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NEWCO Oregon files lawsuit against Oregon Health Authority due to continued delay of certificate of need process

NEWCO Oregon Inc. is suing the Oregon Health Authority because it says the state agency's continued delays hurt plans for a 100-bed mental health facility in Wilsonville.

NEWCO Oregon, part of Universal Health Services Inc. of Pennsylvania, hopes to build a 62,000-square-foot psychiatric hospital, which it plans to call Willamette Valley Behavioral Health, on 8.72 acres at the intersection of Boones Ferry and Day roads.

The company sued the state June 23 in Marion County Circuit Court, claiming the Oregon Health Authority has violated state law by delaying a certificate of need without just cause.

Under state law, Oregon Health Services requires a certificate of need for any new hospital, with OHA acting as the decision-making authority. OHA originally rejected NEWCO's certificate of need Feb. 24, saying NEWCO failed to meet its burden of proof to justify need for the facility. NEWCO then filed for an informal hearing to reconsider, which took place March, 17, but OHA opted to delay a decision to April 6.

On April 5, OHA decided to further delay a decision until June 10, and according to the company's petition. OHA sent a letter to NEWCO June 9 stating its unilateral decision to extend the deadline without specifying when a decision would be made. That delay prompted NEWCO to file the petition, seeking an issue of judgement from the court and money covering attorney fees and costs relating to the lawsuit.

"Because Respondents have not issued a final decision as required by law, Petitioner has no authority to open a healthcare facility or file an appeal," according to the NEWCO petition. "Consequently, the development of Petitioner's facility has been unnecessarily delayed and costs have been and will continue to be increased, resulting in an exponentially higher development cost to Petitioner and increasing costs to patients as a result."

'Anti-competitive collusion'

Fifteen states have replaced certificate of need laws since 1987, but Oregon continues to rely on the certificates.

"This is a clear example of why the U.S. Department of Justice and the Federal Trade Commission have tried to abolish these certificate of need laws," said attorney Jason Conger, who represents the company, in a press release. "From anti-competitive collusion between hospital monopolies to administrative malfeasance, these laws tend to encourage and sanction behavior that would otherwise be illegal."

The Wilsonville City Council unanimously approved the company's proposal March 7, 2016, after years of discussions and planning.

The for-profit medical facility would treat, among other things, adolescents and veterans dealing with mental illness and PTSD.

"Oregon ranks last in the nation for overall outcomes related to mental health care," Conger said. "You would think the state agency responsible for mental health care would be trying to improve the situation."

Contact Wilsonville Spokesman reporter Andrew Kilstrom at 503-636-1281 ext. 112 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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