South Carolina health officials say hospitals and nursing homes will no longer need state approval in order to expand or buy new equipment. However, it’s not clear if hospitals will take advantage of the regulatory lapse anytime soon.
Department of Health and Environmental Control director Catherine Templeton said in a letter Friday that the agency would no longer require health care providers to get a Certificate of Need before they expand. The letter came after the House sustained Governor Nikki Haley’s $1.7 million budget veto for the program on Wednesday.
“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 wrote.
“Suspending the program has the practical effect of allowing new and expanding health care facilities to move forward without the Certificate of Need process.”
The purpose of a Certificate of Need is to prove that a need exists in the community to justify expanding services. But the process is very unpopular among state lawmakers because it often pits hospitals against each other over the limited number of beds allowed in a community.
But South Carolina Hospital Association executive vice president Allan Stalvey said the problem is that a state law which requires the permits still remains on the books, even if DHEC is no longer awarding the permits.
He said he expects hospitals to wait until a court clarifies the law. “I don’t think anybody would want to go out and start building a multi-million dollar facility or purchasing a multi-million dollar piece of equipment based on the communication from DHEC,” Stalvey told South Carolina Radio Network. But he added he could not speak for every health care facility in the state.
In a statement, Gov. Haley expressed support for DHEC. She said she hoped it would lead lawmakers to eliminate the entire law next year. “The Certificate of Need program does three things: restricts access, drives down quality and drives up costs. We’re for competition, and since taking office, have fought for better health for all South Carolinians – that’s what this is all about,” the governor wrote.
State Rep. Kris Crawford (R-Florence), an emergency room doctor in his private career, said he would have preferred that lawmakers reform the law rather than simply defund it.
“Traditionally, in states that don’t have Certificates of Need, you end up with ultimately higher utilization costs throughout the population,” Crawford told South Carolina Radio Network.
DHEC had been considering 32 CON applications worth $86.4 million from around South Carolina in June, according to the agency’s website.