that interest . . . .
Alaska R. Civ. P. 19(a).
28 See Brandon v. Corr. Corp. of Am., 28 P.3d 269, 274
(Alaska 2001) (citing Parson v. Marathon Oil Co., 960 P.2d 615,
618 (Alaska 1998); LeDoux v. Kodiak Island Borough, 827 P.2d
1121, 1123 (Alaska 1992)) (stating that a rule on one motion is
an implicit denial of another contradictory pending motion).
29 Mundt v. Nw. Explorations, Inc., 947 P.2d 827, 830
(Alaska 1997) (holding applicants motion to intervene was timely
even though it was filed after superior court entered final
judgment because record was unclear whether applicant knew,
before court issued its order invalidating her interest in land,
her parcels of land would be affected by the litigation).
30 See Alaskans for a Common Language, Inc. v. Kritz, 3
P.3d 906, 912 (Alaska 2000).
31 Id. at 912.
32 Ulak, 126 P.3d at 143 (citing 7C Charles Alan Wright,
Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure
1916 (1986)).
33 AOICs opening brief states, Appellants submit that [a
superior courts decision to not address a motion for summary
judgment] is an implicit denial of the motion . . . . In
objecting to Banner Healths proposed judgment below, AOIC stated
that [t]he courts oral ruling of August 8, 2006 implicitly
rejects AOICs legal arguments regarding the applicability of Art.
I, 1 (equal protection) and Art. II, 19 (special acts) of the
Alaska Constitution.
34 Brandon v. Corr. Corp. of Am., 28 P.3d 269, 274 (Alaska
2001).
35 See Catherine M. Boerner, Online OIG Audit Reports
Offer Additional Information About Independent Diagnostic Testing
Facilities, 9 NO. 1 J. Health Care Compliance 39, 40 (2007)
([Independent diagnostic testing facilities] are entities
independent of hospitals or physician offices in which licensed
or certified nonphysician personnel (technicians) perform
diagnostic tests under physician supervision.).
36 Article I, section 1 of the Alaska Constitution
provides:
This constitution is dedicated to the
principles that all persons have a natural
right to life, liberty, the pursuit of
happiness, and the enjoyment of the rewards
of their own industry; that all persons are
equal and entitled to equal rights,
opportunities, and protection under the law;
and that all persons have corresponding
obligations to the people and to the State.
37 Glover v. State, Dept of Transp., Alaska Marine Highway
Sys., 175 P.3d 1240, 1257 (Alaska 2008).
38 See Commercial Fisheries Entry Commn v. Apokedak, 606
P.2d 1255, 1266 (Alaska 1980) (stating that right to engage in
economic endeavor is important).
39 State v. Enserch Alaska Constr., Inc., 787 P.2d 624,
633 (Alaska 1989).
40 See AS 18.07.111(8).
41 See AS 18.07.111(8)(B).
42 The DHSS regulation states:
(b) For purposes of AS 18.07.111 and this
section, independent diagnostic testing
facility means a fixed-location facility or
mobile facility that
(1) performs diagnostic testing using major
diagnostic testing equipment; for purposes of
this paragraph, major diagnostic testing
equipment means
(A) magnetic resonance imaging (MRI)
equipment;
(B) a cardiac catheterization
laboratory and related imaging equipment;
(C) ultrasound imaging equipment;
(D) a positron emission tomography
(PET) scanner;
(E) a computed tomography (CT) scanner;
or
(F) a positron emission
tomography/computed tomography (PET/CT)
scanner . . . .
7 AAC 07.012(b).
43 Article II, section 19 of the Alaska Constitution
provides:
The legislature shall pass no local or
special act if a general act can be made
applicable. Whether a general act can be made
applicable shall be subject to judicial
determination. Local acts necessitating
appropriations by a political subdivision may
not become effective unless approved by a
majority of the qualified voters voting
thereon in the subdivision affected.
44 2 Norman J. Singer, Sutherland Statutory Construction
40.1, at 212-13 (6th ed. 2000) (citing Boucher v. Engstrom, 529
P.2d 456 (Alaska 1974) (overruled on other grounds by McAlpine v.
Univ. of Alaska, 762 P.2d 81 (Alaska 1988))).
45 Id. at 213.
46 Baxley v. State, 958 P.2d 422, 430 (Alaska 1988).
47 State v. Lewis, 559 P.2d 630, 643 (Alaska 1977).
48 See AS 18.07.111(8).
49 City of Ralston v. Balka, 530 N.W.2d 594, 601 (Neb.
1995) (internal quotations and citation omitted).
50 See AS 18.07.111(8).
51 See ch. 48, 7, SLA 2004.
52 See Anchorage Citizens for Taxi Reform v. Municipality
of Anchorage, 151 P.3d 418, 422 (Alaska 2006).
53 Health Care Financing Administration [now Center for
Medicare and Medicaid Services], 62 Fed. Reg. 33158 (proposed
Jun. 18, 1997), 1997 WL 329235 at *33179-81.
54 The manual provides that an entity generally should not
be considered independent from a physicians office if:
[1] It is a physician practice that is
owned, directly or indirectly, by one or
more physicians or by a hospital;
[2] The entity primarily bills for physician
services (e.g., evaluation and
management (E & M) codes) and not for
diagnostic tests;
[3] It furnishes
diagnostic
tests primarily
to patients
whose medical
conditions are
being treated
or managed on
an ongoing
basis by one or
more physicians
in the
practice;
[4] The diagnostic tests are performed and
interpreted at the same location where
the practice physicians also treat
patients for their medical conditions.
. . . .
We recognize that many diagnostic tests are
radiological procedures that require the
professional services of a radiologist. We
also recognize that the nature of a
radiologists practice is generally very
different from those of other physicians
because radiologists usually do not bill E &
M codes or treat a patients medical condition
on an ongoing basis. Nevertheless, a
radiologist or a group of radiologists should
not necessarily be required to enroll as an
IDTF. The following features would indicate
that a radiology practice is not independent
from a physician office or hospital:
[1] The practice is owned by radiologists, a
hospital, or both;
[2] The owner radiologists and any employed
or contracted radiologists regularly
perform physician services (e.g., test
interpretations) at the location where
the diagnostic tests are performed;
[3] The billing patterns of the enrolled
entity indicate that the entity is not
primarily a testing facility and that it
was organized to provide the
professional services of radiologists
(e.g., the enrolled entity should not
bill for a significant number of
purchased interpretations, it should
rarely bill only for the technical
component of a diagnostic test, and it
should bill for a substantial percentage
of all of the interpretations of the
diagnostic tests performed by the
practice); and
[4] A substantial majority of the
radiological interpretations are
performed at the practice location where
the diagnostic tests are performed.
Center for Medicare and Medicaid Services, Medicare Program
Integrity Manual ch. 10, 5.1 (2005).
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