Grand Strand, Pee Dee hospital officials want changes to Certificate of Need Law

Hospital officials say Certificate of Need Law is causing a healthcare holdup

HORRY COUNTY, SC (WMBF) – Hospitals must follow very strict federal and state rules in order to protect patients, maintain safety and health practices, and keep medical costs down.

The Certificate of Need Law requires hospitals to prove a new piece of equipment or an expansion is necessary before spending money on it. Many hospital leaders want this law nullified or amended, but lawmakers are not allowing for any change.

"Certificate of need is actually a great concept that has really failed us at this particular community," said Dr. Jon Pangia, the emergency medical director at Grand Strand Regional Medical Center.

Every time a hospital wants to add equipment, add a service or expand, the hospital has to prove it is needed and get permission from the state. South Carolina has required a Certificate of Need (CON) by law ever since 1971.

It was designed to help keep costs down for both hospitals and patients.

"They allow you to expand, normally, if it's a non-covered service," said Dick Tinsley, the administrator of McLeod Loris Seacoast. "The problem with Certificate of Need is it hasn't been updated."

When South Carolina enacted the CON requirements, the threshold was $600,000 for new equipment and $2 million for new facilities. In 2016, those thresholds are the exact same despite healthcare costs and construction costs rising. Some hospital leaders want that threshold to reflect rising costs.

"We'd like Certificate of Need to stay in place, but reformed to make it more streamlined," said Tinsley.

McLeod most recently built a brand new emergency room. The hospital network is also expanding into Carolina Forest, with a new building for medical offices off International Drive.

All of that required Certificates of Need.

"We need reform for it to be more reasonable. In the past, and in the recent past, a lot of healthcare entities have used it to stifle competition. That was not the intention," Tinsley said.

Once a hospital puts in a CON request, Tinsley explained it is published in the state register and a ruling must be made in 120 days.

In that time period, many hospitals then have the chance to request hearings or reviews, appeal requests or put in their own CON.

Pangia explained Grand Strand Medical Center has an ongoing CON request to build an in-patient psychiatric facility. He said the hospital wants, "to take care of people, to bring jobs to the area, to hire psychiatrists, to hire nurses and to put these poor patients in a bed where they can be best taken care of."

According to Pangia, the hospital made the original CON request in August 2014 and Tidelands Health put in a competing CON request in Georgetown for the same thing.

In December 2015, the state Department of Health and Environmental Control approved both. That is when Grand Strand said a third competing hospital opposed the decision and now it is back in the appeal process.

"We shouldn't have to wait two years to put in a mental health facility," said Pangia. "We should not. What we're doing now is we're building facility space and resources to meet the need of two years ago. And in Myrtle Beach, the second fastest-growing community in the country, that is too slow. We need to meet the need of patients today. Construction is slow enough; now we've got to wait two years just to be allowed to start."

House Bill 3250 would have made some changes and compromises to the CON law. But lawmakers could not come to a unanimous agreement on the bill.

"The reform bill gave us a lot of relief from some of those things that have been problematic over the years, like the dollar threshold, how long it takes to get through the process and how easy it is for somebody to appeal just to slow a project up or to stifle competition," said Tinsley.

HB 3250 passed the House of Representatives with a 103-to-1 vote, But never made it to a vote in the Senate.

If the CON law is going to see any reform, lawmakers must start all over again.

"Every time there's reform proposed, a lot of special interests come out of the woodwork to put their own stamp on it – 'we want this, we want that.' And it usually ends up that nothing gets passed. So we don't get any reform," said Tinsley.

The American Hospital Association and the South Carolina Hospital Association both support CON and had lobbyists opposing the bill.

"Why should patients care? If you're in some of the communities that have had hospitals close, now those patients are stuck driving a long distance just to get hospital care. They don't have the economic engine to provide a hospital in their communities anymore. We just had a hospital close up in Bennettsville," said Tinsley.

Hospital leaders said, in the meantime, they are trying to make sure the healthcare systems serves the patients.

"What's hard to see is that we're doing our best with the resources that we're allowed to have. We are being handicapped by a process that was meant to help," said Pangia.

WMBF News filed a Freedom of Information Act with DHEC to request every CON request, appeal, denial and approval over the past five years for 12 hospitals in the Grand Strand and Pee Dee.

DHEC sent a letter on July 14 to say it will not produce information that is, "trade secret information."

WMBF News is still pursuing the request to obtain the public information.

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