ORDERS:
FINAL ORDER AND DECISION
BACKGROUND
This contested case involves the South Carolina Department
of Health and Environmental Control’s (DHEC) ruling on two Certificate of Need
applications. DHEC approved Spartanburg Regional Medical Center’s (SRMC)
application for a Certificate of Need (CON) to establish a regional cancer
center with a linear accelerator on the hospital campus of Upstate Carolina
Medical Center in Gaffney, South Carolina, in Cherokee County. Petitioner
Cancer Centers of the Carolinas (CCC) contested DHEC’s approval of SRMC’s
application, and also contested DHEC’s denial of CCC’s CON application for the
development of a Radiation Oncology Center with a linear accelerator near Mary
Black Hospital in Spartanburg, South Carolina.
On June 18, 2002, DHEC received a CON application from
SRMC, Gibbs Regional Cancer Center Satellite, for the establishment of a
regional cancer center with a linear accelerator on the hospital campus of
Upstate Carolina Medical Center in Gaffney, South Carolina. DHEC notified SRMC
by certified letter dated August 28, 2002 that its application was deemed
complete and the review period had begun. Notice of the application was
published in The State Register on September 27, 2002. On October 10,
2002, DHEC received a CON application from CCC for the development of a
Radiation Oncology Center with a linear accelerator near the campus of Mary
Black Hospital in Spartanburg, South Carolina. DHEC deemed this application by
CCC “competing.” DHEC notified CCC that its application was complete by
certified letter dated January 2, 2003, thus beginning the review period.
Mr. Rodney Bowman of DHEC was assigned to review both
applications and to report his findings to Mr. Joel C. Grice, Director of the
Bureau of Health Facilities and Services Development, who made the final
determinations. After comprehensive evaluation of both applications, DHEC
approved SRMC’s application by letter dated March 31, 2003; DHEC denied CCC’s
CON application by letter on the same date.
As outlined in Section 802 of 24A S.C. Code Ann. Regs.
61-15 (Supp. 2003), DHEC determined that SRMC better met the Criteria for
Project Review of the 2001 South Carolina Health Plan (SHP) listed
below.
(1.) Need: The proposal shall not be approved unless it is in
compliance with the State Health Plan (SHP).
(3.b) Distribution (Accessibility): The proposed service should be
located so that it may serve medically underserved areas (or an underserved
population segment) and should not unnecessarily duplicate existing services or
facilities in the proposed service area.
(22) Distribution: The existing
distribution of the health service(s) should be identified and the effect
of the proposed project upon that distribution should be carefully considered
to functionally balance [sic] the distribution to the target population.
Radiation therapy services are currently available in
Spartanburg County through the operation of three linear accelerators, which
have been continuously operational since October 1997. These three units reached
80.0% utilization during the fiscal year ending September 30, 2002. Although
Standard (3)(A) of the State Health Plan (II-78) allows DHEC to approve a new
megavoltage therapy service when existing units in the service area perform at
a combined use rate of 80% of capacity for the preceding year, if approval of
the new service would reduce utilization below the 80% threshold, the service
should be denied (SHP, II-78, (3)(B)). The provision of a new radiation therapy
service by SRMC in Cherokee County would equitably balance the distribution of
such services to the population of the three-county service area, thereby
improving accessibility of these services in the central upstate area of South
Carolina.
DHEC deemed SRMC’s application complete and published its
Notice of Affected Persons on September 27, 2002. On October 10, 2002 DHEC
received a competing CON application from CCC. DHEC deemed CCC’s application
complete and published its Notice of Affected Persons on January 24, 2003.
DHEC held a Project Review Meeting on both applications on February 25, 2003,
after which it received additional information from both applicants. By letter
dated March 31, 2003 DHEC approved SRMC’s application. By letter to CCC dated
March 31, 2003 DHEC denied its application. CCC requested a contested case
hearing on April 3, 2003.
The hearing took place at the Administrative Law Court in
Columbia, South Carolina December 8–12, 2003.
