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


South Carolina Department of Health and Environmental Control



Francis P. Mood, Attorney for Petitioner

Elizabeth O. Levy, Attorney for Respondent




This contested case matter arises from the decision of the Department of Health and Environmental Control ("DHEC" or "Department") to deny the Certificate of Need application of Columbia Endoscopy Center to construct a freestanding ambulatory surgical center for gastrointestinal endoscopy. A contested case hearing was conducted pursuant to the South Carolina Administrative Procedures Act, during which the parties presented testimony and introduced exhibits, all of which have been carefully reviewed and considered.


Columbia Endoscopy Center's ("Petitioner") application for a Certificate of Need ("CON") to establish a freestanding ambulatory surgery center for gastrointestinal endoscopy at 2412 Main Street in Columbia was accepted for filing by DHEC on August 18, 1993, under the 1992 South Carolina State Health Plan. After Petitioner submitted additional information requested by DHEC, the application was deemed complete on November 30, 1993. Subsequently, DHEC published a "Notification to Affected Persons" in the South Carolina State Register, and held a Project Review Committee Meeting to determine whether the CON should be granted to the Petitioner. On February 18, 1994, DHEC staff issued a proposed decision denying the Petitioner's application for the following reasons:

i) The proposed project is an unnecessary duplication of existing services and facilities that are underutilized;
ii) Utilizing current facilities will be more efficient and cost-effective, in that existing resources in the area will be more fully utilized; and
iii) The approval of the proposed project will adversely impact the existing providers.

On March 4, 1994, Petitioner timely appealed DHEC's denial of the CON, pursuant to S.C. Code Ann. § 44-7-210(D)(2) (Supp. 1993), 24A S.C. Code Ann. Regs. 61-15 § 403 (1993), and 25 S.C. Code Ann. Regs. 61-72 § 201 (Supp. 1993). DHEC served its answer to the Petition for Appeal on March 29, 1994, and the case was referred to the Administrative Law Judge Division on August 2, 1994, pursuant to S.C. Code Ann. § 1-23-600(E) (Supp. 1993). This Court was appointed Special Hearing Officer by Order of the DHEC Commissioner dated August 4, 1994. A contested case hearing was conducted on the merits on August 15 and 16, 1994.



An Administrative Law Judge's review of a DHEC administrative decision to deny a CON application is governed by S.C. Code Ann. § 44-7-210(E) (Supp. 1993), which provides in pertinent part:

The department's proposed decision is not final until the completion of reconsideration or contested case proceedings..... 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.

By the plain language of the statute, any issues "presented or considered" during the staff review process may be considered at the hearing. Thus, any information submitted during the application process by or on behalf of the applicant, as well as any information gathered by the reviewing DHEC staff and utilized in the reviewing process is subject to consideration by the administrative law judge at the contested case hearing. It follows that the issues proper for consideration at a hearing by the administrative law judge are not limited to the reasons stated for denial in the staff's proposed decision but encompass issues raised during the entire information gathering and review process. That is, administrative review of an agency decision should be undertaken upon information which was available to the agency at the time it reviewed the application and only that information. Milliken and Co. v. South Carolina Department of Labor, 275 S.C. 264, 266, 269 S.E.2d 763, 764 (1980).

The Administrative Procedures Act "contemplates a straight-line agency process beginning with fact-finding and ending with judicial review; it does not contemplate an agency's continuous re-initiation of investigation throughout the process." Id. at 267, 269 S.E.2d at 764. In that respect, an administrative law judge's inquiry is quasi-appellate in nature. Parties are prohibited from submitting new or additional facts for consideration at the hearing which were not part of the administrative record at the time of the initial staff decision.

24A S.C. Code Ann. Regs. 61-15, § 308 (Supp. 1993) provides that DHEC's proposed decision is based on staff review of the "record established by the Department," which includes, but is not limited to, "the application, comments from affected persons and other persons concerning the application, data, studies, literature and other information available to the Department."

Within the parameters set forth above limiting the scope of consideration to previously established facts and issues, a contested case hearing must be conducted predominately as a trial de novo. S.C. Code Ann. § 1-23-330 (Rev. 1986) provides that parties to an administrative review have the right to be heard, present evidence, and conduct cross-examination. See National Health Corp. v. South Carolina Department of Health and Environmental Control, 298 S.C. 373, 378-79 n.1, 380 S.E.2d 841, 844 n.1 (Ct. App. 1989). Administrative review does not exist, however, to allow the agency or the applicant two bites at the apple. Milliken, 275 S.C at 266, 269 S.E.2d at 764.

The proper standard of review or burden of proof in weighing the evidence and making a decision on the merits at a contested case hearing is a preponderance of the evidence. National Health Corp. v. S.C. Department of Health and Environmental Control, 380 S.E.2d 841 (S.C. Ct. App. 1989). In National Health Corp., the Court of Appeals held that the Board of DHEC was correct in applying the preponderance of the evidence standard in weighing the evidence in an appeal of a denial of a CON. Id. at 841. Sitting as a special hearing officer in a DHEC proceeding, an Administrative Law Judge must apply that same standard or burden.

In the Petition for Appeal in the present case, the Petitioner first argues that DHEC's reasons for denying the application are not supported by "substantial, reliable, probative evidence." The substantial evidence rule is the standard to be applied upon judicial review of a final decision in a contested case after all administrative remedies are exhausted. S.C. Code Ann. § 1-23-380(A)(6)(e) (Supp. 1993). As such, Petitioner's assertion that the record lacks substantial, reliable, probative evidence need not be addressed. This Court must weigh the evidence in order to determine, by a preponderance or greater weight of the evidence, whether the CON application should be granted. Petitioner bears that burden.

In considering the propriety of the DHEC staff decision, it is necessary to address the factors considered by DHEC in denying the application and the underlying policies followed by the agency when reviewing CON applications. Those policies are set forth in the 1992 SouthCarolina Health Plan and the Project Review Criteria [24A S.C. Code Ann. Regs. 61-15, §§ 801 et seq. (1993)] guidelines.


Petitioner asserts the unenforceability of DHEC's standards and criteria based upon vagueness, violative of Petitioner's due process rights. "The constitutional standard for vagueness is the practical criterion of fair notice to those to whom the law applies." Huber v. State Board of Physical Therapy Examiners, ___ S.C. ___, 446 S.E.2d 433 (1994); Toussaint v. State Board of Medical Examiners, 303 S.C. 316, 400 S.E.2d 488 (1991). A regulation is void when it forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application. See Bouie v. City of Columbia, 378 U.S. 347, 84 S. Ct. 1697, 12 L. Ed. 2d 894 (1964).

