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:
The Long Term Care Foundation vs. SCDHEC et al.

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioner:
The Long Term Care Foundation, d/b/a Roper Nursing Center

Respondent:
South Carolina Department of Health and Environmental Control, and National Health Care L.P.'s, Charleston, South Carolina
 
DOCKET NUMBER:
97-ALJ-07-0381-CC

APPEARANCES:
n/a
 

ORDERS:

FINAL DECISION

This matter arises from a request for a contested case hearing by Long Term Care Foundation, d/b/a Roper Nursing Center ("Roper"). On June 24, 1997, the Department of Health and Environmental Control ("DHEC" or "Department") notified National HealthCare, L.P., Charleston ("NHC") of its decision to award NHC a Certificate of Need ("CON") to construct and operate a 120-bed nursing home facility in Charleston County, South Carolina. On July 3, 1997, Roper filed a Request for a Contested Case Hearing. A hearing on the merits was conducted on November 12-14, 1997. Before the presentation of evidence, the Respondents moved for Partial Judgment on the Pleadings and Partial Summary Judgment. In Motions for Judgment on the Pleadings and Summary Judgment, I determined that there was no genuine issue of material fact as to the finding that the National Health Care (NHC) application was consistent with the 1996 Plan, and that, with regard to that application, there was no genuine issue of fact as to whether the development of superior alternative services to NHC's project would be practicable. Furthermore, I granted Judgment on the Pleadings to Respondents as to Petitioner's allegations that the DHEC decision violated constitutional provisions and that the decision was affected by error of law other than those enumerated in the Petition attached to Petitioner's request for a contested case hearing.

For the reasons that follow, the decision of the DHEC staff to issue a CON to NHC is affirmed. Any issues raised in the proceedings or hearing of this case but not addressed in this Order are deemed denied. Further, the filing of a Motion for Reconsideration is not a prerequisite to any party filing a notice of appeal of this Order.

ISSUES PRESENTED FOR DETERMINATION

Roper asserted thirteen causes of action in its Petition. Respondents' Motion for Summary Judgment as to the Third Cause of Action was granted, and Respondents' Motion for Judgment on the Pleadings was granted as to the Sixth, Ninth and Eleventh Causes of Action. The remaining issues are:

  1. Has Roper proved by the preponderance of the evidence that the Department is incorrect in finding that NHC's CON Application adequately documents need for the project? (First Cause)

2.  Has Roper proved by the preponderance of the evidence that the Department is incorrect in finding that NHC's project is financially feasible? (Second Cause)

3.  Has Roper proved by the preponderance of the evidence that the Department is incorrect in finding that the capital and operating costs of NHC's project and its potential impact on patient charges are reasonable? (Fourth Cause)

4.  Has Roper proved by the preponderance of the evidence that the Department is incorrect in finding that superior alternatives to the NHC project do not exist? (Fifth Cause)

5.  Has Roper proved by the preponderance of the evidence that the Department is incorrect in finding that alternatives to new construction were considered? (Seventh Cause)

6.  Has Roper proved by the preponderance of the evidence that the Department is incorrect in finding that patients would experience serious problems in terms of cost, availability or accessibility in obtaining care of the type NHC's facility proposes in the absence of the project? (Eighth Cause)

7.  Has Roper proved by the preponderance of the evidence that the Department's decision to grant NHC's CON application exceeds DHEC's statutory authority? (Tenth Cause)

8.  Has Roper proved by the preponderance of the evidence that the Department's decision to grant NHC's CON application is clearly erroneous in view of the reliable, probative and substantial evidence on the whole record, and whether the Department's decision to grant NHC's CON application was based upon valid ground and was arbitrary, capricious and characterized by abuse of discretion or clearly unwarranted exercise of discretion? (Twelfth and Thirteenth Causes)

