ORDERS:
FINAL ORDER AND DECISION
This matter comes before me pursuant to S.C. Code Ann. §§ 1-23-600(D) (Supp. 1997) of the
Administrative Procedures Act ("APA") upon appeal from a Final Order of the State Board of
Nursing ("Board") in which the Board found Appellant had engaged in the unauthorized practice of
nursing in violation of S.C. Code Ann. § 40-33-20. Although the Board concluded that Appellant
violated § 40-33-20, the Board declined to impose a sanction and granted Appellant a license to
practice nursing in South Carolina. Appellant filed a Notice of Appeal on May 20, 1998, briefs
were filed by the parties, and oral arguments were heard on September 8, 1998, at the offices of the
Administrative Law Judge Division (ALJD). Upon consideration of the record, applicable law, and
arguments of counsel, that portion of the Board's Order finding that Appellant engaged in the
unauthorized practice of nursing is reversed, and that part granting Appellant a license to practice
nursing in this State is affirmed.
STATEMENT OF THE CASE Appellant is a licensed registered nurse in the State of New York who moved to South
Carolina in February 1998, to begin a new job at Blue Cross and Blue Shield of South Carolina (Blue
Cross) as Director of the Medicare Durable Medical Equipment Division. The position entails
supervising Medicare expenditures on durable medical equipment such as walkers, inhalers,
wheelchairs, and crutches in a multi-state region. One of the requirements included in the job
description was licensure as a registered nurse. This requirement did not specify where the applicant
should be licensed, and neither Blue Cross nor the federal government (whose Medicare contract
Appellant would be safeguarding) required the applicant to hold a South Carolina nursing license.
After accepting the position at Blue Cross, but before moving to South Carolina, Appellant
contacted the Board regarding state licensing procedures. Appellant desired to be able to volunteer
her nursing skills or teach nursing if an opportunity outside of her full-time job with Blue Cross
should arise. Included in the materials mailed to Appellant was information that stated no one could
practice nursing in the state without first becoming licensed.
Appellant reported to work at Blue Cross on Monday, February 9, 1998, and began an
extensive orientation program. During her first week on the job, Appellant met her fellow
employees, had her picture taken for an identification badge, and was trained on general Blue Cross
policies regarding payroll, time cards, parking, employee insurance, and educational assistance. On
Friday, February 13, 1998, Appellant applied for her permanent South Carolina license by
endorsement at the offices of the State Board of Nursing in Columbia. At that time, a Board staff
member informed Appellant that her attendance at orientation constituted the practice of nursing
according to the Board's administrative policy. Appellant was told that she would not be granted
a South Carolina nursing license unless she signed a consent order admitting that she had engaged
in the unauthorized practice of nursing. She refused to sign the consent order.
On February 24, 1998, Appellant filed a completed application for licensure by endorsement,
and the Board issued Appellant a temporary permit on March 11, 1998. Appellant appeared before
the Board on March 27, 1998, at a hearing to determine whether she should be issued a permanent
license to practice nursing. The Board ordered that her application for licensure be granted and did
not sanction Appellant, but the Board did find that she had engaged in the unauthorized practice of
nursing by attending orientation programs between February 9, 1998 and February 13, 1998 in
violation of S.C. Code Ann. § 40-33-20 (Supp. 1997). Appellant filed a Notice of Appeal on May
20, 1998, to appeal the violation finding. The Division assumed jurisdiction over this matter
pursuant to S.C. Code Ann. § 1-23-380 (B) (Supp. 1997), and oral arguments were heard before the
ALJD on September 8, 1998.
ISSUES
I. Did the Board err in concluding that Appellant engaged in the unauthorized practice of nursing by attending an orientation program?
II. Did the Board deny Appellant's due process right by applying an improper
standard of proof in the contested case hearing?
III. Is the Board's decision to sanction Appellant voidable because the Board lacked subject matter jurisdiction over Appellant for the period of time for which the Board sanctioned her?