S.C. Code Ann. § 44-7-190 (Supp. 1993) was enacted by the General Assembly of South Carolina to delegate to DHEC the duty to promulgate Project Review Criteria which:

at a minimum, must provide for the determination of need for health care facilities, beds, services and equipment, to include demographic needs, appropriate distribution, and utilization; accessibility to underserved groups; availability of facilities and services without regard to ability to pay; absence of less costly and more effective alternatives; appropriate financial considerations to include method of financing, financial feasibility, and cost containment; consideration of impact on health systems resources; site and building suitability; consideration of quality of care; and relevant special considerations as may be appropriate.

24A S.C. Code Ann. Regs. 61-15, § 802 (1992) contains thirty-three (33) Criteria [sixty-eight (68) including subparts] purporting to fulfill the Legislative mandate articulated in Section 44-7-190. Of the terms relied upon in the review and denial of its CON application, Petitioner claims the following are indefinite and subjectively applied: "unnecessary duplication," "service area," "accessibility," "underutilization," "capacity," "need," "adverse or negative impact," and "cost-effectiveness." There is no glossary of terms in the regulations, State Health Plan, or other DHEC publication to define any of these terms or concepts. (Tr.Vol. II, p. 66; Tr. Vol. II, pp. 68, 77, 212, 240, 241, 243, 247, 250; Tr. Vol. III, pp. 45-48). Each challenged term must be examined in context and application to determine whether constitutional due process standards are violated.

24A S.C. Code Ann. Regs. 61-15, § 106 imposes upon DHEC the duty to prepare a State Health Plan that must, among other things, develop:

standards for distribution of health care facilities, beds, specified health services, and equipment including scope of services to be provided, utilization, and occupancy rates, travel time, regionalization, other factors relating to proper placement of service, and proper planning of health care facilities.

24A S.C. Code Ann. Regs. 61-15, § 106(3) (1992). (emphasis added.)

The 1992 Plan provides very little specific guidance, however.

Where a statute provides controlling principles, an administrative agency may exercise a large measure of discretion within those principles. 1 Am. Jur. 2d Administrative Law, § 118 (1962). An agency's discretion is not unbridled, however. Regulations promulgated to effect the Legislative mandate must contain articulable standards which can be known in advance, conformed with, and applied rationally. See Mattison v. Dallas Carrier Corp., 947 F.2d 95 (4th Cir. 1991), modified on other grounds in Johnson v. Hugo's Skateway, 974 F.2d 1408 (4th Cir. 1992). An administrative decision reached without reasoned judgment, lacking adequate determining principles or rational basis, or governed by no fixed rules or standards, is arbitrary. Deese v. State Board of Dentistry, 286 S.C. 182, 332 S.E. 2d 539 (Ct. App. 1985).

An administrative law judge has the constitutional and inherent duty to protect the due process rights of parties appearing before him. The South Carolina Constitution, at Article I, Section 22, provides:

No person shall be finally bound by a judicial or quasi-judicial decision of an administrative agency affecting private rights except on due notice and an opportunity to be heard; nor shall he be subject to the same person for both prosecution and adjudication; nor shall he be deprived of liberty or property unless by a mode of procedure prescribed by the General Assembly, and he shall have in all such instances the right to judicial review.

The Administrative Procedures Act (APA), Title 1, Article 3, of the South Carolina Code, provides the legislatively prescribed procedure for the adjudication of administrative contested cases. Administrative law judges hear and decide cases pursuant to the APA under the framework of Article 5 of Title 1 of the Code.

Due process notice rights encompass more than just the right to notice of the date, time, place, and subject matter of a hearing. An agency must give a party notice of the issues in a proceeding and the criteria upon which the controversy will be decided to truly afford substantive due process. An agency must not act unreasonably, arbitrarily, capriciously, or in a discriminatory manner. Huellmantel v. Greenville Hospital System, 303 S.C. 549, 553, 402 S.E. 2d (Ct. App. 1991). Utilization of vague, arbitrary, subjective criteria by an agency in the administrative decision making process deprives a party of a reasonable possibility of compliance and, thus, a reasonable opportunity to be heard on the issues to persuade the decisionmaker of compliance.

Fairness is a fundamental goal of due process. Fairness dictates that an agency act based upon known standards that are impartially applied through revealed procedures. Known standards allow an applicant to understand what the agency expects and limits the agency's allocation of choices based upon principle rather than preference. Concrete and comprehended procedures are essential to an applicant's effective participation in the agency's decisionmaking process and understanding of the use of the standards applied in the process. Aman and Mayton, Administrative Law 173 (West 1993). Objective rules and well-defined criteria provide persons with more precise notice of what conduct will be sanctioned and promotes equality of treatment among similarly situated parties. Dixon v. Love, 431 U.S. 105, 97 S.Ct. 1723, 52 L.Ed.2d 172 (1972). Absent objective, reasonably discernible criteria, due process rights of notice and opportunity to be heard are lacking.

In order to satisfy due process, an administrative decision must be in accord with previously stated, ascertainable standards. (citations omitted). This requirement is to make certain that administrative decisions are fair, orderly and consistent rather than irrational and arbitrary. The standards should be written with sufficient precision to give fair warning as to what the agency will consider in making its decision ....And finally, the standards should be readily available to those having potential contact with the agency. Commission on General Education v. Union Township of Fulton County, 410 N.E.2d 1358 (Ind.App. 1980).

Criteria 3(a) and 3(b) of Reg. 61-15, Section 802, two of the four Criteria for Project Review DHEC claims Petitioner failed to meet, require a Department determination of whether the proposed project is an "unnecessary duplication" of services. Neither "unnecessary" nor "unnecessary duplication" are defined in Reg. 61-15, the 1992 State Health Plan, or the enabling statutes. While it is not essential that all terms in a statutory or regulatory scheme be explicitly defined, words and phrases must be precise enough to be meaningful to avoid being vague under the due process clause.