STANDARD
OF REVIEW AND BURDEN OF PROOF
In a CON case, the Petitioner bears the burden of proving
its case by a preponderance of the evidence. S.C. Code Ann. § 44-7-210(E)
(Supp. 2003); see also Anonymous v. State Bd. Of Med. Exam’rs,
329 S.C. 371, 375, 496 S.E.2d 17, 19 (1998); Nat’l Health Corp. v. S.C.
Dep’t of Health & Envtl. Control, 298 S.C. 373, 379, 380 S.E.2d 841,
844 (Ct. App. 1989). Further, the issues that can be raised in a CON contested
case proceeding are limited to those that were presented to or considered by
DHEC during its review and decision-making process. S.C. Code Ann. §
44-7-210(E) (Supp. 2003). Thus, CCC bears the burden of proving by a
preponderance of the evidence that it better meets the criteria for approval of
a CON than does SRMC or, in the alternative, that both proposed projects meet
the criteria for CON approval and both should be approved.
After reviewing the entire record and all the testimony
during the hearing, I find that the two CON applications are not “competing”
and that both SRMC’s and CCC’s certificate of need applications are approved.
ISSUES
FOR DECISION
Did
the Petitioner, CCC, prove by a preponderance of the evidence that the South
Carolina Department of Health and Environmental Control erred in its
determination that CCC’s and SRMC’s applications were competing, so that only
one additional linear accelerator was needed in the service area composed of
Cherokee, Spartanburg and Union Counties and only one application could be
approved, or is it feasible and within the guidelines established in the
statute, regulations and State Health Plan that both facilities could be
approved?
FINDINGS OF FACT
Having observed
the exhibits and the testimony of the witnesses presented by the parties at the
hearing and closely assessed their credibility, I make the following Findings
of Fact by a preponderance of the evidence:
General Findings
1. Notice
of the time, date, place and subject matter of the hearing was sent to all
parties in a timely manner.
2.
The South Carolina Department of Health and Environmental Control is the
state agency charged with administration and enforcement of the State
Certification of Need and Health Facility Licensure Act.
3. The
2001 South Carolina Health Plan (SHP) controlled both applications for
Certificates of Need.
4. The
policy behind the CON program and the SHP is to contain costs and to establish
services where they are most needed without duplicating services unnecessarily.
5. Adding
unnecessary radiation services increases the cost of cancer treatment to
patients and ultimately to the citizens of South Carolina. Over-proliferation
of radiation therapy facilities could lead to closing units, which is poor
health planning for the state. (TR., 12/12/03, p. 110).
6. The
applicable statute for Certificates of Need is S.C. Code Ann § 44-7-110 et seq.
(Supp. 2003); the applicable regulation is 24A S.C. Code Ann. Regs. 61-15
(Supp. 2003).
7. The
service area for both projects is the tri-county area composed of Cherokee,
Union and Spartanburg Counties.
8. SRMC
currently operates the Gibbs Cancer Center in Spartanburg County, a facility with
three operating linear accelerators on its campus.
9. SRMC,
a not-for-profit hospital, sought CON review to construct and operate a new
regional cancer center with a linear accelerator on the campus of Upstate
Carolina Medical Center in Gaffney, South Carolina in Cherokee County, where no
linear accelerators exist.
10. CCC
applied for a CON to operate a for-profit facility to house a linear
accelerator near Mary Black Hospital in Spartanburg County.
11. The
DHEC reviewer for both applications was Rodney Bowman; the ultimate decision
approving SRMC’s project and denying CCC’s project was made by Joel Grice,
Director of the Bureau of Health Facilities and Services Development. Mr.
Grice evaluated the applications and drafted the decision letters. (TR., 12/12/03,
pp. 32-33).
12. Competing
applications must be submitted not later than 15 days from publication of the
notification of affected persons in the State Register for the first
applicant. 24A S.C. Code Ann. Regs. 61-15 § 103(6) (Supp. 2003). CCC timely
submitted its competing application.
13. Per
regulation, 24A S. C. Code Ann. Regs. 61-15 § 305(2)(b), DHEC’s review period
of SRMC’s application was extended 60 days--until January 25, 2003--in order to
give CCC more time to complete its application.
