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

SC Administrative Law Court Decisions

CAPTION:
Image Trust Florence, Inc. vs. SCDHEC et al.

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioner:
Image Trust Florence, Inc.

Respondent:
South Carolina Department of Health and Environmental Control, Florence Medical Imaging, Florence, South Carolina
 
DOCKET NUMBER:
95-ALJ-07-0539-CC

APPEARANCES:
M. Elizabeth Crum, Esquire and Eileen S. Githens, Esquire
Attorneys for Petitioner

Cheryl H. Bullard, Esquire
Attorney for Respondent S.C. Department
of Health and Environmental Control

Michael A. Molony, Esquire
Attorney for Respondent Florence Medical Imaging
 

ORDERS:

ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before me upon Petition and Amended Petition for Administrative Review filed by Image Trust Florence, Inc. ("ITF"). ITF contests the determination of the South Carolina Department of Health and Environmental Control ("Department") that the establishment of a magnetic resonance imaging ("MRI") center by Florence Medical Imaging ("FMI") is not subject to review under the Department's Certificate of Need ("CON") application and review process set forth in S.C. Code Ann. §§ 44-7-110, et seq. (Supp. 1995) and 24A S.C. Code Regs. 61-15 (Supp. 1995).

ITF is a provider of MRI services in Florence, South Carolina. FMI sought to establish an outpatient freestanding MRI Center in Florence, South Carolina. On July 18, 1995, FMI submitted financial information to the Department to determine the applicability of CON requirements to its proposed MRI Center. In a letter dated July 26, 1995, Mr. Jerry L. Paul, Director of the Department's Health Facilities and Services, advised FMI that the Department concluded that FMI's project did not require CON review. On August 8, 1995, ITF filed a Petition for Administrative Review (Petition) of the Department's formal determination regarding the FMI project. On August 11, 1995, the Department forwarded the Agency Transmittal Form with Petitioner's Petition attached to the Administrative Law Judge Division. ITF amended its Petition on August 28, 1995. On August 30, 1995, ITF filed a Motion for Writ of Mandamus to enforce an automatic stay, pursuant to 24A S.C. Code Regs. 61-72 § 205(A) (1994), during the pendency of this action. On September 15, 1995, FMI filed a Motion to Dismiss ITF's Petition. A hearing on the motions was held on September 25, 1995 at the Administrative Law Judge Division, at which time oral arguments were presented. Both motions were denied by Order dated October 12, 1995.

A contested case hearing was held on January 2 and 22, 1996, to determine whether FMI's MRI project is subject to CON review as alleged by ITF. ITF has failed to demonstrate that FMI's total project cost exceeded the $600,000 threshold amount necessary for CON review, or that FMI is a health care facility. Therefore, CON review of the project is not required.

FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. Notice of the time, date, place, and nature of the hearing was timely given to all parties.

2. The Department is the agency of the State of South Carolina charged, inter alia, with the administration and implementation of the CON review procedure and exemptions therefrom for building, acquisitions, and expansions by health care related persons.

3. FMI sought to establish an outpatient MRI Center in the Florence area. FMI requested an administrative determination that the CON review provisions of 24A S.C. Code Regs. 61-15 were inapplicable to its proposed MRI project. On July 18, 1995, FMI submitted records, documents, and other information to the Department demonstrating that the total project cost of acquiring the medical equipment and establishing the MRI center was less than $600,000. Upon request by the Department, FMI supplemented these submissions and provided additional information as requested.

4. Jerry L. Paul, Director of Health Facilities and Services for the Department, reviewed all documents provided by William E. "Bill" Feley, former president of FMI, and concluded that the project did not require CON review.

5. The Department issued a staff decision, by letter dated July 26, 1995, notifying FMI that its project did not have to undergo CON review because FMI's project consisted of the acquisition of medical equipment to be used for diagnosis with a total project cost of less than $600,000.

