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House Amendment 1
S 164 - Session 125 (2023-2024)
State Health Facility Licensure Act
The Committee on Medical, Military, Public and Municipal Affairs proposes the following amendment (LC-164.VR0031H):
Amend the bill, as and if amended, SECTION 6, by striking Section 44-7-160(B) and inserting:
(B) A person or health care facility, as defined in this article, is required to obtain a Certificate of Need from the department before undertaking the following:
(1) the construction or other establishment of a hospital;
(2) a change in the existing bed complement of a hospital through the addition of one or more beds or change in the classification of licensure of one or more beds.
(C) Effective January 1, 2027, Section 44-7-160 (B) is repealed.
Amend the bill further, by striking SECTION 9 and inserting:
SECTION X. Article 3, Chapter 7, Title 44 of the S.C. Code is amended by adding:
Section 44-7-266.(A) In order to be licensed by the department, a hospital is prohibited from using economic criteria unrelated to quality of care or professional competency in determining an individual's qualifications for initial or continuing hospital medical staff membership or privileges.
(B) The requirements of this section shall apply to new contracts or renewals of contracts entered into on or after the effective date of this section.
(C) In order to be licensed by the department, any ambulatory surgical facility established or constructed after the effective date of this section and which does not require a Certificate of Need under this chapter, shall provide indigent/charity care in one of the amounts below after it has been in operation for two calendar years:
(1) If the ambulatory surgical facility provides care to Medicaid beneficiaries, it must provide uncompensated indigent/charity care to the underinsured or medically indigent in an amount equal to or greater than two percent of its adjusted gross revenue; or
(2) If the ambulatory surgical facility does not provide care to Medicaid beneficiaries, it must provide uncompensated indigent/charity care to the underinsured or medically indigent in an amount equal to or greater than three percent of its adjusted gross revenue.
(3) For purposes of this section, "medically indigent" is defined as in Section 44-6-5(5).
(4) An ambulatory surgical facility subject to this provision must provide annual reports to the department to demonstrate its compliance. Noncompliance of this provision shall result in a monetary penalty in the amount of the difference between the services which the facility is required to provide and the amount actually provided.
(D) The department shall promulgate regulations within one year of the effective date of this act setting forth the necessary duties to comply with this provision.
Amend the bill further by adding SECTIONS to read:
SECTION X.Section 44-7-170 of the S.C. Code is amended to read:
Section 44-7-170. (A) The following are exempt from Certificate of Need review:
(1) the acquisition by a person of medical equipment to be used solely for research, the offering of an institutional health service by a person solely for research, or the obligation of a capital expenditure by a person to be made solely for research if it does not:
(a) affect the charges imposed by the person for the provision of medical or other patient care services other than the services that are included in the research;
(b) change the bed capacity of a health care facility; or
(c) substantially change the medical or other patient care services provided by the person.
A written description of the proposed research project must be submitted to the department in order for the department to determine if these conditions are met. A Certificate of Need is required in order to continue use of the equipment or service after the equipment or service is no longer being used solely for research;
(2) the offices of a licensed private practitioner whether for individual or group practice except as provided for in Section 44-7-160(1) and (6 );
(3) the replacement of like equipment for which a Certificate of Need has been issued which does not constitute a material change in service or a new service;
(4) crisis stabilization unit facilities. Notwithstanding subsection (C), crisis stabilization unit facilities will not require a written exemption from the department.
(B) This article does not apply to:
(1) an expenditure by or on behalf of a health care facility for nonmedical projects for services such as refinancing existing debt, parking garages, laundries, roof replacements, computer systems, telephone systems, heating and air conditioning systems, upgrading facilities which do not involve additional square feet or additional health services, replacement of like equipment with similar capabilities, or similar projects as described in regulations;
(2) facilities owned and operated by the South Carolina Department of Mental Health and the South Carolina Department of Disabilities and Special Needs, except an addition of one or more beds to the total number of beds of the departments' health care facilities existing on July 1, 1988;
(3) educational and penal institutions maintaining infirmaries for the exclusive use of student bodies and inmate populations;
(4) any federal health care facility sponsored and operated by this State;
(5) community-based housing designed to promote independent living for persons with mental or physical disabilities. This does not include a facility defined in this article as a "health care facility ";
(6) kidney disease treatment centers including, but not limited to, free standing hemodialysis centers and renal dialysis centers;
(7) health care facilities owned and operated by the federal government. (A) The following are exempt from Certificate of Need review:
(1) the relocation of a licensed hospital in the same county in which the hospital is currently located, as long as:
(a) any Certificate of Need issued to the hospital for a project to be located at the hospital's existing location has been fulfilled, withdrawn, or has expired in accordance with Section 44-7-230 and the department's implementing regulations; and
(b) the proposed site of relocation is utilized in a manner that furthers health care delivery and innovation for the citizens of the State of South Carolina;
(2) the purchase, merger, or otherwise the acquisition of an existing hospital by another person or health care facility;
(3) crisis stabilization unit facilities. Notwithstanding subsection (C), crisis stabilization unit facilities will not require a written exemption from the department.
