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. |