DISCUSSION

The ultimate issue in this case is whether to grant a CON to NHC to construct a 120-bed nursing home in Charleston County, which will not participate in the Medicaid program until additional Medicaid nursing home permit days become available. A CON must be obtained from the Department before a new health service may be added by a health services provider. The State Certification of Need and Health Facility Licensure Act ("CON Act") seeks to prevent unnecessary duplication of health care facilities and services and to guide the establishment of health facilities and services in South Carolina. To achieve these ends, the Department is required to prepare a State Health Plan for use in the administration of the CON program. A CON must be obtained from DHEC before undertaking the construction or other establishment of a new health care facility. Nursing homes are included in the definition of a health care facility. See S.C. Code Ann. §44-7-150(10) (Supp. 1997). A nursing home provides inpatient care for convalescent or chronic disease patients who require nursing care and related medical services, in which such nursing care and medical services are prescribed by, or are performed under the general direction, of persons licensed to practice medicine or surgery in the State.

At the time the application in the present case was filed, the 1996 State Health Plan ("Plan") was in effect. The 1996 Plan contains eight "Project Review Criteria" (Criteria) considered most important in evaluating CON applications for nursing home facilities. See 24A S.C. Code Ann. Regs. 61-15 §§ 801, et seq. (Supp. 1997). The Criteria are the criteria applied, as applicable to the particular project being reviewed, by DHEC to determine whether to grant the application. These criteria are: (a) need; (b) projected revenues; (c) projected expenses; (d) net income; (e) methods of financing; (f) financial feasibility; (g) record of the applicant; and (h) distribution (accessibility). However, a project does not have to satisfy every criterion in order to be approved. 24A S.C. Code Regs. 61-15, Section 801.3 (Supp. 1997). DHEC notified the NHC in a letter dated April 8, 1997, that NHC's application was complete and in accordance with S.C. Code Ann. Regs. 61-15, §304, and listed the following project review criteria as the most important in the review of the application:

1. Compliance with the State Health Plan (Need) -1

2. Distribution (Accessibility) -3a,3b,3c,3e,3f,3g

3. Projected Revenues-6a,6b,6d

4. Financial Feasibility -15

5. Methods of Financing - 11a

6. Record of Applicant - 13a, 13d

While several secondary issues are in dispute, the question of need for the project underlies and affects all arguments in this case. The 1996 Plan identified thirty-five counties, including Charleston, as counties which need additional nursing home beds. For Charleston County, the 1996 Plan established a need for 300 additional nursing home beds by the year 1998.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, and considering the burden of persuasion by the parties, I make the following Findings of Fact by a preponderance of the evidence:

General Findings

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

2. NHC is a South Carolina Corporation. NHC currently owns or operates 13 nursing home facilities having a total of 1,868 beds in nine counties in South Carolina, namely, Aiken (2), Anderson, Greenville (2), Greenwood, Laurens (2), Lexington, Richland and Sumter (2). NHC is the largest provider of nursing home services in South Carolina.

3. Roper is a nonprofit organization owned by Long Term Care Foundation. Its nursing home facility in Charleston County is operated under contract by Diversified Health Services. Roper operates a 132-bed nursing home facility located in Charleston County.

4. NHC applied on March 13, 1997 for a CON to construct and operate a 120-bed nursing home facility in Charleston County, South Carolina. The application addressed all applicable standards and requirements set forth in CON Regulations, Project Review Criteria and the Plan. DHEC informed NHC in a letter dated April 8, 1997, that its application was considered complete for purposes of DHEC review.

