The Supreme Court of South Carolina has decided the South Carolina Department of Health and Environmental Control must continue to implement and enforce the state's certificate of need program despite the governor's veto of all funding for the program this fiscal year, according to a recent article from the law firm of McGuireWoods.
In 2013, Gov. Nikki Haley (R) issued a line-item veto that eliminated funding for the certificate of need program within DHEC. In response to the veto, the DHEC director issued a letter to healthcare providers notifying them South Carolina DHEC would not operate the certificate of need program beginning July 1, 2013, according to the article.
After receiving the letter, 10 healthcare providers, along with the South Carolina Health Care Association and the South Carolina Hospital Association, petitioned the state's Supreme Court for a ruling in the matter. Because state law still required hospitals and health systems to obtain a certificate of need before beginning construction projects, the law's defunding left organizations with construction plans in a state of limbo.
The South Carolina Supreme Court concluded South Carolina DHEC has a responsibility to administer the certificate of need program, and DHEC's responsibility is not discretionary. The court provided two potential solutions for lack of funding: DHEC could charge and collect fees to cover the cost of operating the certificate of need program, or DHEC could shift funds from other programs within the agency to fund the certificate of need program, according to the article.
Although it is unclear which option DHEC will choose, DHEC objected to the option of collecting fees for the program because the Certificate Of Need Act specifically requires the first $750,000 that DHEC collects in administrative fees every year to be remitted to the general fund of
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