The Appeals Court vacated a March 2011 ruling from U.S. District Judge Michael Schneider in the Eastern District Court of Texas on Thursday, saying that court had no jurisdiction in the federal case involving plaintiffs Texas Spine and Joint Hospital and Physician Hospitals of America, a trade organization.
Lindsey Birdsong, a Tyler attorney who has helped to represent the hospital, along with Scott Oostdyk, who represented the trade association, said the attorneys are “pondering their options” about what to do next.
The Texas Spine and Joint Hospital and Physician Hospitals of America filed a joint federal lawsuit in June 2010, asking for a part of the new federal health care legislation, which President Barack Obama signed into law in March 2010, to be declared unconstitutional. That part of the law, which the plaintiffs wanted to challenge, is Section 6001 of the Patient Protection and Affordable Care Act of 2010, which prevents physician-owned hospitals from expanding or constructing new hospitals.
Physician Hospitals of America is an organization that supports physician-owned hospitals. The other plaintiff, Texas Spine & Joint Hospital, is a physician-owned hospital that opened in Tyler in 2002, according to the Fifth Circuit Court of Appeals ruling. In 2008, Texas Spine and Joint Hospital decided to expand its facilities and spent about $3 million toward a planned $30 million expansion, the ruling stated.
The appeals court cited laws that said plaintiffs should have first gone through “administrative channels” in the case, by first waiting on a ruling from the Secretary of Health and Human Services.
“In summary, judicial review of such a claim is available only after a party first presents the claim to the Secretary and receives a final decision,” the appeals court stated.
Schneider, in the United States District Court in the Eastern District of Texas, issued a judgment on the Spine and Joint lawsuit in March 2011, stating, “The court does not have the authority to judge the wisdom or fairness of Congress's decision. Rather, as the Supreme Court has said, 'the Constitution presumes that ... even improvident decisions will eventually be rectified by the democratic process and that judicial intervention is generally unwarranted no matter how unwisely ... a political branch has acted.”
The hospital and trade organization appealed that judgment with a request to the Fifth Court of Appeals.