14. By
letter to SRMC dated January 27, 2003, DHEC made changes to the project review
criteria, re-ordered the review criteria, and extended the review period for an
additional 60 days. CCC was notified of the changes in the relative importance
of the criteria on February 26, 2003 and knew the same criteria applied to both
applicants. CCC had actual knowledge of the re-ordered criteria by February 7,
2003, prior to the Project Review meeting on February 25, 2003. (TR.,
12/12/03, p. 120).
15. A
project review committee meeting was held on February 25, 2003, at which both SRMC
and CCC made presentations regarding the need for each facility. The
purpose of a project review committee meeting is to permit DHEC staff to
receive additional information from applicants.
16. DHEC
deemed the applications competing; that is, applications for the same service
in the same service area where approval of both would exceed the need. DHEC
determined there was a need for only one additional linear accelerator in the
tri-county service area.
17. On
March 31, 2003, DHEC sent letters to SRMC and CCC, approving a CON for SRMC and
denying a CON for CCC.
Radiation Treatment and the
State Health Plan
18. The
2001 South Carolina Health Plan does not project the need for linear
accelerators in South Carolina, but contains seven standards that must be
satisfied before an additional linear accelerator will be approved. (SHP, pp.
II-78 – II-79).
19. The
SHP provides that the third year of operation of a new radiation therapy facility
is the target period for assessing the number of radiation treatments at that
facility.
20. Although
a linear accelerator is capable of providing more than 7,000 treatments per
year, that number is its maximum capacity for health planning purposes.
21. The
SHP requires that all existing linear accelerators be utilized at 80 % of
capacity before DHEC can approve an additional linear accelerator; i.e., each
unit must be performing 5,600 treatments for the year preceding the filing of a
CON. (SHP, II-78, (3) (B)).
22. SRMC’s
application, filed June 17, 2002, showed that from June 1, 2001 through May 31,
2002, the Gibbs Cancer Center had performed 18,554 treatments. (SRMC, Ex.
#2). Therefore, SRMC’s three existing linear accelerators in Spartanburg each
exceeded the requisite 5,600 treatments for the year preceding this CON
application.
23. The
utilization of the linear accelerator must be projected to be a minimum of
3,500 treatments annually within three years of initiation of services, without
reducing the utilization of existing megavoltage therapy machines in the
service area below the 80 % threshold, or 5,600 treatments per year. (SHP,
II-78)
24. The
SHP requires that the benefits of improved accessibility to a linear
accelerator be equally weighted with the adverse effects of unnecessary duplication.
(SHP, II-79)
25. An
applicant must document the need for its proposed service by providing:
A. epidemiological
evidence of the incidence and prevalence of those conditions for which
megavoltage therapy is appropriate within the proposed service area, including
the number of potential patients.
B. documentation of referral sources for patients within the service
area, including letters of support from physicians and health care facilities
indicating a willingness to refer patients to the proposed service. (SHP,
II-78)
Treatment of Cancer
26. The
incidence of cancer generally rises with the increasing age of the population.
(TR, 12/8/03, p. 160).
27. About
60 % of all new cancer patients require radiation treatment. A typical course
of treatment for a radiation patient is 25 treatments. (TR., 12/8/03, p. 28).
28. Treatments
are typically given five days per week for a four- to five-week period. (TR,
12/8/03, p. 28).
29. Convenience
and closeness to home are the criteria which are most important to patients
receiving radiation therapy. (TR, 12/9/04, p. 216). Richard B. Taylor, a
principal in Oncology Solutions, LLC, testified that a patient with cancer who
goes through the health care system may need surgery, a medical oncologist and
radiation. The more a facility can integrate the delivery of that care, the
better the service will be. (TR, 12/10/04, pp. 15—16). Mr. Taylor was
qualified as an expert in oncology health care consulting and the preparation
of feasibility studies. (TR, 12/10/04, p. 37)
30. A
radiation treatment typically takes approximately 15 minutes, including setting
up and resetting the linear accelerator. (TR, 12/9/04, p. 185).
31. For
the vast majority of cancers treated by radiation therapy, the treatment is by
linear accelerator. (TR, 12/9/04, p. 185).