The term "unnecessary", used as general prohibitory language has specifically been held to be unconstitutionally vague (in a municipal noise ordinance). Jim Crockett Promotion, Inc. v. City of Charlotte, 706 F.2d 486 (4th Cir. 1983). In the present situation, there is no legislative guidance to discern an objective standard to apply to determine when a duplication of services is necessary versus unnecessary. "Unnecessary" is ambiguous under almost any standard. An assessment that something is unnecessary is more a conclusion to be reached after more concrete criteria have been applied than a criterion in and of itself. I find that the terms "unnecessary" and "unnecessary duplication" are unconstitutionally vague and subjective on their face.

DHEC relies upon a sentence found at page II-59 of the 1992 Plan to define "service area." That statement reads: "Ambulatory surgical services are generally available within 30 minutes one way automobile travel time of most of the residents of South Carolina." (Tr. Vol. II, pp. 180, 232). A plain reading of that statement simply indicates that outpatient surgical services currently are available within a 30-minute drive for most South Carolina residents. Petitioner asserts that there is no rational basis for concluding that this statement creates a service area for health planning purposes. The 1992 State Health Plan, at Chapter II Service Areas And Facility Categories, A. Planning Areas, p. II-2, does provide, however:

The need for hospitals and nursing homes is projected by county. Acute Psychiatric services, alcohol and drug abuse services, comprehensive rehabilitation, and home health are based on service areas, and residential treatment centers for children and adolescents are projected statewide. Most health care service (cardiac cathertization, lithotripsy, etc.) standards are based upon a combination of utilization criteria and travel time requirements. Institutions serving a restricted population throughout the state are programmed on a statewide basis.

(emphasis added)

Additionally, applicants are on notice that only those population statistics consistent with those provided by the State Demographer's office are accepted. Criteria 2(b) of Reg. 61-15, Section 802. Population data is compiled on a county-by-county basis only by the State Demographer. While not precise, there is notice to an applicant of general service area parameters considered for application purposes.

The record reveals that the Department coupled its thirty-minute "service area" concept with an unwritten "capacity" criterion to ascertain the need of the proposed project. DHEC contends that applicants must show that existing facilities in the proposed service area lack the "capacity" to perform additional procedures. (Tr. Vol. II, pp. 189-217, 251). The applying physicians claim that the CON application form requests no such information and that no definition of "capacity" can be found in the Criteria or in the 1992 Plan. (Tr. Vol. III, p. 46). DHEC has developed no formal methodology by which an existing provider's "capacity" for delivering outpatient (endoscopic or otherwise) surgery service is calculated. (Id.)

The applicant, Endoscopy Center of Columbia, is a partnership with Endoscopy Center Associates, Inc. ("ECA"), a 60% interest shareholder and the applying physicians (known as Endocorp., Inc.) 40% interest shareholders. ECA has been involved with approximately one hundred freestanding endoscopy centers in twenty-five states. (Tr. Vol. I, p. 18). ECA staff prepared the CON application for Endoscopy Center of Columbia. Although there is no evidence that any persons involved with the applicant group has ever submitted a CON application in South Carolina before, ECA has tremendous experience in preparing CON applications and establishing and operating endoscopy centers. Accordingly, ECA has most assuredly dealt with assessing and projecting use rates and capacities for endoscopy facilities. "When the persons affected by the law constitutes a select group with specialized understanding of the subject being regulated, the degree of definiteness required to satisfy due process is measured by the common understanding and knowledge of the group." Huber v. State Board of Physical Therapy Examiners, ___ S.C ___, 446 S.E.2d 433 (1994); Toussaint v. State Board of Medical Examiners, 303 S.C. 316, 400 S.E.2d 488 (1991). Accordingly, a reasonable method of computing capacity in a general but uniform fashion is acceptable and of assistance during review, considering the sophistication of the applicant.

The Department also cited as a reason for denial of the Center's CON application the conclusion that "utilizing current facilities will be more efficient and cost-effective in that existing resources in the area will be more fully utilized." The Department identified Criteria 17 as the basis for denial on that issue. DHEC has promulgated no definition or standard by which to measure utilization (Tr. Vol. II, pp. 241-242), and there are no Criteria, standards, or analyses relating to cost-effectiveness. (Tr. Vol. III, pp. 47-49). "This is purely an opinion" on the part of the Department. (Tr. Vol. III, p 48). "Utilization" and "cost-effectiveness" are clear enough of terms, however, to be meaningful, even if only in a general sense.

Finally, DHEC also denied the Center's application based on its determination that the proposed project would "adversely impact existing providers." [Ex. 3b, p. 648; See Criterion 23(a)](1). DHEC's conclusion interrelates with the "cost-effective" issue discussed above, in that cost-effectiveness is predicated to some extent on the impact which a proposed project may have on the incomes of existing facilities. (Tr. Vol. III, pp. 51-52).

The terms "adverse impact" and "adverse effect" are not defined in the 1992 Plan or Criteria. (Tr. Vol. II, p. 243; Tr. Vol. III, p. 46). Again, while the language is undesirably broad, it does not quite rise to the level of being so vague as to be meaningless. Within the context of Criteria 23(a), "adverse impact" can be generally construed to mean a material decrease in the present or future use or occupancy rates of existing providers for like procedures. As DHEC has not formulated any method to measure the materiality of any impact, nor does DHEC make any findings as to whether any perceived impact would materially affect existing facilities, it is left to this Court to weigh the materiality of any impact. (See Tr. Vol. III, pp. 45-46).

"Need" and "accessibility" are also cited by Petitioner as vague, undefined terms utilized in the DHEC review and denial. Both appear in the Criteria for Project Review, however, and are adequately explained within Criteria 1, 2, and 3 to survive a vagueness challenge.

A provision of law held to be unconstitutional is void. If the offensive provision is part of a larger regulatory scheme, the question then becomes whether the unconstitutional language is severable from the remaining provisions, and if so, whether the remaining portions are enforceable with the unconstitutional provisions excised. If not, the entire regulatory scheme must be struck as invalid. The well-established South Carolina test for severability is stated below:

The rule is that where part of a statute is unconstitutional, if such part is so connected with the other parts as that they mutually depend upon each other as conditions and considerations for each other, so as to warrant the belief that the Legislature intended them as a whole, and if they cannot be carried into effect, the Legislature would not have passed the residue independently of that which is void, the whole act is void. On the other hand, where part of the statute is unconstitutional, and that which remains is complete in itself, capable of being executed, wholly independent of that which is rejected, and is of such character as that it may fairly be presumed that the Legislature would have passed it independently of that which is in conflict with the Constitution, then the courts will reject that which is void and enforce the remainder. S.C. Tax Commission v. United Oil Marketers, Inc., 306 S.C. 384, 412 S.E. 2d 402 (1991); Fairway Ford, Inc. v. Timmons, 281 S.C. 57, 314 S.E. 2d 322 (1984).

