Court: State must run program despite funding veto

04/15/2014 12:02 AM

04/15/2014 12:04 AM

South Carolina’s public health department must administer a program that regulates the building or expansion of medical facilities even though its funding was vetoed by the governor, the state’s highest court ruled Monday.

The ruling means that the Department of Health and Environmental Control will have to find another way to pay for the Certificate of Need program, which state law requires medical facilities to go through for approval to expand or build.

Last year, Gov. Nikki Haley vetoed the nearly $2 million needed to run it, saying the process would be best left to be sorted out in the free market.

When Haley vetoed the money for the Certificate of Need program, about three dozen projects worth about $100 million were under review, and they remain stalled.

State legislators ultimately sustained Haley’s veto after Ways and Means Chairman Brian White took the floor and said the veto was just about the money, not whether the program should continue. Since that vote, some House Republicans have said they didn’t intend to nix the program entirely.

Hospitals and an association that represents them sued, saying that state law still mandates the Certificate of Need review, and the high court heard arguments last month.

During the hearing, an attorney representing South Carolina’s hospitals said DHEC should find other ways to fund the Certificate of Need program, even if that meant charging higher fees

“That is a problem of their own making,” said Mitch Brown, detailing his notion that DHEC could self-fund the program if it charged higher fees.

In their ruling, justices pointed out that the governor’s line-item veto power affects only funding, not the existence of a program set out in state law – even if that is what she intended.

“The Governor’s veto message leaves no doubt that she intended to use her line item veto power to abolish the entire CON program,” the court wrote. “However, the Governor is not empowered to exercise her veto pen in a manner that so broadly affects public policy and attempts to alter legislative intent by reaching back to repeal a permanent law.”

Billy Wilkins, an attorney for the hospitals, called the decision “a victory for good government” in South Carolina.

A DHEC spokesman said the agency was disappointed in the court’s decision and intended to file a motion for reconsideration. In a statement, Haley spokesman Doug Mayer called the Certificate of Need program “outdated and bad public policy” and said the governor “is determined and will continue working with like-minded legislators to reform a clearly politically driven process that puts additional bureaucracy between South Carolinians and their health care decisions.”

The court Monday didn’t directly address how DHEC should pay for the program but said the agency could use an emergency provision to make changes to its fee structure.

“While we hold that DHEC must fund the CON program, we decline to specify the manner in which DHEC must do so,” the court wrote.

In a dissenting opinion, Associate Justice Costa Pleicones wrote that he agreed with the majority in that the veto didn’t dissolve the program entirely but disagreed that the program could be restarted without funding from the Legislature.

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