6. Since August 21, 1995, FMI has operated an MRI facility at 1120 West Evans Street, Florence, South Carolina.

7. FMI's current ownership is in dispute and subject to pending civil litigation.

8. ITF, a provider of MRI services in Florence County, South Carolina, sought administrative review alleging that the Department failed to properly apply the applicable statutes and regulations in making its determination. ITF further contends that FMI exceeded the $600,000 threshold, thus, necessitating CON review.

9. At the hearing of this matter, ITF offered extensive testimony and exhibits regarding amounts of money which were allegedly expended on the FMI project.

10. This tribunal heard testimony from FMI's former president, Mr. William Feley and FMI's current president, Mr. Paul Callozzo. Mr. Feley and Mr. Callozzo verified certain expenditures for the FMI project.

11. Jerry L. Paul, the Department employee charged with determining the applicability of the CON statutes and regulations, was offered and qualified by ITF as an expert in the area of granting or denying exemptions. (Record I at 97.8-11). Mr. Paul was the Petitioner's only expert witness, albeit an adverse witness. He proffered his opinion as to which expenditures for the FMI project should be included in the total project cost. With regard to whether certain expenditures should be included in the total project cost, Mr. Paul offered contradictory testimony in some instances and indicated that he would defer to a certified public accountant at the Department in several other instances. See (Paul, Record I at 118-119); (Paul, Record I at 118.6-21 and 154.1-7); (Paul, Record I at 190.12-25, 191.1-5); (Paul, Record II at 171.1-15); (Paul, Record II at 193.13-25, 194.1-6); (Paul, Record II at 311.18-24); (Paul, Record II at 311.25-312.6); and (Paul, Record II at 312.7-12).

12. Albert A. Munn, IV, a certified public accountant, licensed by the State of South Carolina, and partner with the accounting firm of Munn and High, P.C. in Florence, South Carolina, was offered by FMI and qualified as an accounting expert to address the issue of what is appropriate capital costs for computation with regard to generally accepted accounting principles (GAAP). (Record II at 222-234). Mr. Munn had the opportunity to review all documents relating to the total project cost, in addition to making a site visit to the FMI facility. Mr. Munn testified as to whether certain expenditures should be included in FMI's total project cost. Mr. Munn also testified that in his expert opinion, taking a conservative approach disfavorable to FMI, FMI's total project cost did not exceed the $600,000 threshold set forth by the applicable regulation. (Record II at 216, 221.16-19, and 234.18-25).

13. In a letter from Mr. Munn to Mr. Paul, dated December 29, 1995, and received by the Department on January 22, 1996, Mr. Munn informed the Department that FMI's total project cost equaled $599,369.87. (Petitioner's Exhibit #5). At the hearing of this matter, Mr. Munn testified that in his expert opinion, this total should be further reduced by $1,426.84, which includes $1,197.84 that was reimbursed to FMI and $229 used to purchase toner, a charger, a cartridge, and a supply cartridge for the copier and fax machine. Munn considered these items to be office supplies which should not be included in the total project cost. (Munn, Record II at 244.9-245.8).

14. ITF presented Petitioner's Exhibit #1, which consists of approximately sixty tabs of expenditures that it alleged should be included in the total project cost. The total of these expenditures proffered by ITF was $600,132.59. According to the testimony and evidence presented at the hearing of this matter, the total project cost of the FMI project is below $600,000. This tribunal heard extensive testimony and reviewed exhibits with regard to ITF's contention that FMI exceeded the $600,000 threshold. However, there are several expenditures which clearly should be deducted from ITF's alleged total for the FMI project.(1)

