SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter arises from a Request for a Contested Case Hearing by Petitioner MRI at Belfair, LLC (Belfair), in which it contests a decision by Respondent South Carolina Department of Health and Environmental Control (DHEC or Department) to approve the Certificate of Need (CON) application of Respondent Coastal Carolina Medical Center (CCMC) for the addition of a 1.5 T Magnetic Resonance Imaging (MRI) unit at its Jasper County, South Carolina hospital facility. A hearing in this matter was held at the offices of the Court in Columbia, South Carolina on August 23, 2005 through August 25, 2005.

DISCUSSION

The ultimate issue in this case is whether to grant a CON to CCMC for one fixed MRI. A CON must be obtained from the Department before a new health service may be added by a health services provider. The State Certification of Need and Health Facility Licensure Act (Act) creates a CON program that, among other things, requires health care facilities to apply for and receive, a CON before undertaking certain projects. See S.C. Code Ann. §§ 44-7-110 to 44-7-240 (2002). The purpose of the Act, as set forth in Section 44-7-120, is:

[T[o 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.

(Emphasis added). To achieve these ends, the Department is required to prepare a State Health Plan for use in the administration of the CON program. The Act requires that the CON must comply with the South Carolina State Health Plan. S.C. Code Ann. § 44-7-210(C) (2002). The 2003 State Health Plan (2003 Plan) is the applicable State Health Plan for consideration and evaluation of the CON in this case.

SUMMARY JUDGMENT

Prior to the hearing in this case, both Respondent CCMC and Petitioner Belfair filed Motions for Summary Judgment. CCMC filed its Motion for Summary Judgment on the grounds that the 2003 Plan dictates that, as a hospital, CCMC should have at least one MRI unit available for the diagnosis of emergency patients, inpatients and outpatients. Accordingly, CCMC argues that since it does not have a MRI unit it is unconditionally authorized to receive a MRI unit and, therefore, there is no genuine issue of material fact to consider in this case. Respondent DHEC joined in Respondent CCMC’s Motion for Summary Judgment. Subsequently, Petitioner filed its own Motion for Summary Judgment on the grounds that the 2003 Plan's provisions for MRI services violate the authorizing statute.

Rule 68 of the Rules of Procedure for the Administrative Law Court provides that “[t]he South Carolina Rules of Civil Procedure may, where practicable, be applied in proceedings before the Court to resolve questions not addressed by these rules.” Rule 56(c), SCRCP, and the accompanying case law set forth that a party may bring a motion for summary judgment.

Petitioner’s Motion for Summary Judgment

Petitioner contends that the MRI Standards of the 2003 Plan do not comply with the requirements set forth in S.C. Code Ann. § 44-7-180 (2002) and 24A S.C. Code Ann

Regs. 61-15 (Supp. 2004).[1] Section 44-7-180(B) provides, in part:

The plan at a minimum must include:

* * *

(2) projections of need for additional health care facilities, beds, health services, and equipment;

* * *

(4) a general statement as to the project review criteria considered most important in evaluating certificate of need applications for each type of facility, services, 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 costs and accessibility.

(Emphasis added). As set forth above, at the time the application in the present case was filed, the 2003 Plan was in effect. That 2003 Plan provides two specific standards for MRIs as follows:

(1) Each hospital should have at least one MRI unit available for diagnosis of emergency patients, inpatients and outpatients.

(2) In order to promote cost-effectiveness, the use of shared mobile MRI units should be considered.

Petitioner argues that the 2003 Plan fails to set forth any projection of need and standards for MRI services and equipment as required by the CON Act, and, therefore, by relying on the 2003 Plan in granting the CON to CCMC, the Department exceeded its statutory authority.