Failure to meet any single criterion is not fatal to a CON application. Reg. 61-15, Section 801(3) provides:

A project does not have to satisfy every 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 the Department determines that the project does not sufficiently meet one or more of the criteria.
(emphasis added)

As noted earlier, Reg. 61-15, Section 802, contains thirty-three (33) separate criteria [sixty-eight (68) with subparts] for review of a CON application. None are singled out as solely determinative of the merit of the application. As a matter of fact, in its proposed order submitted to the Court the Department states: "DHEC does not focus on any one factor when considering a CON application. Rather, DHEC looks at an entire CON application and attempts to balance the desires and goals of the applicant with those of existing medical facilities and the State of South Carolina as a whole."

Criteria 3(a) and 3(b), which contain the unconstitutionally vague phrase "unnecessary duplication," are only two of the eight subparts listed under Criteria number 3, "Distribution (Accessibility)." Without the "unnecessary duplication" language, the whole of criteria 3(a) must be struck, or it makes no sense. Criteria 3(b), however, contains two distinct guidelines. Criteria 3(b) provides: "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." Only that language which is underlined is invalid, while the remainder of the sentence can stand alone as an acceptable guideline.

Absent the unconstitutional language in criteria 3(a) and 3(b), an extensive structure for CON review still exists. Criterion 1 of the Criteria for Project Review, states that an application be in compliance with the State Health Plan, providing another set of guidelines to be met as well.

The legislature's intent to have a comprehensive review procedure for CON applications with standards covering a wide variety of factors is intact even with all or parts of Criteria 3(a) and 3(b) invalidated. Reg. 61-15 is not unconstitutional as a whole.


I. Generally

While all issues presented or considered in the application and review process are subject to review and resolution at the hearing stage, the parties have effectively narrowed the issues in controversy to the criteria enumerated as the basis of DHEC's denial of the CON application.

DHEC did not assert nor present evidence at the hearing that Petitioner's application was deficient except upon the grounds stated in the February 18, 1994, DHEC decision. Accordingly, it is not necessary to reevaluate those standards which DHEC deemed met by Petitioner.

The issues in this case arise out of the DHEC's conclusion that the Center's application does not meet the particular requirements of DHEC's CON Project Review Criteria. See 24A S.C. Code Ann. Regs. 61-15, § 802 (1993). The Department's Project Review Criteria, along with the 1992 State Health Plan, guide DHEC's review of all CON applications. S.C. Code Ann. § 44-7-160 (Supp. 1993). A reading of these two authorities reflects that the Criteria are general and apply to all CON applications regardless of the nature of the facility or service contemplated. The 1992 Plan refers to requirements considered for more specific services.

The Department determined that the application was consistent with the 1992 Plan. (Tr. Vol. III, pp. 63-64). Thus, the testimony centered around Applicant's compliance with the Criteria.

No Criteria specifically apply to the type of facility contemplated in this case. (Tr. Vol. III, p. 64). An endoscopy center is characterized as an ambulatory surgical facility. (1992 Plan, pp. II-59 through 63). As to ambulatory surgical facilities, the 1992 Plan sets forth the "Relative Importance of Project Review Criteria" for use in evaluating applications for ambulatory surgical facilities as follows:

a. Compliance with the Need Outlined in this Plan;
b. Community Need Documentation;
c. Distribution (Accessibility);
d. Operating Budget;
e. Capital Financing Characteristics;
f. Ability of the Applicant to Complete the Project;
g. Financial Feasibility;
h. Cost Containment; and
i. Relationship to the Health System.
1992 Plan, p. II-63.

It is further stated in the 1992 Plan, that " is the determination of the Department that the benefits of improved accessibility will not outweigh the adverse affects caused by the duplication of existing services or equipment." (Ex. 1, p.II-63).

By letter dated November 30, 1993, advising Applicant that its application was deemed complete, DHEC further informed Applicant that "the following project review criteria are considered more important in the review of this application. These criteria are ranked according to their relative importance with the most important being listed first. All other relevant criteria will be given equal importance." (Hearing Ex. 3A, pp. 448-47). According to DHEC, the most pertinent Criteria to the proposed project are:

(1) Community Need Documentation - 2c, 2e
(2) Distribution (Accessibility) - 3a, b, h
Efficiency - 17
(3) Distribution - 22
Adverse Effects on Other Facilities - 23a
4. Acceptability - 4a, b
5. Cost Containment - 16c

The Department concluded that Applicant met the requirements of all but Criteria 3(a) and 3(b) Criterion 17, and Criterion 23. (Tr. Vol. II, p. 244; Tr. Vol. III, pp. 3-4).(3)

The crux of the matter is that the proposed project would provide a facility and specific service targeted to an underserved segment of the population in a manner in which the target group would be more likely to receive the particular treatment, for whatever reason, than it is currently seeking or receiving. The project would, however, provide services already being provided by other licensed health care providers in the service area. The key issue is whether a duplication of services is acceptable under the circumstances. Crucial to that determination is an analysis of the proposed project's present and future impact on the care providers, patients, and the health care system as a whole in the area.

II. Duplication of Existing Services

DHEC states in it's proposed decision, dated February 18, 1994, "The proposed project is an unnecessary duplication of existing services and facilities that are underutilized." That conclusion is based upon the Department's appraisal of the utilization and capacity levels of existing facilities in the proposed service area. As "unnecessary duplication" is unconstitutionally vague, this Court's analysis of any duplication of services is limited to the extent of the duplication, the utilization impact on existing providers, and the cost impact upon existing providers and patients. No finding will be made as to whether any duplication is unnecessary, nor will duplication in itself be recognized as a ground for denial of the CON application.

The applying doctors will be serving almost exclusively persons residing in the zip code areas initially designated by Applicant to identify its target population. The service area was later identified as Richland and Fairfield Counties at the request of DHEC. (Hearing Ex. 3A, p. 356). Capacity and utilization figures were submitted and gathered from all facilities currently providing outpatient endoscopy care in Richland, Fairfield, and Lexington Counties. The Department considered the capacity and utilization information for the facilities in all three counties. (Tr. Vol. II, p. 199). Because the information for all three counties was submitted, gathered, considered, and each of the existing facilities is within the thirty-minute travel radius, the proposed service area should reasonably be identified as Richland, Lexington, and Fairfield Counties.(4) The Department gathered and considered statistics during the application and review process for capacity and utilization estimates for each of the following providers: Richland Memorial Hospital, Providence Hospital, Baptist Medical Center, Columbia Gastrointestinal Endoscopy Center, Lexington Medical Center, and Fairfield Memorial Hospital. Current and projected capacity/utilization analysis will assist in the examination of efficiency, cost effectiveness, and adverse impact issues.