32. The
primary target population for SRMC’s satellite is composed of cancer patients
residing in Gaffney, South Carolina, Cherokee County, but it will also be
accessible to residents in adjacent counties. The target population for CCC’s
facility will be Spartanburg county, but CCC also expects to draw from the
surrounding counties, including Cherokee and Union counties.
33. SRMC
estimates that 250 new cancer cases will need treatment in 2004. Since 60% of
new cancers will be treated with radiation therapy, 150 new cancer cases will
require treatment and each of those cancers will require 25 treatments. The
State Health Plan requires that total projected treatments exceed 3500 within
three years of beginning operations. Total projected treatments for the year
after approval are approximately 3,750 for SRMC’s linear accelerator. This
projection is consistent with the SHP.
34. Dr.
Mark O’Rouke, a practicing oncologist, testified that in projecting the
incidence of cancers in a particular service area, “age specific incidence”
must be evaluated. He further testified that if data fail to account for the
increasing age of a population, the numbers will be inadequate. (TR, 12/8/04, p.162).
Dr. O’Rouke, who has worked with the S.C. Cancer Registry, was qualified as an
Expert Witness in Oncology and Geriatrics.
35. Dr.
O’Rouke testified that even if a Certificate of Need were granted to CCC for a
new linear accelerator, the usage of each of SRMC’s accelerators would still exceed
3,500 treatments in the third year. He projected 5,783 uses for each of SRMC’s
three accelerators, or a total of 20,847 treatments by year three.
36. I find
that Dr. O’Rouke was a very credible witness, and that his testimony supported
the finding that the two CON applications were not competing, and that there
would be no reduction in services below the 80% utilization requirement in the
third year of operation for any of the existing operational linear accelerators.
37. Currently,
Cherokee County cancer patients must drive 30 – 40 minutes to Spartanburg for
daily cancer treatments. Radiation therapy is frequently debilitating and
fatiguing. Additionally, many patients have difficulty securing
transportation. The patient’s spouse, who may also be in poor health, may have
to drive the patient to Spartanburg and back for treatment. (TR., 12/12/04, p.
41.)
38. With
the proposed SRMC project, patients will have to travel to Spartanburg once to
receive treatment planning services, but thereafter will be able to receive
daily treatments at the Gibbs Cancer satellite in Cherokee County. The
facility at the Gibbs Cancer Center utilizes IMRT, or Intensity Modulated
Radiation Therapy. This therapy is designed to vary the radiation treatment so
that there is less damage to the surrounding tissue according to Dr. Julian
Josey, a radiation oncologist at the Gibbs Center. (TR, 12/10/04, pp. 110-11`
39. SRMC
currently has three linear accelerators at Gibbs Regional Cancer Center, all of
which currently exceed the 80% utilization rate per unit annually.
Data Sources and Projections
40. S.C.
Code Ann. Regs. 61-15 § 202(11) requires the applicant to use population
statistics consistent with those generated by the State Demographer of the
State Budget and Control Board.
41. The
number of new cancer patients who will require radiation treatments in a
service area is calculated by multiplying the cancer incidence rate by the
population in the service area; 60% of those new cancer patients will require
the services of a linear accelerator.
42. SRMC
used population data from the State Demographer’s office based on the 2000
census.
43. Statistics
from the State Demographer’s office for the tri-county service area for
the years 2002 to 2007 predict a growth rate of 4.6 % in that area; for the
entire state of South Carolina, the growth rate from 2002 to 2007 is 5.3 %.
Cherokee and Spartanburg Counties exhibit a slower growth rate than the state
average, while Union County’s growth is minimal. (SRMC Ex. #1, p. 2).
44. Using
population statistics from the State Demographer’s office and cancer incidence
from the S.C. Central Cancer Registry for the year 2002, the number of new
cancer cases in the tri-county area for that year was 1,438; for the year 2007,
the number of new cancer cases is projected to be 2,005. (SRMC Ex. #1, p. 4.)
45. SRMC’s
testing and exhibits project that when its facility in Cherokee County is
operational, for years 2004 – 2007, 95 % of new cancer patients would use that facility
rather than out-migrating to another county, and that the existing Spartanburg
facilities would still sustain utilization rates above 80 %. (SRMC Ex. #1, pp.
