Bill would streamline SC medical facility building program

COLUMBIA, S.C. (AP) - South Carolina legislators might finally be in position this year to overhaul the regulations for building or expanding medical facilities.

Under state law, a certificate of need is currently required before hospitals and other medical facilities can build, expand, offer a new service or buy medical equipment costing more than $600,000.

During a preview session Thursday, Rep. Murrell Smith said he’s hopeful a bill will be approved early in the coming legislative session to streamline that process.

“I’m more optimistic this year than I have been in any other year in dealing with certificate of need,” said Smith, R-Sumter, who chairs a House health care subcommittee.

Legislators have been pondering ways to deal with the program since July 2013, when Gov. Nikki Haley vetoed the $2 million needed to run the program. At the time, the Republican said the process should be left to the open market.

Haley has long opposed certificates of need. Before becoming governor, she worked as a fundraiser for Lexington Medical Center, which spent nearly a decade fighting with the Department of Health and Environmental Control over whether it could do open-heart surgery before reaching a compromise with another Columbia-area hospital.

The House sustained Haley’s veto after Ways and Means Chairman Brian White took the floor and said the cut was just about the money, not whether the program should continue. Some House Republicans ultimately said they didn’t intend to nix the program entirely.

DHEC director Catherine Templeton told providers that, if the Legislature eventually restored the process, the agency wouldn’t punish projects undertaken in the interim unless forced to do so. DHEC immediately laid off employees and shuttered the review process after the funding was vetoed.

Hospitals sued, and the state Supreme Court ruled last year that DHEC must continue the program, even though its funding was vetoed.

Among other things, Smith’s proposal would eliminate some requirements, like a hospital needing permission to expand an existing facility. In September, Lexington Medical was ordered to shut down an open-heart surgery unit and catheterization lab that it opened earlier in the year, while the certificate of need program was in limbo. An administrative law judge ruled the hospital needed a certificate for the expansion, even though it mirrored other previously approved facilities.

Smith’s bill also requires the DHEC board to review projects that sprung up during the nearly yearlong period between Haley’s veto and the Supreme Court decision.

South Carolina is among nearly three dozen states that require the regulatory review of major medical projects. A 1974 federal law required states to enact the process in an effort to control health care costs. But Congress repealed the law 13 years later, after studies showed it had little effect.

Since then, more than a dozen states have repealed their certificate of need programs. Regulations vary widely among remaining states, according to the National Conference of State Legislatures.

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