Med. Univ. Hosp. Auth. v. S.C. Dep't of Health & Envtl. Control

• Docket Number: 21-ALJ-07-0107-CC,21-ALJ-07-0259-CC
• Decision Date: 07 August 2023
• Parties: Medical University Hospital Authority, d/b/a MUSC Shawn Jenkins Children's Hospital and Pearl Tourville Woman's Pavilion, Petitioner, v. South Carolina Department of Health and Environmental Control and Trident Medical Center, LLC, d/b/a Summerville Medical Center, Respondents. Trident Medical Center, LLC, d/b/a Summerville Medical Center, Petitioner, v. South Carolina Department of Health and Environmental Control and Medical University Hospital Authority, d/b/a MUSC Shawn Jenkins Children's Hospital and Pearl Tourville Woman's Pavilion, Respondents.
• Court: South Carolina Administrative Law Court Decisions

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Medical University Hospital Authority, d/b/a MUSC Shawn Jenkins Children's Hospital and Pearl Tourville Woman's Pavilion, Petitioner, v. South Carolina Department of Health and Environmental Control and Trident Medical Center, LLC, d/b/a Summerville Medical Center, Respondents.

Trident Medical Center, LLC, d/b/a Summerville Medical Center, Petitioner, v. South Carolina Department of Health and Environmental Control and Medical University Hospital Authority, d/b/a MUSC Shawn Jenkins Children's Hospital and Pearl Tourville Woman's Pavilion, Respondents.

Nos. 21-ALJ-07-0107-CC, 21-ALJ-07-0259-CC

South Carolina Administrative Law Court Decisions

August 7, 2023

For Petitioner/Respondent Medical University Hospital Authority d/b/a MUSC Shawn Jenkins Children's Hospital and Pearl Tourville Women's Pavilion:

Daniel J Westbrook, Esq.; Travis Dayhuff, Esq.; and Caroline Warner Esq.

For Respondent/Petitioner Trident Medical Center, LLC, d/b/a Summerville Medical Center:

David B. Summer, Jr., Esq.; William R. Thomas, Esq.; J. Evan Phillips, Esq.; Ashley W. Johnson, Esq.

For Respondent South Carolina Department of Health and Environmental Control:

Vito M. Wicevic, Esq.; Jessamine L. Grice, Esq.; Ashley C Biggers, Esq.; Jenny R. Pittman, Esq.

FINAL ORDER

Milton G. Kimpson, Administrative Law Court Judge

STATEMENT OF THE CASE

This consolidated case came before the South Carolina Administrative Law Court ("ALC" or "Court") pursuant to two requests for contested case hearings. Medical University Hospital Authority d/b/a MUSC Shawn Jenkins Children's Hospital and Pearl Tourville Women's Pavilion ("MUSC") requested a contested case hearing to challenge a February 21, 2021 decision by the South Carolina Department of Health and Environmental Control ("DHEC") to approve a Certificate of Need ("CON") application from Trident Medical Center, LLC d/b/a Summerville Medical Center ("SMC"), which sought to establish a Level III neonatal intensive care unit ("NICU") ^[1] at its hospital in Summerville, South Carolina by converting six of its Level II intermediate care bassinets to Level III intensive care bassinets. SMC likewise requested a contested case hearing to challenge DHEC's April 26, 2021, approval of a CON application filed by MUHA, which sought to add 3 Level II intermediate care bassinets ^[2] and six Level III intensive care bassinets to its Shawn Jenkins Children's Hospital in Charleston, South Carolina. This Court consolidated the two contested cases, which were tried over twelve days in August, September, and October of 2022.

During the hearing, the parties presented eighteen witnesses, both fact and expert, entered over 150 trial exhibits into the Record, and introduced over 150 demonstrative exhibits in support of their respective positions. After careful consideration of the testimony, evidence, applicable law, and the parties' arguments and proposed orders, the Court upholds the Department's decisions approving both projects.

ISSUES

1. Whether the Department erred in finding that MUHA's and SMC's Projects were not competing applications?;

2. Whether MUHA's and SMC's respective Level III projects comply with the applicable 2020 South Carolina Health Plan ("Health Plan")^[3] standards governing neonatal services, and in particular, whether Standards 1(d) and 1(e), operate retrospectively?;

3. Whether SMC must prove its compliance with the neonate management licensing requirements found in S.C. Code Ann. Reg. 61-16, Section 1306(C) at this stage of the proceedings?;

4. Whether MUHA's and SMC's respective Level III projects are consistent with the project review criteria ("PRC") considered the most important in the Health Plan and as set forth at S.C. Code Ann. Regs. 61-15 governing documentation of compliance with the need outlined in the Health Plan (§ 802.1); Distribution (Accessibility)(§ 802.3); Record of the Applicant (§ 802.13); Adverse Effects on Other Facilities (§ 802.23), and the PRC, Community Need Documentation (§ 802.2), identified by the Department in its decision to approve the projects?;

5. Whether SMC's project complies with the Department's findings under S.C. Code Reg. 61-15 § 501?;

6. Whether the various studies introduced during the contested case hearing related to very low birth weight baby ("VLBW") thresholds and outcomes are reliable given the increased access to subspecialists and advances in medicine?