6-7).
46. CCC
used Claritas population data in its application, which it maintains is more
accurate than that of the State Demographer’s office. Claritas source
separates the population into age cohorts. The statistical difference between
the two sources is minimal.
47. Incidence
data on which the projected number of cancer cases is based is provided by SEER
(created by the National Cancer Institute) and by the South Carolina Cancer
Registry (SCCR). SEER data is extrapolated from the number of cancer cases in
a sampling of the population at large (TR, 12/10/04, p. 155); SCCR data
is based on the actual number of cancer cases in South Carolina.
However, CCC contends that SCCR underreports the actual number of cancer cases.
48. CCC
relied on SEER data for its number of projected cases; SRMC relied on SCCR
data. I find, however, that the data do not reveal statistically significant
differences in the number of projected cases.
49. SRMC
based its need for a linear accelerator on projections of cancer cases in
Cherokee County alone. However, SRMC anticipates that patients other than
those from Cherokee County will use its facility, e.g., patients from
Spartanburg, York and Union Counties. (TR. 12/11/03, pp. 21-92).
50. SRMC
predicts it will perform 3,850 radiation therapy treatments in 2006 and 3,900
treatments in 2007 at a new Cherokee County location; both projections exceed
the State Health Plan’s requirement of 3,500 annual treatments per linear
accelerator. (TR., 12/12/03, p. 212).
51. SRMC
projects that the total number of radiation therapy treatments in the service
area in 2006 will be 22,346 and 22,544 in 2007; CCC, using SEER data, projects
that the total number will be 27,172 treatments in 2006 and 27,586 in 2007.
52. Because
the increases in new cancers have been gradual, it has taken six years for
SRMC, with a third unit, to reach 80% utilization of all its linear
accelerators. (TR. 12/12/03, p. 73.)
Indigent Care Plan and Medically
Underserved Groups
53. Applicants
should demonstrate that the location of their project will promote services to
medically underserved areas. (Regulation 61-15 § 802(3) (b)).
54. SRMC’s
indigent care plan is projected to provide 4 % of gross charges for indigent
care.
55. CCC’s
indigent care plan is projected to provide 3.47 % of gross charges for indigent
care.
56. Dr.
Mark O’Rouke, an expert witness in Oncology and Geriatrics, testified that more
indigent patients would be served by CCC’s linear accelerator than at SRMC’s in
Gaffney.
Financial Feasibility
57. Radiation
oncology projects generate positive net income and are usually financially feasible.
(TR., 12/12/03, p.173).
58. Financing
for SRMC’s project will come from its operations. CCC is funded by U.S.
Oncology, a for-profit corporation. Both entities are financially stable.
(TR., 12/12/03, pp. 53-54).
59. Each
applicant submitted its budget and certified that the information submitted was
true and correct to the best of its knowledge.
60. By a preponderance of the
evidence, both projects appear to be financially feasible.
Community Need Documentation
61. Both
SRMC and CCC presented evidence of extensive support from the community and
local physicians for their projects.
62. Approval
of SRMC’s project will balance the distribution of radiation therapy services
to the population of the three-county service area and improve accessibility of
these services in the central upstate area of South Carolina.
63. Placing
a linear accelerator in Cherokee County, when compared with Spartanburg County,
minimizes the adverse effect on the existing units in the three-county service
area. (TR.,12/12/04, p. 45).
64. CCC
garnered 663 letters of support for its CON application, 57 of which were from
physicians; SRMC submitted 312 letters, 3 of those were from physicians. (TR.,
12/8/04, p. 184). I find that there is extensive documentation in the record of
the community’s need for both facilities and of the willingness to utilize both
facilities.
CONCLUSIONS
OF LAW
Based upon the
preceding Findings of Fact, I conclude the following as a matter of law:
1. S.C.
Code Ann. § 1-23-600 (Supp. 2003) grants jurisdiction to the South Carolina
Administrative Law Court to hear contested cases under the Administrative
Procedures Act.
