South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Carolinas Hospital System vs. DHEC and McLeod Regional Medical Center

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioner:
Carolinas Hospital System

Respondents:
South Carolina Department of Health and Environmental Control and McLeod Regional Medical Center
 
DOCKET NUMBER:
03-ALJ-07-0311-CC

APPEARANCES:
n/a
 

ORDERS:

CONSENT AGREEMENT AND ORDER

This Consent Agreement and Order (“Consent Agreement and Order”) is entered into this 19th day of September 2003, by and between Carolinas Hospital System (“Carolinas”), the South Carolina Department of Health and Environmental Control (the “Department”), and McLeod Regional Medical Center of the Pee Dee, Inc. (“McLeod”).

FACTUAL BACKGROUND

As a preamble to this Consent Agreement and Order, the parties agree as follows:

Petitioner Carolinas requested a contested case hearing to challenge the Department’s decision to approve McLeod’s application for a Certificate of Need (“CON”) for the construction of a seven-floor addition to the existing Women’s Pavilion to house 140 general acute care beds and 16 operating rooms resulting in a total licensed bed capacity of 441 general acute care beds and 35 psychiatric beds (“the Project”). The Department’s decision was made pursuant to the South Carolina Health Plan, 24A S.C. Code Ann. Regs. 61-15 (Supp. 2002), Certification of Need for Health Facilities and Services, and S.C. Code Ann. §§ 44-7-110 et seq. (Supp. 2002), State Certification of Need and Health Facility Licensure Act.

Prior to proceeding to a hearing on the merits, the parties met and were able to reach the following mutual Consent Agreement and Order to resolve this dispute.

TERMS AND CONDITIONS

In view of the foregoing, the mutual promises and covenants set forth herein, and for such other good and valuable consideration as set forth herein, the receipt and sufficiency of which is hereby acknowledged, Carolinas, the Department, and McLeod agree as follows:

1.Carolinas will submit a Certificate of Need (CON) application or applications to build a desired number of observation beds and a shelled-in area that has the ability to accommodate up to 98 future acute care beds. These beds will only be for the existing health care facility located on Carolinas’ main campus at 805 Pamplico Highway, Florence, South Carolina. Carolinas will have four years from the full execution of this Consent Agreement and Order to apply for the full complement of the 98 acute care beds. Under existing state law, observation beds can be built to in-patient standards but cannot house in-patients or hold patients for more than a twenty-four-hour period.

2.Carolinas will submit a CON application or applications to add up to fifty additional acute care beds and to convert as many beds as desired of its existing nursing home and substance abuse beds to acute care beds. This could result in the addition of up to 98 acute care beds. These applications would involve converting the observation beds to licensed beds and completing the shelled-in area to add up to fifty additional acute beds. These areas (the shelled-in area and the observation beds), if approved, correspond to the number of acute care beds identified in paragraph 1 above. These beds will only be for the existing health care facility located on Carolinas’ main campus at 805 Pamplico Highway, Florence, South Carolina.

3.For a period of four (4) years from the date this Consent Agreement and Order is fully executed and filed with the Clerk of the Division, McLeod agrees not to participate in, promote, encourage, or fund another party to or otherwise attempt to participate in the Department’s review process of Carolinas’ CON application or applications for up to the 98 acute care beds described in paragraphs 1 and 2.

4.For a period of four (4) years from the date this Consent Agreement and Order is fully executed and filed with the Clerk of the Division, both McLeod and Carolinas agree not to participate in, promote or encourage another party, or otherwise attempt to change the hospital bed need methodology in the South Carolina Health Plan prepared for and adopted by the Board of the Department after the 2003 South Carolina Health Plan.

5.For a period of four (4) years from the date this Consent Agreement and Order is fully executed and filed with the Clerk of the Division, the Department agrees to utilize the most current recognized complete twelve month data set, including but not limited to a Joint Annual Report, in calculating bed need in developing the South Carolina Health Plan. This does not prohibit Carolinas from presenting any other data sets in support of its application or applications for up to 98 acute care beds.

6.Carolinas’ appeal of the McLeod Project is withdrawn and is hereby dismissed with prejudice.

7.Upon the execution and filing of this Consent Agreement and Order, the Department agrees immediately to issue McLeod’s CON for the Project as previously approved.

8.Carolinas may proceed with certain expenditures in preparation for the offering or developing of the healthcare service as provided for in 24A S.C. Code Ann. Regs. 61-15, Section 701; however, pursuant to Sections 701 and 702, Carolinas may not sign a construction contract for a specific project or make a financial commitment for a specific project unless it has received a CON.

9.It is understood and acknowledged by the parties that submission of an application for a CON does not assure its approval by the Department. Furthermore, dates for publication of future South Carolina Health Plans or the methods for calculating the need for additional hospital beds cannot be determined at this time.

10.If either Carolinas or McLeod has to enforce the terms of this Consent Agreement and Order against each other, the prevailing party shall be entitled to costs and reasonable attorney’s fees from the other.

11.This Consent Agreement and Order constitutes the entire agreement between the parties with respect to the resolution and settlement of the matters discussed herein and supercedes all prior or contemporaneous Consent Agreements and Orders, promises, or understandings between the parties. The parties are not relying upon any representations, promises, understandings, or Consent Agreements and Orders except as expressly set forth within this Consent Agreement and Order.

12.The undersigned individuals signing this Consent Agreement and Order on behalf of the parties represent and warrant that they are duly authorized to execute this Consent Agreement and Order and lawfully bind their principals.

13.In the event of the invalidity of any term or provision of this Consent Agreement and Order, all terms and provisions shall be considered severable and the balance of this Consent Agreement and Order shall remain in effect.

14.Nothing in this Consent Agreement and Order shall be construed as limiting the Department’s ability to enforce any or all of the provisions of S.C. Code Ann. §§ 44-7-110 et seq., The State Certification of Need and Health Facility Licensure Act, or its accompanying regulations.

The undersigned parties agree and consent:

MCLEOD REGIONAL MEDICAL CENTERCAROLINAS HOSPITAL SYSTEM, INC.

OF THE PEE DEE, INC.



By: s/ By: s/



SOUTH CAROLINA DEPARTMENT OF HEALTH

AND ENVIRONMENTAL CONTROL



By: s/



IT IS SO ORDERED:



______________________________

JOHN D. GEATHERS

Administrative Law Judge




September 19, 2003

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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