In a 21-page decision released Thursday, hearing officer Catherine R. Warren found that applicant Encompass Health, a large publicly traded company based in Alabama, has not proved the need for its envisioned 50-bed inpatient rehab in Johnston.
The state and/or Encompass have 30 days from the mailing date of this decision to appeal Warren’s decision to Superior Court.
As The Public’s Radio reported in June 2020, opponents of the project made the same argument. They cited how the Faulkner Consulting Group, an independent consultant hired by RI’s Health Services Council, found that Rhode Island has enough inpatient rehab beds for such ailments as strokes and broken hips to last through 2030. Faulkner also found that only 63 percent of available statewide rehab beds were occupied in 2018.
At the time, opponents like Teresa Paiva Weed, head of the Hospital Association of Rhode Island, argued that the Encompass proposal would cannibalize existing health resources in the state.
“Encompass Health would actually be an economic drain on our healthcare system and state economy,” Paiva Weed said last year.
Encompass argued it could fill what it called a gap in rehab services, and the application was backed by Johnston Mayor Joseph Polisena and other Johnston officials.
Despite Faulker’s finding that the facility was not needed, the Health Services Council — an advisory group to the state Department of Health — voted to approve the Encompass project, 3 to 2, in March 2020, in a vote with less than half the membership of the HSC.
Alexander-Scott approved that recommendation to issue a certificate of need (CON), and she rejected an appeal by opponents of the project last December.
That’s when lawyers representing existing inpatient rehab facilities in Rhode Island appealed Alexander-Scott’s rejection to an administrative hearing officer with the state Department of Administration.
In her conclusion, Warren wrote that she cannot substitute her judgment for that of the Health Department.
“However, the undersigned must determine whether there is legally competent evidence to support the Department’s approval of the CON Application,” she wrote. “In order to approve a CON application, there must be a public need which must be substantial or obvious. While the record includes evidence in favor and against the Application, the standard requires legally competent evidence to support a substantial or obvious need.”
“The Faulkner Report discussed various projections of population and growth in relation to IRF’s [inpatient rehabilitation facilities] and found there was no public need,” Warren continued. “There will be no shortfall of IRF beds by 2030 …. the [Health] Department’s approval of the CON application is overturned as there is no legally competent evidence to support a finding of public need.”
Joseph Wendelken, spokesman for the state Department of Health, did not immediately respond to a query about whether DOH will appeal the hearing officer’s decision.
Ian Donnis can be reached at idonnis@ripr.org. Follow him on Twitter @IanDon. Sign up here for his weekly RI politics and media newsletter.