7. Whether SMC's CON application for NICU at issue in the instant case differs from its CON application in 2017 for the same services, which the Department denied?; and, 8. Whether SMC's and MUHA's Projects meet the goals and purposes of the State Certification of Need and Health Facility Licensure Act ("CON Act") set forth in S.C. Code Ann. § 44-7-120?

STANDARD OF REVIEW

1. The South Carolina Administrative Procedures Act ("APA") authorizes the ALC to conduct contested case hearings arising from certain agency decisions. S.C. Code Ann. §§ 1-23-505(3), 600(A) (2005 & Supp. 2022); § 44-1-60(G) (2018); § 44-7-210(E) (2018). Since DHEC's approval of SMC's CON application and its approval of the MUHA CON application constituted final agency decisions under subsection 44-7-210(E), the Court has jurisdiction over the respective contested cases challenging these decisions.

2. Because MUHA and SMC are CON applicants and reside within the geographic areas served or to be served by each other's projects, they are "affected persons" for the purposes of participating in a contested case related to the Department's Decision. S.C. Code Ann. § 44-7-130(1)(2018). Accordingly, both parties have standing to participate in this contested case proceeding. See § 44-1-60(G)(2018) (identifying right of applicants, permittees, licensees, or affected persons to request a contested case hearing with the ALC).

3. A contested case hearing conducted before this Court in a CON matter is a trial de novo, in which "the whole case is tried as if no trial whatsoever had been had in the first instance," and the administrative law judge conducting the hearing is the sole finder of fact, who "must make sufficiently detailed findings supporting the denial or grant of a permit application." Marlboro Park Hosp, 358 S.C. 573, 579, 595 S.E.2d 851, 854 (Ct. App. 2004) (quoting Blizzard v. Miller, 306 S.C. 373, 412 S.E.2d 406 (1991) and Converse Power Corp. v. S.C. Dep't of Health & Envtl. Control, 350 S.C. 39, 564 S.E.2d 341 (Ct. App. 2002)).

4. The trial judge who observes a witness is in the best position to judge the witness's demeanor and veracity and to evaluate the credibility of his testimony. Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990). Therefore, the weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. S.C. Cable Television Ass'n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992).

5. An expert is granted wide latitude in determining the basis of his or her opinion, and where an expert's testimony is based upon facts sufficient to form an opinion, the trier of fact must weigh its probative value. Small v. Pioneer Machinery, Inc., 329 S.C. 448, 470, 494 S.E.2d 835, 846 (Ct. App. 1997). In general, the trier of fact may give an expert's testimony the weight he or she determines it deserves. Florence County Dep't of Soc. Servs. v. Ward, 310 S.C. 69, 425 S.E.2d 61 (Ct. App. 1992). Further, the trier of fact may accept the testimony of one expert over that of another. S.C. Cable Television Ass'n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992).

6. MUHA, as the moving party challenging the Department's Decision to approve SMC's Project, bears the burden of proof. S.C. Code Ann. § 44-7-210(E) (2018); S.C. Code Ann. Regs. 61-15 § 403(1) (Supp. 2005); see also Leventis v. S.C. Dep't of Health & Envtl. Control, 340 S.C. 118, 132-33, 530 S.E.2d 643, 651 (Ct. App. 2000) (holding that the burden of proof in administrative proceedings generally rests upon the party asserting the affirmative of an issue). Similarly, SMC bears the burden of proof in its case against MUHA.

7. Each respective party must, therefore, prove its case by a preponderance of the evidence. Nat'l Health Corp. v. S.C. Dep't of Health & Envtl. Control, 298 S.C. 373, 379, 380 S.E.2d 841, 844 (Ct. App. 1989) (indicating the preponderance of the evidence standard applies in CON disputes). Preponderance of the evidence means "evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole show that the fact sought to be proved is more probable than not." Black's Law Dictionary 1182 (6th ed. 1990).

PROCEDURAL BACKGROUND

1. On August 6, 2020, SMC filed its CON application for the SMC Project under the 2020 Health Plan. On January 27, 2021, the Department issued its letter deeming SMC's CON application complete. The Department identified the following priority project review criteria for its review of SMC's CON application: (a) compliance with the need outlined in the 2020 SHP; (2) community need documentation; (3) distribution (accessibility); (4) record of the applicant; and (5) adverse effects on other facilities.

2. On November 6, 2020, MUHA notified the Department of its status as an affected person and its opposition to the SMC Project. MUHA asserted that because it had also filed a CON application for 6 NICU bassinets, its CON application should be considered "competing" with SMC's application.

3. On February 22, 2021, the Department issued its decision letter approving SMC's CON application ("SMC Decision"). In the SMC Decision, the Department did...