Dept. of Health v. VNA
Annotate this Case
Download PDF
REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 526 September Term, 2005 DEPARTMENT OF HEALTH AND MENTAL HYGIENE, OFFICE OF HEALTH CARE QUALITY v. VNA HOSPICE OF MARYLAND Krauser, Barbera, Moylan, Charles E. (Retired, specially assigned), JJ. Opinion by Barbera, J. Filed: September 28, 2007 We consider in this appeal the constitutionality of the law presently codified at Maryland Code (1982, 2005 Repl. Vol.), § 19-906 of the H ealth General Article ( H G ). That section sets forth the requirements for obtaining a license to provide home-based hospice services. Before 2003, VNA Hospice of M aryland ( VNA ), appellee, held a statewide license pursuant to the then-applicable version of HG § 19-906, to provide homebased hospice ca re service in M aryland. In 200 3, the Gen eral Assembly substan tially amended HG § 19-906, causing appellant, the Department of Health and Mental Hygiene ( the Department ), to am end VNA s license so that it could no longer provide hospice services in Carroll and Prince George s counties. VNA appealed the alteration of its license, challenging the constitutionality of the 2003 amendments. Following a hearing on the matter, an Administrative Law Judge ( ALJ ) issued a Proposed Decision upholding the amendments. VNA f iled exceptions, and the designee of the Secretary of the Department issued a Final Decision adopting the proposed findings of fact and conc lusions of la w set forth in the ALJ s Proposed Decision. The Board of Review of the D epartm ent aff irmed th e decisio n of the Secreta ry s desig nee. VNA filed a Petition for Judicial Re view in the C ircuit Co urt for Baltim ore C oun ty. The court iss ued an opinio n rever sing the Depa rtment s decisio n. The court ruled that the license issued to VNA in 1982 was a vested property right afforded constitutional protection under Article 24 of th e Marylan d De clara tion of R ights. Al ternative ly, the court ruled that HG § 19-906 (c)(3), whic h restricts the licen ses for hom e-based h ospice pro viders to on ly those jurisdictions in which the providers had administered services within the 12-month period ending on December 31, 2001, was arbitrary. Finally, the court ruled that the State s failure to provide, or offer to provide, any financial compensation to VNA as a result of the amendment of VNA s license constituted a taking in violation of Article III, § 40, of the Marylan d Con stitution. T he De partme nt noted a timely ap peal to th is Cou rt. For the reasons that follow, we conclude that HG § 19-906(c)(3) is not unconstitutional on any of the grounds asserted by VNA. We therefore reverse the judgment of the c ircuit co urt with the direc tion that it affirm the Fin al Dec ision of the De partme nt. BACKGROUND VNA offers home-based hospice and health care service s in Maryland.1 Since 1982, hospice care providers have been included within the definition of he alth c are f acility under T itle 19 of the He alth-G eneral A rticle. See HG § 19-11 4(d)(vii ). As health care f acilities, hospice care provid ers are requ ired to obtain a C ertificate of Need ( CON ), issued by the Maryland Health Care Commission, before develo ping or operating a hospice c are facility or participating in hospice care. HG § 19-120(e). A CON refers to a certification or finding of public need for a particular health care project. HG § Home-based hospice services are not defined in the Code; however, they are defined in COMAR 10.02.21.02(B)(6) as hospic e care servic es provide d to a patien t in the patient s permanent or temporary residence. A general hospice care program is a 1 coordinated, interdisciplinary program of hospice care services for meeting the special physical, psychological, spiritual, and social needs of dying individu als and their families, by providing palliative and supportive medical, nursing, and other health services through home or inpatient care during the illness and bereavem ent: (1) to individuals who have no reasonable prospect of cure as estimated by a physician; and (2) to the families of those individuals. HG § 19-90 1(d). -2- 19-114(c). In Maryland, providers of hospice services mu st apply for a C ON prio r to developing, operatin g, or par ticipating in these health c are pro grams . See HG § 19 -120(e). The general purpose of a CON is to ensure that new he alth care services and facilities are developed only as needed, based on the publicly developed measures of cost effectiveness, quality of care, and geographic and financial access to care. By 1987 M d. Laws , ch. 670, the G eneral As sembly amended HG § 19-906, entitled Qualifications for License, to require home-based hospice care providers to obtain a license under that provision. The law also required that such programs obtain a CON. An uncodified section of the 198 7 law, see 1987 Md. Laws, ch. 670, § 2, provided that hospice care programs in existence and delivering hospice care services before January 1, 1987 , were exem pt from the CO N requ iremen t. Because VNA was in existence and delivering hospice care services before Jan uary 1, 1987, it was exempt from the CON requirement that was added to the law in that yea r. Before enactment of the 2003 amendments to HG § 19-906, VNA was licensed to provide home-based hospice care services and provided such services in Baltimore City and Anne Arundel, Baltimore, Cecil, Carroll, Harford, Howard, and Prince George s counties. In 2003, the General Assembly again amended HG § 19-906, by passing SB 732. See 2003 Md. Laws, ch. 404. As a result of those amen dmen ts, HG § 19-9 06(c) prov ides, in relevant pa rt: (2) The Secretary, in consultation with the Maryland H ealth Care Commission, shall specify those jurisdictions in which a general hospice is authorized to provide home-based hospice services. -3- (3) A general hospice may not be licensed to provide home-based hospice services in a jurisdiction unless the g eneral hosp ice or an en tity acquired by the general hospice provided home-based hospice services to a