Infirmary Health System v. Sacred Heart Health System, Inc.Annotate this Case
Sacred Heart Health System, Inc., the defendant in a declaratory-judgment action filed by Infirmary Health System, Inc. (IHS) and South Baldwin Regional Medical Center appealed to the Supreme Court from one aspect of a final judgment entered by a circuit court in favor of IHS and South Baldwin. IHS and South Baldwin cross-appealed from another aspect of the trial court's judgment held in favor of Sacred Heart. The Supreme Court transferred the appeal and cross-appeal to the Court of Civil Appeals, and that court reversed the judgment of the trial court. Sacred Heart owns "Sacred Heart Medical Group" (SHMG) which consists of 143 multi-specialty physicians who practice in the area served by Sacred Heart. All SHMG physicians have uniform employment contracts with SHMG. Six of those physicians practice in southern Baldwin County. When the Baldwin County practice saw an increase in patients, Sacred Heart sought to expand existing leased space for additional physicians and facilities. The contested issue between the parties was whether the portion of the medical-building project Sacred Heart leased for its Baldwin County physicians to use was subject to Sacred Heart's first obtaining a "Certificate of Need" to expand its facilities from the State Health Planning and Development Agency (SHPDA). Finding that the trial did not engage in a five-part inquiry (as expressed in 22-21-260(6) Ala. Code 1975) on whether the proposed expanded practice required a CON in order to proceed, the Supreme Court remanded the case back to the trial court for further proceedings.