South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
South Cross Surgery Center, LLC vs. SCDHEC, et al

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioner:
Carolinas HealthCare System

Respondents:
South Carolina Department of Health and Environmental Control and Carolina Surgery Center, LLC

Intervenors/ Respondents:
Piedmont Healthcare System, Inc., Carolina Surgery Center, LLC and Carolinas Healthcare System
 
DOCKET NUMBER:
04-ALJ-07-0068-CC

APPEARANCES:
Stephen P. Bates and Mary Margaret Hyatt of McAngus Goudelock & Courie, LLC, on behalf of Piedmont Healthcare System, Inc.

David B. Summer, Jr., of Parker Poe Adams & Bernstein, LLP, on behalf of Carolina Surgery Center, LLC

Nancy L. Roberts on behalf of the South Carolina Department of Health and Environmental Control

James G. Long, III, of Nexsen Pruet, LLC, on behalf of South Cross Surgery Center, LLC

Douglas M. Muller, of Moore & Van Allen, PLLC, on behalf of Carolinas HealthCare System
 

ORDERS:

What is the geographic area served or to be served by Springs?

Notwithstanding this Court’s decision that Carolinas does not meet the residency requirement for purposes of the State Certification of Need and Health Facility Licensure Act, this Court will identify the geographic area to be served by Springs with its proposed ASC. Neither the Department nor this Court is required to examine or consider the geographic area served by Carolinas. See Roper Hospital, Inc. v. South Carolina Dep’t of Health and Envtl. Control, 01-ALJ-07-0186-CC (February 12, 2002).

In Roper Hospital, the court dismissed St. Joseph’s Hospital from the case, finding it was not an affected person because it did not reside in the geographic area for which the CON was sought. St. Joseph’s Hospital, Inc. (St. Joseph’s), located in Savannah, Georgia, conducted an adult open-heart surgery program and cardiac catheterization service. It provided some limited service to residents of South Carolina primarily in Beaufort, Jasper, and Hampton Counties. St. Joseph’s challenged the Department’s decision to approve Hilton Head Medical Center and Clinics’ (Hilton Head) CON application to provide open-heart surgery to residents of these three South Carolina counties. In its arguments, St. Joseph’s argued that it met the definition of “affected person” under the same statutory provisions at issue in this case.

The court in Roper Hospital examined the geographic area served or to be served by Hilton Head for its open heart surgery program. The court noted that the geographic service area consisted of Beaufort, Jasper, and Hampton Counties and that Hilton Head had no plan to serve the geographic area of Savannah. Furthermore, the court held that its determination of the geographic area was best supported by past history of the services provided by Hilton Head and its future plans. In this case, the evidence is clear that all of the surgical services provided by Carolinas are in North Carolina. Furthermore, the majority of Carolinas’ patients are from North Carolina, not from the geographic area in South Carolina which is the primary focus for Springs.

Carolinas opines that the geographic area to be served by Springs will include counties in North Carolina, which Carolinas’ facilities serve. Contrary to Carolinas’ contention, the primary geographic service area for Springs consists of several counties in South Carolina, including Lancaster, York, Chester and Chesterfield. Footnote Accordingly, this Court finds that Carolinas does not reside in the geographic area served or to be served by Springs.


Is Carolinas a person located in the health service area in which the proposed ASC is to be located and does Carolinas provide similar services there?


An “affected person” also includes “persons located in the health service area in which the project is to be located and who provide similar services to the proposed project.” S.C. Code Ann. § 44-7-130(1) (2003) and S.C. Code Reg. 61-15 § 103(1) (2003). Footnote