patient in the jurisdiction during the 12-month period ending December 31, 2001. *** (5) Upon the notification by the Maryland Health Care Commission of the issuance of a certificate of need to a general hospice, the Secretary shall append to the general hospice license any additional jurisdictions in which the genera l hospic e may pro vide ho me-ba sed ho spice se rvices. Pursuant to the 2003 ame ndments, the Secretary of the M aryland Health Care Commission is required to specify the jurisdictions or counties in which a general hospice is authorized to provide home-based hospice services. A ge neral hosp ice may enlarg e its license to include a dditional jurisd ictions by applying for a CON . General hospices are exempt from the CON requirement, however, if they provided hospice care services in a jurisdiction within the 12-month period ending on December 31, 2001. Following the enactment of the 2003 amendments to HG § 19-906, the Department of Hea lth an d M enta l Hygiene Off ice o f He alth C are Q ualit y ( OHCQ ), which issues licenses for hospice services in Maryland, reviewed a 2001 survey conducted by the Hospice Network of Maryland, Inc. OH CQ determ ined that VNA had not provided h ospice care service s in Car roll and Prince Georg e s cou nties du ring the 2001 c alenda r year. By letter dated August 18, 2003, OHCQ notified VNA that, pursuant to the 2003 amendments to HG § 19-906, its lice nse was a mended to limit its operatio ns to the six jurisdictions in which it h ad served home-b ased hosp ice patients in 2001: B altimore C ity and Anne Arundel, Baltimore, Cecil, Harford, and Howard counties. Under the amended license, -4- VNA could not provide services in Carroll and Prince George s counties, unless it obtained a CON and beca me licensed to provide service in those counties. VNA appealed the alteration of its license to the Office of Administrative Hearings. A hearing on VNA s appeal was conducted before an AL J. VN A argu ed, inter alia,2 that the 2003 amendm ents to HG § 19-906 violated both the Maryland Declaration of Rights and the United States Co nstitution. VN A mainta ined that the 2003 amendments operated retroactively to abrogate its existing property right to provide hospice ca re services in C arroll and Pr ince G eorge s coun ties. The ALJ rendered a Proposed Decision declining to hold the 2 003 ame ndments to HG § 19-906 unconstitutional as applied to VNA. The ALJ concluded that VNA did not have a vested property right in providing home-based hospice services. The ALJ th erefore concluded that the 2003 amendments to HG § 19-906 did not deprive VNA of its due process rights under Article 24 of the Maryland Declaration of Rights or the Fourteenth Amendment to the Constitution of the United States. The ALJ also conclude d that the 20 03 amen dments did not con stitute a taking u nder Article III, § 40 of the Marylan d Constitu tion or the Fif th Amendment (as incorporated through the due process clause of the F ourteenth Ame ndment), and those amendments did not create a monopoly in violation of Article 41 of the Maryland Declaration of Rights. VNA filed excep tions to the Proposed Decision, and the designee of the Secretary of VNA also argued that it had provided services in Prince George s and Carroll counties in 2001 . VNA does n ot raise th at argum ent on a ppeal. 2 -5- the Departm ent held a hearing, at which the Secretary s des ignee hea rd argum ent of cou nsel. She later issued a Final Decision adopting the proposed findings of fact and conclusions of law set forth in the Proposed Decision and upholding the Office of H ealth Care Quality s action to amend VNA s hospice care license to exclude VNA from providing home-based hospice services in Carroll and Prince George s counties pursuant to HG § 19-906(c)(3). VNA appealed the decision to the Department s Board of Review ( Board ). At the hearing before the Board, VNA argued, as it had before the ALJ , that the 2003 amendm ents to HG § 1 9-906(c)(3 ) retroactively divested VNA of its right to a license to provide hospice services in Carroll an d Prince G eorge s co unties. The Board o f Review disagreed and affirm ed the F inal De cision. VNA filed a Petition for Judicial Review in the Circuit Court for Balt imore Coun ty. Following a hearing, the court issued an opinion reve rsing the decision adopted by the Board of Review. The court ruled that VNA had a vested property right in providing home-based hospice services that was abrogated by the 2003 amendments. The court further ruled that the provision of HG § 19-906 exempting from the CON requireme nt only general hospices that provided services in a jurisdiction in 2001 is arbitrary and unconstitutional under A rticle 24 of the Ma ryland Declaration of Rights and an improper exercise of the State s police powers. The court did not reach the remaining claims. The Department timely appealed. THE PARTIES CONTENTIONS The Department contends that the Final Decision is proper because VNA did not establish that HG § 19-906, as amended in 2003, is unconstitutional on any of the grounds -6- that VNA asserted. The Departmen t therefore asks us to reverse the decision of the circu it court and affirm the decision of the Department. The Department argues that VNA has no property interest in continuing to provide h ospice services in Carroll and Prince George s counties; therefore, the 2003 am endmen ts do not dep rive VN A of a v ested prop erty right in violation of due process under either Article 24 of the Maryland Declaration of Rights or the Fourteen th Amendment to the Constitution. For the same reason, the Department argues that the 2003 amendments also do not offend the prohibition in the Fifth Amendment and Article III, § 40 of the Maryland Constitution against a taking without just compensation. The Department also argues that the 2003 changes to the law do not constitute an improper exercise of the State s police power, and they do not cre ate a mon opoly prohibited b y Article 41 of the Maryland Declaration of Rights. VNA disagrees with each of the Department s contentions. VNA reasserts all of the state and Federal constitutional arguments that it raised at the administrative level and b efore the circuit cou rt. STANDARD OF REVIEW In reviewing the decision of an administrative agency, this Court performs the same function as the circuit court. Bd. of License Comm rs for Prince George s County v. Global Express Money Orders, Inc., 168 Md. App . 