2. The
standard of proof in administrative proceedings is a preponderance of the
evidence. Anonymous v. State Bd. Of Medical Examiners, 329 S.C. 371,
496 S.E.2d 17 (1998).
3. Pursuant
to ALC Rule 29(C), issues raised at the hearing not specifically addressed in
this Order are deemed denied.
4. S.C.
Code Ann. §§ 44-7-110 et seq. (Supp. 2003), the State Certification of Need and
Health Facility Licensure Act, grants DHEC the authority to administer the
State’s CON program.
5. The
burden of proof is on the Petitioner. CCC has the burden to establish by a
preponderance of the evidence that CCC’s application more satisfactorily meets
the requirements of S.C. Code Ann. §§ 44-7-110 through -340 (Supp. 2003), 24A
S.C. Code Ann. 61-15 (Supp. 2003) and the 2001 South Carolina Health Plan.
In the alternative, CCC must prove that both CCC’s and SRMC’s applications meet
those requirements and thus both applications should be approved. National
Health Corp. v. S.C. Dept. of Health and Envt’l Control, 298 S.C. 373 380
S.E.2d 841 (1989).
6. The
Administrative Law Judge (ALJ) is the fact finder in this matter for purposes
of administrative and judicial review and does not sit in an appellate
capacity. Brown v. S.C. Dep’t of Health and Envt’l. Control, 348 S.C.
507, 560 S.E. 2d 410 (2002). Evidence of allegations must be sufficient and
probative of the matter to be proven. Coleman v. Palmetto State Life Ins.
Co., 241 S.C. 384, 128 S.E. 2d 699 (1962). As trier of fact, the ALJ is not
compelled to accept an expert’s testimony, but may give it such weight and
credibility as the ALJ determines it deserves. Florence County Dep’t of
Social Serv. v. Ward, 310 S.C. 69, 425 S.E. 2d 61 (1992).
7. It
is appropriate to give due consideration to the Department’s CON Staff’s
utilization of its specialized knowledge and expertise in the application of
the CON Act and CON regulations. See S.C. Code Ann. §1-23-330 (4) (1986
and Supp. 2003). As a state administrative agency, DHEC can only exercise those
powers conferred upon it by the General Assembly. Triska v. Department of
Health and Environmental Control, 292 S.C.190, 355 S.E. 2d 531(1987). When
the language of a statute or regulation is clear and unambiguous, the court is
to impose its meaning without employing the rules of statutory interpretation. Paschal
v. State Election Commission, 317 S.C. 434, 454 S.E. 2d 890 (1995).
8.
DHEC’s evaluation of both applications was fair, comprehensive and in
keeping with its customary procedures for review. The project review committee
meeting was conducted in a manner equitable to both CCC and SRMC.
9. No
statutory or regulatory provision requires DHEC to approve any project that is inconsistent
with the State Health Plan. S.C. Code Ann. § 44-7-180(B)(4) (Supp. 2003), 24A
S.C. Code Ann. Regs. 61-15 § 106(2) (Supp. 2003).
10. DHEC
may not issue a Certificate of Need unless an application is in compliance with
the State Health Plan as described in this regulation, project review criteria,
and other regulations which must be identified by DHEC. 24A S.C. Code Ann.
Regs. 61-15 § 307(1) (Supp. 2003).
11. The
applicable State Health Plan is the 2001 South Carolina Health Plan.
According to this Plan the following project review criteria are considered
most important in evaluating a CON for a linear accelerator unit:
a. Compliance
with the Need Outlined in this Plan;
b. Community
Need Documentation;
c. Distribution
(Accessibility);
d. Projected
Revenues;
e. Projected
Expenses;
f. Financial
Feasibility; and
g. Cost
Containment.
12. A
project does not have to satisfy every project review criterion in order to be
approved, but no project may be approved unless it is consistent with the State
Health Plan. A project may be denied if DHEC determines that the project does
not sufficiently meet one or more of the criteria. (S.C. Code Ann.Regulation
61-15 § 801(3)).
13. DHEC
considered SRMC’s and CCC’s application with the following Project Review Criteria
contained in S.C. Code Ann. Regs. 61-15 § 802, ranked in order of importance by
DHEC:
1.
