COLUMBIA, SC — S.C. health care industry officials said Friday they expect a court fight over the suspension of the state program that reviews requests for new and added work at medical facilities.
The state Department of Health and Environmental Control plans to suspend the Certificate of Need program on Monday after failing to get funding for the year in the state budget, agency director Catherine Templeton said in a letter released Friday.
The S.C. House sustained Gov. Nikki Haley’s veto of $1.7 million in funding for the program this week.
DHEC said hospitals, nursing homes and physicians can go ahead with plans for expansion, added services and new machines without state approval. The agency will not take action against any work done while the program is suspended unless told to do so by the General Assembly, Templeton said.
That doesn’t mean caretakers will go forward with the 33 Certificate of Need applications pending on projects worth more than $85 million, according to the latest update on the agency’s website. Another eight applications, including a contentious fight over a new Fort Mill hospital, are under appeal.
“This is like driving down the highway and all the speed limit signs are down,” said Dr. Bruce Snyder, president of the S.C. Medical Association, the trade group for physicians. “We don’t know what we’re supposed to do.”
Randy Lee, president of the S.C. Health Care Association, which represents nursing homes, said the medical community needs clarification.
“This a quick change; this is a drastic change,” Lee said. “We’re not sure (Templeton) can suspend a state law.”
Haley said in her veto message that she wanted the market to work rather than politics.
“Instead of freeing up the market, Gov. Haley has paralyzed it,” S.C. Carolina Hospital Association executive vice president Allan Stalvey said. “Unless the administration acts to resolve the uncertainty it has created in the marketplace, the only avenue available to health care facilities will be costly litigation.”
State Reps. Brian White and Murrell Smith, leaders on the House Ways and Means Committee, also raised legal concerns in a joint statement.
“If the Governor and the agency director wish to unilaterally discontinue the program, as they have indicated, then that is a decision that lies exclusively within the executive branch and one which may be contrary to law but is certainly contrary to the will and intent of the House of Representatives,” the lawmakers said.
They said DHEC should have found another way to pay for the program seen by advocates as a way to avoid a glut of medical services.
Haley vetoed funding for the program she calls a “political obstacle” twice in the past two years. At least 14 states do not have Certificate of Need programs, according to National Conference of State Legislatures.
“The Certificate of Need program does three things: restricts access, drives down quality and drives up costs,” she said in a statement.
Before she became governor, Haley was a fundraiser for the Lexington Medical Center Foundation while the hospital fought DHEC’s rejection for a heart surgery unit. Lexington later received the heart unit in a trade with Providence Hospitals.
In her statement Friday, Haley called for legislators to kill the program, which did not happen in the budget.
DHEC cited a 2010 S.C. Attorney General’s opinion in an issue involving the S.C. Human Affairs Commission that said: “By not providing the funding for a particular statutory obligation, in the opinion of this office, a court would likely conclude that, from a legal standpoint, the General Assembly has chosen to suspend the commission’s statutory obligations in such regard for the current fiscal year.”
The department also cited a brief that then-Senate President Pro Tempore Glenn McConnell submitted for a 2011 S.C. Supreme Court decision that said money that is part of a gubernatorial veto sustained by lawmakers cannot be used for its intended purpose.
“DHEC has no independent authority to expend state funds for Certificate of Need, and therefore, the veto completely suspends the program for the upcoming fiscal year,” Templeton said in her letter.
The governor does not appoint the DHEC director but does name the agency board that selected her. Templeton is a Haley ally, whom the governor appointed to head the state’s labor agency before she was tapped to run DHEC.
The state will continue to review health and safety concerns in the agency’s construction and licensing programs, Templeton said. which were not affected by the veto. The department also will continue to license and inspect health care facilities.
Columbia-area hospitals have more than $21 million in projects awaiting approval.
Lexington Medical Center, which has two projects worth $10.4 million under review, has no immediate plans to move forward with expansion of its radiation treatment department and purchase of a new surgical machine, spokeswoman Jennifer Wilson said.
Efforts to reach Columbia-based Palmetto Health, which has $10.7 million in projects in the program, were unsuccessful Friday.
State Sen. Joel Lourie, D-Richland, asked Haley to order a special session of the General Assembly to restore the funding.
“It is now open season for any new shady operator to build a surgery center or hospital in South Carolina,” Lourie said. “The losers will be the consumers who will see their health care cost increase to pay for this medical arms race. Gov. Haley’s actions are reckless and will cost consumers in South Carolina more money.”
Document: Certificate of Need update, June 2013