339, 344 (2006). We review the decision of the agency, not that of the circuit court. Id. When reviewing an administrative agency decision, the court s task is not to substitute its judgment for the expertise of those persons who constitute the administrative -7- agency[.] United Parcel Serv., Inc. v. People s Counsel for Balt. County, 336 Md. 569, 576-77 (1994) (citation and internal quotation ma rks omitted). Even w ith regard to some legal issues, a degree of deference should often be accorded the position of the administrative agenc y. Md. Aviation Admin. v. Noland, 386 Md. 556, 572 (2005). When, as in this case, the issue decided by the administrative agency involves pure questions of law, we review the issue de novo to determine if the agency s decision is premised upon an erroneous conclusion of law. See id. at 571; Md. Bd. of Physicians v. Elliott, 170 Md. App. 369, 425 (2006 ). DISCUSSION Before we add ress the spec ific argum ents presen ted by the parties, we revie w in somewhat greater detail than at the outset of this opinion the statutory context of HG § 19906. HG § 19-906 is part of what has been termed a comprehen sive health care statutory frame work . Catonsville Nursing Home, Inc. v. Loveman, 349 Md. 560, 573 (1998). That statutory frame work is highly re gulated . See HG § 19-102 (a) ( The General Assembly finds that the health ca re regulatory system in this State is a highly complex structure that needs to be cons tantly reevaluated and modified in order to better reflect and be more responsive to the ever ch anging he alth care environment an d the needs of the citizens o f this State ). HG § 19-906, including the 2003 amen dments that added s ubsections (c)(2) through (c )(5), must be viewe d together w ith other prov isions of the Health Care Facilities Subtitle, particularly the provisions that address CONs. CONs give effect to the priority in Maryland to promote th e develop ment of a health -8- care system that provides, fo r all citizens, finan cial and geo graphic ac cess to qua lity health care at a reasonable cost. Sinai Hosp. of Balt., Inc. v. Md. H ealth Res. Planning C omm n , 306 Md. 472, 473 (1986) (quoting HG § 19-102). The Court of Appeals traced the origins of Maryland s CON requirement in Loveman, 349 Md. at 572-75. CONs are a product of the National Health Planni ng and Resou rces D evelop ment A ct of 19 74, cod ified at 4 2 U.S.C . § 300k 300n -6 (1982) ( Federal Act ). See Loveman, 349 Md. at 572. The Federal Act, an attemp t to curb the rising costs of health c are acro ss the co untry, provided substantial federal funding conditioned on a state s enactment of certain health care pla nning law s . . . . [T]he Fed eral Act req uired states to implement a state health plan (SHP) and administer a CON program for new institutional health services proposed to be offered or developed within the State. The purpose of the CON requirement was to add teeth to the Federal Act and to help Congress achieve its goals of limiting skyrocketing health care costs, preventing unnecessary duplication of health facilities and resources, and fo stering e qual ac cess to q uality hea lth care f or a reas onable cost. Id. (citations omitted). Congress repealed the CON require ments in 1986, see Pub. L. No. 99-600 § 701, 100 Stat. 3743, 3799 (1986), evidently because the requirements were counterproductive for reforming health care. Id. (citation and internal quotation marks omitted). Nevertheless, Marylan d, amo ng ma ny other s tates, reta ined its C ON la ws. Id. In 1975, the Maryland General Assembly authorized the Governor to implement provisions of the Federa l Act. Id. at 573. Then, in 1978, the General Assembly, finding that it was a priority of the State to assu re equal fin ancial and g eograph ic access to q uality health care for all citizens at a reasonable cost, created the Maryland Health Planning and Development Agency and the Maryland Health Resources Planning Commission [now, the -9- Maryland Health Care C omm ission] to carry out th e fede ral and s tate legis lation. Id. at 573 (citing 1978 M d. Law s, ch. 911). Chap ter 911 codified Maryland s Health Planning and Deve lopme nt Act a nd imp lemen ted the la ws an d proce dures f or obta ining a C ON. The Maryland Health Care Commission ( Commission ) is an independent commission that functions within the De partme nt of H ealth an d Me ntal Hyg iene. HG § 19103. The Co mmission is authorized by HG § 9 -115 to pro mulgate rules and regulations concerning issuance of CONs in a manner th at ensure[ s] that chang es in service c apacity and major expenditures for health care facilities are needed and affordable, and consistent with the Commission s policies. See Sinai Hosp., 306 Md. at 474 (citation and internal quotation marks om itted). Before a person can develop, operate, or participate in certain health care projects, the Commission must issue a CON. HG § 9-115. The CON requirement serves to assure an efficient and effective health care system for Maryland. Loveman, 349 Md. at 575 (citation and internal quotation m arks omitted). At the same time that the General Assemb ly enacted the C ON req uirements in 1978, it provided that the requirement of a CON does not apply to a health care project w hich: (I) was not subject to Certificate of Conformance Review as required by Chapter 222 of the Acts of 1968; and (II) was completed and in operation on or before June 1, 1978. 