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November 18, 2022

Johnson Memorial challenges state penalty for closing maternity ward

Courtesy photo Johnson Memorial Hospital
By Eric Bedner, Journal Inquirer

Officials from Johnson Memorial Hospital in Stafford are challenging the state Office of Health Strategy’s attempt to levy a substantial fine — potentially totaling hundreds of thousands of dollars — for the closure of its labor and delivery unit without first obtaining state approval.

During a hearing on Wednesday, both parties agreed to an immediate halt of any further accruing of the $1,000-a-day-fines until the issue is resolved.

The dispute stems from a series of executive orders issued by Gov. Ned Lamont during the height of the COVID-19 pandemic that allowed health care providers to waive the requirement to file a certificate of need when suspending certain services in order to combat the virus.

Under an executive order, the hospital was allowed to suspend its labor and delivery unit without OHS approval. However, when the executive order expired, maternity services should have resumed because the state had not approved the closure.

OHS notified Johnson Memorial Hospital officials on May 30, 2021 that it would be fined $1,000 per day until births resumed at the hospital.

There have been no deliveries at the hospital since it suspended its labor unit in October 2020, and the hospital “chose to willfully ignore” announcements from OHS that services should resume, agency lawyer Lara Manzione said on Wednesday during a hearing on the matter.

“The hospital knew the law, willfully broke the law, and should be assessed $1,000 per day as a civil penalty,” she said.

The hospital, which is owned by Trinity Health and St. Francis Hospital and Medical Center in Hartford, disagrees.

“Johnson Memorial took tremendous efforts during this very uncertain time to recruit and staff labor and delivery services,” David DeBassio, a lawyer representing the hospital said on Wednesday.

DeBassio and Johnson Memorial Hospital President Stuart Rosenberg said during Wednesday’s hearing that the hospital recruited and trained staff for the labor unit, but that the prospective employees chose to work at different hospitals rather than stay at Johnson Memorial. This was despite offerings of incentives, the details of which were not made public during Wednesday’s hearing, to remain in Stafford, they said.

After their efforts to reopen the labor unit fell short, Johnson Memorial Hospital officials did eventually apply for a certificate of need to formally close the unit.

OHS officials, however, noted that state law requires approval of a certificate of need before any inpatient services can be halted.

“Johnson Memorial Hospital acted like they should not have to follow the law requiring a (certificate of need) before terminating an inpatient service as important as labor and delivery,” Manzione said.

Although hospital officials said that they didn’t initially intend to close the unit, “the law is clear,” Manzione said. “In order to terminate an inpatient service, a hospital requires a (certificate of need). The hospital must keep providing the services until a (certificate of need) is approved.”

She added that hospital officials were again notified in November 2021 that they were in violation of state law.

DeBassio argued that since hospital officials worked to train and hire staff for the unit, albeit unsuccessfully, OHS should not be able to make the case that the hospital willfully disregarded the law.

“You can’t find somebody acted willfully if it was impossible for them to fulfill those obligations,” he said, adding that labor shortages impacted many businesses during the pandemic, particularly in the healthcare field.

DeBassio further argued that OHS was fully aware of Johnson Memorial’s efforts to restaff its labor unit and that it was “an abuse of discretion” for the agency to fine the hospital $1,000 per day — the maximum civil fine allowed.

If Johnson Memorial were to lose its appeal, DeBassio argued the daily fine should stop at the date the hospital eventually filed its certificate of need — Sept. 29, 2022.

Daniel Csuka, the OHS hearing officer overseeing the dispute, ultimately has discretion in the ruling on how much Johnson Memorial should be fined, and the range of dates when the daily fine would apply.
 

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