Haley, legislature should cease games with certificate of need program

Once again, Gov. Nikki Haley vetoed funding for the state's certificate of need program, whose stated purpose is to hold down health care costs by preventing unnecessary duplication.

And once again, we ask for a more sensible approach to this issue: If Haley doesn't like the certificate of need program, she should work to change the law rather than simply not pay for its enforcement.

Haley struck $1.8 million from the budget designated for the program, and the House sustained the veto in a 56-65 vote. (A two-thirds vote was needed to override it). In 2012 and 2011, lawmakers overrode hervetoes of funding for the program.

In her 2013 veto message, Haley said the program is "an intensely political one through which bureaucratic policymakers deny new health care providers from offering treatment. We should allow the market to work rather than politics."

She makes a fine political statement herself, but there is that pesky law requiring the agency to review projects and decide whether to issue permits. And there is an appeals process if you don't like the bureaucrats' decision.

The immediate reaction from Catherine Templeton, director of the state Department of Health and Environmental Control, the agency charged with reviewing applications, was to tell hospitals and other health care providers they could do what they want while the program was "suspended" due to lack of funding. In a letter, Templeton promised not to penalize health care providers who expand during that time "unless instructed otherwise by the General Assembly."

DHEC officials point to an earlier opinion from the state Attorney General's Office that concludes a program is suspended for the fiscal year if the legislature fails to fund it. But opponents of the move say there is flexibility in DHEC's budget to shift money from other areas to pay for the certificate of need program.

Now Templeton is asking the S.C. Supreme Court to tell her what to do. Her agency has sued two trade organizations -- the S.C. Hospital Association and the S.C. Health Care Association -- as a vehicle to seek direction from the court. The lawsuit asks the court to tell the agency whether it is right in its interpretation that the lack of funding suspends the certificate of need program for this fiscal year unless the General Assembly acts.

"A multitude of circuit court actions are likely to follow the General Assembly's failure to fund, as individual applicants seek relief in separate actions," DHEC's attorneys wrote in their petition asking the court to take the case. "This undesirable result can best be prevented by resolution of the questions identified in the (lawsuit)."

It has to be noted that certificates of need frequently are opposed by competitors. A carte blanche directive to go ahead with projects would make somebody unhappy.

But the lawsuit apparently has given pause to health care providers seeking such certificates. Several told The (Columbia) State newspaper that they would not be rushing to complete projects under the circumstances. That might be one of the reasons it was filed. Or it could have been filed to force the legislature to fund it -- or get rid of the law altogether.

It's hard to understand why a business friendly governor and legislature would create so much uncertainty for a very big industry in the state. Uncertainty can cost money just as surely as regulations. The Spartanburg Herald-Journal reports that about three dozen projects worth $90 million are waiting for DHEC approval.

No matter how the court rules, the governor and lawmakers should decide whether or not they want a law requiring health care providers to justify the need for new hospitals, nursing homes and expensive medical equipment. If they don't like the current situation -- as the failure to fund the program this year suggests -- then they need to change the law.