1978 Md. Laws, ch. 911. The Loveman Court dete rmined tha t even thou gh the w ord exem pt was not used in that provisio n of the law , the effec t of [it] was to exempt those facilities from the requirement to obtain a CON. 349 Md. at 575. The Loveman Court concluded that the -10- exemption from the obligation of obtaining a CON was a privilege, personal to the person or entity exempted. Id. at 577. Th e Court no ted that such exemptio ns must b e narrow ly constru ed. Id. at 578. The Co urt disagreed with Loveman that there existed in the grant of the CON exemption a broad right to retain the exemption, as if it were created to run with the land much like a zon ing nonconforming use provision. Id. at 580. Th e Court sa id in that regard: The Health Planning and Development Act is a regulatory scheme. The General Assembly gave the Commission the power to regulate the placement of health care projects, the types of services offered, and the number of persons to be served in an attempt to reduce the number of unused or unuseful projects throughout the State. A ccordingly, this statute is regulatory in nature in terms of the distribution of health c are services a nd does n ot, nor was it intended to, confer any specific real property rights. Moreover, if [Love man s] inter est in the health care project was a property right, it w as, at best, an inc orporeal he reditamen t. Id. We have said that, by 1987 Md. Laws, ch. 670, the General Assembly amended HG § 19-906 to require h ome-based ho spice care providers to obtain a license under Su btitle 9 of Title 19. The 1 987 am endm ent also require d that su ch prog rams o btain a C ON. A n uncodified section of th e 1987 law provided that hospice care programs in existence and delivering hospice care services before January 1, 1987, were exempt from the CON requireme nt. The un codified se ction of the enactmen t provided th at those hospice care programs in existence and delivering hospice care services before January 1, 1987, that request licensure between July 1, 1987 and July 1, 1998, shall not be required to obtain a certificate of need prior to licensure. Howeve r, those hospice care programs seeking exemption from formal submission of a certificate of need fo r a hospice care progra m under this -11- section shall meet the criteria estab lished by the M aryland Hea lth Resources Planning Commission in consultation with interested groups, including the Hospice Network of Maryland, Inc., for determining whethe r a hospice care program was in existence and delivering hospice care services before Janua ry 1, 1987. See 1987 M d. Law s, ch. 67 0, § 2. Therefore, the uncodified provision of the 1987 law, like the similar provision of the 1978 law, created an exemption from the requirement of a CON for hospice care programs already in existence and requesting licensure within the period designated by the law. By application of the reasoning the Loveman Court employed, the exemption created by the 1987 law is a privilege, not a real property right, and if a property right at all, it is, at best, an incorp oreal he reditam ent tha t must b e const rued na rrowly. See 349 M d. at 578 , 580. Pursuant to the exemption or grandfather clause in the 1987 law, some hospice programs acquired the authority to provide home-b ased hosp ice services th roughou t the State without ever having to obtain a CON for such services. Concern about the number of service providers being perm itted to operate state-wide p rompted th e Genera l Assemb ly to enact the changes to Subtitle 19 that have precipitated this litigation. Of particular relevance to the present case, the law now requires the Secretary of the Department, in consultation with the Commission, to specify the jurisdictions in which a general hospice is licensed to provide home-based hospic e servic es. See HG § 19-906(c)(2). The law also limits the jurisdictions for which a general hospice can be licensed to provide home-based hospice services to those in which the program provided home-based services to a patient during calendar year 2001. See HG § 19-906(c)(3). A program is entitled to seek licensure to provide serv ices in -12- addition al jurisdic tions by ap plying fo r and re ceiving a CO N. See HG § 19 -906(c)(5). 3 This Case At issue in the present case is the lawfulness of the Department s amendment of VNA s license, pursuant to the dictates of the 2003 amendments to HG § 19-906. The amendment of the license had the ef fect of red ucing by two the numb er of jurisdictio ns in which VNA can provide home hospice services, in the absence of its first obtaining a CON to provide services in those jurisdictions. We already have identified the various constitutional arguments that VNA makes concerning those changes to the law and the Depa rtment s respo nses to e ach. W e shall co nsider e ach co ntention , in turn. Do the 2003 amendments to HG §19-906(c) constitute a retroactive a brogation of a vested r ight ? It has been firmly settled by the o pinions of the Court of Appeals that the Constitution of Maryland prohibits legislation which retroactively abrogates vested rights. No matter how rational under particular circumsta nces, the Sta te is constitution ally precluded from abolishing a vested property right or taking one person s property and giving it to someone else. Dua v . Com cast Ca ble of M d., Inc., 370 Md. 604, 623 (2002). [E]ven a remedial o r procedu ral statute may no t be applied retroactively if it w ill interfere with vested or substantive rights. Id. at 625 (citations and internal quo tation marks omitted). The concept of vested pro perty rights, in con nection w ith retroactive c ivil legislation, w ith The 2003 legis lation also limits a successor organization to providing services in those geograp hic areas co vered b y the trans ferring entity. See HG §19-120(k)(5). Moreover, the legislation added HG § 19-120(o), which prohibits the Commission, with respect to an acquisition, from authorizing a general hospice to provide services on a state-wide basis. 