When a phrase is not defined, the meaning of the words must be ascertained in the manner that fulfills the intent of the legislature. Rosenbaum v. S-M-S 32, 311 S.C. 140, 427 S.E.2d 897 (1993) (expressing the well known maxim that the cardinal rule of statutory construction is that the courts must ascertain and give effect to the actual intent of the legislature); Browning v. Hartvigsen, 307 S.C. 122, 414 S.E.2d 115 (1992). Legislative intent is best found from the plain meaning of the words used in the statute. Stephen v. Avins Constr. Co., 324 S.C. 334, 478 S.E.2d 74 (Ct. App. 1996). When terms of a statute are clear and unambiguous, they must be applied according to their literal meaning. Medlock v. Ford F-150 Pick Up, 308 S.C. 68, 417 S.E. 2d 85 (1992). However, the plain meaning will not be applied if the legislature utilizes words having acquired a technical meaning since such words are generally to be construed as being used in their technical sense. Poole v. Saxon Mills, 192 S.C. 339, 6 S.E.2d 761 (1940).

Finding the phrase “health service area” had acquired a technical meaning, the court explored that meaning in Roper Hospital, supra. While it was argued that the phrase “health service area” was synonymous with “service area” as used in the South Carolina Health Plan, the court disagreed and determined that the phrase “‘health service area’ means one of four geographic regions of the state (HSA I, II, III, IV).” Roper Hospital at 6.

Noting that “words in a statute must be construed ‘in light of the conditions obtaining at the time of their enactment,’” the court examined the South Carolina Health Plan and the phrase “health service area” in the years closest to the 1988 amendment of the statutory definition of “affected person,” in which the Legislature did not alter the phrase “health service area.” The court found the Legislature’s adoption of the technical use of the phrase “health service area” was synonymous with the Department’s adoption of “Health Service Areas” (HSAs I through IV). HSAs equated to a health service area within a geographic region of the state. While the Department abandoned the Health Service Areas as a planning tool, the Department never abandoned HSAs as a concept. The Department “merely shifted the concept from a planning tool to an administrative tool used for inventorying services.” Roper Hospital at 8; see also 2003 South Carolina Health Plan at II-3 - II-4. Like the South Carolina Health Plan in use at the time of the Roper Hospital case, the 2003 South Carolina Health Plan also states:


This State Plan has adopted four regions and one statewide category for the purpose of inventorying health facilities and services as specified in Section C. below. These regions, based on existing geographic, trade and political areas, are a practical method of administration. The Health Service Area (HSA) designations previously used are no longer applicable and have been replaced.

. . .


The needs for most services (cardiac catheterization, open heart surgery, etc.) are based upon the service standard, which is a combination of utilization criteria and travel time requirements. Each service standard constitutes the service area for that particular service.


See Roper Hospital at 6-7.


Because the court in Roper Hospital found the term “health service area,” rather than being synonymous with “service area” as used in the State Health Plan, meant one of the four geographic regions of the state (HSA I, II, III, and IV), the court held that Savannah, Georgia was not within one of the four HSAs. Because St. Joseph’s was located in Savannah, it was not an affected person because it was not one of the “persons located in the health service area in which the project is to be located.” Id. at 9.

Here, Carolinas contends it is a person located in the health service area in which the Springs’ ASC is to be located and providing similar services because Carolinas operates four hospitals that provide outpatient surgical services and one freestanding outpatient surgery center within a 30-minute drive of the proposed sites. In addition, CMC-Pineville is located only 7.2 miles from the proposed site. (See Exhibit A, “Written Comments and Exhibits Regarding Proposed Outpatient Surgery Centers” submitted to the Department by Carolinas, p. 6). All of the facilities cited by Carolinas are located in North Carolina. None of them are located within one of the applicable four geographic health service areas, or inventorying areas, in South Carolina. See 2003 South Carolina Health Plan at II-3 – II-4. In addition, while Carolinas maintains that it owns physician practices and a radiation treatment facility in South Carolina, these providers are not parties to this action and there is no evidence that they provide similar services to Springs’ proposed project. As such, the question is only whether Carolinas is located in the health service area in which Springs’ ASC is to be located.

Just like Savannah, Georgia was not within one of the four geographic regions of the state, Mecklenburg County, North Carolina also is not within one of the four geographic regions of the state. Therefore, Carolinas is not an affected person because it is not one of the “persons in the health service area in which the project is to be located.”