DISCUSSION
I. Unauthorized Practice of Nursing
Appellant asserts that the Board erred in concluding that she engaged in the unauthorized
practice of nursing merely by attending a general orientation program during her first week in her
new position at Blue Cross. To support its conclusion that Appellant's actions constituted the
practice of nursing, the Board relies upon the fact that Blue Cross required licensure as a registered
nurse as a prerequisite to employment and that the Board has an internal policy which considers
"orientation ... to be employment if the individual is being compensated as a nurse...." State Board
of Nursing Policy #V.D.3.
The Board's conclusion constitutes an error of law on several grounds. First, the Board
relied on an internal agency policy equating orientation with the practice of nursing and neglected
to provide Appellant with adequate notice of this policy. Furthermore, the decision of the Board is
contrary to the reliable, probative and substantial evidence on the whole record.
A. Internal Agency Policy Not Binding
Where a statute provides controlling principles, an administrative agency may exercise a
large measure of discretion within those principles. 1 Am. Jur. 2d Administrative Law, § 118
(1962). S.C. Code Ann. §§ 40-33-20 and 40-33-510 provide that it is unlawful for any person to
practice as a registered nurse in this State unless he or she is licensed as a registered nurse by the
State Board of Nursing. Section 40-33-10 defines the practice of nursing and S.C. Code Ann. § 40-33-270 (Rev. 1986) authorizes the Board to promulgate regulations necessary for the purposes of
carrying out the provisions of the chapter relating to the Nursing Board and the practice of nursing.
Regulations promulgated to effect the Legislative mandate must contain articulable standards
which can be known in advance, conformed with, and applied rationally. See Mattison v. Dallas
Carrier Corp., 947 F.2d 95 (4th Cir. 1991), modified on other grounds in Johnson v. Hugo's
Skateway, 974 F.2d 1408 (4th Cir. 1992). Regulation is defined in S.C. Code Ann. § 1-23-10(4)
(Supp. 1997), inter alia, as an:
agency statement of general public applicability that implements or prescribes law
or policy or practice requirements of any agency. Policy or guidance issued by an
agency other than in a regulation does not have the force or effect of law. The term
"regulation" includes general licensing criteria and conditions....
Fairness, a fundamental goal of due process, dictates that an agency act in accordance with
known standards that are impartially applied through revealed procedures. Aman and Mayton,
Administrative Law 173 (West 1993). Known standards allow an applicant to understand what the
agency expects and limits the agency's allocation of choices based upon principle rather than
preference. Id. Well-defined criteria provide persons with more precise notice of what conduct will
be sanctioned and promotes equality of treatment among similarly situated parties. Dixon v. Love,
431 U.S. 105 (1972). The standards should be written with sufficient precision to give fair warning
as to what the agency will consider in making its decision. Commission on Gen. Educ. v. Union
Township of Fulton County, 410 N.E.2d 1358 (Ind.App. 1980). Criteria for licensure is not required
to be so specific as to be all inclusive in setting forth factors to be considered; however, factors must
not be arbitrarily limited by unwritten internal agency policy. Home Health Serv., Inc. v. South
Carolina Tax Comm'n, 312 S.C. 324, 440 S.E.2d 375 (1994); Captain's Quarters Motors Inn, Inc.
v. South Carolina Coastal Council, 306 S.C. 488, 413 S.E.2d 13 (1991).
Whether a particular agency action amounts to a rule or a general policy statement depends
upon whether the agency action establishes a binding norm. Home Health Service, 312 S.C. at
328, 440 S.E.2d at 379; Ryder Truck Lines, Inc. v. United States, 716 F.2d 1369 (1983). An agency
oversteps its statutory authority in formulating and applying a binding standard if it does so without
formalizing it by regulation. See Captain's Quarters, 306 S.C. at 490, 413 S.E.2d at 14. An
administrative decision reached without reasoned judgment, lacking adequate determining principles
or rational basis, or governed by no fixed rules or standards, is arbitrary. Deese v. State Board of
Dentistry, 286 S.C. 182, 332 S.E. 2d 539 (Ct. App. 1985). "[W]hen there is a close question whether
a pronouncement is a policy statement or regulation, the commission should promulgate the ruling
as a regulation in compliance with the APA." Home Health Service, 312 S.C. at 329, 440 S.E.2d
at 378.