3 -13- some exceptions, includes that which is regarded as a property right under Maryland property law. Id. at 631. Under Maryland law, the meaning of pro perty is q uite bro ad, and include s real, p ersona l, mixed , tangible or intan gible pr operty of every kin d. Id. at 631 n.10 (q uoting Md. R ule 1-2 02(v)). VNA argues that its license to provide services in Carroll and Prince G eorge s counties is a vested property right that was retroactively abrogated by the passage of the 2003 amendments. The Depa rtment responds that V NA s argument fails in its premise because a license to p rovide ho spice service s is not a veste d property righ t.4 We have defined a vested right as a right so fixed that it is not dependent on any future act, contingency or decision to mak e it more secure . . . . In other words, [t]o be vested, a right must be more that a mere expectation based on an anticipation of the continuance of an existing law; it must have become a title, legal or equitable, to the present or future enforcement of a demand. McComas v. Criminal Injuries Comp. Bd., 88 Md. App. 143, 149-50 (1991) (citations and internal quotation marks omitted); see also Langston v. Riffe, 359 Md. 396, 419-20 (2000) (summarizing variou s definitions of vested right ). The appellate courts of this State have said on more than one occasion that a professional license, though having certa in p rope rty rights, is not an a bsolute ves ted right, but only a conditional right which is subordinate to the police power of the State to protect and preserve the public health. Comm n on Med. Discipline v. Stillma n, 291 Md. 390, 405 The De partment does not argue that the 2003 amendments to HG §19-906 have no retroactive application. 4 -14- (1981) (quoting Aitchison v. State, 204 M d. 538, cert. denied, 348 U.S. 880 (1954)); see also Landsman v. Md. Hom e Improvem ent Comm n, 154 Md. App. 241, 259 (2003) (quoting Dr. K. v. State Bd. Of Physician Quality Assurance, 98 M d. App . 103, 12 0 (199 3), cert. denied, 334 M d. 18, cert. denied, 513 U.S. 817 (19 94)). 5 A number of our sister state courts have declared that a professional license or license to operate a busin ess doe s not cre ate a ve sted righ t. See, e.g., O Bar v. Town of Rainbow City,112 So. 2d 790, 791-92 (Ala. 1959) (holding that the appellant, who operated a night club and café, did not have vested right in her op erating licens e; although the state could not revoke the license ar bitrarily, it could revoke the license when substantial evidence supported the action); In re Application of Herrick, 922 P.2d 942, 951 (Haw. 1996) (stating that a regulation did n ot co nstitute a pro mise tha t the t emp orar y court-reporter certification would never be abolishe d, and obs erving that, in granting a lice nse, the state re serves the rig ht to exercise its police powers and p lace additional regulatory burdens o n license holders ); O Connor v. City of Moscow, 202 P.2d 401, 405 (Idaho 19 49) (holdin g that a licen se to operate a beer parlor or a billiard or a pool hall does not confer any vested right, but further stating that, if the local government makes such businesses lawful by a permit or license, it cannot arbitrarily, capriciously, or unreasonably impair, interfere with, or eradicate the The Administrative Procedure Act defines license as all or any part of permission that: (1) is required by law to be o btained fro m an age ncy; (2) is not required only for revenue purposes; and (3) is in any form, including: (i) an approv al; (ii) a certificate; (iii) a charter; (iv) a pe rmit; or (v ) a registr ation. Md. Code (1984, 2004 Repl. Vol.), § 10-202(e) of the State Gove rnmen t Article . See also B LACK S L AW D ICTIONARY at 931 (7th ed. 1999) (defining a license as [a] revoca ble permiss ion to com mit some act th at would otherwise be unlaw ful ). 5 -15- same ); Latreille v. Mich. State Bd. of Chiropractic Exam rs, 98 N.W.2d 611, 614 (Mich. 1959) (stating that a license to practice a profession creates no vested interest and that the license may be withdraw n for proper cause by the authority that granted it); Hodes v. Axelrod, 515 N.E.2d 612, 615-16 (N.Y. 1987) (holding that the application of an amended statute permitting th e revocation of a nursing home operating certificate based on an operator s industry-related felony convictions does not impair the operator s vested rights, even though the operator had successfully litigated the automatic revocation under the preexisting law); Coletti v. Dep t of State Police, 832 N.E.2d 8, 11-12 (Mass. App. Ct. 2005) (holding that, pursuant to a statute requiring the licensing of all private detectives and permitting the revocation of licenses at any time for cause, the state may properly revoke a private detec tive s license f or miscon duct preda ting the licens e application ); Bourgeous v. State, Dep t of Commerce, 41 P.3d 461, 465 (Utah Ct. App. 2002) (stating that, because a license does not c reate a vested right, the legislature may impose new or additional burdens on the licensee, alter the license, or revoke it). Other states characterize such licenses, onc e obtained, as a vested p roperty right that cannot be impaired without affording the license-holder proced ural du e proce ss. See State v. Perez, 885 A.2d 178 , 186 (Conn. 200 5) (acknowledg ing a vested right in an attorney s license to practice law); Derby Refining Co. v. Bd. of Aldermen of Chelsea, 555 N.E.2d 584, 587 (Mass. 1990) (stating that once a license has issued, it becomes the vested property right of the licensee, and revocation of the license must comport with due process protections); Patterson v. Bd. of Pilot Comm rs, 47 P. 786, 787 (Or. 1897) (stating, in a case concerning -16- the non-rene wal of a p ilot s license, that, a fter a license is once issued, a right to the renewal thereof becomes, under the statute, a vested an d valuable right, of which the holder cannot be deprived without notice ); James v. Bd. of Dental Examiners, 218 C al. Rptr. 710, 716 (Cal. Ct. App. 1985) (recognizin g a vested rig ht in profes sional license s); John v. Dep t of Professional Regulation, 713 N.E .2d 673, 67 8 (Ill. App. Ct. 1999) (finding no vested right in a nurse s license bef ore fulfillme nt of a test req uirement, but remarking that a vested right existed in examin ation attempts to fulfill that test requirement within the designated time frame); see also Santa Ana Tustin Cmty. Hosp. v. Bd. of Supervisors of the County of Orange, 179 Ca l. Rptr. 620, 6 26 (Cal. C t. App. 198 2) (recogn izing the po ssibility that a licensee may have a sub stantial vested property right in its hospital licenses. ). 