Lack of Reciprocity between North Carolina and South Carolina in the CON process


Even if Carolinas met the definition of “affected person” under S.C. Code Ann. § Section 44-7-130(1) and S.C. Code Regs. 61-15 § 103(1), Carolinas could not participate in a South Carolina contested case because North Carolina does not provide for similar involvement of persons from South Carolina in its certificate of need process.

S.C. Code Ann. § 44-7-130(1) outlines those persons who qualify as an affected person. However, it provides that those “[p]ersons 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.” (Emphasis added). The word “provide” means “[t]o make, procure, or furnish for future use, prepare; to supply; to afford; to contribute.” See Black’s Law Dictionary 1224 (6th ed. 1990). Piedmont, the Department, Springs, and South Cross argue that this last sentence in S.C. Code Ann. § 44-7-130(1) prohibits Carolinas from requesting a contested case hearing in South Carolina because North Carolina does not provide for similar involvement of persons from South Carolina in the North Carolina CON process.

The term “affected persons” is defined by statute in North Carolina as follows:

The term “affected persons” includes: the applicant; any person residing within the geographic area served or to be served by the applicant; any person who regularly uses health service facilities within that geographic area; health service facilities and health maintenance organizations (HMOs) located in the health service area in which the project is proposed to be located, which provide services similar to the services of the facility under review; health service facilities and HMOs which, prior to receipt by the agency of the proposal being reviewed, have formally indicated an intention to provide similar services in the future; third party payers who reimburse health service facilities for services in the health service area in which the project is proposed to be located; and any agency which establishes rates for health service facilities or HMOs located in the health service area in which the project is proposed to be located.

N.C. Gen. Stat. § 131E-188(c).


While the definition of an “affected person” in the North Carolina statute is similar to South Carolina’s statutory definition, North Carolina’s definition is noticeably silent with regard to the issue of reciprocity in its CON process for participation of persons from other states. There are no provisions in North Carolina’s CON law or North Carolina’s State Medical Facilities Plan which furnish, supply, or provide for reciprocity to persons from other states. Instead, North Carolina’s statutes and State Medical Facilities Plan express an intention to limit North Carolina’s CON process to persons in that state.

In particular, the definition used in North Carolina’s CON statutes defines “service area” as “the area of the State, as defined in the State Medical Facilities Plan or in rules adopted by the Department, which receives services from a health service facility.” N.C. Gen. Stat. § 131E-176(24a). “Service area” is clearly defined by North Carolina to be an applicable area within that state.

Carolinas offered into evidence an affidavit from Lee Hoffman, Chief of the Certificate of Need Section of the North Carolina Department of Health and Human Services Division of Facility Services, dated November 23, 2004. Ms. Hoffman stated in the affidavit that she was familiar with the North Carolina CON statute. She opined that the term “geographic area” as used in the North Carolina statute was “not limited to only those areas within the State of North Carolina, but rather can include areas outside of, and may cross the state boundary lines of the State of North Carolina” and that it could “include areas within states bordering North Carolina, such as areas within the State of South Carolina.” Also, Ms. Hoffman opined that the North Carolina General Statutes do not prohibit persons from areas in South Carolina, which are served or to be served by an applicant, from filing a petition for a contested case hearing on a decision made by the Certificate of Need Section of the North Carolina Department of Health and Human Services Division of Facility Services, regarding the applicant’s proposed project.

In Charlotte Orthopedic Specialists, P.A. v. N.C. Department of Health and Human Services, Division of Facility Services, Certificate of Need Section and Orion Imaging, LLC, Mercy Hospital, Inc. d/b/a Carolinas Medical Center-Pineville, Docket No. 03- DHR 0505, the Hon. Beecher R. Gray, Administrative Law Judge with the North Carolina Office of Administrative Hearings, applied the North Carolina certificate of need statutory and regulatory law to decide whether Charlotte Orthopedic Specialists or Orion Imaging should be granted a CON for one fixed magnetic resonance imaging machine in service area 17. In the order Judge Gray analyzed a criterion which requires an applicant to demonstrate that the proposed health services will accommodate the clinical needs of health professional training programs in the area. In reviewing the affiliation agreement between Orion Imaging and an MRI training program in Greenville, South Carolina, he stated that “it is unreasonable to assume that in adopting North Carolina’s Certificate of Need statute, the [North Carolina] General Assembly intended to accommodate the needs of health professional training programs in other States.” Judge Gray made it clear that an applicant for a CON in North Carolina should not consider the needs of patients outside a service area in North Carolina.

