COLUMBIA – Dozens of health facilities expansions face uncertainty, as South Carolina leaders try to reform the state Certificate of Need program.
South Carolina’s health agency grants a limited number of permits, so-called CONs, to hospitals and health care systems before they may start new construction or purchase expensive equipment. The purpose is to contain costs, avoid duplication and prevent poor areas from having no providers nearby, due to facilities cherry-picking paying customers by operating only in wealthy areas.
But following the governor’s veto of the CON program’s funding last year, its operations were suspended, and the health agency said projects could move forward without a permit. In April of this year, however, the Supreme
Court ruled against the state health department and said that the CON permits must be administered.
“There were about 70 or so projects that went forward that required a CON during that time the CON (program) was not operating,”said Jonathan Yarborough, director of external affairs for the S.C. Department of Health and Environmental Control.
“A great majority of those were home healthcare agencies,” he added, addressing a committee of legislators on Wednesday.
“A lot of those agencies tell us that they were providing services to new clients, but because they didn’t have a CON, we can’t, under the law, renew their annual license, absence some sort of legislative direction, which we did not get last year.”
The reason those home health agencies don’t simply apply for a CON now: The State Health Plan did not calculate a need for new home health facilities.
Rep. Murrell Smith, R-Sumter, wondered what should become of those who invested in a new projects but have since been ordered to close down or face an expiring license. While about three-fourths of the 70 projects were home healthcare facilities, the remaining ones are largely hospitals.
“I don’t think you can mothball them,” Smith said.
Yarborough said the hospitals could immediately apply for a CON.
“They’ll be a year or a year and half behind where they were before, and they may get denied that certificate of need, so that’s the risk.”
Rep. Jim Merrill, R-Charleston, urged the DHEC official to look for regulatory remedies ahead of the Legislature’s upcoming efforts to clear up the confusion surrounding the program. The General Assembly returns to Columbia in January.
“Since the debacle of the last year and all, we kind of predicted there would be lawsuits,” said Merrill. Yarborough said there had been one so far that stemmed directly from the situation at hand.
As for Gov. Nikki Haley’s initial strike in June of last year against the program’s $1.7 million operating funds, the Republican governor said the market should be in charge instead and called the program “an intensely political one through which bureaucratic policy makers deny new healthcare providers from offering treatment.”
Yarborough said it’s hard to find consistent data showing whether CON contains costs better than free-market competition.
“You can find a study that says whatever you want to depending on what side of the argument you’re on.”