Clearly, in the instant case, the Board has applied its internal policy relating to employment
orientation and the practice of nursing as a general licensing criteria and condition and binding norm
upon Appellant. Had the policy merely been one criterion considered in determining whether
Appellant committed misconduct or been a basis for conducting an investigation to more fully
explore Appellant's activities, then the policy may have been reasonable. Instead, the Board relied
upon the internal policy to create an irrebuttable presumption that anyone involved in an orientation
program for a job which requires the employee to be a licensed nurse is engaged in the practice of
nursing, regardless of the content of the orientation program. The policy expands the statutory
definition of the practice of nursing and the Board failed to provide Appellant with adequate notice
of this policy in accordance with due process. Appellant did not have prior notice because the Board
did not publish its policy as a regulation in accordance with the Administrative Procedures Act
(APA), S.C. Code Ann. §§ 1-23-130 and 1-23-140.
Any agency statement of general public applicability that implements or prescribes law or
policy or practice requirements of any agency involving general licensing criteria and conditions
must be promulgated as a regulation. Policy or guidance issued by an agency other than in a
regulation does not have the force or effect of law. S.C. Code Ann. § 1-23-10(4) (Supp. 1997). The
internal policy here is neither a regulation, rule, order, nor decision within the intent and meaning
of the APA. Therefore, the policy is not binding upon Appellant or other applicants.
B. Notice of Policy to Appellant Inadequate
Even if the Board's internal policy in this case is enforceable, the Board failed to follow its
own stated procedure of advising applicants of the Board's internal policy, depriving Appellant of
any reasonable means of receiving notice of the policy. Internal Policy V.D.3 provides, inter alia:
1. The Board staff by consultation and through the News Magazine:
a. advises employers that a South Carolina license or temporary permit
is required before the nurse employee begins orientation;
...
c. advises graduates of nursing education programs and endorsees that
orientation is determined to be employment if the individual is being
compensated as a nurse.
Appellant had no warning that attending an orientation session would be considered illegal. Despite
the internal policy directive to staff to consult and advise endorsee applicants that the Board
considered orientation to be the practice of nursing, the Board never informed Appellant or
Appellant's employer of its practice.
The Board did not include a statement of this policy in the materials sent to Appellant when
she requested information on state licensing policies and procedures. The Board notifies applicants
graduating from state nursing programs of the policy regarding orientation, yet does not notify out
of state nurses applying for licensure by endorsement in South Carolina. Appellant's employer, Blue
Cross, a company that conceivably employs many registered nurses, similarly never received a copy
of the Board's policy. The first time Appellant or Blue Cross became aware of the orientation policy
was when Appellant delivered her license application to the Board's offices on February 13, 1998.
Appellant could have found the Board's policy only by looking in a binder stored in the Board's
offices, a binder which she would need to know about in order to request.
The procedure for providing Appellant with notice of binding, internal Board policy is not
a reasonable method to convey the required information. It is not rational to expect out of state
applicants to know of the existence, content, and applicability of a notebook located in the Board's
office and such a notebook is not an adequate means of actually informing interested persons of
licensing criteria and conditions. In its brief, the Board incredibly suggests that Appellant should
have sought disclosure of the Board's internal policies by filing a Freedom of Information Act
("FOIA") request pursuant to S.C. Code Ann. §§ 30-4-20(c) (Supp. 1997). Respondent's Brief, p.