To accurately determine capacity and utilization figures for each existing provider, all endoscopy procedures (inpatient and outpatient) performed by a facility must be counted, while the potential impact from the proposed project should be considered only within the context of the possible number of outpatient procedures which the existing facilities would lose by virtue of an additional freestanding ambulatory endoscopy center opening in the service area.

DHEC staff computed capacity and utilization of all facilities in the service area using figures supplied by the facilities themselves. The facilities provided the information in varying forms, often lacking supporting documentation. DHEC did not use a consistent formula to compute the numbers on a comparative basis for uniform analysis. (Tr. Vol. III, pp. 39-41). Mary Fechtel, DHEC Project Administrator, testified that the most conservative numbers submitted by the existing providers were used in capacity calculations. Ms. Fechtel estimated that the existing facilities in Richland and Fairfield Counties are 74% currently utilized, without projecting future utilization. (Tr. Vol. II, p. 197). Petitioner, using figures from Richland and Lexington Counties, however, estimated 1993 utilization at 70% and projected 1994 estimated utilization of existing facilities at 105%. (Tr. Vol. II, p. 210). Based upon the evidence in the application and review record and presented at the hearing, I find neither figure reliable or accurate.

To compare "apples to apples," capacity and utilization levels must be computed uniformly. A review of the evidence regarding each existing facility is required, with a uniform method of calculation and comparison. Fifty weeks was considered a full year for computation. (Tr. Vol. II, p. 196). Ms. Fechtel testified that, on average, four procedures a day could be performed per individual procedure room. (Tr. Vol. II, pp. 200-202). Of the six existing facilities, four based their figures on an average of four procedures per room, per day, as well. (Ex. 3b, pp. 467, 472, 488, 495). Richland Memorial Hospital gauged capacity at 6.25 procedures per room, per day (Ex. 3b, p. 515), while Columbia Gastrointestinal Center did not indicate an estimated capacity.

Using the formula outlined by Ms. Fechtel and used by a majority of the existing providers, each functional endoscopy procedure room should be able to handle approximately 1,000 procedures a year when operating at capacity on a five-day work week, fifty weeks a year.

Richland Memorial Hospital

Richland Memorial Hospital ("RMH") reported 4534 outpatient endoscopy procedures performed in 1993, utilizing four procedure rooms. DHEC estimated RMH's utilization of its endoscopy lab at 66% in the Department review of the CON application. Using the capacity formula outlined above, annual capacity for the RMH endoscopy lab should be approximately 4,000 procedures. There is no evidence in the record to indicate how or why Richland Memorial could be expected to perform, on average, 25% more procedures per procedure room than the other existing local providers.

Jenny Greenhalgh, Nurse Manager of the Endoscopy Lab at Richland Memorial Hospital testified that RMH is currently performing approximately 18 endoscopic procedures daily, an increase from 13 per day in January, 1993, and 16 per day in January, 1994, (Tr.Vol. III, p.112),

a 27% increase in less than two years. Eighteen cases per day, based upon a five-day work week and a fifty-week year, averages out to approximately 4,680 annual endoscopic procedures.

Ms. Greenhalgh estimates annual capacity to be five or six cases per room daily (Tr. Vol. III, pp. 110-111) and about 5,000 cases annually (Tr. Vol. III, p. 111), though an increase in staffing would likewise increase capacity (Tr. Vol. III, p. 119). Using Nurse Greenhalgh's figures, RMH is operating at 94% capacity with current staffing. Nurse Greenhalgh also testified that, beginning July 1, 1994, bronchoscopies are being performed in the endoscopy lab, with the projected rate of 2.25 cases per day.

All four of the applying physicians have privileges at RMH. 67.4% of the out-patient endoscopy procedures performed by the applying physicians in 1992-93 (approximately 720 per year) were performed at RMH. (Ex. 3a, p.255). Nurse Greenhalgh testified that the endoscopic procedures performed by Doctors Gallman, Suber, Theiu, and Amarnath, constitute approximately 22% of the total procedures performed at the RMH endoscopy lab; however the outpatient procedures performed by those doctors amount to only 12% of the RMH endoscopic cases. (Tr. Vol. III, p. 109).

Providence Hospital

Providence Hospital's endoscopy lab has five dedicated procedure rooms, with only four currently equipped and three utilized. According to its records, Providence performed 1,737 endoscopy procedures in 1993. Based upon the uniform formula (endorsed by Providence), capacity for Providence is 5,000 cases per year (4,000, if counting only equipped rooms). 1993 utilization was approximately 35% for dedicated rooms and 43% for equipped rooms.

Drs. Thieu, Gallman, and Suber have staff privileges at Providence Hospital. They estimate that 24.7% (264 per year) of the applying physician group's out-patient endoscopic procedures are performed at Providence. (Ex. 3a, p.255). That accounts for 15% of the Providence endoscopy cases.

Baptist Medical Center

Baptist Medical Center has four equipped procedure rooms but five dedicated rooms. DHEC estimated the endoscopy lab at Baptist Medical Center ("Baptist") to be operating at 45% of capacity. Using the uniform formula, Baptist's capacity is 5,000 cases per year for the dedicated rooms and 4,000 cases per year for the equipped rooms. That equates to utilization at 45% and 56%, respectively. Dr. Anthony Lowman, Medical Director for the Baptist Medical Center Gastrointestinal Lab, testified that the lab is actually operating at about 75-76% of capacity, however. (Tr. Vol. III, pp. 9,11). The discrepancy in figures may be accounted for by the fact that Baptist uses the fifth dedicated room as a motility room and has an additional consultation room. Both are unequipped for endoscopy procedures.

All four applying doctors have staff privileges at Baptist Medical Center. Based upon 1992-93 data, the group performed 7.9% of its out-patient procedures (84 per year) at Baptist. (Ex. 3a, p.255). That accounted for less than 4% of Baptist's total endoscopies for that period.