Summary Judgment is appropriate when it is clear there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Rule 56, SCRCP; Vermeer Carolina’s, Inc. v. Wood/Chuck Chipper Corp., 336 S.C. 53, 518 S.E.2d 301 (Ct. App. 1999). In determining whether any triable issue of fact exists such as to preclude summary judgment, the evidence and all inferences reasonably drawn therefrom must be viewed in the light most favorable to the non-moving party. Strother v. Lexington County Recreation Comm’n., 332 S.C. 54, 504 S.E.2d 117 (1998). Moreover, “[s]ummary judgment is not appropriate where further inquiry into the facts of the case is desirable to clarify the application of the law.” Middleborough Horizontal Property Regime Council of Co-Owners v. Montedison S.p.A., 320 S.C. 470, 479, 465 S.E.2d 765, 771 (Ct. App. 1995).

Here, the 2003 Plan sets forth that each hospital should have an MRI unit available for emergency patients, inpatients and outpatients. Whether that projection is sufficient and whether the ALC can question the efficacy of the 2003 Plan are questions that warrant inquiry into the facts of the case to clarify the application of the law. Accordingly, Petitioner’s Motion for Summary Judgment is denied.

Respondent CCMC’s Motion for Summary Judgment

The basis for Respondent CCMC’s Motion for Summary Judgment is that CCMC is a hospital, and, therefore, pursuant to the 2003 Plan, its application for a CON for an MRI should be granted. Therefore, Respondent CCMC submits that under the 2003 Plan there is no need to demonstrate: (a) Community Need Documentation; (b) Distribution (Accessibility); (c) Acceptability; and (d) Cost Containment.

Here, the very language of the 2003 Plan reflects that each hospital have at least one MRI unit “available for diagnosis of emergency patients, inpatients and outpatients.”^[2] Furthermore, the undisputed evidence established that in the 2003 Plan the DHEC Board, in keeping with the State Health Planning Committee, made a public policy decision that each hospital, if it could afford it, should have an MRI. In other words, each hospital needs an MRI. Moreover, the Board eliminated the requirement in the 2003 Plan that a hospital applying for a MRI must address the utilization of existing resources in order to be approved for its first MRI.

Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Rule 56(c), SCRCP; see also Tupper v. Dorchester County, 326 S.C. 318, 487 S.E.2d 187 (1997). Furthermore, where “plain, palpable and indisputable facts exist on which reasonable minds cannot differ,” summary judgment in favor of the moving party is proper. Williams v. Chesterfield Lumber Co., 267 S.C. 607, 610, 230 S.E.2d 447, 448 (1976).

I find that the MRI standards under the 2003 Plan do not require CCMC to establish: (a) Community Need Documentation; (b) Distribution (Accessibility); (c) Acceptability; and (d) Cost Containment. Accordingly, since there is no genuine issue of material fact regarding those criteria, I find that Respondent CCMC’s Motion for Summary Judgment should be granted, in part. Nevertheless, there is a question of material fact as to whether CCMC needs an MRI “available for diagnosis of emergency patients, inpatients and outpatients,” and whether “the use of shared mobile MRI units should be considered” in determining availability. Since these issues warrant further inquiry, I find that summary judgment is not justified regarding those specific issues.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion of the Petitioner and the Respondents, I make the following findings of fact by a preponderance of evidence:

1. Notice of the date, time, place and subject matter of the hearing was properly given to all the parties.

2. CCMC is a forty-one (41) bed hospital located in Jasper County, South Carolina, which opened to the public in November 2004. The hospital is open twenty-four hours a day, seven days a week. It has an emergency room which is also open twenty-four hours a day, seven days a week. The facility is located near Interstate 95 (I-95) and its primary service area is Jasper and Beaufort Counties. The area serves a full-time population as well as a large vacation population. Moreover, it is anticipated that by 2006 over 48,000 people will reside full-time in this service area. Additionally, due to its proximity to I-95, CCMC frequently receives patients injured in traffic accidents as well as those in need of treatment for other reasons. As a result, its emergency room is often busy.