a. The ITF total should be reduced by $1,197.84. This figure represents the amount of a check written to John Casbarro for the construction of a cement slab for the MRI equipment. Testimony during the trial demonstrated that this work was never performed by Mr. Casbarro. (Feley, Record II at 48). Rather, FMI retained the services of Red Holliday, who did construct the cement slab. (Feley, Record II at 48). Further, testimony by Mr. Callozzo and Mr. Feley indicated that the $1,197.84 had been refunded, although there was some question as to the form and time of refund. Therefore, the ITF total should be reduced by $1,197.84, resulting in a revised total of $598,934.75.
b. ITF's total should be further reduced by $952.50 which appears twice, at Tabs 15 and 47, as a payment to Dowis Associates. Ms. Crum, counsel for ITF, indicated at the hearing that this amount "is a duplicate of an earlier tab, so that should be struck." (Record II at 95.21-23). This additional reduction reduces ITF's total to $597,982.25.
c. An expenditure of $108.75 for an optical disk, an electronic storage medium, should also be excluded from the total reached by ITF. Mr. Paul indicated that he would defer to an accountant whether or not the optical disc should be included in the total project cost. (Record II at 312.7-12). Further, Mr. Munn testified in his expert opinion that the optical disk is "coded to office supplies because they're an expendable item." (Record II at 219.14-16). Accordingly, the optical disk should not be included as total project cost. This further reduction brings the total to $597,873.50.
d. The $495 expenditure appearing at Tab 35 of Petitioner's Exhibit #1 should be reduced by $100. Mr. Callozzo testified that because FMI did not have the carpet cleaned, $100 was deducted from the invoice amount, leaving a balance of $395, instead of the original $495. (Record I at 68.25-69). The $395 cost was further verified by Mr. Feley. (Record II at 82.5-12). With a $100 reduction, ITF's total is further reduced to $597,773.50.
e. Tracey Wright performed consulting, marketing, and design services for FMI. (Feley, Record II at 97.15). Mr. Paul's testimony indicated that he would have to defer to a C.P.A. to determine whether these expenditures in the amount of $1,712.32 would be classified as a capital cost. (See Record II at 311.18-24) Mr. Munn excluded this amount from his calculation of the total project cost because he was told by Bill Feley that these expenditures were for marketing. (Munn, Record II at 281-283). A reduction of $1,712.32 decreases ITF's total to $596,061.18.
f. The med bags, totaling $104, and the mailboxes, totaling $92.75 should also be deducted from ITF's total. Mr. Munn testified that the med bags were an expendable item and the mailboxes were office supplies. (Munn, Record II at 285-286). Therefore, these items should not be included in the total project cost according to Mr. Munn. These items also represent amounts that Mr. Paul would not include in the total project cost because they represent expendable items. (Paul, Record II at 309.8-21). ITF's total should be further decreased by $196.75, which reduces ITF's total to $595,864.43.
g. FMI paid $1,987.40 to the City of Florence as a business license fee. FMI also paid a license fee to the Department in the amount of $67.50. Mr. Paul testified that in order to determine if these expenditures should be included in the total project cost, he would "seek out an opinion from a C.P.A." (Paul, Record II at 311.25-312.6). Moreover, Mr. Munn stated that these licenses are required each year and are expenses that should not be included in the total project cost. (Munn, Record II at 283.22 to 284.17). Subtracting these two fees totaling $2054.90 decreases the ITF total to $593,809.53.
h. The cost of the radiation badges should be deducted from ITF's total because ITF's witness, Mr. Paul, offered contradictory testimony regarding whether the radiation badges should be included in the total project cost. First, Mr. Paul testified that he would have to consult the Department's accountant and inquire whether the radiation badges should be included in the total project cost. (Paul, Record I at 118.6-21). Later, Mr. Paul stated that he would include the radiation badges in FMI's total project cost. (Paul, Record I at 154.1-7). This tribunal does not find this testimony to be credible as to whether the radiation badges should be included in the total project cost. Mr. Munn was not questioned about the radiation badges. ITF's total should be reduced by $403.60 which further decreases the ITF total to $593,405.93.
i. Based upon the testimony of Mr. Paul, the telephone expenditure of $383.53 and the pager expenditure of $20 should not be included in the total project cost. Mr. Paul testified that he would have to defer the determination as to whether these items should be included in total project cost to an accountant at the Department. (Paul, Record I at 118-119). Therefore, ITF's total should be further reduced by $403.53, which further decreases the ITF total to $593,002.40.