Further, Judge Gray, in finding that the phrase “in the area” was not defined, noted that one of Ms. Hoffman’s subordinates provided three different definitions for the term at the hearing before him. Based on the testimony, Judge Gray concluded, “The Agency has no clear standards for applying this Criterion.” Id. In light of the plain language of North Carolina’s statutory provisions and State Medical Facilities Plan, and giving deference to the North Carolina Administrative Law Judge’s opinion set forth above, which included findings of inconsistencies by Ms. Hoffman and her staff in applying the CON statutes and regulations to applications, this court finds Ms. Hoffman’s affidavit unpersuasive.

Neither N.C. Gen. Stat. § 131E-188(c) nor any other applicable North Carolina statutory provision provides for involvement of persons from South Carolina or any other state in its CON process. This Court finds and concludes, after a thorough review of the North Carolina CON statute defining “affected person” and the decision by Judge Gray, that North Carolina does not acknowledge any reciprocity with this state in the CON process.

Because North Carolina does not provide for involvement of persons from South Carolina in its CON process, Carolinas cannot be treated as an “affected person” in South Carolina’s CON process. Furthermore, Carolinas is not a resident of this State, is not located in this State, nor does it have standing to challenge the grant or denial of a CON in this State. For all these reasons, Carolinas is dismissed as a party in Docket Numbers 04-ALJ-07-0044-CC and 04-ALJ-07-0068-CC.

ORDER

Having considered all the issues raised and for all the foregoing reasons, this Court grants the Motion to Dismiss by Piedmont and dismisses Carolinas as a party in Carolinas Health Care System vs. South Carolina Department of Health and Environmental Control and Carolina andSurgery Center, LLC, Docket Number 04-ALJ-07-0044-CC and South Cross Surgery Center, LLC v. South Carolina Department of Health and Environmental Control, Docket Number 04-ALJ-07-0068-CC.


AND IT IS SO ORDERED.


________________________________________

Marvin F. Kittrell

Chief Administrative Law Judge


April 20, 2005

Columbia, South Carolina

What is the geographic area served or to be served by Springs?

 

Notwithstanding this Court’s decision that Carolinas does not meet the residency requirement for purposes of the State Certification of Need and Health Facility Licensure Act, this Court will identify the geographic area to be served by Springs with its proposed ASC. Neither the Department nor this Court is required to examine or consider the geographic area served by Carolinas. See Roper Hospital, Inc. v. South Carolina Dep’t of Health and Envtl. Control, 01-ALJ-07-0186-CC (February 12, 2002).

            In Roper Hospital, the court dismissed St. Joseph’s Hospital from the case, finding it was not an affected person because it did not reside in the geographic area for which the CON was sought. St. Joseph’s Hospital, Inc. (St. Joseph’s), located in Savannah, Georgia, conducted an adult open-heart surgery program and cardiac catheterization service. It provided some limited service to residents of South Carolina primarily in Beaufort, Jasper, and Hampton Counties. St. Joseph’s challenged the Department’s decision to approve Hilton Head Medical Center and Clinics’ (Hilton Head) CON application to provide open-heart surgery to residents of these three South Carolina counties. In its arguments, St. Joseph’s argued that it met the definition of “affected person” under the same statutory provisions at issue in this case.