After it began its initial operation, CCMC determined that it needed an MRI scanner. The use of MRI scans is ever increasing in South Carolina. The scans have become a commonplace diagnostic modality and are being used by physicians with greater frequency as a diagnostic tool to analyze conditions of the spine, brain, abdomen and other parts of the body. The use of an MRI can eliminate the need for other more invasive tests, in addition to reducing risk and discomfort to the patient. New uses for MRIs are also continually being discovered. At present, no MRI services are available in Jasper County.

In accessing its needs for an MRI unit, CCMC considered the use of a shared mobile MRI unit. CCMC determined, however, that a shared unit would not meet the needs of its patients. Rather, CCMC concluded that a fixed base MRI would best meet the needs of its patients and physicians who utilize the hospital. In making its decision, CCMC considered immediate accessibility for patients and physicians and convenience for the inpatients and outpatients. It also considered the number of patients that would be seen in CCMC’s emergency room, that it was located in a growing community, and the accessibility of the hospital from I-95, Jasper County, and southern Beaufort County, among other things.

Therefore, on May 7, 2004, CCMC submitted to the Department an application for a CON to purchase a GE Signa LX 1.5 Tesla MRI to be located in its existing facility. The total project cost is $3.2 million dollars. The application for the CON was submitted pursuant to the 2003 State Health Plan. The Department determined that the CCMC CON application was consistent with the applicable standards in the 2003 Plan and approved the issuance of the CON by letter dated November 22, 2004.[3] After the Department issued its decision, Petitioner requested a contested case hearing by letter dated November 24, 2004.

3. Petitioner Belfair is a free-standing imaging facility providing MRI services in Bluffton, South Carolina. It is located approximately 13.8 miles from CCMC in Beaufort County. Belfair is a limited liability corporation owned by Albert J. Borelli, Jr., M.D. Dr. Borelli is the sole practitioner. He personally reads the MRI scans at Belfair and is only open for business from 7:00 a.m. to 6:00 p.m., Monday through Friday. Belfair, however, currently has no on-call responsibilities with any health care facilities.

4. Petitioner Belfair contends that the existing MRI facilities provide sufficient capacity for diagnosis of emergency patients, inpatients, and outpatients without CCMC having a fixed, in-house MRI unit on-site. Dr. Borelli argues that the hospital would not have “an overwhelming number of scans” and could, therefore, contract with providers of mobile MRI services or use existing MRI centers for outpatients. Inpatients and emergency patients could be accommodated by an on-site mobile unit, or, if the mobile unit was not there when it was needed, CCMC could have a transfer agreement with another facility.

However, Dr. Dean Vincent Moesch, a radiologist with Chatham Radiologists which currently provides most of the radiology services to CCMC, testified that the MRI needs to be available 24/7 at CCMC for emergency trauma patients from traffic accidents alone. Furthermore, the image quality from a mobile unit is generally not as good as a fixed site scanner. Most of the existing mobile MRI units are older, lower-cost equipment with smaller magnets. Thus, the mobile and “free-standing” fixed MRI units are usually less effective diagnostic tools.[4]

Additionally, although ten (10) MRI units exist in Beaufort County, including both mobile and fixed MRI units, numerous problems result from a hospital depending on a mobile unit or having to transfer a patient. CCMC is open twenty-four hours a day, seven days a week. To the contrary, a mobile unit is usually present only three days a week and a patient must wait for the unit to return to the hospital.[5] Furthermore, the free-standing MRI providers, such as Belfair, are not open twenty-four hours a day, seven days a week. Other MRI units are in physician offices and limited to use for patients of those particular practices. Accordingly, use of such facilities could unreasonably delay the diagnosis by the physician, which can alter the type of treatment the physician orders in the interim. The patient’s length of hospital stay may also be extended, resulting in an increased cost to the patient and his insurer.