10. An applicant should not have to resort to making a formal FOIA request to be assured of being
provided with basic licensing information during a routine application process.
To satisfy due process, an agency's administrative decision must follow previously stated,
ascertainable standards which are written with sufficient precision to give fair warning as to what
the agency will consider in making its decision , and those standards should be readily available to
those having potential contact with the agency. Commission on General Education v. Union
Township of Fulton County, 410 N.E.2d 1358 (Ind.App. 1980).
No statute within the chapter governing nursing or regulation promulgated by the Board
characterizes "orientation" as the practice of nursing. The designation of orientation as the practice
of nursing is found only as part of an internal policy of the Board. Because the policy qualifying
orientation as the practice of nursing is not a promulgated statute or regulation, and Appellant had
no actual notice of the existence or content of the policy, the designation does not have the force and
effect of law and is not legally binding on Appellant. See, Home Health Serv., Inc. v. South Carolina
Tax Comm'n, 312 S.C. at 328-29, 440 S.E.2d at 377-78; See also, Ryder Truck Lines, Inc. v. United
States, 716 F.2d 1377-78; American Bus Ass'n v. United States, 627 F.2d 525 (D.C. Cir. 1980). C. Board's Decision Unsupported By Substantial Evidence
The provisions of the APA govern an appeal from an action of the Board. Lark v. Bi-Lo.
Inc., 276 S.C. 130, 276 S.E.2d 304 (1981). Under the APA, the ALJ "shall not substitute its
judgment for that of the agency as to the weight of the evidence on questions of fact." The ALJ,
however, may reverse or modify the decision of the Board if substantial rights of the appellant have
been prejudiced because the administrative findings or decisions are "clearly erroneous in view of
the reliable, probative and substantial evidence on the whole record." S.C. Code Ann. § 1-23-380(A)(6) (Supp. 1997).
The General Assembly has outlined specific actions which constitute the "practice of
nursing" in this state:
the provision of services for compensation that assist individuals and groups to
obtain or maintain optimal health. Nursing practice is commensurate with the
educational preparation and demonstrated competencies of the individual who is
accountable to the public for the quality of nursing care. Nursing practice includes
the provision of direct care and treatment services including the implementation of
a medical regimen as authorized and prescribed by a licensing physician, dentist, or
other person authorized by law, teaching, counseling, administration, research,
consultation, supervision, delegation, and evaluation of practice. Nursing process
includes the assessment and nursing diagnosis of human responses to actual or
potential health problems and the planning, intervention, and evaluation of care in the
promotion and maintenance of health, the case finding and nursing management of
illness, injury, or infirmity, the restoration of optimum function, or the achievement
of a dignified death.
The Board's conclusion that Appellant engaged in the unauthorized practice of nursing is not
supported by substantial evidence. The record is absolutely devoid of any evidence to prove, or
even suggest, that Appellant performed any type of nursing services during her orientation.
Although Blue Cross chose to fill the Director of the Medicare Durable Medical Equipment Division
position with a registered nurse, neither Blue Cross nor the federal government (whose Medicare
contract Appellant would be safeguarding) required the applicant to hold a South Carolina nursing
license.
It is conceivable that in exercising the duties of the position of Director of the Medicare
Durable Medical Equipment Division, that the job holder would be required to engage in certain
activities which may be considered the practice of nursing, but that possibility does not constitute
a violation within itself. The Board must allege and prove that Appellant actually engaged in one
or more of the activities enumerated by statute or regulation as being the practice of nursing. There
is no evidence which, in considering the record as a whole, would allow reasonable minds to reach
the conclusion that the Appellant engaged in the practice of nursing during her orientation period.
See, e.g., Jennings v. Chambers Dev. Co., No. 2877 at *5, 1998 WL 472465 (S.C. Ct. App. Aug. 10,
1998).