The court in Roper Hospital examined the geographic area served or to be served by Hilton Head for its open heart surgery program. The court noted that the geographic service area consisted of Beaufort, Jasper, and Hampton Counties and that Hilton Head had no plan to serve the geographic area of Savannah. Furthermore, the court held that its determination of the geographic area was best supported by past history of the services provided by Hilton Head and its future plans. In this case, the evidence is clear that all of the surgical services provided by Carolinas are in North Carolina. Furthermore, the majority of Carolinas’ patients are from North Carolina, not from the geographic area in South Carolina which is the primary focus for Springs.

Carolinas opines that the geographic area to be served by Springs will include counties in North Carolina, which Carolinas’ facilities serve. Contrary to Carolinas’ contention, the primary geographic service area for Springs consists of several counties in South Carolina, including Lancaster, York, Chester and Chesterfield. Footnote Accordingly, this Court finds that Carolinas does not reside in the geographic area served or to be served by Springs.


Is Carolinas a person located in the health service area in which the proposed ASC is to be located and does Carolinas provide similar services there?


An “affected person” also includes “persons located in the health service area in which the project is to be located and who provide similar services to the proposed project.” S.C. Code Ann. § 44-7-130(1) (2003) and S.C. Code Reg. 61-15 § 103(1) (2003). Footnote

When a phrase is not defined, the meaning of the words must be ascertained in the manner that fulfills the intent of the legislature. Rosenbaum v. S-M-S 32, 311 S.C. 140, 427 S.E.2d 897 (1993) (expressing the well known maxim that the cardinal rule of statutory construction is that the courts must ascertain and give effect to the actual intent of the legislature); Browning v. Hartvigsen, 307 S.C. 122, 414 S.E.2d 115 (1992). Legislative intent is best found from the plain meaning of the words used in the statute. Stephen v. Avins Constr. Co., 324 S.C. 334, 478 S.E.2d 74 (Ct. App. 1996). When terms of a statute are clear and unambiguous, they must be applied according to their literal meaning. Medlock v. Ford F-150 Pick Up, 308 S.C. 68, 417 S.E. 2d 85 (1992). However, the plain meaning will not be applied if the legislature utilizes words having acquired a technical meaning since such words are generally to be construed as being used in their technical sense. Poole v. Saxon Mills, 192 S.C. 339, 6 S.E.2d 761 (1940).

            Finding the phrase “health service area” had acquired a technical meaning, the court explored that meaning in Roper Hospital, supra. While it was argued that the phrase “health service area” was synonymous with “service area” as used in the South Carolina Health Plan, the court disagreed and determined that the phrase “‘health service area’ means one of four geographic regions of the state (HSA I, II, III, IV).” Roper Hospital at 6.

            Noting that “words in a statute must be construed ‘in light of the conditions obtaining at the time of their enactment,’” the court examined the South Carolina Health Plan and the phrase “health service area” in the years closest to the 1988 amendment of the statutory definition of “affected person,” in which the Legislature did not alter the phrase “health service area.” The court found the Legislature’s adoption of the technical use of the phrase “health service area” was synonymous with the Department’s adoption of “Health Service Areas” (HSAs I through IV). HSAs equated to a health service area within a geographic region of the state. While the Department abandoned the Health Service Areas as a planning tool, the Department never abandoned HSAs as a concept. The Department “merely shifted the concept from a planning tool to an administrative tool used for inventorying services.” Roper Hospital at 8; see also 2003 South Carolina Health Plan at II-3 - II-4. Like the South Carolina Health Plan in use at the time of the Roper Hospital case, the 2003 South Carolina Health Plan also states:


This State Plan has adopted four regions and one statewide category for the purpose of inventorying health facilities and services as specified in Section C. below. These regions, based on existing geographic, trade and political areas, are a practical method of administration. The Health Service Area (HSA) designations previously used are no longer applicable and have been replaced.

 

. . .


The needs for most services (cardiac catheterization, open heart surgery, etc.) are based upon the service standard, which is a combination of utilization criteria and travel time requirements. Each service standard constitutes the service area for that particular service.


See Roper Hospital at 6-7.


