April 1, 2014

Carolinas HealthCare System has options after Fort Mill hospital decision

Carolinas HealthCare System has several options in response to a South Carolina Administrative Law Judge’s order that awarded construction of a Fort Mill hospital to Piedmont Medical Center.

Carolinas HealthCare System has several options in response to a South Carolina Administrative Law Judge’s order that awarded construction of a Fort Mill hospital to Piedmont Medical Center.

The company could give up the fight after 10 years; ask Judge Phillip Lenski to reconsider his decision; or appeal to the state Court of Appeals.

Or, given the uncertainly surrounding South Carolina’s certificate of need process, Carolinas HealthCare System could file the necessary paperwork to build a Fort Mill hospital with the state Department of Health and Environmental Control and see what happens, according to a health care analyst.

Carolinas HealthCare System said Tuesday it was considering its options. Officials said they didn’t know when they would decide.

The Fort Mill hospital issue has been appealed in court before. After DHEC initially awarded a certificate of need to Piedmont in 2006, the case was appealed to an administrative law judge, who ordered that the case be returned to DHEC. That ruling was appealed to the state Supreme Court, who also sent it back to DHEC.

Lynn Bailey, a Columbia-based health care economist, said if the company were her client, she would advise it to file an application with DHEC.

Lenski’s decision was made while the S.C. Supreme Court considers a challenge to DHEC’s suspension last year of the state’s certificate of need program.

For years, health care providers had to seek approval from DHEC before moving forward with major medical projects. The decisions were supposed to be made based on the need for each service. Supporters said the process was intended to control health care costs by preventing multiple health care providers in each community from providing the same expensive services.

But in 2013, Gov. Nikki Haley vetoed funding for the certificate of need program, and the House of Representatives sustained the veto. Haley said politics often factored into certificate of need decisions. She said the free market, not politics, should determine health care.

DHEC, citing a lack of funding, suspended the certificate of need program. The agency has instructed hospitals to move forward with projects without fear of consequences. That has created confusion for hospital and other health care providers about how to proceed with construction projects.

According to DHEC, applications for 36 projects totaling about $102 million were being processed when the certificate of need program was suspended.

The state Supreme Court heard arguments in the case last month. The arguments centered on whether the law required DHEC to operate the program even if the governor pulled the funding.

Attorneys representing the S.C. Hospital Association and S.C. Health Care Association – along with about 10 hospitals and nursing-home companies – said the agency’s obligation to enforce the law did not go away because of Haley’s veto.

A permanent law – separate from the state budget process – still exists and requires the program continue, they said, adding DHEC should have moved money from elsewhere or raised fees to pay for the program.

Bailey said the court’s decision could come as early as next month, but no official date has been set for the court’s opinion.

Bailey said Carolinas HealthCare could submit its application and its construction drawings to DHEC. State law requires DHEC to review and approve hospital construction plans.

Bailey said Carolinas HealthCare should act before the court’s opinion is released or before a decision by the legislature on funding the certificate of need program. State Sen. Thomas Alexander, R-Oconee, chairman of the Senate budget subcommittee that oversees DHEC’s budget, said he will try to restore the program’s funding this year.

The State newspaper contributed to this story.

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