Current Status Introducing Body:
HouseBill Number: 4639Ratification Number: 613Act Number: 511Primary Sponsor: RamaType of Legislation: GBSubject: Certificate of need and healthCompanion Bill Number: 1436Date Bill Passed both Bodies: May 21, 1992Computer Document Number: BR1/2377.ACGovernor's Action: SDate of Governor's Action: Jul 10, 1992Introduced Date: Mar 31, 1992Date of Last Amendment: May 19, 1992Last History Body: ------Last History Date: Jul 10, 1992Last History Type: Act No. 511Scope of Legislation: StatewideAll Sponsors: Rama Altman Felder P. Harris Houck Manly Tucker WhiteType of Legislation: General Bill
Bill Body Date Action Description CMN ---- ------ ------------ ------------------------------ --- 4639 ------ Jul 10, 1992 Act No. 511 4639 ------ Jul 10, 1992 Signed by Governor 4639 ------ Jun 04, 1992 Ratified R 613 4639 House May 21, 1992 Concurred in Senate amendment, enrolled for ratification 4639 Senate May 19, 1992 Amended, read third time, returned to House with amendments 4639 Senate May 07, 1992 Read second time, ordered to third reading with notice of general amendments 4639 Senate May 05, 1992 Introduced, read first time, placed on Calendar without reference 4639 House Apr 30, 1992 Read third time, sent to Senate 4639 House Apr 29, 1992 Amended, read second time 4639 House Apr 15, 1992 Committee Report: Favorable 27 with amendment 4639 House Mar 31, 1992 Introduced, read first time, 27 referred to CommitteeView additional legislative information at the LPITS web site.
(A511, R613, H4639)
AN ACT TO AMEND TITLE 44, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO HEALTH, BY ADDING SECTION 44-7-265 SO AS TO REQUIRE THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL TO PROMULGATE REGULATIONS REGARDING FREESTANDING OR MOBILE TECHNOLOGY; TO AMEND SECTION 37-6-604, AS AMENDED, RELATING TO THE FUNCTIONS AND DUTIES OF THE DIVISION OF CONSUMER ADVOCACY, SO AS TO INCLUDE PROVIDING LEGAL REPRESENTATION OF CONSUMER INTEREST CONCERNING CERTIFICATES OF NEED; TO AMEND SECTION 44-7-120, AS AMENDED, RELATING TO THE PURPOSE OF THE CERTIFICATE OF NEED AND HEALTH LICENSURE ACT, SO AS TO CHANGE REFERENCES FROM THE STATE MEDICAL FACILITIES PLAN TO THE STATE HEALTH PLAN; TO AMEND SECTION 44-7-130, AS AMENDED, RELATING TO DEFINITIONS, SO AS TO REVISE THE DEFINITION OF "AFFECTED PERSON", "HEALTH CARE FACILITY", "HEALTH SERVICE" AND "FREESTANDING OR MOBILE TECHNOLOGY", AND TO ADD THE DEFINITION OF "LIKE EQUIPMENT WITH SIMILAR CAPABILITIES"; TO AMEND SECTION 44-7-160, AS AMENDED, RELATING TO CIRCUMSTANCES REQUIRING CERTIFICATE OF NEED, SO AS TO DELETE PROVISIONS RELATING TO ACQUISITION OF MEDICAL EQUIPMENT OWNED BY OR LOCATED IN A HEALTH CARE FACILITY; TO AMEND SECTION 44-7-170, AS AMENDED, RELATING TO TRANSACTIONS AND INSTITUTIONS EXEMPT FROM THE ARTICLE, SO AS TO DELETE PROVISIONS RELATING TO THE INITIATION OF SERVICES THROUGH CONTRACTUAL ARRANGEMENTS FOR SHARED MOBILE DIAGNOSTIC AND THERAPEUTIC DEVICES; TO AMEND SECTION 44-7-180, AS AMENDED, RELATING TO THE STATE MEDICAL FACILITIES PLAN, SO AS TO CHANGE THIS PLAN TO THE STATE HEALTH PLAN, TO PROVIDE FOR A HEALTH PLANNING COMMITTEE, ITS MEMBERS AND TERMS, AND TO PROVIDE THAT THE COMMITTEE SHALL ADVISE IN THE PREPARATION OF THE PLAN, TO REVISE THE CONTENT, APPROVAL, AND REVISION PROCEDURES FOR THE PLAN, AND TO ESTABLISH FEES FOR OPERATION OF THE CERTIFICATE OF NEED PROGRAM; TO AMEND SECTION 44-7-200, AS AMENDED, RELATING TO CERTIFICATE OF NEED APPLICATIONS, SO AS TO PROHIBIT CERTAIN DEPARTMENT PERSONNEL FROM COMMUNICATING WITH OTHER PERSONS ABOUT PENDING APPLICATIONS; TO AMEND SECTION 44-7-210, AS AMENDED, RELATING TO PROCEDURES FOLLOWING COMPLETION OF A CERTIFICATE OF NEED APPLICATION, SO AS TO PROVIDE FOR PROJECT REVIEW CRITERIA AND PROCEDURES; TO AMEND SECTION 44-7-230, AS AMENDED, RELATING TO THE NONTRANSFERABILITY OF CERTIFICATE OF NEED, SO AS TO REQUIRE PROJECT