15. ITF alleged a total project cost of $600,132.59 for the FMI project. This figure includes amounts totaling $7,130.19, as stated and referenced above in items "a" through "i." If ITF's alleged total of $600,132.59 is reduced by $7,130.19, ITF's alleged total project cost would be $593,002.40. This amount is approximately $7,000 below the $600,000 threshold.

16. FMI presented testimony which indicated that the total project cost was less than $600,000. (Munn, Record at 221.16-19 and 234.18-25). In Mr. Munn's letter to Mr. Paul, dated December 29, 1995, Mr. Munn informed the Department that FMI's total project cost equals $599,369.87. (Petitioner's Exhibit #5). However at the hearing of this matter, Mr. Munn testified that this amount should be further reduced by $1,426.84, which includes $1,197.84 that was reimbursed to FMI and $229 used to purchase toner, a charger, a cartridge, and a supply cartridge for the copier and fax machine. Mr. Munn considered these items to be office supplies which should not be included in the total project cost. (Munn, Record II at 244.9 through 245.8). ITF alleges that the following items should be added to the total project cost submitted to the Department by FMI.

a. ITF alleges that legal fees paid to Robert Carter in the amount of $2,316.69 should be added to FMI's total. However, these legal fees were included in FMI's total project cost. (Munn, Record II at 269-70). These legal expenses were also included in ITF's total submitted to this tribunal. Therefore, no additional amount should be added to FMI's total for the legal expenses.
b. ITF further alleges that check #200 in the amount of $272.95 was not included in FMI's total project cost. This check was written to Compusystem for supplies and installation. Mr. Munn testified that the $272.95 was not included because it was expended for office supplies. (Munn, Record II at 279.19-25). However, Mr. Paul testified that he would include this check for $272.95 in the total project cost because "this is part of the cost of getting that piece of equipment on-line and usable to the facility." (Paul, Record II at 305.1-5). Mr. Munn is the better qualified expert to render an opinion on what is a properly charged capital cost under generally accepted accounting principles. Therefore, based upon credible evidence presented to this tribunal the amount of $272.95 should not be included in the total project cost.

17. The Department does not interpret the applicable CON statutes and regulations defining "health care facility" in such a manner that would bring FMI within their parameters.

18. The longstanding practice of the Department, pursuant to the applicable statutes and regulations is not to require all purchasers of MRI units to undergo CON review.

19. The evidence establishes that the Department acted in accordance with the applicable statutory and regulatory requirements in not requiring CON review in this case.

CONCLUSIONS OF LAW AND DISCUSSION

Based upon the foregoing Findings of Fact and the testimony put forth in this case, I make the following Conclusions of Law.

A. Jurisdiction/Procedure

1. This matter is an administrative review of an agency decision and is governed by the provisions of the Administrative Procedures Act. S.C. Const. art. 1, § 22, See League of Women Voters of Georgetown County v. Litchfield by the Sea, 305 S.C. 424, 409 S.E.2d 378 (1991).

2. The Administrative Law Judge Division has jurisdiction over this matter and is authorized to hear this case pursuant to S.C. Const. art. 1, § 22; S.C. Code Ann. §§ 1-23-500 through 1-23-600 (Supp. 1995), and 24A S.C. Code Ann. § 44-7-210(E) (Supp. 1995).

3. S.C. Code Ann. § 44-7-140 grants the Department the authority to administer the Certificate of Need ("CON") program for the State of South Carolina.

4. The CON program is administered by the Department under the guidelines set forth at 24A S.C. Code Regs. 61-15, which were promulgated pursuant to S.C. Code Ann. §§ 44-7-110, et seq (1995).

5. FMI originally sought a determination from the Department as to the applicability of the CON statutes and regulations to its proposed MRI center. FMI asserted that since its acquisition of medical equipment did not surpass the $600,000 threshold found in 24A S.C. Code Regs. 61-15, § 102(1)(f), it was not required to undergo CON review. FMI did not seek an exemption as that term is defined by 24A S.C. Code Regs. 61-15, § 104. In essence, FMI sought a determination of non-applicability of the CON review provisions, pursuant to 24A S.C. Code Regs. 61-15, § 102(3).