6 The provision of home-based hospice services is subject to significant regulation as a component of the health care system in Maryland. Further, issuance of a license has long been contingent (excepting those entities that come within the statutory exemption) upon obtaining a CON, which is tied directly to the goal of delivering quality health care to citizens of all parts o f the sta te. Loveman, 349 Md. at 573. We therefore conclude that, like other profession al licenses, a lice nse to deliver home-based hospice is not an absolute vested right, but only a conditional right which is subordina te to the police power o f the State to VNA directs us to cases that address jurisdictional limits on licensees to e ngage in common occup ations o r calling s. See Bruce v. Director, Dep t of Chesapeake Bay Affairs, 261 Md. 585, 605 (1971); Attorney General of Maryland v. Waldron, 289 Md. 683, 714-20 (1981). We do n ot find thos e cases help ful to our ve sted rights analysis because they involve a state s reasonable exercise of police power over one s property right in one s common occupation, rather than a state s exercise of police power over vested property rights. 6 -17- protect and preserve the public health. Stillman, 291 Md. at 405 (citation and internal quotation marks omitted). 7 That VNA s license is not a vested property right does not mean, of course, that it is not subject to procedural due process before it can be revoked, suspended, or otherw ise altere d. See id. VNA makes no argument that it was denied procedural due process. Because VNA did not have a veste d property right in the license to provide homebased hospice services in Carroll and Prince George s counties, it follows that the 2003 amendm ents to HG § 19-906, which o perated to amend VNA s license such that it could no longer provide services in th ose coun ties without f irst obtaining a CON , did not viola te VNA s rights under Article 24 of the Maryland Declaration of Rights. For the same reason, the 2003 am endmen ts do not co nstitute a takin g under Article III, § 40 of the Maryland Cons titution. See Dua, 370 Md. at 630, 630 n.9. We have decided the above state constitutional issues as the parties have presented them. Indeed, the parties agree that those issues turn on whether VNA has a vested right in We are aware of the decision in United Sta tes ex. r el. Joslin v. Cmty. Home Health of Md., Inc., 984 F. Supp. 374 (D. Md. 1997), in which the court refe rred to the defendan t s exemption from the CON process as a vested right. Aside from the fact that decisions of the United States District Court are not controlling, the court s comment was dicta. Moreover, although the court referred to the license to o perate home hea lth care services as a vested property right, the focus of the Joslin decision did not rest on whether that right was vested. Rather, the court s attention centered on whether the General Assembly intended to apply the repealer retroactively. Id. at 379. The court found [t]he repealer evince[d] no such intention ; thus, although the CON exemption was repealed, the repeal did not affect the def endan ts prop erty rights. Id. In any case, federal law differs from Maryland law in that a vested right may be divested by retroactive leg islation if that div estment m eets a due p rocess ration ality analysis. Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717 (19 84). 7 -18- a license that would p ermit it to contin ue to prov ide home -based ho spice service s in Carroll and Prince George s counties. We note, however, that the Department might well have framed the issue as w hether V NA ha s a vested rig ht, not in the license itself, but in VNA s 1987 exemption from the requireme nt of secur ing a CO N as a pre requisite to obtaining that license to provid e state-w ide hom e-base d hosp ice serv ices. See 1987 Md. Laws, ch. 670, § 2. Given the Court of Appeals declaration in Loveman that a CON exemption is a privilege and that, [t]o the extent that the exemption is related to real prope rty, and we do not hold that it is, the exemption would remain a privilege, an incorporeal hereditament, 349 Md. at 577, VNA would be hard-pressed to argue that it has a vested right in that exemption. We shall now turn to the rem ainder of th e constitution al challenge s to the 2003 amendments to HG §19-906.8 Do the 2003 amendments to HG §19-906(c) constitute a taking under the Fifth Amendment s Takings Clause? VNA also challenges the constitutionality of HG § 19-906(c)(2) on the ground that the statute violates th e takings cla use of the F ifth Ame ndment. 9 VNA devotes only two paragraphs in its brief to the argument and cites Eastern Enterprises v. Apfel, 524 U.S. 498 We have mentioned that the circuit court did not reach VNA s arguments under the federal Constitution, because it ruled that the 200 3 change s to HG §19-906 violated the s tate Constitution. In the interest of judicial economy, we shall address the federal constitutional arguments. 8 The takings clause of the Fifth Amendment is applicable to the states through the Due Process Clause of the Fourteenth Ame ndme nt. Mercantile-Safe Deposit and Trust Co. v. Mayor and City C ouncil of B alt., 308 Md. 627 (1987). 