SC Administrative Law Court Decisions

Order DENYING MOTION
TO ENFORCE STAY

STATEMENT OF THE CASE

This matter comes before the Administrative Law Court (“ALC” or “Court”) pursuant to Petitioner Amisub of South Carolina, Inc. d/b/a Piedmont Medical Center’s (“Piedmont”) motion to enforce a stay filed on March 12, 2009.  Piedmont moves this Court to stay the operation of Respondent Carolinas Physicians Network, Inc. (“CPN”) urgent care center in Fort Mill, South Carolina.  Piedmont based its motion on S.C. Code Ann. § 1-23-600(H)(2) which describes instances in which the filing of a contested case stays an administrative action. Respondents Charlotte Mecklenburg Hospital Authority d/b/a Carolinas Healthcare System (“CHS”), CPN and the South Carolina Department of Health and Environmental Control (the “Department”) (collectively “Respondents”) opposed Piedmont’s motion. 

A hearing on this matter was held at 10:00 a.m. on Thursday, April 16, 2009 at the offices of the ALC in Columbia, South Carolina.  All parties appeared at the hearing.  Upon consideration of the parties’ written memoranda, affidavits and oral arguments presented at the hearing, this Court finds that no stay exists in this matter. 

DISCUSSION

            The initial issue before this court is whether a certificate of need (“CON”) exemption that does not require prior, written approval from the Department constitutes a license.  The filing of a contested case challenging the issuance of a “license” results in the automatic imposition of a stay.  S.C. Code Ann. § 1-23-600(H)(2).  Subsection (H)(2) does not define license but the Administrative Procedures Act (“APA”), under which section 1-23-600 is codified, defines license as “the whole or part of any agency permit, franchise, certificate, approval, registration, charter, or similar form of permission required by law, but it does not include a license required solely for revenue purposes.”  S.C. Code Ann. § 1-23-310(4) (2008).  

“The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature.”  Mid-State Auto Auction of Lexington, Inc. v. Altman, 324 S.C. 65, 69, 476 S.E.2d 690, 692 (1996) (citing Gilstrap v. S.C. Budget & Control Bd., 310 S.C. 210, 423 S.E.2d 101 (1992)).  “In construing statutory language, the statute must be read as a whole and sections which are part of the same general statutory law must be construed together and each one given effect.”  S.C. State Ports Auth. v. Jasper County, 368 S.C. 388, 398, 629 S.E.2d 624, 629 (2006).  Furthermore, “the language must also be read in a sense that harmonizes with its subject matter and accords with its general purpose.”  Hitachi Data Systems Corp. v. Leatherman, 309 S.C. 174, 178, 420 S.E.2d 843, 846 (1992). 

Regulation 61-15 § 104(2)(e) provides that an office of a licensed private practitioner is exempt from the CON requirements.   24A S.C. Code Regs. § 104(2)(e).   The Regulation does not require written approval from the Department before the office begins its operations.  Id.  S.C. Code Ann. Regs. 61-15 §104(2) (2008) lists twelve (12) exemptions.  Five (5) of those exemptions contain a provision expressly requiring written approval of the Department in order for the exemption to be valid. These exemptions occupy the same status as the non-applicability determination (“NAD”) in MRI at Belfair, LLC, et al v. SCDHEC, et al., 07-ALJ-07-0538-CC (S.C. Admin. Law Ct. April 30, 2008) and the “nonmedical projects” exemption sought under R 61-15 §104 (2) (f) in Amisub of S.C., Inc., etc v. SCDHEC, et al., 08-ALJ-07-0063 (S.C. Admin. Law Ct. June 16, 2008).  That is so because both the “nonmedical projects” exemption under 104(2)(f) and the NAD require agency action and approval and approval thereof is in the nature of a license.

