The New Mexico Court of Appeals ruled Thursday that the contract Valencia County signed with a local nonprofit for management of the hospital project is a valid contract under the New Mexico Hospital Funding Act, agreeing with the district court’s earlier ruling.

“The district court found that Defendant did not exceed its authority under the Hospital Funding Act. We agree and affirm,” Appellate Judge James J. Wechsler wrote in the appeals court’s 13-page opinion.

The act regulates how hospitals are funded, including the construction, maintenance and operation of hospitals.

In 2006, voters in Valencia County approved a hospital mill levy, regulated by the act, which will be used for maintenance and operation of a hospital in the county. Shortly after, a lawsuit was filed.

The plaintiffs-appellants, a group of nine county residents, argued the health care facilities contract with the nonprofit, Valencia Health Commons, was invalid because the health commons wasn’t a hospital located in New Mexico, which the plaintiffs said state law required the contracting entity to be.

The appeals court said the contract complies with state law because Valencia Health Commons won’t receive mill levy money until the nonprofit has achieved “substantial completion” of a hospital in Valencia County.

“The contract at issue does not pledge mill levy proceeds for anything other than the performance of a health care facilities contract for a hospital located in New Mexico, albeit one that will be operating at some point in the future,” the appeals court writes.

The court also pointed to a conflict between the plaintiff’s “limited interpretation” of the Hospital Funding Act versus the “legislative intent” of the act.

“Plaintiffs’ argument does not comport with the expressed purpose of the Hospital Funding Act ‘to provide flexibility in financing construction, operation and maintenance of necessary hospital facilities,’” the court writes.

The ruling means Valencia Health Commons has a valid contract and can begin to move forward with seeking financing for the construction of a hospital.

The plaintiffs have the option to appeal the decision to the New Mexico Supreme Court.

Related Documents:

(Valencia! redacted fax information and three signatures.)

This page was published on February 13, 2010 at 12:10pm and is filed under Hospital.