B. Total Project Cost

6. ITF contends that the total project cost involved in the acquisition and installation of the medical equipment for the FMI project exceeded the $600,000 threshold set forth in S.C. Code Regs. 61-15, § 102(1)(f).

7. As the moving party, ITF bears the burden of proving by a preponderance of the evidence that FMI should have been required by the Department to undergo the CON review process set forth in S.C. Code Ann. §44-7-110, et seq. and 24A S.C. Code Regs. 61-15. National Health Care Corp. v. S.C. Dep't of Health and Environmental Control, 298 S.C. 373, 380 S.E.2d 841 (Ct. App. 1989); see also 24A S.C. Code Regs. 61-15 § 403; Sanders, Neese, and Nichols, South Carolina Trial Handbook, § 9:3 Party With Burden, Civil Cases (1994).

8. The preponderance of the evidence "is evidence which is of the greater weight or more convincing than the evidence which is offered in opposition to it . . . ." Black's Law Dictionary 1182 (6th ed. 1990). "The preponderance of the evidence means such evidence as, when considered and compared with that opposed to it, has more convincing force and produces in the mind the belief that what is sought to be proved is more likely true than not true." Sanders, Neese, and Nichols, South Carolina Trial Handbook, § 9:5 Quantum of Evidence in Civil Cases(1994), (citing Frazier v. Frazier, 228 S.C. 149, 89 S.E.2d 225 (1955)). FMI's motion for directed verdict to establish a burden of proof by "clear and convincing evidence" need not be addressed by this tribunal, as the Petitioner has failed to meet the lower standard of proof by preponderance of the evidence, which is applicable to this case.

9. Evidence of allegations must be sufficient and probative of the matter to be proven. See Coleman v. Palmetto State Life Ins. Co., 241 S.C. 384, 128 S.E.2d 699 (1962).

10. The test for the sufficiency of a proffer of evidence to warrant a finding is as follows.

A . . . finding must be based on the evidence and . . . on the facts proved . . . . [A]lthough difficulty of proof does not prevent the assertion of a legal right, the . . . finding cannot rest on surmise nor can it rest on mere speculation. Likewise, . . . a . . . finding cannot rest on conjecture. . . guesswork . . . or rest on supposition, assumption, imagination, suspicion, arbitrary action, whim, caprice, illogical and unsound reasoning, innuendo, percentage, likelihood, mere theory, or conclusions that are in conflict with undisputed fact . . . The evidence on which the . . . finding is based must be competent, legal evidence received in the course of the trial, credible, and of probative force, and must support every material fact. The decision should be against the party having the burden of proof where there is no evidence, or the evidence as to the material issue is insufficient. . . . (emphasis added).

32 C.J.S Evidence § 1042 (1964); see also S.C. Code Ann. § 1-23-320(i) (Supp. 1995).

11. Evidence has probative value "if it tends to prove an issue." Blacks Law Dictionary 1203 (6th ed. 1990).

12. CON review is required for most health care facility projects. S.C. Code Ann. § 44-7-110, et seq.; 24A S.C. Code Reg. 61-15.

13. 24A S.C. Code Regs. 61-15, § 102(1)(f) mandates CON review if the total project cost for the acquisition of medical equipment, which is to be used for diagnosis or treatment, is in excess of $600,000. Therefore, for the determination of nonapplicability of the CON review process to be invalid, ITF must prove by a preponderance of the evidence that FMI's total project cost was in excess of $600,000.

14. 24A S.C. Code Reg. 61-15, § 103(25) defines "total project cost" as:

. . . the estimated total capital cost of a project including land cost, construction, fixed and movable equipment, architect's fees, financing costs, and other capital costs properly charged under generally accepted accounting principles as a capital cost. The determination of project cost involving leased equipment or buildings will be calculated based upon the total value (purchase price) of the equipment or building being leased. (emphasis added).