5. DHEC is required to notify the applicant of the relative importance of the project review criteria to be used in reviewing the application. 24A S.C. Code Ann. Regs. 61-15, § 802 (Supp. 1997), 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. DHEC identified the following criteria as those most important in reviewing NHC's application, listing the criteria in their order of importance, and referencing beside each criterion relevant subsections of Regulation 61-15, § 802:

a. Compliance with the State Health Plan (Need) - 1

b. Distribution (Accessibility) - 3a, 3b, 3c, 3e, 3f, 3g

c. Project Revenues - 6a, 6b, 6d

d. Financial Feasibility - 15

e. Methods of Financing - 11a

f. Record of Applicant - 13a, 13d

6. On April 25, 1997, by publication in the State Register, DHEC notified the public and affected persons that NHC's CON application had been accepted for filing and that affected persons had 30 days from April 25, 1997, to submit comments or requests for a public hearing. Though Roper is an affected person as defined in the Act, Roper did not request a public hearing on the NHC application. The only issues Roper raised during the application review period were raised by letter dated June 17, 1997 and received by the Department via facsimile on June 18, 1997. Those issues were that:

a. NHC did not document need.

b. The increase in residential care, assisted living, and home health services are reducing the demand for nursing home beds, which will make the approval of the NHC project an unnecessary duplication of existing services.

c. NHC's projected occupancy rate is too high and the project's financial feasibility will be jeopardized if the utilization rates are not achieved.

d. NHC's "proforma (sic) financial statements identified discrepancies in operating expenses" as related to ancillary costs reported on the "Proforma (sic) Budget."

7. On June 24, 1997, DHEC approved the issuance of the NHC CON. Pursuant to this decision letter ("Decision Letter"), the Department based its decision to issue the CON to NHC on the following:

a. The applicant has adequately documented need for the project within the application;

b. The project appears to be financially feasible; and

c. The proposed project has been determined to be consistent with the standards for long term care facilities and services as outlined in the 1996 S.C. Health Plan.

8. In the Decision Letter, the Department made the following findings pursuant to 24A S.C. Code Ann. Regs. 61-15, § 501:

a. The capital and operating costs of the proposal and their potential impact on patient charges are reasonable;

b. Superior alternatives to such services in terms of cost, efficiency, or appropriateness do not exist and that the development of such alternatives is not practicable;

c. In the case of new construction, alternatives to new construction (e.g., modernization or sharing arrangements) have been considered; and

d. Patients will experience serious problems in terms of costs, availability or accessibility, or such other problems as may be identified by the department, in obtaining care of the type proposed in the absence of the project.

9. Failure to meet any single criterion is not fatal to a CON application. Regs. 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). There is no requirement in the State Health Plan that a nursing home CON application have physician support letters.

10. On July 3, 1997, Roper filed its Request for a Contested Case hearing. DHEC timely transmitted the Request for a Contested Case hearing to the Administrative Law Judge Division.

Documentation of Need

11. A nursing home is a medical facility under the Act. As required by Regs. 61-15, § 504, the Department's decision to approve the CON was based on the currently approved State Health Plan ("Plan") in effect at the time the application was accepted. The Plan in effect at the time the application was received was the 1996 South Carolina Health Plan.

12. S.C. Code Ann. § 44-7-180 (Supp. 1997) requires DHEC, with the advice of the health planning committee, to prepare the Plan for use in the administration of the CON program. Public hearings are held around the state for the public to submit input to the Plan. The Plan addresses the need for medical facilities and services in the State. The nursing home bed need methodology used in the Plan is based upon a ratio of 39 beds/1,000 population age 65+, which ratio factors in the turnover rates of beds, available supply, desired occupancy factor, new Medicaid eligible demanders (people needing nursing home services), new non-Medicaid eligible demanders, and the limited number of slots available in the South Carolina Community Long Term Care Project.

13. The 1996 Plan documents a need for 300 new nursing home beds in Charleston County through the year 1998. The need in the Charleston area was projected for two years from the year of the current Plan, because it takes approximately two years for a nursing home to be developed, constructed and licensed. At the same time that the NHC application was under consideration by DHEC, two other CON applications for nursing home beds, one seeking approval for 60 beds, and the other seeking approval for 42 beds, were approved by DHEC for the Charleston area. None of these CON applications were considered competing because the total of nursing home beds offered did not exceed the 300 additional nursing home bed need from the 1996 Plan.