Because the court in Roper Hospital found the term “health service area,” rather than being synonymous with “service area” as used in the State Health Plan, meant one of the four geographic regions of the state (HSA I, II, III, and IV), the court held that Savannah, Georgia was not within one of the four HSAs. Because St. Joseph’s was located in Savannah, it was not an affected person because it was not one of the “persons located in the health service area in which the project is to be located.” Id. at 9.

Here, Carolinas contends it is a person located in the health service area in which the Springs’ ASC is to be located and providing similar services because Carolinas operates four hospitals that provide outpatient surgical services and one freestanding outpatient surgery center within a 30-minute drive of the proposed sites. In addition, CMC-Pineville is located only 7.2 miles from the proposed site. (See Exhibit A, “Written Comments and Exhibits Regarding Proposed Outpatient Surgery Centers” submitted to the Department by Carolinas, p. 6). All of the facilities cited by Carolinas are located in North Carolina. None of them are located within one of the applicable four geographic health service areas, or inventorying areas, in South Carolina. See 2003 South Carolina Health Plan at II-3 – II-4. In addition, while Carolinas maintains that it owns physician practices and a radiation treatment facility in South Carolina, these providers are not parties to this action and there is no evidence that they provide similar services to Springs’ proposed project. As such, the question is only whether Carolinas is located in the health service area in which Springs’ ASC is to be located.

            Just like Savannah, Georgia was not within one of the four geographic regions of the state, Mecklenburg County, North Carolina also is not within one of the four geographic regions of the state. Therefore, Carolinas is not an affected person because it is not one of the “persons in the health service area in which the project is to be located.”


Lack of Reciprocity between North Carolina and South Carolina in the CON process


            Even if Carolinas met the definition of “affected person” under S.C. Code Ann. § Section 44-7-130(1) and S.C. Code Regs. 61-15 § 103(1), Carolinas could not participate in a South Carolina contested case because North Carolina does not provide for similar involvement of persons from South Carolina in its certificate of need process.

            S.C. Code Ann. § 44-7-130(1) outlines those persons who qualify as an affected person. However, it provides that those “[p]ersons 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.” (Emphasis added). The word “provide” means “[t]o make, procure, or furnish for future use, prepare; to supply; to afford; to contribute.” See Black’s Law Dictionary 1224 (6th ed. 1990). Piedmont, the Department, Springs, and South Cross argue that this last sentence in S.C. Code Ann. § 44-7-130(1) prohibits Carolinas from requesting a contested case hearing in South Carolina because North Carolina does not provide for similar involvement of persons from South Carolina in the North Carolina CON process.

             The term “affected persons” is defined by statute in North Carolina as follows:

The term “affected persons” includes: the applicant; any person residing within the geographic area served or to be served by the applicant; any person who regularly uses health service facilities within that geographic area; health service facilities and health maintenance organizations (HMOs) located in the health service area in which the project is proposed to be located, which provide services similar to the services of the facility under review; health service facilities and HMOs which, prior to receipt by the agency of the proposal being reviewed, have formally indicated an intention to provide similar services in the future; third party payers who reimburse health service facilities for services in the health service area in which the project is proposed to be located; and any agency which establishes rates for health service facilities or HMOs located in the health service area in which the project is proposed to be located.

 

N.C. Gen. Stat. § 131E-188(c).


            While the definition of an “affected person” in the North Carolina statute is similar to South Carolina’s statutory definition, North Carolina’s definition is noticeably silent with regard to the issue of reciprocity in its CON process for participation of persons from other states. There are no provisions in North Carolina’s CON law or North Carolina’s State Medical Facilities Plan which furnish, supply, or provide for reciprocity to persons from other states. Instead, North Carolina’s statutes and State Medical Facilities Plan express an intention to limit North Carolina’s CON process to persons in that state.

In particular, the definition used in North Carolina’s CON statutes defines “service area” as “the area of the State, as defined in the State Medical Facilities Plan or in rules adopted by the Department, which receives services from a health service facility.” N.C. Gen. Stat. § 131E-176(24a). “Service area” is clearly defined by North Carolina to be an applicable area within that state.