Columbia Gastrointestinal

Columbia Gastrointestinal Endoscopy Center ("Columbia Gastro") received its CON in 1986 as the only freestanding ambulatory endoscopy facility in the service area. It has two procedure rooms dedicated and equipped. Based on the uniform formula previously outlined, capacity for the facility is 2,000 cases per annum. In 1993, 1,876 cases were performed, translating to 94% utilization under that standard. Columbia Gastro failed to furnish a capacity figure to DHEC, stating only that it could increase procedures 50-100% before reaching capacity. Procedures are performed at the freestanding facility 4.5 days a week.

None of the applying physicians have privileges at Columbia Gastro. In a letter dated September 21, 1993, Dr. Joseph S. Rice, of Columbia Gastro stated: "The proposed facility would not impact greatly upon our operation. The physicians who would be using the center do not currently use our center." Like the applying physicians, the doctors on staff at Columbia Gastro have an established practice with a stable patient base.

Fairfield Memorial Hospital

Fairfield Memorial has one endoscopy procedure room. It is undisputed that it could accommodate approximately 1,000 procedures per year. At its 206 level in 1993, it is only 20% utilized.

None of the applying doctors are on staff at Fairfield Memorial Hospital.

Utilization figures from Fairfield Memorial Hospital indicate a minimal usage of its endoscopic lab facilities. In response to a DHEC inquiry, however, the hospital administrator stated, in a letter dated October 21, 1993: "We anticipate that an additional free-standing facility in Columbia would have little impact on our facility." (Ex. 3b, pp.469-470).

Dr. Gallman has a substantial patient base in Fairfield County, with approximately three to four hundred patients. (Tr. Vol. II, p. 159). Dr. Gallman does not have privileges at Fairfield Memorial Hospital. His Fairfield patients come to Columbia for treatment.

Lexington Medical Center

Petitioner and DHEC agree that Lexington Medical Center's three-room endoscopy lab is operating at approximately 105% of capacity. The lab is open five and one-half days a week, fifty-two weeks per year. Using the uniform formula implemented with the other providers, however, Lexington, with three procedure rooms, is actually operating at about 193% of the 3,000 cases per year benchmark capacity.

The statistical inconsistency notwithstanding, the proposed project would have no direct impact upon Lexington's operations. Only Dr. Thieu has staff privileges at Lexington Medical Center, and he rarely practices there. The Lexington statistics are helpful, though, in projecting growth and assessing overall endoscopy needs in the service area. If Lexington's demand increases, other providers in the area with existing capacity can meet that demand.

III. Projected Growth

DHEC is charged with overseeing present medical service needs of the State and also planning for future needs. More than a year may lapse between the time a CON application is filed and a newly licensed facility can begin serving patients. The application must be deemed complete, reviewed, and granted. An applicant must then complete construction, purchase equipment, and hire staff. Since providing new services cannot be accomplished simultaneously with licensure, projections for future service needs must be made and considered by the Department.

Growth rates were not considered by DHEC in assessing need. (Tr. Vol. III, p. 44). Petitioner used two different methods to project growth and thoroughly explained each method and its results. (Tr. Vol. I, pp. 62-66). DHEC noted that the supporting factual documentation provided by Petitioner with its initial application was accurate but pointed to the existing capacity. (Ex. 3b, p. 653). The figures submitted by Petitioner indicate a 53.6% increase in the number of endoscopy procedures performed in Richland and Lexington Counties from 1992 to 1993. Using that figure, utilization of those facilities was projected at 105% for 1994. (Ex. 3b, p. 555). Substituting Fairfield County for Lexington, DHEC projected 1994 utilization by existing providers at 74% of capacity. (Tr. Vol. II, p. 197). Considering total endoscopy procedures for Richland, Fairfield, and Lexington Counties, there was a 53% increase from 1992 to 1993, with 20% growth from 1991 to 1992. (Ex. 3b, p. 649). For 1994, that projects to 103% of capacity under the uniform formula used throughout this Court's analysis of existing provider capacities and utilization.

The recent increase in endoscopy procedures in the service area was illustrated on an individual facility basis by Nurse Greenhalgh's testimony regarding the rise at Richland Memorial during her 1.8 year tenure there. As already noted, RMH is currently performing approximately 18 endoscopic procedures daily, an increase from 13 per day in January, 1993, and 16 per day in January, 1994. (Tr.Vol. III, p.112).

Regardless of whether the Court's uniform formula for determining capacity/utilization is the most accurate or desirable method of calculation, the hard numbers clearly demonstrate growth in endoscopy procedures. Growth at even half the rate of the last two years, collectively and at the affected individual providers, would offset the projected lost procedures to the applying physicians. As demand for endoscopy procedures increases, DHEC admits that the size limitations of existing hospital-based endoscopy units will necessitate a new provider entering the service area. (Tr. Vol. III, p. 423).

Petitioner submitted voluminous data on colon cancer rates in South Carolina and among the target patient populations, indicating a higher than average rate for each. Petitioner also highlighted intended educational and awareness programs to be instituted in the surrounding community to encourage higher risk persons to have endoscopic screenings. Public education and awareness and population increases alone should dictate growth in the absence of any other factors.

From all of the above data and analysis, it is obvious that the proposed project would have negligible, if any, impact upon capacities or utilization rates at Lexington Medical Center, Fairfield Memorial Hospital, or Columbia Gastro, mainly because the applying physicians do not practice at those facilities presently. RMH, Baptist, and Providence would lose procedures to the proposed project. Although RMH, Baptist, and Providence will not realize as great of an increase in endoscopy procedures if the proposed project is approved, projected growth should more than make up for those losses.

Without a consideration of growth, the Department can justify the denial of the CON application. Using a mechanical rule of thumb which automatically equates present excess capacity to lack of need may simplify the review process, but it ignores practical considerations of future demands. Growth has steadily occurred and no evidence suggests that it will not continue.

IV. Medically Underserved Groups Considerations

Criteria 3b, with the vague references to unnecessary duplication extracted, encourages locating services to serve medically underserved areas or segments of the population. The proposed project is located on North Main Street, in Columbia. There is a large concentration of the black population in and around the area. The State of South Carolina has declared much of the area in which the Center is to be located, as well as all of Fairfield County, to be medically underserved. (Hearing Ex. 2C; Tr. Vol. I, p. 51).