14. The 300 additional bed need set forth in the 1996 Plan is not divided by payor source. A large percentage of nursing home beds are paid with Medicaid (Title XIX) Program funds. Medicaid days are funded by the state and nursing homes apply for a certain number of Medicaid days from the ones that have been allocated for that year. If additional nursing home beds are not built by facilities who will participate in the Medicaid program, then nursing home patients who could benefit when additional Medicaid days are offered will not be able to do so. Roper, although eligible for more Medicaid days, refused to apply for additional Medicaid days when those days were offered, even though additional Medicaid days would have increased Roper's occupancy rate. Furthermore, unless there are nursing home beds not certified for Medicaid available when additional Medicaid days become available for Charleston County, the Medicaid patient days will be given to another county and the Charleston population will not have access to those days.

Since DHEC cannot presently approve additional Medicaid beds based on limited financial resources in South Carolina, NHC was required by DHEC to provide a certification that it would not participate in the Medicaid program. However, NHC will seek eligibility to participate in the Medicaid program once additional Medicaid days become available. Without available and willing facilities, those additional Medicaid days will be allocated to a county with nursing home facilities willing to have beds certified as Medicaid beds.

15. Based upon the documented trends and projections of the Charleston County population, especially the increase of the elderly population, and the projected need in the 1996 Plan for additional nursing home beds in Charleston County, an additional nursing home offering the services recited in the NHC application is needed in Charleston County.

16. Roper alleges that NHC's project will unnecessarily duplicate services offered by existing nursing homes in Charleston County. Roper further maintains that its nursing home is currently underutilized, and that the nursing homes currently operating in Charleston County have capacity sufficient to accommodate patients who do not participate in the Medicaid program. The evidence offered by Roper to prove that the NHC facility would unnecessarily duplicate its services and therefore have an adverse effect on Roper was based upon speculation. Roper did not prove by the preponderance of the evidence that NHC's application does not adequately demonstrate need. Furthermore, Roper did not prove that the services currently offered by existing nursing homes in Charleston County would be unnecessarily duplicated by the NHC project.



Financial Feasibility

17. Regs. 61-15, § 202(B)(16) requires that the applicant submit a proposed budget, on the budget form provided by DHEC, for the three (3) years after the completion of the proposed project. In its application, NHC submitted its proposed three (3) year budget on the form provided by DHEC and provided additional budget information beyond that required by DHEC. Roper contended in its letter to DHEC that NHC's projected occupancy rate is too high and that the project's financial feasibility will be jeopardized if the utilization rates are not achieved. In other words, Petitioner alleged that the NHC application did not demonstrate that there was a target population in Charleston County capable of supporting a nursing home such as the NHC project. At the hearing, Petitioner questioned only the absence of an allocation in NHC's application for working capital in the budgets. However, since NHC's parent company will absorb the cost of working capital, there was no need to allocate it in the budget.

18. NHC purchased four (4) tracts of land comprising 22.17 acres in Charleston County in 1992 at a total cost of $1,395,205. The cost of the land was $62,932 per acre. The proposed site for the nursing center will occupy 9.446 acres of the 22.17 acres owned by NHC. The cost of the land as stated in the application that the nursing center will occupy is $594,480. The total project cost as stated in the application, for the nursing center is $8,991,030.

19. NHC's semi-private room rate is $105/day for 1999 (yr. 1 of operation), $110.25/day for 2000 (yr. 2 of operation), and 115.76/day for 2001 (yr. 3 of operation). The room rate is the same as room and board. NHC's private room rate is $129/day for 1999 (yr. 1 of operation), $135.45/day for 2000 (yr. 2 of operation), and $142.22/day for 2001 (yr. 3 of operation). The facility will have 49 semi-private rooms (98 beds) and 22 private rooms (22 beds).

