The state House has moved to no longer require that hospitals seeking to expand in South Carolina get state permission first.
The measure passed in a 103-1 vote on Wednesday, although another procedural vote is needed before it heads to the Senate. Supporters say the current practice, a complex regulatory process known as a “Certificate of Need,” hurts medical care because getting approval often takes years of legal challenges.
“It’s enriching a couple of the larger hospital conglomerates. It’s enriching a lot of lobbyists here and there and a lot of other folks,” State Rep. Jim Merrill, R-Charleston, said on the House floor. “But what it’s not doing is helping healthcare in the state of South Carolina.”
Certificates of Need (CON) are touted by hospital groups and regulators as a way to ensure medical facilities are offering all public needs in a community and are not duplicating the care of other facilities. The state Department of Health and Environmental Control (DHEC) grants the certificates through a complex process that requires providers show a need exists in the community. But the approval of new hospitals and new beds are often challenged by competing hospitals in appeals that can drag on for years.
The bill would allow existing hospitals, medical centers and nursing homes to add beds within a mile of their facility. It also would allow hospitals to expand services that are already approved under the program and remove the need to seek permission to buy costly equipment like X-ray machines or MRI scanners. It would take effect in 2018, if ultimately approved.
But CON opponents (and even some supporters) say the process is in bad need of reform. Merrill said Berkeley County has seen a six-year legal fight between Roper St. Francis and Trident Health over a new proposed facility there. “Six years they’ve wanted to go, one competed with the other to build a hospital up there,” he said. “But you know how many hospitals we have in upper Berkeley County now after six years? Not one.”
Merrill called the process the “antithesis of free market.”
However, some legislators said free market rules don’t work for hospitals, which are required by federal law to treat any patient regardless of ability to pay. State Rep. Walt McLeod, D-Little Mountain, worried some clinics would only offer the more lucrative urgent care services, leaving hospitals to handle the rest. “If we just have the Wild West profit motive afoot, we’ll have bankrupt hospitals everywhere and bankrupt nursing homes everywhere,” McLeod said.
The South Carolina Hospital Association also supports keeping CON intact, saying reforms are needed but the overall idea is necessary for healthcare in underserved communities. “The South Carolina Hospital Association believes an efficient Certificate of Need program is vital for our state not only to protect and enhance patient care, but also to maintain a financially viable hospital safety net program,” the group posts on its website.
Gov. Nikki Haley tried to end the program when she vetoed funding for it in 2013. DHEC said it would no longer grant the certificates after the veto. But the state Supreme Court ruled lawmakers never specifically ended the program, and ordered DHEC to begin granting permits again.
Merrill claimed the medical community did not encounter problems in the nine months between the governor’s veto and the Supreme Court decision. But the Hospital Association said many providers delayed work because they were unsure if the veto would stand.
The bill now heads to the Senate, where it has little chance of passing in the legislature’s final month of regular session. However, Senate Medical Affairs Committee chairman Harvey Peeler, R-Cherokee, is an ardent opponent of CON and has said he will try to get the legislation out to the floor quickly.