(B) This article does not apply to:
(1) construction of a new hospital with up to fifty beds in any county currently without a hospital;
(2) hospitals owned and operated by the South Carolina Department of Mental Health and the South Carolina Department of Disabilities and Special Needs, except an addition of one or more beds to the total number of beds of the departments' health care facilities existing on July 1, 1988;
(3) any federal hospital sponsored and operated by this State;
(4) hospitals owned and operated by the federal government.
(C) Before undertaking a project enumerated in subsection (A), a person shall obtain a written exemption from the department as may be more fully described in regulation.
SECTION X.Section 44-7-190 of the S.C. Code is amended by adding:
(C) Project review criteria must prioritize timely access to health care services and seek a balance between competition in the marketplace and regulation in the provision of health care and must support reasonable patient choice in health care facilities and services. The department shall promulgate regulations within one year of the effective date of this act identifying how the department will incorporate these considerations in reviewing Certificate of Need applications.
SECTION X.Section 44-7-200(D) of the S.C. Code is amended to read:
(D) After receipt of an application with proof of publication and payment of the initial application fee, the department shall publish in the State Register a notice that an application has been accepted for filing. Within thirtyfifteen days of acceptance of the application, the department may request additional information as may be necessary to complete the application. The applicant has thirtyfifteen days from the date of the request to submit the additional information. If the applicant fails to submit the requested information within the thirty-dayfifteen-day period, the application is considered withdrawn.
SECTION X.Section 44-7-210(A), (F), and (G) of the S.C. Code is amended to read:
Section 44-7-210. (A) After the department has determined that an application is complete, affected persons must be notified in accordance with departmental regulations. The notification to affected persons that the application is complete begins the review period; however, in the case of competing applications, the review period begins on the date of notice to affected persons that the last of the competing applications is complete and notice is published in the State Register. The staff shall issue its decision to approve or deny the application no earlier than thirty calendar days, but no later than one hundred twentyninety calendar days, from the date affected persons are notified that the application is complete, unless a public hearing is timely requested as may be provided for by department regulation. If a public hearing is properly requested, the staff's decision must not be made until after the public hearing, but in no event shall the decision be issu'd more than one hundred fiftyone hundred twenty calendar days from the date affected persons are notified that the application is complete. The staff may reorder the relative importance of the project review criteria no more than one time during the review period. The staff's reorderi'g of the relative importance of the project review criteria does not extend the review period provided for in this section.
(F) Notwithstanding any other provision of law, including Section 1-23-650 (C), in a contested case arising from the department's decision to grant or deny a Certificate of Need application, grant or deny a request for exemption under Section 44-7-170, or the issuance of a determination regarding the applicability of Section 44-7-160, the following apply:
(1) each party may name no more than tenfive witnesses who may testify at the contested case hearing;
(2) each party is permitted to take only the deposition of a person listed by an opposing party as a witness who may testify at the contested case hearing, unless otherwise provided for by the Administrative Law Court and one Federal Rules of Civil Procedure Rule 30(b)(6) deposition;
(3) each party is permitted to serve only ten interrogatories pursuant to Rule 33 of the South Carolina Rules of Civil Procedure;
(4) each party is permitted to serve only ten requests for admission, including subparts; and
(5) each party is permitted to serve only thirty fifteen requests for production, including subparts; and
(6) the parties shall complete discovery within one hundred twenty days after the assignment of the administrative law judge .
The limitations provided for in this subsection are intended to make the contested case process more efficient, less burdensome, and less costly to the parties in Certificate of Need cases. Therefore, the Administrative Law Court may, by court order, lift these limitations beyond the parameters set forth in this subsection only in exceptional circumstances when failure to do so would cause substantial prejudice to the party seeking additional discovery.
