WASILLA -- The Alaska Supreme Court has overturned a lower court decision in a case between Mat-Su Regional Medical Center and Advanced Pain Centers of Alaska Inc. The state Department of Health and Social Services is also a party to the suit.

The case centers on whether Advanced Pain Centers should have been required to get a state "certificate of need," proving that the pain management surgery center it planned to build was needed in Mat-Su.

Advanced Pain Centers in 2006 wanted to convert office space in Wasilla into a small surgery center at an estimated cost of $966,036. In fiscal year 2006, state law required health care facilities to get a certificate of need if their project cost was more than $1,050,000. The state said Advanced Pain did not need a certificate. Obtaining the certificate means going through a public input process and an in-depth review of the project.

Mat-Su Regional responded by suing Advanced Pain and the state, seeking to stop the project and prevent Advanced Pain from operating. In the original suit and the appeal, Mat-Su Regional complained that Advanced Pain "knowingly misrepresented" the project cost and that the state erred by "blindly accept(ing) Advanced Pain's representations with no independent analysis."

State Superior Court Judge Peter Michalski in Anchorage ruled in March 2008 for Advanced Pain and the state, stating that Mat-Su couldn't challenge the terms of Advanced Pain's certificate of need since the company had not received one, and that Mat-Su Regional had missed a deadline to appeal the decision and therefore lost its chance to argue the issue. Michalski also granted $3,337 in attorney's fees to the state and $76,899 to Advanced Pain.

The Alaska Supreme Court on Friday overturned Michalski's ruling.

The high court found that Mat-Su Regional had adequate standing to complain, and that the state had failed to make clear the 30-day deadline for appealing its decision to waive the certificate of need.

The court also ruled that Advanced Pain and the state, no longer prevailing parties, should not receive attorney's fees. The Supreme Court remanded the case back to Superior Court for further proceedings.