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Commission on Hospitals and Health Care v. Lakoff

Supreme Court of Connecticut

March 27, 1990

COMMISSION ON HOSPITALS AND HEALTH CARE
v.
Kenneth M. LAKOFF, et al.

Argued Jan. 9, 1990.

Page 317

David K. Jaffe, Hartford, with whom, on the brief, was Hollace P. Brooks, Bloomfield, for appellants (defendants).

Henry A. Salton, Asst. Atty. Gen., with whom were Patricia Gerner, Asst. Atty. Gen., and, on the brief, Clarine Nardi Riddle, Atty. Gen., and Richard J. Lynch, Asst. Atty. Gen., for appellee (plaintiff).

Before PETERS, C.J., and ARTHUR H. HEALEY, GLASS, HULL and SANTANIELLO, JJ.

[214 Conn. 322] HULL, Associate Justice.

The dispositive issue in this appeal is whether the defendants, Kenneth M. Lakoff et al., [1] were required by law to seek permission from the plaintiff, the commission[214 Conn. 323] on hospitals and health care (commission), prior to providing magnetic resonance imaging (MRI) services [2] at the Cromwell Imaging Center located in the town of Cromwell. The defendants acquired a Technicare 0.6 Teslacon MRI system and began offering MRI services to the public on March 21, 1988. Upon investigation, the commission determined that the defendants' failure to secure the approval of the commission prior to acquiring the MRI system and instituting the MRI services was in violation of General Statutes §§ 19a-154 [3] and 19a-155. [4] Consequently,

Page 318

the [214 Conn. 324] commission brought an enforcement action under General Statutes § 19a-159, [5] seeking temporary and permanent injunctions barring the defendants from providing MRI services at the Cromwell Imaging Center until such time as the defendants had secured the necessary commission approval. A de novo hearing on the merits of the commission's action was held, after which the court rendered judgment, in part, for the commission and, accordingly, granted the requested relief. From this judgment the defendants appeal. We find no error.

The following facts are relevant to this appeal. The commission filed a three count complaint against the defendants. The first count alleged a violation of § 19a-154 in that the defendants, in operating a health care facility, had failed to seek permission from the commission prior to their introduction of an additional function or service into their program of health care. [214 Conn. 325] The second and third counts alleged that the defendants had failed to seek permission from the commission prior to spending in excess of $400,000 for major medical equipment, in violation of § 19a-155(a), and for imaging equipment, in violation of § 19a-155(b).

In considering the issues presented by the commission's action, the court made the following factual findings: "The defendants are Kenneth M. Lakoff, M.D. and a series of interlocking corporations which together own and operate a radiological center and an MRI center in the same quarters (but in different suites) of a building in Cromwell. Separate corporations have acquired the equipment in question ... from the leasing and operating corporations. Separate corporations operate the radiology service and the MRI service. For the purposes of this action, the court will find that the defendants are jointly controlled by Dr. Lakoff and Medscan, Inc."

The court further found that the "MRI Service is performed for the defendants' MRI operating company, MRI of Cromwell Diagnostic, P.C., by an independent group of radiologists. The service is strictly a diagnostic function. This company receives virtually no business on its own but only from referring physicians. Hospitals make no referrals to it, nor does the company perform any imaging services for hospitals."

With these facts as its backdrop, the court rendered judgment in favor of the commission on the first count. The court's ruling was based on its conclusion that the defendants operate a "health care facility" under § 19a-145 and are thus subject to the approval provision of § 19a-154. With respect to the second and third counts, the court found in favor of the defendants, concluding that the defendants had not exceeded

Page 319

the statutory limit of $400,000 in the acquisition of the MRI system. Given its ruling on the first count, the court [214 Conn. 326] granted the requested injunctions, ordering that the defendants cease operating and providing MRI services at the Cromwell Imaging Center until such time as they received the necessary commission approval. On appeal the defendants claim that the court erred in determining that the defendants were subject to the approval provision of § 19a-154 because: (1) the defendants are not a "health care facility" as defined by § 19a-145; and (2) the defendants are not introducing "an additional function or service" as that term is used in § 19a-154(a).

I

We turn first to the defendants' claim that the court erred in its conclusion that the defendants operate a "health care facility" as defined by our statutes.

General Statutes ยง 19a-145 provides in pertinent part: " 'health care facility or institution' means any facility or institution engaged primarily in providing services for the prevention, diagnosis and treatment of human health conditions, including, but not limited to, home health care agencies, homemaker-home health aide agencies ... clinical laboratory or central service facilities serving one or more health care facilities, practitioners or institutions...." (Emphasis added.) The court determined that "the legislature intended to include in this definition institutions which perform all of the health care functions of diagnosis, treatment and prevention, but in addition thereto, certain others which the statute specifically designates." Because the defendants perform only a diagnostic function, the court found that the defendants do not fall within the parameters of the statute's general definition. However, the court determined that the additional facilities designated by the statute are exceptions to the general definition of a health care facility and are not required to perform all of the services of prevention, [214 Conn. 327] diagnosis, and treatment. The court then ...


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