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RALEIGH (AP) — A man found innocent by reason of insanity of killing four people and wounding five others in a 1988 shooting spree must have a new hearing that could lead to his conditional release from a psychiatric hospital, a state appeals court ruled Tuesday.

A three-judge panel of the Court of Appeals ruled that Michael Hayes was entitled to a new hearing on whether he should remain committed to Dorothea Dix Hospital. The court ruled a judge failed to consider in 2007 that Hayes could be released with conditions aimed at preventing him from backsliding on 19 years of sobriety that's kept him free of psychosis.

"The need for resolution of this significant issue is well demonstrated by Hayes' case: this issue will recur every year at his recommitment hearing. It is in the public's interest that this issue be resolved now," Judge Martha Geer wrote in the ruling joined by Judges Robert C. Hunter and Sanford Steelman.

Hayes is entitled to an annual judicial review of the need for his involuntary commitment. He waived a hearing in August 2008. His longtime attorney, Karl Knudsen, said a new hearing had been scheduled for next month. A spokesman for the state Department of Health and Human Services, which runs the psychiatric hospital, said officials there are legally barred from discussing a patient's case.

The ruling notes several times that a verdict of not guilty due to insanity is a full acquittal, which means Hayes would be entitled to be released once his mental illness is deemed to be cured.

At his latest hearing in September 2007, Hayes was ordered recommitted. But the appeals court ruled Forsyth Superior Court Judge Steve Balog thought he could rule only between Hayes' unconditional release or recommitting him. Hayes' attorneys did not argue for a conditional release during that hearing, nor did prosecutors present it as an option.

"Because the trial court was unaware that it had the option of conditionally releasing Hayes, it made its findings of fact and conclusions of law under a misapprehension of the law," Geer wrote.

Six doctors or therapists at the hospital and an outside expert brought in to examine Hayes said in 2007 he hasn't been mentally ill for years and is no longer a threat to society. Because Hayes holds a full-time job, attends Alcoholics Anonymous meetings and visits family, he already spends more time off the hospital's campus than on it, his doctor said.

A forensic psychiatrist testifying for the state said in his medical opinion Hayes remains mentally ill and that even the "small or slight" risk of future violence Hayes represented was unacceptable. But Dr. Robert S. Brown Jr. said Hayes' two decades at Dorothea Dix "can be concluded with a rational and safe and appropriate discharge plan."

"Mr. Hayes has sort of been on conditional release for years," Knudsen said. "If it would reassure the state and the community of Mr. Hayes' continued lack of danger to the community, if they wanted to have some continued contact with him or check in with him on an outpatient basis, we wouldn't object to that if that would make everybody comfortable."

Hayes was found not guilty by reason of insanity and involuntarily committed to the state hospital in Raleigh after he allegedly fired a .22-caliber rifle into cars stopped at a rural Forsyth County intersection in July 1988. He said he thought he was shooting at demons.