REPORTS AND INSPECTIONS TO ASSURE COMPLIANCE AND TO EXTEND A CERTIFICATE OF NEED FROM SIX MONTHS TO ONE YEAR ON MAJOR HOSPITAL CONSTRUCTION PROJECTS; TO AMEND SECTION 44-7-240, AS AMENDED, RELATING TO A STATE CONSTRUCTION PROGRAM, SO AS TO CHANGE THE REFERENCE FROM STATE FACILITIES PLAN TO STATE HEALTH PLAN; TO PROVIDE FOR CERTIFICATE OF NEED EXEMPTIONS FOR MEDICAL EQUIPMENT UNDER CERTAIN CONDITIONS; TO REQUIRE THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL TO EVALUATE THE ADEQUACY OF HEART SURGERY AND HEART CATHETERIZATION UNITS IN THE STATE; TO PROVIDE FOR STAGGERED TERMS FOR MEMBERS APPOINTED TO THE HEALTH PLANNING COMMITTEE; AND TO AMEND SECTION 44-7-260, AS AMENDED, RELATING TO FACILITIES AND SERVICES REQUIRING LICENSURE, SO AS TO INCLUDE FREESTANDING OR MOBILE TECHNOLOGY.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 44-7-120 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-120. The purpose of this article is to promote cost containment, prevent unnecessary duplication of health care facilities and services, guide the establishment of health facilities and services which will best serve public needs, and ensure that high quality services are provided in health facilities in this State. To achieve these purposes, this article requires:
(1) the issuance of a Certificate of Need before undertaking a project prescribed by this article;
(2) adoption of procedures and criteria for submittal of an application and appropriate review before issuance of a Certificate of Need;
(3) preparation and publication of a State Health Plan;
(4) the licensure of facilities rendering medical, nursing, and other health care."
SECTION 2. Section 44-7-130(1) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(1) `Affected person' means the applicant, a person residing within the geographic area served or to be served by the applicant, persons located in the health service area in which the project is to be located and who provide similar services to the proposed project, persons who before receipt by the department of the proposal being reviewed have formally indicated an intention to provide similar services in the future, persons who pay for health services in the health service area in which the project is to be located and who have notified the department of their interest in Certificate of Need applications, the State Consumer Advocate, and the State Ombudsman. Persons from another state who would otherwise be considered `affected persons' are not included unless that state provides for similar involvement of persons from South Carolina in its certificate of need process."
SECTION 3. Section 44-7-130(10) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(10) `Health care facility' means acute care hospitals, psychiatric hospitals, alcohol and substance abuse hospitals, tuberculosis hospitals, nursing homes, kidney disease treatment centers, including free-standing hemodialysis centers, ambulatory surgical facilities, rehabilitation facilities, residential treatment facilities for children and adolescents, habilitation centers for mentally retarded persons or persons with related conditions, and any other facility for which Certificate of Need review is required by federal law."
SECTION 4. Section 44-7-130(11) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(11) `Health service' means clinically related, diagnostic, treatment, or rehabilitative services and includes alcohol, drug abuse, and mental health services for which specific standards or criteria are prescribed in the State Health Plan."
SECTION 5. Section 44-7-130 of the 1976 Code, as last amended by Part II, Section 64, Act 612 of 1990, is further amended by adding an appropriately numbered item to read:
"( ) `Like equipment with similar capabilities' means medical equipment which does not increase the potential volume or type of procedures possible."