The demographic analysis contained in the Center's application reflects that the population the Center will serve, as the applying physicians currently serve, is overwhelmingly composed of racial minority patients. The black population constitutes the largest component of the patients seen by these physicians, representing approximately sixty-five (65%) percent to seventy-five (75%) percent; Southeast Asians represent five (5%) percent; and the remaining patients are of other races, including Caucasians. (Hearing Ex. 3A, p. 268). Financially, approximately twenty (20%) percent to twenty-five (25%) percent of the patients seen in these four practices are comprised of uninsured individuals and individuals receiving Medicaid benefits. (Id.) These minority-group patients are within a racial population which experiences a higher incidence and higher mortality rate of cancer than the white population, particularly with regard to gastrointestinal cancers of the stomach and esophagus. (Tr. Vol. I, p. 57).

Petitioner most obviously meets the guidelines of the redacted Criteria 3(b).

V. Cost Effectiveness and Efficiency

DHEC's denial letter states: "Utilizing current facilities will be more efficient and cost-effective, in that existing resources in the area will be more fully utilized." The record lacks a concrete basis for that decision. The Department reached that conclusion based upon the information furnished by the existing providers without any further analysis. (Tr. Vol. III,

pp. 48-49). There is no information to assist in judging the effect on general overhead costs or per procedure costs for existing facilities other than the general self-serving correspondence from the providers.

Criteria 17 provides: "The proposed project should improve efficiency by avoiding duplication of services, promoting shared services and fostering economies of scale."

The proposed project most definitely duplicates services, discourages the continued use of existing facilities for outpatient procedures by its applying physicians, and arguably limits economies of scale. Using a literal approach, the proposed project fails to meet Criteria 17. If demand for endoscopy remains static, it would be more efficient for the health system to deny this CON application for a new endoscopy center. Given the projected growth in endoscopy procedures, however, efficiency will be lost as existing resources can no longer adequately handle the demand. At that point, duplication becomes desirable.

Further, there is no evidence to indicate that DHEC evaluated or considered the cost impact of the proposed project on patients. DHEC does acknowledge that the cost to patients of the proposed project would be comparable to costs at other local facilities and that the project is financially viable. (Tr. Vol. III, pp. 50-51).

VI. Adverse Impact to Existing Providers

DHEC's finding that "approval of the proposed project will adversely impact the existing providers" is based upon Criteria 23a in Reg. 61-15, which provides: "The impact on the current

and projected occupancy rates or use rates of the existing facilities and service should be weighed against the increased accessibility offered by the proposed services."

Additionally, the following is a provision of the 1992 State Health Plan regarding outpatient facilities:

There has been a substantial increase in the past five years in both the number and percentage of ambulatory surgeries performed and the number of ambulatory surgery centers approved and licensed. This trend has generally been encouraged because many surgical procedures can be performed on an outpatient basis at a lower cost. However, there is now concern that, particularly in the case of specialty facilities, ambulatory surgery centers are being proposed as a method of increasing reimbursement for procedures currently being performed in physician's offices (through the "facility fee" built into the reimbursement mechanisms). The Department will continue to evaluate applications for ambulatory surgery centers on their individual merit. However, it is the determination of the Department that the benefits of improved accessibility will not outweigh the adverse effects caused by the duplication of existing services or equipment. (Ex.1, p. II-63)
(emphasis added)

DHEC interprets the highlighted sentence to be an absolute prohibition against granting a CON in an area that has existing capacity. (Tr. Vol. III, p.32). That interpretation presumes that any duplication of existing services by providers not currently operating at capacity will necessarily result in an adverse effect. It leaves no room for consideration that duplication may have an immaterial negative effect, no effect, or a positive effect on existing providers, the overall health care system, and/or patients. Reading the above-quoted paragraph as a whole, it appears that "adverse effects" refers to the practice of increasing physician reimbursements through facility fee charges. DHEC admits that there is no evidence that the applying physicians are motivated to open the proposed center to increase reimbursement fees. (Tr. Vol. III, pp. 38-39).

Accessibility will be improved to the underserved population in the service area in several ways. The proposed center is physically located in the service area. The medical staff is entirely representative of racial or ethnic minorities. The majority of the existing and targeted patient base of the applying physicians is the underserved population segment. A freestanding center's physical layout is also easier and more convenient for patients to find and enter and less intimidating than a unit contained within a hospital setting.

DHEC did not undertake any standardized methodology to determine the impact upon existing providers from the proposed project. (Tr. Vol. III, pp.44-49). The Department merely relied upon the assertions of the existing providers without attempting to substantiate the conclusions. (Tr. Vol. III, p. 65). Given that growth in the number of procedures performed at some of the existing facilities will be mitigated by the proposed project, it must then be determined whether the smaller increase would have an adverse impact on those providers. The evidence indicates that while existing providers may not benefit from the establishment of a freestanding ambulatory endoscopy center, any adverse effect upon occupancy/use rates should be minimal in light of growth trends. At worst, it is likely that existing providers would encounter neither a net decrease nor increase in endoscopy procedures if the proposed project is approved.

Petitioner's proposed project does not contradict Criteria 23(a) or the 1992 State Health Plan "adverse impact" provision if projected growth is considered in the analysis. Without an adverse impact finding resulting from a thorough study of present and future demands, an automatic denial of the CON application is unwarranted. Duplication, in and of itself, is not grounds for denial. The Department is unpersuasive in its assertion of adverse impact based upon a mechanical rule of thumb.


By a preponderance of the evidence, I find the following facts:

1. Petitioner, Columbia Endoscopy Center, filed a Certificate of Need application with DHEC for a free standing ambulatory surgical facility for gastrointestinal endoscopy only for 2412 Main Street, Columbia, South Carolina.

2. The CON application was deemed complete by DHEC.

3. Only those Project Review Criteria cited by DHEC in its denial of the CON application are in dispute.

4. Petitioner is a South Carolina general partnership composed of Endoscopy Center Associates, Inc., a Delaware corporation based in California (with a 60% interest), and Endocorp, Inc., a South Carolina Statutory Close Corporation (with 40% interest) with four Richland County gastroenterologists as principals.

5. The applying physicians, Drs. Rathna P. Amarnath, Burnett W. Gallman, Taundolyn Suber, and Nguyen, each represent an ethnic or racial minority and serve a predominately racially minority patient base.