Need (Compliance with the State Health Plan) – 1
Distribution
(Accessibility)- 31, 3b, 3d, 3f, 3g
Medically Underserved Groups-
31a, 31b, 31d
2.
Community Need-Documentation- 2a, 2b, 2c, 2e
Distribution- 22
3.
Projected revenues/Projected Expenses- 6a/7
Financial Feasibility- 15
4. Acceptability- 4a, 4b
Cost Containment- 16c
14. In
the case of competing applications, DHEC shall award a Certificate of Need, if
appropriate, on the basis of which, if either, most fully complies with the
requirements, goals, and purposes of the Certificate of Need program, State
Health Plan, project review criteria, and any regulations developed by DHEC.
24A S.C. Code Ann. Regs. 61-15 § 307(2) (Supp. 2003).
15. The
relevant service area for linear accelerators applicable to CCC and SRMC is
defined in the 2001 SHP as Cherokee, Spartanburg and Union Counties. While CON
Standard (2) of the 2001 Plan (DHEC Ex. 3) defines the service area for
the CCC and SRMC proposals herein in the section concerning linear accelerators
at II-82, to consist of Cherokee, Spartanburg, and Union counties, it also
provides flexibility to allow consideration of the “relevant” service area in
assessing need. (II-2). The CCC and SRMC proposals herein may be viewed as
either both being located inside the same three-county service area or within
the Spartanburg/Union service area for CCC and Cherokee county service area for
SRMC. That is, if sufficient need is shown for two units, both applications
could be approved at the same time, since the two applicants would not be
“competing applicants” under S.C. Code Ann. §44-7-130 (5). Accord, Tr.,
Grice at 18, lines 2 through 14 and 70, line 19 through 71, line 10 (12/12/03).
16. The
2001 SHP provides that existing linear accelerators must perform at 80 % of
capacity (5,600 treatments per unit) in the year immediately preceding the
filing of the applicant’s CON application and that within three years of
initiation of its proposed service, the applicant must project that it will
perform a minimum of 3,500 treatments annually. No existing linear accelerator
in the service area should fall below the 80 % threshold.
17. “The
benefits of improved accessibility will be equally weighted with the adverse
affects [sic] of duplication . . .” in DHEC’s evaluation of CON applications
for linear accelerators. (2001 SHP, II-79).
ANALYSIS
The term “Competing
Applications” is defined in S.C. Code Ann. §44-7-130(5) as “two or more persons
or health care facilities as defined in this article who apply
for Certificates of Need to provide similar services or facilities in the same
service area within a time frame as established by the department
regulations and whose applications, if approved, would exceed the need
for services or facilities.” [Emphasis added]
Regulation 61-15, Section 103(6) repeats the
statutory definition, and then adds:
An application shall be considered
competing if it is received by the Department no later than fifteen (15)
days after a Notice of Affected Persons is published in the State Register for
one or more applications for similar services and/or facilities in the same
service area. All applications received by the Department within fifteen (15)
days of publication of the Notice of Affected Persons in the State Register for
the first application(s) will be considered to be competing. Any applications
received by the Department later than the fifteenth day following publication
of the Notice of Affected Persons in the state Register for the first
applications(s) will not be considered to be competing with the(se)
applications.
The statutory
definition, when construed with the Regulation, requires that two conditions be
met for two applications to be “competing”: (1) both Applications for
Certificates of Need must be received by DHEC within the same fifteen-day time
frame; and (2) there must be a finding that if both applications were approved,
the need for services would be exceeded.
The first requirement
for “competing” Applications—filing the Application for a CON with DHEC within
15 days of the Notice in the State Register—is simply a method of initially
classifying Applications. The
Regulation makes that clear by stating that any Application received by DHEC after
the fifteenth day is not considered “competing”.
Thus, the significant
and outcome-determinative inquiry which must be made to ascertain if
Applications are truly “competing” is: Would granting both Applications exceed
the need for facilities or services in that service area?