Certificate of need required under certain circumstances
SECTION 6. Section 44-7-160 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-160. A person or health care facility as defined in this article is required to obtain a Certificate of Need from the department before undertaking any of the following:
(1) the construction or other establishment of a new health care facility;
(2) a change in the existing bed complement of a health care facility through the addition of one or more beds or change in the classification of licensure of one or more beds;
(3) an expenditure by or on behalf of a health care facility in excess of an amount to be prescribed by regulation which, under generally acceptable accounting principles consistently applied, is considered a capital expenditure except those expenditures exempted in Section 44-7-170(B)(1). The cost of any studies, surveys, designs, plans, working drawings, specifications, and other activities essential to the development, acquisition, improvement, expansion, or replacement of any plant or equipment must be included in determining if the expenditure exceeds the prescribed amount;
(4) a capital expenditure by or on behalf of a health care facility which is associated with the addition or substantial expansion of a health service for which specific standards or criteria are prescribed in the State Health Plan;
(5) the offering of a health service by or on behalf of a health care facility which has not been offered by the facility in the preceding twelve months and which has an annual operating cost in excess of an amount to be prescribed by regulation and for which specific standards or criteria are prescribed in the State Health Plan;
(6) the acquisition of medical equipment which is to be used for diagnosis or treatment if the total project cost is in excess of that prescribed by regulation;
(7) the acquisition or change in ownership or in controlling interest of a health care facility or entity owning a health care facility directly or indirectly by purchase, lease, gift, donation, sale of stock, or comparable arrangement if the acquisition or change in ownership or controlling interest may result in an increase in cost to the facility or increase in government-sponsored reimbursement;
(8) the acquisition of an existing health care facility by a person who has failed to notify the department and seeks an exemption before entering into a contractual arrangement to acquire an existing facility;
(9) an expenditure or financial obligation made in preparation for the offering or developing of a project which requires certification of need pursuant to this section if the expenditure or financial obligation is in excess of an amount to be prescribed by regulation."
Exemptions from article
SECTION 7. Section 44-7-170(B) of the 1976 Code, as last amended by an act of 1992 bearing ratification number 361, is further amended to read:
"(B) The Certificate of Need provisions of this article do 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 State Department of Mental Health and the South Carolina Department of Mental Retardation, 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 their respective 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'."
Health Planning Committee; State Health Plan; Certificate of Need fees
SECTION 8. Section 44-7-180 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-180. (A) There is created a health planning committee comprised of fourteen members. The Governor shall appoint twelve members, at least one member from each congressional district. Each of the following groups must be equally represented among the Governor's appointees: health care consumers, health care financiers to include business and insurance, and health care providers. The chairman of the board shall appoint one member. The South Carolina Consumer Advocate or the Consumer Advocate's designee is an ex officio nonvoting member. Members are appointed for four-year terms, may serve only two consecutive terms, and are allowed the usual mileage and subsistence as provided for members of boards, committees, and commissions.
(B) With the advice of the health planning committee, the department shall prepare a State Health Plan for use in the administration of the Certificate of Need Program provided in this article. The plan at a minimum must include:
(1) an inventory of existing health care facilities, beds, specified health services, and equipment;
(2) projections of need for additional health care facilities, beds, health services, and equipment;
(3) standards for distribution of health care facilities, beds, specified health services, and equipment including scope of services to be provided, utilization, and occupancy rates, travel time, regionalization, other factors relating to proper placement of services, and proper planning of health care facilities; and
(4) a general statement as to the project review criteria considered most important in evaluating certificate of need applications for each type of facility, service, and equipment, including a finding as to whether the benefits of improved accessibility to each such type of facility, service, and equipment may outweigh the adverse affects caused by the duplication of any existing facility, service, or equipment.
The State Health Plan must address and include projections and standards for specified health services and equipment which have a potential to substantially impact health care cost and accessibility. Nothing in this provision shall be construed as requiring the department to approve any project which is inconsistent with the State Health Plan.
(C) Upon approval by the health planning committee, the State Health Plan must be submitted at least once every two years to the board for final revision and adoption. Once adopted by the board, the plan may later be revised through the same planning and approval process. The department shall adopt by regulation a procedure to allow public review and comment, including regional public hearings, before adoption or revision of the plan.
(D) The Department of Health and Environmental Control may charge and collect fees to cover the cost of operating the Certificate of Need program. Upon submission of a complete Certificate of Need application, the applicant must pay a fee of five hundred dollars plus five-tenths of one percent of the project cost for review of the project, not to exceed seven thousand, five hundred dollars; however, for an applicant whose review fee would exceed seven thousand, five hundred dollars an additional fee of seven thousand, five hundred dollars is imposed if the applicant is awarded a Certificate of Need, which must be paid at the time of the award. Fees paid pursuant to this subsection must be deposited to the credit of the general fund of the State."
