Appeals court ruling allows Memorial fight to continue

YAKIMA, Wash. -- Yakima Valley Memorial Hospital's legal challenge to its competitor's hold on the heart angioplasty business remains alive under a federal appeals court decision rendered Friday.

The 9th Circuit Court of Appeals sent back to a lower court for trial the question of whether the state is violating the Commerce Clause of the Constitution by licensing only Yakima Regional Medical and Cardiac Center to perform elective angioplasties, a procedure to unclog arteries.

But the appeals panel found against Memorial on its assertion that the state is also violating the Sherman Antitrust Act.

The two hospitals are waging a battle over elective, or nonemergency, angioplasties, a market Regional dominates but which Memorial is seeking to enter. Both are appealing to the public to pressure the state as it weighs a request from Memorial for a license through the certificate of need process.

Memorial can do emergency angioplasties but scheduled angioplasties, where a catheter is used to re-open arteries, can only be performed at Regional. The market is regulated by the state in an effort to prevent unnecessary and expensive duplication of services.

Regional, the only hospital with open-heart surgery capabilities, argues that its financial viability would be jeopardized if Memorial is permitted to do elective angioplasties.

Memorial sued the state Department of Health in U.S. District Court in 2009 over its rules that effectively prevent the hospital from performing lucrative nonemergency angioplasties until at least 2022.

It lost the case in U.S. District Court in Olympia and appealed to the Ninth Circuit. The appeals panel heard oral arguments in March.

In its decision, the three-judge panel rejected the state's argument that Congress authorized it to set regulations governing the procedure, known as percutaneous coronary intervention, or PCI. That authorization, the state had argued, meant the Commerce Clause prohibiting restraint of interstate trade did not apply.

But now that question will have to be explored again.

"By virtue of the certificate of need requirement, the Department prevents Memorial from soliciting out-of-state patients and competing in an interstate market to offer elective PCI services, activities that clearly involve interstate commerce," the panel wrote.

Even though Memorial is a local hospital, the panel said the Commerce Clause protects the national market for goods and services, not the location of a particular participant.

"Thus a state burdens the rights of its own residents as well as those of other states when it burdens interstate commerce," according to the decision.

On the antitrust argument, the appeals panel rejected Memorial's argument that the state has effectively given regulatory power to Regional to control the market.

Memorial officials were unavailable for comment Friday.

Memorial is separately pursuing a second application to the state for a certificate of need, arguing that new data demonstrates a need for another provider in the market.

* Leah Beth Ward can be reached at 509-577-7626 or lward@yakimaherald.com.