15. A capital cost is a cost which benefits the purchaser for a period of longer than one (1) calendar year. Capital cost is commonly defined as cost for improvement to property, such are depreciable over the useful life of the improvements. See Robert N. Anthony and James S. Reese, Accounting Text and Cases (6th ed. 1979); Ralph Estes, Dictionary of Accounting (1981); J.K. Lasser's, Standard Handbook for Accountants (1962). An expense, i.e., an item other than a capital cost, is generally considered to be a cost of an item of service which is exhausted within a twelve (12) month period. Id.

16. The estimated total capital cost properly charged under generally accepted accounting principles, and other costs included in the total project costs of FMI's MRI project, did not exceed the $600,000 threshold amount necessary to require CON review. Although this tribunal is cognizant of the testimony and documentary exhibits offered by ITF with regard to expenditures on this project, such amounts were not substantiated as "total capital costs . . . properly charged under generally accepted accounting principles as capital costs." 24A S.C. Code Regs 61-15, § 103(25) (Supp. 1995). ITF did not present credible testimony that under generally accepted accounting principles, FMI's total project cost, as that term is defined in 24A S.C. Code Regs. 61-15, § 103(25), reached or exceeded $600,000.

17. "The qualification of a witness as an expert in a particular field is within the sound discretion of the trial judge." Smoak v. Liebherr-Am., Inc., 281 S.C. 420, 422, 315 S.E.2d 116, 118 (1984); S.C. Dep't of Highways and Public Transp. v. Manning, 283 S.C. 394, 323 S.E.2d 775 (1984). However, where the expert's testimony is based upon facts sufficient to form the basis for an opinion, the trier of fact determines its probative weight. Berkley Elec. Coop. v. S.C. Public Serv. Comm'n, 304 S.C. 15, 402 S.E.2d 674 (1991); Smoak, supra. Further, a trier of fact is not compelled to accept an expert's testimony, but may give it the weight and credibility he determines it deserves. Florence County Dep't of Social Serv. v. Ward, 310 S.C. 69, 425 S.E.2d 61 (1992); Greyhound Lines v. S.C. Public Serv. Comm'n, 274 S.C. 161, 262 S.E.2d 18 (1980). He also may accept one expert over another. S.C. Cable Tel. Assn. v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992). Accordingly, this tribunal finds that Mr. Munn's testimony deserves greater weight than that of Mr. Paul. While Mr. Paul is Director of Health Facilities and Services of the Department and charged with making a determination on CON exemptions, it is quite apparent from his testimony that he is highly reliant on accountants and CPAs to assist him in such matters. As he is not an accountant and would defer to the judgment of his staff who are accountants and CPAs, his testimony must be given lesser weight than that of Mr. Munn with regards to GAAP. Although Mr. Paul was qualified as an expert "in the area of the Department granting or denial of exemptions," the most credible testimony from an expert witness with regard to what should be included in the total project cost using GAAP was that offered by Mr. Munn. Mr. Munn testified that, in his opinion, the total project cost for this project did not exceed $600,000. This testimony was unrefuted and this tribunal finds it to be compelling.

C. Health Care Facility

18. ITF contends S.C. Code Ann. § 44-7-160(1) and 24A S.C. Code Regs. 61-15, § 102(1)(a), require FMI to undergo CON review prior to acquisition and operation of a freestanding MRI unit because FMI is undertaking "the construction and expansion of a new health care facility." S.C. Code Ann. § 44-7-160(4) (Supp. 1995) and 24A S.C. Code Regs. 61-15, § 102(1)(d) require CON review before a "capital expenditure by or on behalf of a health care facility which is associated with the addition or substantial expansion of a health service for which specific standards or criteria are prescribed in the State Health Plan." Not all purchases of MRI units render the owner a health care facility, thus subjecting the project to CON review. Sections 44-7-160(1) and (4), as well as 24A S.C. Code Regs. 61-15, §§ 102(1)(a) and (1)(d), do not apply to the present situation. Because FMI is not a "health care facility", these regulations are inapplicable.