9 -19- (1998). In that case, a mere plurality of the Court f ound an unconstitutional taking in a monetary assessment imposed upon the prior owner of a coal mine under a provision of the Coal Industry Retiree Health Benefits Act of 1992. The Department argues that VNA has provided no support for its assertion that the takings clause applies to the revocation of professional licenses. The Department contends that federal case law rejects the application of the takings clause to licenses and permits. The Department cites tw o fede ral decis ions in s uppor t, Conti v. United States, 291 F.3d 1334, 1340 (Fed. Cir. 2002) (concluding that a swordfishing permit d id not conf er a proper ty interest for purp oses of the takin gs clau se), cert. denied, 537 U.S. 1112 (2003) and Am. Pelagic Fishing Co., L.P. v. United States, 379 F.3d 1363 (Fed. Cir. 2004) (holding that the petitioner did not and could not possess a pro pert y interest in its fisher y permits) , cert. denied, 545 U.S. 1139 (2 005). VNA has not provided us with any authority from the Supreme Court or lower federal courts that suggests, much less holds, that alteration or revocation of a license to provide a health care services amounts to a taking of property, as that term is used in takings jurisprudence. Indeed, the decisions sugge st the co ntrary. See, e.g, Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978) ( A taking may more readily be found when the interferenc e with pro perty can be c haracterized as a physical inv asion by gov ernment, than when interferenc e arises from some pu blic program adjusting benefits and burdens of economic life to prom ote the commo n good. ) (internal citation omitted). We already have concluded that VNA did not have an absolu te vested righ t in -20- retaining the license to provide home-based hospice services in Carroll and Prince George s counties. We further conclude that the amendment of the license that resulted from the 2003 changes to HG §19-906(c) did not amount to a taking of property without compensation, in violation o f the Fifth A mendm ent. Do the 2 003 am endme nts to HG §19-906 (c) violate the Due P rocess Cla use of the F ourteenth A mendm ent? VNA understandably devotes little space in its brief to the argument that the 2003 amendm ents violate the due proc ess clause o f the Fou rteenth Am endmen t. Under the federal constitutional standard, the burden of satisfying due process is met simply by showing that the retroactive application of the legislation is itself justified by a rational legislative purpo se. Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 730 (1984). The obvious legislative purpose of limiting the activities and expansion of CON-exempt hospice provid ers satisf ies the r ationality test. Do the 2 003 am endme nts create a monop oly in violation of Article 41 of the Maryland Declaration of Rights? VNA further contends that HG § 19-906(c)(2) is unconstitutional under Article 41 of the Maryland Declaration of Rights, because that sub section unc onstitutionally gra nts to existing hospice ca re provider s in Carroll and Prince George s counties an exclusive franch ise to p rovide hospic e care. The Department responds that Article 41 does not apply to regulations enacted to protect the public. It contends that anti-competitive regulatory schemes are immunized from antitrust scrutiny and are ipso facto . . . exempt from the operation of antitr ust law s. -21- The State s hospice regulatory system, the Dep artment argues, does not establish an unconstitu tional monopoly; rather, the system reasonably regulates hospice services as require d to pro tect the p ublic int erest. We begin our answer to this contentio n with the proposition that [a] grant of privileges, even though monopolistic in character, does not constitute a monopoly in the constitutional sense when reasonab ly required for p rotection of some pu blic interest, or when given in return for some public service, or when given in reference to some matter not of common right. Levin v. Sinai Hosp. of Balt. City, Inc., 186 M d. 174, 183 (1946); see also Raney v. County Comm rs of M ontgomery County , 170 Md. 183, 193 (1936). The Court of Appeals stated in Raney: There is, therefore, this relation between a special privileg e monop olistic in character and the police power of the state, that when the creation or grant of such a privilege is needed to aid some governmental function or purpose essential to the protection of the public security, health, or morals, it may not be obn oxious to the co nstitution al cond emna tion of m onopo lies. Id. In Raney, the Court examined the constitutionality of a Montgomery County act that required the County, when publishing certain public notices, to print the notices in two Montgom ery county newspapers of general circulation that me t specif ic criteria . Id. at 186. Specifically, the act required the newspapers to be printed in Montgomery County and to have been in service for fou r consecutive years prior to the publica tion of th e notice s. Id. Only one newspaper in Montgomery County met the requ iremen ts. Id. at 190. Examining the act in light of Article 41 of the Maryland Declaration of Rights, the Court concluded that -22- the act essentially conferred on that single paper a special privilege for which no other paper was eli gible to c ompe te. Id. Reasoning that the location of a newspa per s printing and its length of service were not relevant to its effectiveness in publishing public notices, the Court ruled that the act created an unconstitutional monopoly depriving the persons excluded from the equ al protec tion of th e law. Id. at 196- 97. VNA relies on Raney to argue tha t, like the act at issu e in that case, HG § 19-906(c)(2) violates the prohibition against monopolies established in Article 41 by restricting to a class of providers th e right to provide hospice care services in Carroll and Prince Georg e s cou nties. Id. at 190. Acknowledging that HG § 19-906(c)(2) does not create a monopoly in a single pro vider, it contends that the bill grants to certain hospice care provid ers an e xclusiv e privile ge on a rbitrary gro unds. W e disag ree. HG § 19-906(c)(2) does not make ineligible all but one or a small class of hospice services in Carroll or Prince Ge orge s counties. Rather, that subsection limits the exemption of a CON to the home-based hospice care providers that provided service in those counties in 2001. Th e ALJ s P roposed D ecision note s that when the General Assembly was considering