II. Applicable Standard of Proof
Appellant also asserts that the Board failed to apply the appropriate standard of proof in the
contested case proceeding. She argues that the applicable standard in this matter is "clear and
convincing" evidence. In its Order, the Board based its findings on "the reliable, probative, and
substantial evidence on the whole record." In professional licensing proceedings, the burden of
proof is customarily a preponderance of the evidence. 2 Am. Jur. 2d Administrative Law § 363
(1994).
The Board did apply an inappropriate standard, as the substantial evidence standard is one
of appellate review, not of proof at the contested case stage. See S.C. Code Ann. § 1-23-380(A)(6)
(Supp. 1997). In South Carolina, the preponderance of evidence standard is the appropriate standard
in professional licensing and disciplinary cases, unless a different standard is legislatively mandated.
Anonymous v. State Bd. of Medical Examiners, 329 S.C. 371, 375, 496 S.E.2d 17, 19 (1998).
However, the issue of the correct standard of proof is moot as the Board failed to prove that
Appellant engaged in the unauthorized practice of nursing under either the clear and convincing or
preponderance standard of proof. Additionally, upon review, the Board's conclusion under either
burden is not supported by substantial evidence.
III. Subject Matter Jurisdiction
Appellant finally argues that the Nursing Board lacked subject matter jurisdiction over her
for the period of time for which she was found to have engaged in the unauthorized practice of
nursing. Appellant contends that the only authority the Board properly could exercise over her as
an out of state registered nurse applying for licensure by endorsement was to deny her application.
The Board asserts that its actions regarding Appellant's application are within its statutory power to
authorize and regulate the practice of nursing.
The Board possess the power to "deny licensure [to nurses registered in other states] based
on evidence of unlawful acts, incompetence, unprofessional conduct, or other misconduct." S.C.
Code Ann. § 40-33-560 (Supp. 1997). "Misconduct" by a candidate for a nursing license includes
violating any statute or regulation governing the practice of nursing. S.C. Code Ann. § 40-33-935
(Supp. 1997). However, the Board's powers extend beyond the power to deny a license. The
General Assembly has granted the Board the power to "examine, license, and renew the licenses of
duly qualified individuals" and to "conduct investigations and hearings concerning alleged
violations" of the nursing statutes. S.C. Code Ann. § 40-33-220 (Supp. 1997). Additionally, S.C.
Code Ann. § 40-1-115 (Supp. 1997) provides that "[t]he Board has jurisdiction to act on any matter
which arises during the practice authorization period."
Since Appellant is licensed to practice in another state, the Board may deny Appellant a
license upon a finding of misconduct. The Board's actions in investigating Appellant's alleged
misconduct and holding a hearing on Appellant's application are within the Board's power to
regulate the practice of nursing. The Board is authorized to examine the qualifications of Appellant
and evaluate if she meets the requirements of the nursing statutes. Therefore, the Board possessed
subject matter jurisdiction over Appellant to conduct a hearing to evaluate Appellant's alleged
misconduct in engaging in the practice of nursing by participation in an orientation program prior
to receiving a license to practice in this state.
CONCLUSION
The Board's reliance on its internal policy to find that Appellant engaged in the unauthorized
practice of nursing constitutes an error of law and the Board's method of providing Appellant with
"notice" of its internal policy regarding orientation is unreasonable and does not comport with
minimum due process standards. In viewing the whole record, the Board's conclusion that Appellant
engaged in the unauthorized practice of nursing is unsupported by the reliable, probative, and
substantial evidence.
ORDER
For the foregoing reasons, the Board's Order is REVERSED in part and AFFIRMED in part.
That portion of the Board's Order finding that Appellant engaged in the unauthorized practice of
nursing is reversed, and that part granting Appellant a license to practice nursing in this State is
affirmed. Appellant is hereby granted a license to practice nursing in this state as a registered nurse.
__________________________________
STEPHEN P. BATES
ADMINISTRATIVE LAW JUDGE
October 29, 1998
Columbia, South Carolina |