Furthermore, even if another MRI unit is open, transporting a patient has its own risks. Without an on-site MRI unit, if a CCMC physician determines that an inpatient should have an MRI scan, the hospital must locate a provider that has the availability to administer the MRI, determine if the patient is stable enough to be transported, determine if the patient needs a nurse or other caregiver to accompany the patient, locate appropriate transportation (either ambulance or van), load the patient, and then transport the patient. A transferred inpatient must leave the safety net of services and providers who are on site in the hospital, which can produce additional stress and harm to the patient. There may also be an interruption in the patient receiving necessary medications. In addition, there is always the possibility an ambulance could be involved in an accident while transporting the patient. Moreover, both CCMC and Belfair are located near Hilton Head, South Carolina. The area has a substantial increase in tourist population at different times of the year. The traffic and the travel time between CCMC and any of the other providers of MRI services depends on a number of factors, including the time of year, the time of day, traffic congestion, and highway construction and maintenance. Therefore, transferring patients interrupts the continuity of care of the patient, delays the patient receiving services at the hospital, and is inconvenient to the patient and the family. The process can potentially jeopardize patient care.

Currently, if a patient presents to the CCMC emergency room and the physician determines an MRI is necessary, the patient generally will be transferred to hospitals located in Savannah, Georgia, which is about forty (40) to forty-five (45) minutes from CCMC. The result is that a Jasper County resident has to leave his home and family to go out of state to receive medical care. In addition, the patient will generally be admitted for the rest of the patient’s care at the receiving facility rather than be transported back to CCMC. Accordingly, only small, rural hospitals in South Carolina “that absolutely do not have the funding” are using mobile MRI units.

5. Therefore, though the current need for urgent MRI scans at CCMC may be limited, I find that upon considering the impact to CCMC’s emergency patients and inpatients, the existing MRI facilities in the area do not sufficiently meet the hospital’s needs of “availability” to warrant disapproving CCMC’s fixed, in-house MRI.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:

1. The Administrative Law Court has jurisdiction over CON contested case proceedings and consequently over this matter pursuant to S.C. Code Ann. § 44-7-210 (2002) and § 1-23-600(B) (Supp. 2002). An Administrative Law Judge’s review of an administrative decision of the Department to grant a CON request is governed by S.C. Code Ann. § 44-7-210(E) (2002), which provides:

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.

In contested case hearings, the Administrative Law Judge is the fact finder. Brown v. S.C. Department of Health and Environmental Control, 348 S.C. 507, 560 S.E.2d 410 (2002). Furthermore, Petitioner bears the burden of proving its case by a preponderance of the evidence. S.C. Code Ann. § 44-7-210(E) (2002); see also Nat’l Health Corp. v. SCDHEC, 298 S.C. 373, 380 S.E.2d 841 (Ct. App. 1989). In the present case, Petitioner has the burden of proving by a preponderance of the evidence that the Department’s recommendation to approve CCMC’s CON application was in error. Id.

2. As trier of fact, the Administrative Law Judge (ALJ) is not compelled to accept an expert’s testimony, but may give it the weight and credibility the ALJ determines it deserves. Florence County Dep’t. of Social Serv. v. Ward, 310 S.C. 69, 425 S.E.2d 61 (Ct. App. 1992). Nevertheless, it is appropriate to give due consideration to the 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) (Supp. 2002).

3. The Department administers the CON program for South Carolina pursuant to the State Certification of Need and Health Facility Licensure Act, S.C. Code Ann. §§ 44-7-110, et seq. (2002). Under the Act, before an entity can operate certain health care facilities and services in South Carolina, the Department must issue a Certificate of Need to that entity, subject to certain statutory exemptions. See S.C. Code Ann. §§ 44-7-160 & 44-7-180 (2002). The CON program is also administered under the guidelines of 24A S.C. Code Ann. Regs. 61-15 (Supp. 2003). Additionally, Section 44-7-210(C) provides that, “[t]he Department may not issue a Certificate of Need unless an application complies with the State Health Plan, Project Review Criteria, and other regulations.” In considering the State Health Plan, the Department’s decision must be based on the currently approved State Health Plan in effect at the time such application is accepted. See Regulation 61-15 § 504.

