Rael explains hospital legal arguments
September 16, 2009
In an interview with Valencia County Commission Chairman Pedro Rael last week, he explained the details of the legal arguments against the Valencia Health Commons contract.
The commission, by a 3-to-2 vote, approved the contract in July 2008.
The health care facilities contract, as it’s titled, is an eight-year contract with possible termination after three year if the health commons fails to provide a Certificate of Substantial Completion showing, essentially, that a hospital or 24-hour emergency facility has been built.
More than a full year of the contract has passed without ground having been broken. Bob Davey, the chairman of Valencia Health Commons has stated publicly that he’s unsure if the health commons can build a hospital to “substantial completion” in the remaining life of the contract.
“It’s going to take 18 to 22 months from start to finish,” Davey said last month at a commission meeting.
Davey said he has been waiting for a decision from the New Mexico Court of Appeals before moving forward with construction, a decision that is still months, if not more than a year, away.
“Sadly, nothing definitive can be done until this is resolved in the courts,” he said.
The delay of the hospital construction caused by waiting for a decision is why an extension of the health commons contract was sought by Commissioner Ron Gentry two weeks ago. That extension failed by a 3 to 2 vote.
On Friday, the attorney for the hospital lawsuit’s plaintiffs sent a letter to Valencia County’s attorneys asking that the county consider accepting a settlement offer. By Monday, the hospital issue was added to the agenda, with the commission to vote to either accept or deny the offer, if the offer isn’t tabled.
That offer is expected to ask for a termination of the Valencia Health Commons contract. It is also expected to ask that any new contract follow the provisions of the New Mexico Hospital Funding Act, which includes committing the mill levy money by contract to an existing hospital only.
During the interview at his law office, Rael said the Valencia Health Commons contract is illegal because the health commons isn’t a hospital.
Under the Hospital Funding Act, a health care facilities contract is “an agreement between a hospital and a county.” The act provides a more detailed definition. Davey has suggested Valencia Health Commons is not a hospital.
“If you are asking me whether I can open the doors to a hospital tomorrow morning, the answer is obviously no,” Davey said last month in reaction to a question from Rael.
While the courts could terminate the contract by determining it to be illegal, Rael said it’s possible for commissioners to terminate it.
The contract itself offers six ways of terminating it. Valencia Health Commons doesn’t appear to have yet violated any of the termination provisions.
Rael, however, pointed to a termination that isn’t specified within the contract but is a part of legal precedent.
He said he thought the contract could be terminated by what he called “anticipatory repudiation,” a legal concept that says the county anticipates Valencia Health Commons can’t fulfill its responsibilities under the contract and, therefore, is terminating the contract now, instead of waiting out the time left in the contract.
With the hospital lawsuit not having yet been assigned to a panel of judges at the court of appeals, a decision could be anywhere from six months to more than a year away. Cases vary depending on their complexity and how quickly the court hears civil cases.
Rael believes waiting for the court decision means Valencia Health Commons won’t be able to fulfill its contractual responsibility to receive a Certificate of Substantial Completion in three years from the date the contract was signed.
Posted in: Hospital