6. The proposed service area is composed of Richland, Lexington and Fairfield Counties.

7. Portions of Richland County and all of Fairfield County are designated by the State as medically underserved areas.

8. The following facilities are existing providers of endoscopy services in the proposed service area: Richland Memorial Hospital, Baptist Medical Center, Providence Hospital, Fairfield Memorial Hospital, Lexington Medical Center, and Columbia Gastro.

9. There are currently twenty (20) dedicated endoscopy procedure rooms in the service area, eighteen (18) of which are currently equipped.

10. Four of the existing providers and DHEC used the following formula to estimate capacity and utilization levels: four endoscopy procedures per dedicated room, five days a week for fifty weeks a year, equalling approximately one thousand (1,000) procedures per room annually.

11. Based upon the above uniform formula to estimate capacity and utilization for all existing providers in the service area, the total utilization of existing providers was approximately 81% in 1993.

12. There were 8,822 endoscopic procedures performed by the existing providers in the service area in 1991.

13. There were 10,615 endoscopic procedures performed by the existing providers in the service area in 1992, an increase of 20% from 1991.

14. There were 16,201 endoscopic procedures performed by the existing providers in the service area in 1993, an increase of 53% from 1992.

15. Accessibility to endoscopy services for underserved population segments in the proposed service area will be improved by the project.

16. Considering growth history and projections in population and the numberof endoscopy procedures in the service area, existing capacity will be insufficient in the near future.

17. Existing providers may realize a short-term temporary decrease in use rates of their endoscopy labs; however, projected growth should more than compensate for the short term loss.

18. The proposed project should improve efficiency of the overall health care system for providers and patients as projected growth occurs, although it may result in a short-term temporary inefficiency because of the new duplication of services and an adjustment by existing providers.


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

1. This court has jurisdiction in the case pursuant to S.C. Code Ann. § 1-23-600(E) (Supp. 1993); Order of the DHEC Commissioner dated August 4, 1994; S.C. Code Ann. § 44-7-210(D)(2) (Supp. 1993); 24A S.C. Code Ann. Regs. 61-15 § 403 (1993); and 25 S.C. Code Ann. Regs. 61-72 § 201(Supp. 1993).

2. The proper standard of review or burden of proof in weighing the evidence and making a decision on the merits at a contested case hearing is a preponderance of the evidence. National Health Corp. v. S.C. Department of Health and Environmental Control, 380 S.E.2d 841 (S.C. Ct. App. 1989).

3. S.C. Code Ann. § 44-7-180, et seq. (Supp. 1993) provides for the application procedures, criteria, and standards for a Certificate of Need.

4. Regs. 61-15 provides the regulatory framework for the CON application process.

5. "The constitutional standard for vagueness is the practical criterion of fair notice to those to whom the law applies." Huber v. State Board of Physical Therapy Examiners, ___ S.C. ___, 446 S.E.2d 433 (1994); Toussaint v. State Board of Medical Examiners, 303 S.C. 316, 400 S.E.2d 488 (1991).

6. The phrases "unnecessary" and "unnecessary duplication" are void as unconstitutionally vague. Jim Crockett Promotion, Inc. v. City of Charlotte, 706 F.2d 486 (4th Cir. 1983).

7. Following the South Carolina test for severability, as stated in S.C. Tax Commission v. United Oil Marketers, Inc., 306 S.C. 384, 412 S.E. 2d 402 (1991) and Fairway Ford, Inc. v. Timmons, 281 S.C. 57, 314 S.E. 2d 322 (1984), the invalid phrases are struck from Reg 61-15, Section 802, Criteria 3(a) and 3(b), with the remainder of the regulation valid and enforceable.

8. The 1992 State Health Plan is the applicable version of the State Health Plan for review of this CON application.

9. Petitioner's application is consistent with the 1992 State Health Plan.

10. According to the 1992 State Health Plan, the following project review criteria are considered most important in evaluating a CON for an ambulatory surgical facility:

a. Compliance with the Need Outlined in this Plan;
b. Community Need Documentation;
c. Distribution (Accessibility);
d. Operating Budget;
e. Capital Financing Characteristics;
f. Ability of the Applicant to Complete the Project;
g. Financial Feasibility;
h. Cost Containment;
i. Relationship to the Health System.
(Ex. 1, p. II-63)

11. Petitioner meets the criteria set forth in the 1992 State Health Plan for issuance of a CON for a freestanding ambulatory center for endoscopy only.

12. Petitioner meets the criteria set forth in Reg. 61-15, Section 802 for issuance of a CON for a freestanding ambulatory center for endoscopy only.


Based on the foregoing facts and conclusions, Petitioner has carried its burden in establishing prima facie compliance with the State Health Plan and the Project Review Criteria contained in Reg. 61-15. The information contained in the CON application and supporting data complies with an objective interpretation of the requirements set forth in the Project Review Criteria and the State Health Plan for licensure of an ambulatory surgical facility for endoscopy only. The Department has failed to produce reliable and probative evidence to persuade this Court that Petitioner's CON application should be denied. The review criteria are broad, and DHEC relied unquestioningly upon unsubstantiated information from existing providers without performing and documenting an independent analysis itself. Based upon a thorough review of the entire record and weighing the sources, credibility, and specificity of the information presented, I find and conclude that Petitioner's application should be granted.


IT IS HEREBY ORDERED, that the Department of Health and Environmental Control grant the Certificate of Need applied for by Columbia Endoscopy Center.




December 30, 1994

Columbia, South Carolina


Fn. 1. Criterion 23(a) provides: "The impact on the current and projected occupancy of existing facilities and rates or use rate services should be weighted against the increased accessibility offered by the proposed services." (emphasis added)

Fn. 2. The numbers included at the right of each item reference specific Project Review Criteria.

Fn. 3. The four Criteria which the Department concluded had not been met by Applicant provide as follows:

3. Distribution (Accessibility):
a. Duplication and modernization of services must be justified. Unnecessary duplication of services and unnecessary modernization of services will not be approved.
b. The proposed service should be located so that it may service medically underserved areas and should not unnecessarily duplicate existing services or facilities in the proposed service area.
17. Efficiency:
The proposed project should improve efficiency by avoiding duplication of services, promoting shared services and fostering economies of scale or size.
23. Adverse Effects on Other Facilities:
a. The impact on the current and projected occupancy rates or use rates of existing facilities and services should be weighted against the increased accessibility offered by the proposed services.

Fn. 4. Dr. Amarnath, as the only pediatric gastroenterologist in the state, has a statewide patient base. His service area is considered the entire state of South Carolina.

Brown Bldg.






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