Oregon Health Authority denied NEWCO Oregon's request for a certificate of need Thursday, July 6, meaning the company can't move forward at this time with its proposed 100-bed inpatient psychiatric facility in Wilsonville.
In a letter sent to NEWCO Oregon regarding the decision, Oregon Health Authority (OHA) said that the company had not met its burden of proof for justifying the need for a 100-bed inpatient psychiatric facility. OHA specifically cited that the service area population does not need the proposed project.
"The applicant has not met its burden with regard to either identifying the population to be served or the bed-need within the proposed service area. The applicant has proposed a service area that for general acute care beds is too large given the likely market share," the letter stated. "With regard to the service area for psychiatric beds, the proposed tri-county area of Multnomah, Washington and Clackamas Counties is also too large and the more appropriate service area would be a single county service area."
NEWCO Oregon — which is part of Universal Health Services — was hoping to build a 62,000-square-foot psychiatric hospital on 8.72 acres at the intersection of Boones Ferry and Day roads. The proposed facility, which would be called Willamette Valley Behavioral Health, was unanimously approved by Wilsonville City Council in March of 2016.
A certificate of need is required by Oregon Health Services for any new hospital in Oregon, with OHA acting as the decision-making authority. OHA's rejection of the certificate of need came two weeks after NEWCO filed a lawsuit June 23 to expedite the decision-making process.
"The U.S. Department of Justice and the Federal Trade Commission have repeatedly urged states to abolish these certificate of need laws because they 'restrict entry and expansion, limit consumer choice, and stifle innovation.' Additionally, these agencies have raised concerns that CON processes can be exploited by incumbent firms to thwart or delay entry by new competitors," Jason Conger, an attorney at Lynch Conger McLane LLP, who represents the company, said in a press release. "The known involvement of Portland-area hospital systems and the state's largest public employee union in this process raises serious concerns about the integrity of the application decision."
NEWCO has 60 days to file a written request, which Conger says NEWCO plans to do.