the adoption of HG § 19-906(c)(2), it had bef ore it evidence that seven hospice care providers rendered home-based services in Prince George s County in 2001, and four hospic e care p rovide rs rende red hom e-base d servic es in Ca rroll Co unty in 20 01. Because VNA did not render hospice care services in Carroll or Prince George s counties in 2001, it is req uired to obtain a C ON to provide hospice services in those counties. -23- Providers that rendered service in those counties in 2001 do not face the sa me require ment. Despite the distinction in the CON requirement, we do not conclude that the privilege not to obtain a CON , conferred upon the hospice providers that were servicing Carroll and Prince George s counties in 2001, creates an unconstitutional monopoly. Rather, the distinction is reasonab ly required for protection of some public interest, see Levin , 186 Md. at 183, nam ely, ensuring that new health care services and facilities are developed only as needed, as mea sured b y their cos t effec tivenes s, quality, an d geog raphica l location . The other ca ses upo n whic h VN A relies , Mayor and City Council of Havre de Grace v. Johnson, 143 Md. 601 (1923) and State v. Mercer, 132 Md. 263 (1918), involve discriminatory classifications based entirely on a com pany s residen cy. Those cases do not assist the analysis. HG § 19-906(c)(2) does not afford ho spice prov iders from one coun ty an advantage over out-of-co unty hospices ; rather, it grants the hospice providers tha t were providing services in P rince Geo rge s and C arroll counties the privilege of maintaining their licenses in those countie s, regard less of r esiden cy. Are the 2003 amendments to HG §19-906 an improper exercise of the State s Police Power? VNA argues that the General Assembly s enactment of HG § 19-906(c)(2) was arbitrary and capricious and, thus, constitutes an invalid exercise of the State s police powe r. VNA sets forth three reasons to support this contention: First, the enactment caused VNA to lose its hospic e care license even thou gh it provided hospice services in Carroll and Prince George s countie s both b efore a nd afte r the ena ctmen t. Second, the revocation of its license -24- is not due to any misconduct, negligence, fraud, o r any othe r derelic tion on its part. Third, the statute s use of the twelve-month period ending with December 31, 2001, for grand fatherin g purp oses, is n ot base d on rat ional cri teria. The Department respo nds that HG § 19-906(c)(2) is not an arb itrary or capricious exercise of legislative power under the State s police power. It contends that the General Assemb ly purposefully based the exemption for the CON requirement on calendar year 2001 because, at the time the legislature was considering the enactment of § 19-906(c)(2), that was the most recent year for which there was available data. The Department writes: The General Assembly sought to advance its interest in improved planning for home-based hospice service . . . [by] establish[ing] an inventory of home-based hospice services based on the b est data t hen av ailable the 200 1 annu al hosp ice surv ey. A state s police p ower is its power to take action that will protect the public health, morals, safety, and welfare of its citizens. See Dawson v. State, 329 Md. 275 , 283 (1993); Raynor v. Md. Dep t of Health and Mental Hygiene, 110 Md. App. 165, 178 (1996). In Dawson, the Court o f Appe als wrote: The exercise by the Legislature of the police power will not be interfered with unless it is shown to be exercised arb itrarily, op pres sively or unrea sona bly. The wisdom or expediency of a law adopted in the exercise of the police power of a state is not subject to judicial review, an d the law w ill not be held void if there are any considerations relating to the p ublic welf are by which it can be supported. Such a statute carries with it a strong presumption of constitutionality. 329 Md. at 283-84 (quoting Bowie In n, Inc. v. City o f Bowie, 274 M d. 230, 2 36 (19 75)). -25- A statute enacted by the Legislature in the exercise of the police power is presumed to be valid and on e attacking its va lidity has the burd en of aff irmatively and c learly establishing its invalidity. Governor of Md. v. Exxon Corp., 279 Md. 410, 426 (1977) (quoting Salisbury B eauty Sch ools v. State Bd. of Cosm etologists, 268 Md. 32, 48 (1973)). [T]he legislature is pre sumed to have acted within con stitutional limits so that if any state of facts rea sonably can b e conceiv ed that wo uld sustain the constitutionality of the statute, the existence o f that state of f acts as a basis for the passage of the law mus t be assumed. Md. Aggreg ates Ass n., In c. v. State, 337 Md. 658, 670 (1995) (quoting Edgewood Nursing Home v. Maxw ell, 282 M d. 422, 4 27 (19 78)). VNA argues that we should disregard the Department s explanation of why the General Assembly used data from calendar year 2001 to determine which home-based hospice care providers would be exempt from the CON requirement. VNA states that the Department did not pres ent that infor mation du ring the adm inistrative proceeding s, so it cannot do so now. Although we could fairly assume, on our own, that the General Assembly selected 2001 as the year during which the most recent data was available, we need not trouble to do so, because it is VNA s burden to demonstrate that more recent or more reliable data was available at that time. See Exxon Corp., 279 Md. at 426. VNA has not carried that burden. We conclude , therefore, tha t VNA has not overcome the presumption of validity in the General Assembly s decision to rely on the 2001 data when limiting the exemption of the -26- CON requirement to those hospice care providers that had rendered home-based services that year. JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY REVERSED; CASE REMANDED TO THAT COURT WITH DIRECT IONS TO AFFIR M THE FINAL DECISION OF THE DEPARTMENT OF HEALTH AND MENTAL HYGIENE. COSTS TO BE PAID BY APPELLEE. -27-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