After reviewing the
voluminous exhibits, extensive testimony, and taking into account the totality
of circumstances in the tri-county service area in this case, I find that the
two applications are not competing because granting both Applications will not
exceed the need for linear accelerator facilities and the services which they
provide. I further find that each application is consistent with the requirements
of the State Health Plan, as contained in the Plan itself, and as ranked in
relative importance by the DHEC staff.
The record is
replete with evidence that both the aging population and the general class of
cancer patients in the tri-county service area—particularly those in the more
rural areas—need easier access to radiation treatments. Moreover, the rapidly
expanding population in the urban areas of the tri-county region establishes
the need for the additional Spartanburg facility.
I find that a
preponderance of the evidence establishes that the projected population growth
in the service area justifies granting both Certificates of Need, and that the
projected growth will enable both facilities to meet the requirement of 3,600
treatments per year for each linear accelerator by their third year of
operation. Moreover, I find that the preponderance of the evidence supports
the conclusion that each facility is financially feasible.
"The cardinal rule
of statutory construction is to ascertain and effectuate the legislative intent
whenever possible." Strother v. Lexington County Recreation Comm'n,
332 S.C. 54, 62, 504 S.E.2d 117, 121 (1998). "All
rules of statutory construction are subservient to the one that the legislative
intent must prevail if it can be reasonably discovered in the language used,
and that language must be construed in the light of the intended purpose of the
statute." Kiriakides v. United Artists Communications, Inc., 312 S.C. 271, 275, 440 S.E.2d 364, 366 (1994). The words
of the statute must be given their plain and ordinary meaning without resorting
to subtle or forced construction to limit or expand the statute's operation. Hitachi
Data Sys. Corp. v. Leatherman, 309 S.C. 174, 178, 420 S.E.2d 843, 846 (1992). Marlboro
Park Hospital v. SCDHEC, 358 S.C. 573, 595 S.E. 2d 851 (SC Ct. App. 2004).
The plain language of
S.C.Code Ann. § 44-7-120 and of the project review criteria requires a
comprehensive evaluation of an Application in light of the stated purposes.
This includes not only whether a facility may duplicate existing facilities,
but the relative merit of allowing that duplication in order to promote
cost containment and establish high quality health facilities and services.
These purposes are plainly set forth in the Act and in the regulations. That is
why the Act prevents only unnecessary duplication.
Nowhere in the Act does
it state that a proposed facility is always unnecessary if there are
existing facilities which are not currently utilized at full capacity. A
proposed facility is only unnecessary to the extent it does not promote the
purposes of the Act as set forth in S.C.Code Ann. § 44-7-120 and as amplified
in the applicable State Health Plan.
This court is aware of
the complexities facing DHEC when confronted by conflicting opinions on
scientifically complex issues presented by opposing factions of the medical
community. I am equally aware of the complex nature of current economic trends
in healthcare, which often result in the forging of unlikely economic
relationships in response to new competition and call into question the rationale
underlying the Act. See Joshua A. Newberg, In Defense of Aston Park:
The Case For State Substantive Due Process Review of Health Care Regulation,
68 N.C.L.Rev. 253 (1990). Here, however, each center has its own strengths
and advantages for specific populations in need of these services. Based upon
the totality of the circumstances, I find that each party has established by a
preponderance of the evidence that its CON application meets the requirements
of S.C. Code Ann. §§44-7-100—340, 24 A S.C. Code Ann. Reg. 61-15 and the 2001
State Health Plan.
ORDER
THEREFORE, IT IS HEREBY ORDERED that DHEC’s approval of a
Certificate of Need for Spartanburg Regional Medical Center’s proposed project
for the establishment of a regional cancer center with a linear accelerator on
the hospital campus of Upstate Carolina Medical Center in Gaffney, South
Carolina (Cherokee County) is upheld and that DHEC’s denial of a Certificate of
Need for Cancer Centers of the Carolinas for the development of a Radiation
Oncology Center with a linear accelerator near the campus of Mary Black
Hospital in Spartanburg, South Carolina is reversed. DHEC shall issue a CON
for both proposed projects.
AND IT IS SO ORDERED.
___________________________________
CAROLYN
C. MATTHEWS
Administrative
Law Judge
June 24, 2004
Columbia, South
Carolina |
