Many of South Carolina’s hospitals are suing the state’s health department over the program that regulates hospital expansion and expensive technology investments.
Last month, Catherine Templeton, director of the Department of Health and Environmental Control, announced the Certificate of Need program would be suspended for a year after Gov. Nikki Haley vetoed funds to pay for it from the state budget. The Legislature sustained the governor’s veto.
Haley called the program restrictive and said it makes health care more expensive.
“The Certificate of Need program is an intensely political one through which bureaucratic policymakers deny health care providers from offering treatment,” Haley said in June. “We should allow the market to work rather than politics.”
In the lawsuit, the hospitals, which include Medical University Hospital and the S.C. Hospital Association, argue that DHEC, which administers the Certificate of Need program, has historically collected more money in fees from applicants than it actually costs to enforce the program. The hospitals and association would like the department to reallocate money to continue enforcing it through next summer, even though there is technically no money budgeted for it.
DHEC filed a separate suit earlier this month asking the Supreme Court to clarify the situation.
The program regulates the number of hospitals and hospital beds in the state according to need and geography.
Without it, in theory, hospitals and health care facilities could expand without restriction or buy expensive medical equipment without prior approval.
But suspending the program for one year has not eliminated it from the books, creating confusion among hospital administrators and their lawyers about what happens when the suspension is lifted.
It also leaves in limbo some hospitals already involved in the Certificate of Need process. The lawsuit says 32 projects worth $86 million are stalled, pending DHEC approval.
“We felt like the best chance of the Supreme Court taking ... this case would be if we had actual health care facilities that are regulated through the Certificate of Need process in the complaint with us,” said Allan Stalvey, executive vice president of the S.C. Hospital Association.
Editor’s Note: A previous version of this story included incorrect information about court papers filed by DHEC.