Halifax Health will try to convince the Florida Supreme Court that a multimillion dollar hospital under construction in Deltona should be completed using bond money after two state court judges ruled that the project is unlawful.
The area’s largest and only public hospital said in court filings last week that it intends to appeal one of the judge’s decision rejecting its request to issue $115 million in bonds to pay for the medical facility located outside of the special taxing district Halifax Health was created to serve.
The case is one of three overlapping legal disputes that are threatening to derail the health system’s plans to offer medical services on the opposite end of the county. By pushing its case to the state’s highest court, Halifax Health is preparing for the ultimate legal battle that could have far-reaching effects on its future business opportunities.
The appeal is also one of a handful of options Halifax Health has to attach legitimacy to the many facilities it already owns and operates in cities outside of the Halifax Hospital District. One judge suggested Halifax take its cause to the state legislature where other public hospitals have been granted powers that allow them to compete as a business.
Lately, however, the hospital has been on bit of a losing streak in the courtroom.
Last month, Volusia County Circuit Judge Christopher France denied a request for a bond validation — a voluntary proceeding that Halifax Health initiated in January. France decided that the “plain reading” of state law does not give the hospital the power to build facilities outside of its taxing district. Therefore, issuing bonds to pay for the Deltona hospital would be illegal.
Following that ruling, Volusia County Circuit Court Judge Michael Orfinger sided with former Ponce Inlet Mayor Nancy Epps who first challenged the hospital’s plans to move outside the taxing district nearly two years ago. Epps has asked that the hospital withdraw completely from the Deltona project, but Orfinger has held off on granting the request as a solution.
Following that ruling in the Epps case, a band of local business owners and residents filed a lawsuit seeking class action status to recover any tax dollars that might have been used to pay for the Deltona project.
Meanwhile, the taxpayer-supported Halifax Health has been spending large sums on legal fees and expenses — more than $600,000 — a review of billing invoices shows. With the appeal to the supreme court, the tab will only increase.
A bond validation hearing gives the hospital the right to an expedited hearing but a Florida Supreme Court spokesperson said it’s unclear how soon the case will land in high court. Halifax Health officials declined to comment on the pending litigation, but hospital administrators have previously said that bonds would play a key role in their financial strategy.
Solution in the Legislature?
The hospital could also find a solution in the state legislature. They would have to first convince local lawmakers to take up its cause.
There were mixed responses among four of the seven lawmakers reached by The News-Journal. Some said they needed more information while others were supportive of giving Halifax Health the legal heft it needs to open the Deltona hospital.
“I haven’t had the opportunity to talk to people about it and review the situation so I’m not going to make a comment on whether I would support or not support,” said state Sen. Dorothy Hukill, R-Port Orange. “It just hit the fan so to speak. I’m just not going to take a position.”
It’s still a long time between now and March 1, 2019 when the next legislative session begins. The effects of the decision in the Epps case could be irreversible by then. Halifax Health has asked Orfinger to stop the proceeding until the appeal has been heard.
Unless a lawmaker proposed changes to taxing districts across the state, the seven members of the local delegation would have to agree to introduce a local bill that only applies to Halifax Health.
The proposed law doesn’t necessarily need unanimous support in the delegation. But lawmakers would perceive it more favorably if everyone agreed on its importance, said Rep. Tom Leek, R-Ormond Beach, who is the chairman of the local delegation.
“Typically I’m going to fall on the side of our local hospitals here particularly one like Halifax that is trying to get its reliance on tax dollars down to zero. But without knowing the context of it I can’t really (comment) on it,” Leek said.
“Taxing authorities generally are not favored but to the extent that the purpose is to reduce the reliance on tax dollars — that might find some favor, but it’s hard to say.”
There could also be some lingering opposition in the legislature to taxing districts after years of skepticism, particularly from Gov. Rick Scott who will leave office to run for U.S. Senate.
“I don’t think there’s any reason to rush into any special delegation meeting knowing that we’re not going back until March,” said state Sen. Travis Hutson, R-Palm Coast, who said he needed to do some fact-finding first.
“As of right now I’d be supportive of all of us in the delegation taking a couple months to figure out what this issue is. And then come back maybe right after the elections when we have our normal delegation meeting.”
A ‘hospital war’?
Rep. David Santiago, R-Deltona, sees the landscape differently.
A former Deltona city commissioner, Santiago is aware of the city’s longtime courtship of health care providers and the politics that are taking shape today.
In a recent interview, Santiago repeated a claim first made by Halifax Health officials that Nancy Epps’ lawsuit is being funded by a third party and the organization most likely to hold a grudge against Halifax Health is the health care giant Hospital Corporation of America.
Santiago said he is willing, if necessary, to run a local bill through the House.
“The legislature today, I would say the overall theme is access to health care. How do we expand it and not necessarily corporate competition from a corporate battle,” Santiago said. “What we have here is a hospital war. That’s really what it is — between HCA (and Halifax).”
A sizable number of residents living in West Volusia frequent Orlando area hospitals. The HCA-owned Central Florida Regional Hospital in Sanford is one of the closest to the Volusia-Seminole County line. And a new hospital, like the one Halifax Health is currently building in Deltona, could dig into its customer base.
In fact, Central Florida Regional was the only organization to formally protest the Deltona facility through its lobbyist Stephen Ecenia while state regulators decided whether to greenlight the project. But due to a regulatory limitation, the state Agency for Health Care Administration didn’t consider their complaint.
Ecenia’s law practice, Rutledge Ecenia, re-emerged as one of two representing Epps in her lawsuit challenging the project. They used the same legal arguments, too.
Epps has previously said any connections to HCA are nothing more than a coincidence. Ecenia did not respond to a recent request for an interview.
Santiago said he can see beneath the deflections.
“There is probably over a million dollars in that litigation,” Santiago said. “Nancy Epps is not putting up $1 million to stop Halifax from building a hospital.”