Application for Certificate of Need
SECTION 9. Section 44-7-200 of the 1976 Code, as last amended by Act 471 of 1990, is further amended to read:
"Section 44-7-200. (A) An application for a Certificate of Need must be submitted to the department in a form established by regulation. The application must address all applicable standards and requirements set forth in departmental regulations, Project Review Criteria of the department, and the State Health Plan. The application must include the payment of a nonrefundable initial application fee of five hundred dollars. The department shall deduct this fee from the Certificate of Need filing fee which is payable in accordance with departmental regulations when the application is determined to be complete.
(B) Within twenty days before submission of an application, the applicant shall publish notification that an application is to be submitted to the department in a newspaper serving the area where the project is to be located for three consecutive days. The notification must contain a brief description of the scope and nature of the project. No application may be accepted for filing by the department unless accompanied by proof that publication has been made for three consecutive days within the prior twenty-day period and payment of the initial application fee has been received.
(C) Upon publication of this notice and until a contested case hearing is requested pursuant to Section 44-7-210:
(1) members of the board and persons appointed by the board to hear appeals from department staff decisions may not communicate directly or indirectly with any person in connection with the application; and
(2) no person shall communicate, or cause another to communicate, as to the merits of the application with members of the board and persons appointed by the board to hear appeals from department staff decisions.
A person who violates this subsection is subject to the penalties provided in Section 1-23-360.
(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 thirty days of acceptance of the application, the department may request additional information as may be necessary to complete the application. The applicant has thirty days from the date of the request to submit the additional information. If the applicant fails to submit the requested information within the thirty-day period, the application is considered withdrawn."
Certificate of Need project review process
SECTION 10. Section 44-7-210 of the 1976 Code, as last amended by Act 471 of 1990, is further 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 of affected persons begins the review period. During the review process, the department shall determine the relative importance of the project review criteria for this project and shall notify the applicant of this determination. The applicant has thirty days from the date of the receipt of this notice to submit any additional information. The review period for a completed application is sixty days from the date of notification of affected persons, or up to sixty days from the date that applicants are notified of the relative importance of project review criteria provided for in this section, whichever is longer. One extension of up to sixty days may be granted by the department in accordance with departmental regulations with the exception of an extension that is granted to comply with a request for a public hearing.
(B) The department may hold a public hearing, if timely requested, to gather information and obtain public comment and opinion about the proposed project.
(C) The department may not issue a Certificate of Need unless an application complies with the State Health Plan, Project Review Criteria, and other regulations. Based on project review criteria and other regulations, which must be identified by the department, the department may refuse to issue a Certificate of Need even if an application complies with the State Health Plan. In the case of competing applications, the department shall award a Certificate of Need, if appropriate, on the basis of which, if any, most fully complies with the requirements, goals, and purposes of this article and the State Health Plan, Project Review Criteria, and the regulations adopted by the department.
(D) On the basis of staff review of the application, the staff of the department shall make a proposed decision to grant or deny the Certificate of Need. Notice of the proposed decision must be sent to the applicant and affected persons who have asked to be notified. The proposed decision becomes the final agency decision within ten days after the receipt of a notice of the proposed decision by the applicant unless:
(1) a reconsideration by the staff of the department is requested in writing within the ten-day period by an affected person showing good cause for reconsideration of the proposed decision; or
(2) a contested case hearing before the board, or its designee, regarding the grant or denial of the Certificate of Need is requested in writing within the ten-day period by the applicant or other affected person with standing to contest the grant or denial of the application.
Reconsideration by the staff must occur within thirty days from receipt of the request.
(E) The department's proposed decision is not final until the completion of reconsideration or contested case proceedings. The burden of proof in a reconsideration or contested case hearing must be upon the moving party. The contested case hearing before the board or its designee is conducted as a contested case under the Administrative Procedures Act. The issues considered at the contested case hearing are limited to those presented or considered during the staff review and decision process."
Certificate of Need, reports and project inspections
SECTION 11. Section 44-7-230(A) of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"(A) The Certificate of Need, if issued, is valid only for the project described in the application including location, beds and services to be offered, physical plant, capital or operating costs, or other factors as set forth in the application, except as may be modified in accordance with regulations. The department shall require periodic reports and make inspections to determine compliance with the Certificate of Need. Implementation of the project or operation of the facility or medical equipment that is not in accordance with the Certificate of Need application or conditions subsequently agreed to by the applicant and the department may be considered a violation of this article."