The Act was enacted 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 South Carolina. S.C. Code Ann. § 44-7-120 (2002). Here, CCMC is a health care facility as defined by the CON Act. S.C. Code Ann. § 44-7-130(10) (2002). Furthermore, Belfair is an affected party as defined in the CON Act. See S.C. Code Ann. § 44-7-130(1) (2002).

4. The CON Act and regulations require that CCMC obtain a CON prior undertaking “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.” S.C. Code Ann. § 44-7-160(6) (2002). A health care facility is required to obtain a CON before acquiring “medical equipment which is to be used for diagnosis or treatment if the total project cost is in excess of $600,000” or spending in excess of $2,000,000 on behalf of a health care facility. S.C. Code Ann. Reg. 61-15 § 102.1(c) and (f)(2002). At the time the Application in the present case was filed, the 2003 Plan was in effect. The 2003 Plan provides, in relevant part, as follows:

(1) Each hospital should have at least one MRI unit available for diagnosis of emergency patients, inpatients and outpatients.

(2) In order to promote cost-effectiveness, the use of shared mobile MRI units should be considered.

The Plan does not define “available” for purposes of determining whether a CON application for a MRI unit should be granted. The Department and CCMC interpret the word “available” in “standard 1” of the 2003 Plan as meaning immediate access twenty-four hours, seven days a week. Thus, every hospital should be granted a CON for at least one fixed MRI unit (either within its four walls or in a permanent facility adjacent to the hospital on its grounds) if the hospital can afford a unit. In other words, in instances in which a hospital seeks a MRI unit, the use of shared mobile MRI units is not a consideration.

As when seeking to determine the meaning of statutes, the rules of statutory construction apply to the interpretation of the meaning of regulations. See Converse Power Corp. v. South Carolina Dept. of Health and Environment Control, 350 S.C. 39, 564 S.E.2d 341 (Ct. App. 2002). “Statutes dealing with the same subject matter must be reconciled, if possible, so as to render both operative.” Hodges v. Rainey, 341 S.C. 79, 88, 533 S.E.2d 578, 583 (2000). See also Statutes and Statutory Construction, § 46.05, at 154 (6th ed. 2000). (A statute is passed as a whole and not in parts or sections and is animated by one general purpose and intent. Consequently, each part or section should be construed in connection with every other part or section so as to produce a harmonious whole.).^[6] The 2003 State Health Plan clearly sets forth the determination that hospitals need at least one MRI unit available. However, the 2003 Plan does not set forth that only fixed, in-house units meet the requisite availability. In other words, the 2003 Plan simply does not set forth a mandatory requirement that “at least one” MRI must be available to all hospitals without considering shared units.

Furthermore, there are certainly plausible instances in which both standards would be applicable to an MRI application by a hospital. Not all hospitals are necessarily open twenty-four hours, seven days a week or even treat individuals who would need an MRI. Therefore, “available” as used in the 2003 Plan does not mean that any hospital is entitled to at least one onsite MRI unit as long as it can afford the unit. Rather, the application of the above two standards must be made based upon the facts of the case in light of the MRI needs of the hospital. Construing “standard 1” as mandatory, without specific language requiring that reading would render “standard 2” meaningless in all hospital applications, no matter what the circumstances.

Nevertheless, CCMC is open twenty-four hours a day, seven days a week. Moreover, CCMC not only treats individuals who would need MRI scans, but treats individuals who urgently need MRI scans. There are times when patients are too unstable to be transported off site. Therefore, though “standard 2” may be a consideration, the facts of this case clearly establish that to be sufficiently “available” to CCMC, it needs a fixed, in-house MRI unit.

ORDER

Based upon the above Findings of Fact and Conclusions of Law, it is hereby:

ORDERED that the application of CCMC for its Certificate of Need is granted.

AND IT IS SO ORDERED.

_________________________________

Ralph King Anderson, III

Administrative Law Judge

November 10, 2005

Columbia, South Carolina