19. The term "health care facility" is specifically defined in S.C. Code Ann. § 44-7-130(10) (Supp. 1995) as:

[A]cute care hospitals, psychiatric hospitals, alcohol and substance abuse hospitals, tuberculosis hospitals, nursing homes, kidney disease treatment centers, including free-standing hemodialysis centers, ambulatory surgical facilities, rehabilitation facilities, residential treatment facilities for children and adolescents, rehabilitation centers for mentally retarded persons or persons with related conditions and any other facility for which CON review is required by federal law.

24A S.C. Code Regs. 61-14, §103(13) contains essentially the same definition of a health care facility, with slight modification.(2)

20. The General Assembly has the power to prescribe and adopt legal definitions by statute and regulation, and such definitions are binding upon the courts and should prevail. Pervis v. State Farm Mutual Automobile Ins. Co., 304 S.C. 283, 403 S.E.2d 662 (Ct. App. 1981); seealso Brown v. Martin, 203 S.C. 84, 26 S.E.2d 317 (1943). S.C. Code Ann. § 44-7-130(10) and 24A S.C. Code Regs. 61-15, § 103(13) set forth the definition of a health care facility. An outpatient MRI center does not fall within the parameters of the definition. This tribunal cannot expand the definition approved by the General Assembly to include FMI within the reach of this statute and regulatory provision.

21. The above conclusion is buttressed by the fact that the Department does not interpret the definition of a health care facility to include outpatient, freestanding MRI centers. An agency's interpretation of the regulations and statutes which it is charged with administering is entitled to a most respectful consideration and should not be overruled absent compelling reasons. Captain's Quarters v. S.C. Coastal Council, 306 S.C. 488, 413 S.E.2d 13 (1992); Dalton v. S.C. Tax Comm'n, 295 S.C. 174, 367 S.E.2d 459 (Ct. App. 1988). The Department, as the sole state agency responsible for administering the CON, is given great discretion and latitude in administering the terms and conditions of that program. Byerly Hospital v. State Health and Human Servs. Fin. Comm'n, ___ S.C. ___, 460 S.E. 2d 383 (1995). ITF presented no compelling reasons in support of adopting its definition of a health care facility; a definition that is completely contrary to that enumerated by both the statute and regulation.

22. The testimony and evidence offered by ITF did not establish that, utilizing generally accepted accounting principles, the total project cost for FMI exceeded the $600,000 threshold which would necessitate CON review.

23. No evidence presented during the course of this hearing has indicated that the Department's review was inadequate or incomplete, or that the determination of nonapplicability was erroneous.

24. A decision is arbitrary if it is without a rational basis, is based alone on one's will and not upon any course of reasoning in exercise of judgment, is made at pleasure, without adequate determining principles, or as governed by no fixed rules or standards. Deese v. S.C. State Board of Dentistry, 286 S.C. 182, 332 S.E.2d 539 (Ct. App. 1985).

25. The Department's determination that FMI need not apply for CON review under the applicable statutes and regulations was based upon clear standards and sound reasoning. The Department fully complied with the applicable requirements set forth in the statutes and regulations.

26. Any other issues raised in the proceedings of this case but not addressed in this Order are deemed denied pursuant to ALJD Rule 29(B).

ORDER

Therefore, it is ordered that Florence Medical Imaging's MRI project does not require CON review.

AND IT IS SO ORDERED.



John D. Geathers

Administrative Law Judge



Columbia, South Carolina

This 19th day of April, 1996



____________________

Fn. 1. Accordingly, it should be noted that this analysis should not be construed to suggest that all other expenditures are therefore included in the total project cost of FMI's MRI project.

Fn. 2. This regulation also includes those facilities for which a CON is required under state law as health care facilities.


Brown Bldg.

 

 

 

 

 

Copyright © 2022 South Carolina Administrative Law Court