(G) Notwithstanding any other provision of law, in a contested case arising from the department 's decision to grant or deny a Certificate of Need application, grant or deny a request for exemption under Section 44-7-170, or the issuance of a determination regarding the applicability of Section 44-7-160, the Administrative Law Court shall file a final decision no later than eighteentwelve months after the contested case is filed with the Clerk of the Administrative Law Court, unless all parties to the contested case consent to an extension or the court finds substantial cause otherwise. An affected person who was a party to the contested case has a right to appeal to the Supreme Court final decisions issued by the Administrative Law Court for a contested case arising from the department's decision to grant or deny a Certificate of Need application, grant or denial of a request for exemption under Section 44-7-170, or the issuance of a determination regarding the applicability of Section 44-7-160.
SECTION X.Section 44-7-220 of the S.C. Code is amended to read:
Section 44-7-220. (A) A party who is aggrieved by the Administrative Law Court 's final decision may seek judicial review of the final decision in accordance with Section 1-23-380.
(B) (1) If a party does not prevail in a contested case at the Administrative Law Court when requesting the reversal of the department's decision concerning a Certificate of Need application, when claiming an exemption under Section 44-7-170, or when claiming that the article is not applicable pursuant to Section 44-7-160, the Administrative Law Court shall award the party whose project is the subject of the appeal reasonable attorney's fees and costs incurred in the contested case.
(2) If a party does not prevail in an appeal to the Supreme Court when requesting the reversal of the Administrative Law Court's decision concerning a Certificate of Need application, when claiming an exemption under Section 44-7-170, or when claiming that the article is not applicable pursuant to Section 44-7-160, the Supreme Court shall award the party whose project is the subject of the contested case reasonable attorney's fees and costs incurred in the appeal.
(C) If the relief requested in the appeal is the reversal of the Administrative Law Court's decision to approve the Certificate of Need application or approve the request for exemption under Section 44-7-170 or approve the determination that Section 44-7-160 is not applicable, the party filing the appeal shall deposit a bond with the Clerk of the Court of Appeals Supreme Court within five calendar days after filing the petition to appeal. The bond must be secured by cash or a surety authorized to do business in this State in an amount equal to five percent of the total cost of the project or one hundred thousand dollars, whichever is greater, up to a maximum of one million five hundred thousand dollars. If the Court of AppealsSupreme Court affirms the Administrative Law Court's decision or dismisses the appeal, the Court of AppealsSupreme Court shall award to the party whose project is the subject of the appeal all of the bond and also may award reasonable attorney's fees and costs incurred in the appeal. If a party appeals the denial of its own Certificate of Need application or of an exemption request under Section 44-7-170 or appeals the determination that Section 44-7-160 is applicable and there is no competing application involved in the appeal, the party filing the appeal is not required to deposit a bond with the Court of AppealsSupreme Court.
(C)(1) Furthermore, if at the conclusion of the contested case or judicial review the Administrative Law Court or the Court of Appeals finds that the contested case or a subsequent appeal was frivolous, the Administrative Law Court or the Court of Appeals may award damages incurred as a result of the delay, as well as reasonable attorney's fees and costs, to the party whose project is the subject of the contested case or judicial review.
(2) As used in this subsection, "frivolous appeal" means any one of the following:
(a) taken solely for purposes of delay or harassment;
(b) where no question of law is involved;
(c) where the contested case or judicial review is without merit.
(D)(1) If at the conclusion of the contested case or judicial review the Administrative Law Court or the Supreme Court finds that the contested case or a subsequent appeal was frivolous, the Administrative Law Court or the Supreme Court shall award damages incurred as a result of the delay, as well as reasonable attorney's fees and costs, to the party whose project is the subject of the contested case or judicial review.
(2) As used in this subsection, "frivolous appeal" means a reasonable person in the same circumstances would believe that:
(a) the contested case or subsequent appeal was clearly not warranted under existing law and that a good faith or reasonable argument did not exist for the extension, modification, or reversal of existing law;
(b) the procurement, initiation, or continuation of the contested case or subsequent appeal was intended merely to harass or injure the other party; or
(c) the contested case or subsequent appeal was not reasonably founded in fact or was interposed merely for delay or was merely brought for a purpose other than securing proper discovery or adjudication of the claim upon which the proceedings are based.
(3) This subsection must not be construed to prohibit any party from seeking sanctions pursuant to the South Carolina Frivolous Civil Proceedings Sanctions Act pursuant to Section 15-36-10, et. seq.
(E)(1) The court must not assess attorney's fees or costs awarded against or to the department in any contested case or appeal involving a Certificate of Need application or an exemption request pursuant to Section 44-7-170 or a request for a determination as to the applicability of Section 44-7-160.
(2) This subsection must not be interpreted to abrogate the contractual rights of any party concerning the recovery of attorney's fees or other monies in accordance with the provisions of any written contract between the parties to the action.