20. The payor sources for NHC's proposed facility include private pay (income or other assets, including help from family members), Medicare, Medicare risk avoidance, CHAMPUS, traditional insurance (reimbursement for ancillary services and medications), managed care, nursing home care insurance, and charity care. Both the private and the semi-private room rates are comparable to those in other nursing home facilities in Charleston County. Furthermore, the application provided that at least 15% of the patient mix of the first year would be Medicare recipients, and that the facility would increase its Medicare patient numbers each year. Based on the information provided in the NHC application, there was sufficient documentation in the application of a target population which could support a nursing home in Charleston County which did not participate in the Medicaid program.

In 1996 there would be 205 nursing home beds needed by persons with incomes of $50,000 or over. In 2001, there would be 284. However, the $50,000 figure is a very conservative estimate, because in actuality patients would more than likely use assets other than income alone to pay the nursing home costs. The 1995 Joint Annual Reports ("JARs") of nursing home facilities in Charleston County indicated that there were already 354 nursing home beds paid from funds other than Medicaid or Medicare. This evidence demonstrates that, even as early as 1995, there were more persons using nursing home beds funded by sources other than Medicaid or Medicare than had incomes over a $50,000 level. Accordingly, private payor sources are derived from sources other than income alone. In fact, most private pay nursing home residents have some sort of insurance. Moreover, the percentage of nursing home residents obtaining long term care insurance is increasing and is projected to continue increasing.

21. Roper did not establish that NHC's rates were unreasonable or that the capital and operating costs were unreasonable. To the contrary, the evidence established that NHC's rates and its capital and operating costs are reasonable. Therefore, the proposed project is financially feasible as required by 24A S.C. Code Ann. Regs. 61-15 § 802(15).

Projected Patient Cost and Charges

22. The only issue concerning patient costs or charges presented by Roper to DHEC was that NHC's "proforma (sic) financial statements identified discrepancies in operating expenses" as related to ancillary costs reported on the "Proforma (sic) Budget." Roper's letter of June 18, 1997, miscalculated the projected ancillary costs, and the ancillary costs stated in NHC pro forma budget are correct. In determining the total ancillary cost on the pro forma budget, Roper neglected to add into the total cost the cost of physical, occupational and speech therapy, which are also considered to be ancillary costs. When all ancillary costs are included, the total equals the ancillary costs identified on the Estimated Medicare Contractual Adjustment schedule.

23. In determining the cost for entry into a nursing home, only the room and board charges should be considered. The amount of ancillary services to be used by each resident is variable and speculative.

24. NHC's proposed patient charges for both the private and semi-private rooms are comparable to rates charged by existing nursing home facilities in Charleston County and are reasonable.

Alternatives to New Construction

25. NHC does not have an existing facility in Charleston County and does not have the alternative of expanding such a facility. NHC considered the alternative of constructing a smaller nursing home facility in Charleston County. DHEC nursing home licensure requirements provide that nursing homes can be staffed on a 60 bed basis. The number of beds necessary to provide the high acuity of services at the facility is 120. It is not in the best interest of patients or the facility's economic feasibility to build a facility with fewer beds. The only alternative NHC has to fill the existing need for nursing home beds in Charleston County is to construct a new 120-bed facility.

Availability or Accessibility of Services

26. The NHC nursing center proposes to provide the following services:

a. Nursing Services;

b. Rehabilitation Services;

c. Dietary Services;

d. Medical Director;

e. Consultant Services;

f. Housekeeping and Janitorial Services;

g. Laundry;

h. Patient Assessment Program;

I. Discharge Planning;

j. Respite Care;

k. Management;

l. Hospice;

m. Dementia/Alzheimer's Services;

n. Sub-Acute Care; and

o. Respiratory Therapy.

The facility will have a dedicated thirty (30) bed Alzheimer/dementia unit, which will be the only dedicated Alzheimer's unit in Charleston County, and a sixteen (16) bed dedicated sub-acute unit complete with oxygen and suction.