Certificate of Need length of validity
SECTION 12. Section 44-7-230(D) of the 1976 Code, as last amended by Act 471 of 1990, is further amended to read:
"(D) A Certificate of Need is valid for six months from the date of issuance except for projects involving construction or replacement of, or major renovations or additions to, an acute care hospital. For these projects the Certificate of Need is valid for one year from the date of issuance. A Certificate of Need must be issued with a timetable submitted by the applicant and approved by the department to be followed for completion of the project. The holder of the Certificate of Need shall submit periodic progress reports on meeting the timetable as may be required by the department. Failure to meet the timetable results in the revocation of the Certificate of Need by the department unless the department determines that extenuating circumstances beyond the control of the holder of the Certificate of Need are the cause of the delay. The department may grant two extensions of up to six months each upon evidence that substantial progress has been made in accordance with procedures set forth in regulations. The board may grant further extensions of up to six months each only if it determines that substantial progress has been made in accordance with the procedures set forth in regulations."
SECTION 13. Section 44-7-240 of the 1976 Code, as last amended by Act 670 of 1988, is further amended to read:
"Section 44-7-240. The department may establish a construction program providing for adequate facilities in this State and, insofar as possible, shall provide for the distribution of facilities and services throughout this State in such manner as to make all types of health services reasonably accessible to all persons in this State. The State Health Plan as required by this article may be used for purposes of establishing the relative need of projects for which applications are submitted under this construction program. Submittal of applications and review and approval of projects for which federal funds are requested must be in accordance with regulations adopted by the department and applicable federal act."
Special Certificate of Need exemption
SECTION 14. Medical equipment lawfully leased or purchased before this act's effective date or an outpatient facility project, including medical equipment, which was exempt from Certificate of Need requirements before this act's effective date and which exemption has been documented by the South Carolina Department of Health and Environmental Control on or before January 1, 1992, which involves expenditures in an amount in excess of that prescribed by the department by regulation, is exempt from the provisions of Section 44-7-160(6) as contained in Section 6 of this act, provided that an application for an exemption is made within six months of this act's effective date. The application must be in the form required by the department and must include current utilization data for the equipment.
Health planning committee; staggered terms
SECTION 15. Of the twelve members initially appointed by the Governor to the health planning committee created by this act, six members, to be designated by the Governor, are appointed for two-year terms.
SECTION 16. Section 44-7-130 of the 1976 Code, as last amended by Section 64, Part II, Act 612 of 1990, is further amended by adding:
"(20) `Freestanding or mobile technology' means medical equipment owned or operated by a person other than a health care facility for which the total cost is in excess of that prescribed by regulation and for which specific standards or criteria are prescribed in the State Health Plan."
Facility or service required to be licensed
SECTION 17. Section 44-7-260(A) of the 1976 Code, as last amended by Act 501 of 1990, is further amended by adding:
"(12) freestanding or mobile technology."
Freestanding or mobile technology regulations to be promulgated
SECTION 18. The 1976 Code is amended by adding:
"Section 44-7-265. The department shall promulgate regulations for licensing freestanding or mobile technology. At a minimum, the regulations must include:
(1) standards for the maintenance and operation of freestanding or mobile technology to ensure the safe and effective treatment of persons served;
(2) a description of the professional qualifications necessary for personnel to operate the equipment and interpret the test results;
(3) minimum staffing requirements to ensure the safe operation of the equipment and interpret the test results; and
(4) that all freestanding or mobile technology must be in conformance with professional organizational standards."
Functions, duties, Division of Consumer Advocacy
SECTION 19. Section 37-6-604(1) of the 1976 Code, as last amended by Act 148 of 1989, is further amended to read:
"(1) To provide legal representation of the consumer interest before the state and federal regulatory agencies which undertake to fix rates or prices for consumer products or services or to enact regulations or establish policies related thereto and to provide legal representation of the consumer interest concerning Certificates of Need for health facilities and services, as required for an activity under Section 44-7-160, health care licensing procedures, and other health related-matters."
Evaluate whether heart surgery and catheterization units are serving their purpose
SECTION 20. Within five years of this act's effective date the South Carolina Department of Health and Environmental Control shall determine if each open heart surgery unit or heart catheterization unit operating in a health care facility in this State under a Certificate of Need issued pursuant to Chapter 7, Title 44 of the 1976 Code is adequately serving its purpose. This determination must be based upon the number of procedures being performed and the quality of the operation according to national or statewide results, or both.
Effective date for certain provisions
SECTION 21. The amendments to Section 44-7-210 of the 1976 Code as contained in Section 10 of this act apply only to Certificate of Need applications submitted after April 1, 1992.
SECTION 22. This act takes effect upon approval by the Governor.
Approved the 10th day of July, 1992.