Carolinas offered into evidence an affidavit from Lee Hoffman, Chief of the Certificate of Need Section of the North Carolina Department of Health and Human Services Division of Facility Services, dated November 23, 2004. Ms. Hoffman stated in the affidavit that she was familiar with the North Carolina CON statute. She opined that the term “geographic area” as used in the North Carolina statute was “not limited to only those areas within the State of North Carolina, but rather can include areas outside of, and may cross the state boundary lines of the State of North Carolina” and that it could “include areas within states bordering North Carolina, such as areas within the State of South Carolina.” Also, Ms. Hoffman opined that the North Carolina General Statutes do not prohibit persons from areas in South Carolina, which are served or to be served by an applicant, from filing a petition for a contested case hearing on a decision made by the Certificate of Need Section of the North Carolina Department of Health and Human Services Division of Facility Services, regarding the applicant’s proposed project.

In Charlotte Orthopedic Specialists, P.A. v. N.C. Department of Health and Human Services, Division of Facility Services, Certificate of Need Section and Orion Imaging, LLC, Mercy Hospital, Inc. d/b/a Carolinas Medical Center-Pineville, Docket No. 03- DHR 0505, the Hon. Beecher R. Gray, Administrative Law Judge with the North Carolina Office of Administrative Hearings, applied the North Carolina certificate of need statutory and regulatory law to decide whether Charlotte Orthopedic Specialists or Orion Imaging should be granted a CON for one fixed magnetic resonance imaging machine in service area 17. In the order Judge Gray analyzed a criterion which requires an applicant to demonstrate that the proposed health services will accommodate the clinical needs of health professional training programs in the area. In reviewing the affiliation agreement between Orion Imaging and an MRI training program in Greenville, South Carolina, he stated that “it is unreasonable to assume that in adopting North Carolina’s Certificate of Need statute, the [North Carolina] General Assembly intended to accommodate the needs of health professional training programs in other States.” Judge Gray made it clear that an applicant for a CON in North Carolina should not consider the needs of patients outside a service area in North Carolina.

Further, Judge Gray, in finding that the phrase “in the area” was not defined, noted that one of Ms. Hoffman’s subordinates provided three different definitions for the term at the hearing before him. Based on the testimony, Judge Gray concluded, “The Agency has no clear standards for applying this Criterion.” Id. In light of the plain language of North Carolina’s statutory provisions and State Medical Facilities Plan, and giving deference to the North Carolina Administrative Law Judge’s opinion set forth above, which included findings of inconsistencies by Ms. Hoffman and her staff in applying the CON statutes and regulations to applications, this court finds Ms. Hoffman’s affidavit unpersuasive.

Neither N.C. Gen. Stat. § 131E-188(c) nor any other applicable North Carolina statutory provision provides for involvement of persons from South Carolina or any other state in its CON process. This Court finds and concludes, after a thorough review of the North Carolina CON statute defining “affected person” and the decision by Judge Gray, that North Carolina does not acknowledge any reciprocity with this state in the CON process.

            Because North Carolina does not provide for involvement of persons from South Carolina in its CON process, Carolinas cannot be treated as an “affected person” in South Carolina’s CON process. Furthermore, Carolinas is not a resident of this State, is not located in this State, nor does it have standing to challenge the grant or denial of a CON in this State. For all these reasons, Carolinas is dismissed as a party in Docket Numbers 04-ALJ-07-0044-CC and 04-ALJ-07-0068-CC.

ORDER

Having considered all the issues raised and for all the foregoing reasons, this Court grants the Motion to Dismiss by Piedmont and dismisses Carolinas as a party in Carolinas Health Care System vs. South Carolina Department of Health and Environmental Control and Carolina andSurgery Center, LLC, Docket Number 04-ALJ-07-0044-CC and South Cross Surgery Center, LLC v. South Carolina Department of Health and Environmental Control, Docket Number 04-ALJ-07-0068-CC.


AND IT IS SO ORDERED.


 

 

            ________________________________________

Marvin F. Kittrell

                                                            Chief Administrative Law Judge


April 20, 2005

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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