27. Most nursing homes in South Carolina do not have sub-acute units complete with in-wall suction and oxygen. In-wall oxygen provides a more consistent rate of oxygen, is not cumbersome like tanks, provides a higher level of oxygen, has humidifiers and different types of oxygen, and is better for tracheotomy patients. In-wall suction has a better pull and requires less frequent patient suction. Additionally, a dedicated Alzheimer unit in a nursing home is more beneficial and safer to both the facility's Alzheimer patients and non-Alzheimer patients. Roper does not have a dedicated Alzheimer unit.

CONCLUSIONS OF LAW

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

1. The Administrative Law Judge Division has jurisdiction over this matter and is authorized to hear it as a contested case pursuant to S.C. Const. Art. I, §22; Chapter 23 of Title 1 of the 1976 Code, as amended, S.C. Code Ann. §1-23-600(B) (Supp. 1997); S.C. Code Ann. §§ 1-23-310, 320 (Supp. 1997); § 44-7-210(D)(2) (Supp. 1997); S.C. Code Ann. Regs. 61-15 §403 (Supp. 1997) and S.C. Code Ann. Regs. 61-72 § 201 (Supp. 1997).

2. The burden of proof in a contested case hearing is a preponderance of the evidence, with the burden being upon the Petitioner. Therefore, Roper has the burden of proof to establish by a preponderance of the evidence that NHC's CON application should be denied. S.C. Code Ann. §§ 44-7-11- through 44-7-340 (Supp. 1997); S.C. Code Ann. Regs. 61-15, §403(1) (Supp. 1997); National Health Corp. v. S.C. Dep't. of Health and Environmental Control, 298 S.C. 373, 380 S.E.2d 841 (1989).

3. An Administrative Law Judge's review of a DHEC administrative decision to grant a CON application is governed by S.C. Code Ann. § 44-7-210(E) (Supp. 1997), 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.

(emphasis added). 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." Milliken and Co. v. South Carolina Department of Labor, 275 S.C. 264, 267, 269 S.E.2d 763, 764 (1980). Therefore, 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.

4. Pursuant to S.C. Code Ann. §1-23-330(4) (1986), in the evaluation of the NHC application, and in the presentation of testimony and evidence at the hearing, DHEC used its experience, technical competence, and specialized knowledge.

5. DHEC is an agency of the State of South Carolina, charged, inter alia, with the administration and implementation of the State Certification of Need and Health Facility Licensure Act, S.C. Code Ann. §§ 44-7-110, et seq. (Supp. 1997). It is therefore the State agency responsible for licensing and regulating nursing homes. Nursing homes are licensed and regulated pursuant to 24A S.C. Code Ann. Regs. 61-17 (Supp. 1997). South Carolina Code Ann. §§ 44-7-180, et seq. (Supp. 1997) provides for the application procedures, criteria, and standards for a Certificate of Need. Furthermore, the CON program is administered pursuant to the guidelines of S.C. Code Ann. Regs. 61-15 (Supp. 1997). In order to approve a CON application for a nursing home the Department must find that:

a. The capital and operating costs of the proposal and their potential impact on patient charges are reasonable;

b. Superior alternatives to such services in terms of cost, efficiency, or appropriateness do not exist and that the development of such alternatives is not practicable;

c. In the case of new construction, alternatives to new construction (e.g., modernization or sharing arrangements) have been considered;

d. Patients will experience serious problems in terms of costs, availability or accessibility, or such other problems as may be identified by the department, in obtaining care of the type proposed in the absence of the project; and

e. In the case of a proposed addition of beds for the provision of nursing care service, the addition is consistent with the plans of other State agencies responsible for provision and financing of long-term care (including home health) services.

24A S.C. Code Ann. Regs. 61-15 § 503 (Supp. 1997).

