- Associated Press - Thursday, March 6, 2014

COLUMBIA, S.C. (AP) - A program that regulates the building or expansion of medical facilities was not negated when Gov. Nikki Haley vetoed its appropriations funding and should be paid for through other channels, attorneys representing South Carolina’s hospitals argued Thursday.

During a hearing before the state Supreme Court, attorney Mitch Brown said that the Department of Health and Environmental Control should find other ways to fund the Certificate of Need program. That could mean charging higher fees which, he argued, could cover the program’s cost entirely.

“That is a problem of their own making,” said Brown, detailing his notion that DHEC could self-fund the program if only it charged more in fees.

State law requires that medical facilities seeking to build or expand have approval under the program, which is administered by DHEC. When Haley vetoed the nearly $2 million needed to run the program in June, about three dozen projects worth about $100 million were under DHEC review, and those projects remain stalled.

Of the veto, Haley indicated she felt the process was unnecessary and would best be left to be sorted out in the free market. House lawmakers sustained Haley’s veto after Ways and Means Chairman Brian White took the floor and said the veto was just about the money, not whether the program should continue.

Since that vote, some House Republicans have said they didn’t intend to nix the program entirely, saying that an executive decision to discontinue the program “may be contrary to law but is certainly contrary to the will and intent of the House of Representatives.” Hospitals and an association that represents them sued, saying that state law still mandates the review.

On Thursday, an attorney representing DHEC said the agency had no choice but the halt the program when its funding suddenly disappeared. After the veto was sustained, Jim Richardson said, DHEC laid off some of the employees who administered the program and reassigned others.

Several justices questioned Richardson about the agency’s interpretation of the veto’s import, suggesting that perhaps DHEC could have found an alternate funding source for the program and pointing out that the state law requiring medical facilities to obtain the approval is on the books.

Haley said that her veto, upheld by the South Carolina House, meant the program is finished, and that companies shouldn’t have to get approval before they make business decisions.

Haley has long opposed the Certificate of Need program. Before she became governor, Haley worked as a fundraiser for Lexington Medical Center, which spent nearly a decade fighting with DHEC over whether it could do open-heart surgery before reaching a compromise with another Columbia-area hospital.

The court will issue its decision later.


Kinnard can be reached at https://twitter.com/MegKinnardAP

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