The other seven (7) exemptions require no approval, written or otherwise.  Among them is S.C. Code Ann. Regs. 61-15 §104(2)(e) (2008), at issue here, which exempts “offices of a licensed private practitioner.”  The clear words of the statute do not beg the application of the canons of statutory construction.  Thus, the Court concludes that because no license is involved and no agency action or approval is required, the Order Denying the Enforcement of the Stay should be granted because there is no Stay in existence.[1]

It cannot be doubted that the legislature intended through S.C. Code Ann. Regs. 61-15 §104 (2) (e) (2008) to free the licensed private practitioner from the fetters that apply to other levels of patient care. Consider the effect upon the delivery of primary health care if every young doctor, before setting up practice, was subject to CON-like attacks by established physicians.

  CPN and the Department contend this urgent care center is exempt pursuant to Regulation 104(2)(e).  While Piedmont disputes the applicability of that exemption to this project, it is clear that the Department’s position is that the 104(2)(e) exemption applies to this urgent care center. Accordingly, prior approval was not required. 

In contrast to this case, the ALC has found that a CON, a NAD and a CON exemption requiring prior, agency approval are all licenses for purposes of subsection (H)(2).  Southern MRI, LLC v. S.C. Dep’t of Health & Envtl. Control and Hilton Head Reg’l Med. Ctr., 08-ALJ-07-0378-CC (Dec. 2, 20080 (holding a CON is a license); MRI at Belfair, LLC. v. S.C. Dep’t of Health & Envtl. Control and Southern MRI, LLC., 07-ALJ-07-0538-CC (April 30, 2008) (holding a NAD is a license); Amisub of SC, Inc. d/b/a Piedmont Med. Ctr. v. S.C. Dep’t of Health & Envtl. Control and Charlotte-Mecklenburg Hosp. Auth. d/b/a Carolinas Healthcare Syst., 08-ALJ-07-0063-CC (June 16, 2008) (holding a CON exemption requiring prior, written approval is a license).  A clear distinction can be drawn between the preceding cases and CPN’s urgent care center because CPN was not required by Regulation to receive prior approval from the Department.  For the other entities, written approval was a prerequisite to begin their operations.  In this case, CPN simply began operating its urgent care center.    

Furthermore, to impose an automatic stay in circumstances when prior approval was not required would lead to an absurd result unintended by the legislature because physician offices that are exempt from CON and outside of DHEC’s purview could be closed by the filing of a contested case.  “Courts will reject [a statutory] interpretation leading to an absurd result clearly unintended by the legislature.”  Original Blue Ribbon Taxi Corp. v. South Carolina Dept. of Motor Vehicles, 380 S.C. 600, 609, 670 S.E.2d 674, 678 (Ct. App. 2008).

Piedmont’s principal argument is CPN’s urgent care center should not be viewed as the office of a licensed private practitioner, but instead as an expenditure “by or on behalf of a health care facility” requiring CPN to obtain a CON or NAD.  24A S.C. Code Regs. § 102(1)(c).  This argument is based on the fact that CPN, which is not a health care facility[2], is a wholly owned subsidiary of CHS.  Piedmont failed to produce any evidence to contradict the affidavits filed by CPN demonstrating that the urgent care center is the office of a licensed private practitioner.  Moreover, under Piedmont’s interpretation all physician offices owned by health care facilities in South Carolina would fail to qualify for the private practitioner exemption.  Accordingly, the filing of a contested case challenging a hospital owned physician office would trigger the automatic stay provision resulting in the closure of the practice.  Since these offices were opened without prior approval from the Department, a contested case challenging the office could be brought at any time.  The General Assembly certainly did not intend such an absurd result with its passage of section 1-23-600(H)(2). 

ORDER

I find CON exemptions for offices of a licensed private practitioner, without a prior agency approval requirement, are not licenses.  Therefore, it is HEREBY ORDERED that the filing of Piedmont’s contested case failed to implicate the automatic stay requirements of section 1-23-600(H)(2) and because no stay exists in this case, CPN may continue to operate is urgent care center in Fort Mill, South Carolina. 

IT IS SO ORDERED.