6. 24A S.C. Code Ann. Regs. 61-15 § 202(2)(b)(11) requires that a project application "demonstrate that the proposed project is needed or projected as necessary to meet an identified need of the public." The regulation further requires the application to address the following: "identification of the target population; the degree of unmet need; projected utilization of the proposed facility or service; utilization of existing facilities and services; past utilization of existing similar services within the facility; and justification that the proposed project will not unnecessarily duplicate existing entities." The regulation also requires that the applicant show all assumptions, data sources and methodologies and that the population statistics be consistent with those generated by the State Demographer.

7. S. C. Code Ann. § 44-7-180 (Supp. 1997) requires DHEC, with the advice of the health planning committee, to prepare the Plan for use in the administration of the CON program. The Plan addresses the need for medical facilities and services in the State. A nursing home is a medical facility under the Act. All CON applications must be consistent with the State Health Plan in effect at the time of the application. S.C. Code Ann. Regs. 61-15, §504 (Supp. 1997). The public hearings, which are held across the state at the time a State Health Plan is proposed, are the appropriate forums in which to object to the provisions of a State Health Plan. Once the provisions of a State Health Plan are approved by the DHEC Board, the CON analysts are bound by the requirements of the Plan.

8. As required by Regs. 61-15, § 504, the Department's decision to approve the CON was based on the currently approved Plan in effect at the time the application was accepted. The plan in effect at the time the application was received was the 1996 South Carolina Health Plan ("Plan").

9. DHEC is required by S. C. Code Ann. § 44-7-210(A) (Supp. 1997) and by S. C. Code Ann. Regs. 61-15, Section 304 (Supp. 1997) to notify the applicant of the relative importance of the project review criteria to be used in reviewing the application. The relative importance assigned to each specific criterion depends on the importance of the criterion applied to the specific project. S. C. Code Ann. Regs. 61-15, Section 801.2 (Supp. 1997). According to the 1996 South Carolina Health Plan, the following project review criteria are considered most important in evaluating a CON for a nursing home facility:

a. need;

b. projected revenues;

c. projected expenses;

d. net income;

e. methods of financing;

f. financial feasibility;

g. record of the applicant;

h. distribution (accessibility).

10. A project does not have to satisfy every criterion in order to be approved. Regulation 61-15, § 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).

11. The NHC application meets all of the requirements of the Project Review Criteria which DHEC ranked in importance, pursuant to S.C. Code Ann. Regs 61-15, §802.

12. The NHC application is consistent with and is in compliance with the 1996 South Carolina Health Plan.

13. DHEC met all statutory and regulatory requirements in its review of the NHC application and in its decision to issue a CON to NHC to construct a 120-bed nursing home facility that will not participate in the Medicaid program.

14. Roper is an "affected person" with standing to request a contested case hearing of DHEC's decision to approve NHC's CON application for the construction of a 120-bed nursing home facility. S.C. Code Ann. §44-7-130 (Supp. 1997) and S.C. Code Ann. Regs. 61-15, § 103.1 (Supp. 1997). Furthermore, Roper timely filed a Petition for Administrative Review for a Contested Case Hearing regarding DHEC's approval of NHC's CON application. However, Petitioner failed to prove by a preponderance of the evidence that DHEC's review of the NHC application was not in accordance with the State Health Plan, the Project Review Criteria, and Regulation 61-15. Likewise, the evidence and testimony presented at the hearing do not support a finding that DHEC failed to follow its adopted procedures. Evidence of allegations must be sufficient and probative of the matter proven. Coleman v. Palmetto Life Insurance Co., 241 S.C. 384, 128 S.E.2d 699 (1962).

ORDER

IT IS HEREBY ORDERED that DHEC grant a Certificate of Need to National HealthCare, L.P. to construct a 120-bed nursing home facility in Charleston County.

AND IT IS SO ORDERED.





Ralph King Anderson, III

Administrative Law Judge

July 14, 1998

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

Copyright © 2021 South Carolina Administrative Law Court