Piedmont Medical Center awarded right to build Fort Mill hospital

April 01--FORT MILL -- Piedmont Medical Center has been chosen by an administrative law judge to build a Fort Mill hospital.

In a ruling released Tuesday, judge Phillip Lenski overturned a decision by the state Department of Health and Environmental Control to award a certificate of need to Carolinas HealthCare of Charlotte, parent company of Carolinas Medical Center. Piedmont plans to build a 100-bed at the corner of S.C. 160 W and U.S. 21.

The hospital could be opened by 2018, said Bill Masterton, Piedmont's chief executive officer.

"We celebrate today with the community of Fort Mill as they are one step closer to getting the high-quality hospital that they have deserved for years," Masterton said in a prepared statement. "Fort Mill Medical Center will deliver trusted health care services in the heart of town as we extend the quality programs that residents have come to expect from Piedmont Medical Center."

Chris Hummer, president of CMC-Pineville, said CMC officials are "disappointed" with the decision.

"We are trying to understand the judge's decision and determine our next step," Hummer said.

He said no decision has been made about whether to appeal. He doesn't know when a decision would be made.

"We are committed to serving York County residents. That doesn't change. We have done that for a long time and will be there for a long time," he said.

Once built, Fort Mill Medical Center will offer patients an array of specialized services, including a 24-hour emergency room, comprehensive women's health services, advanced cardiac services and an intensive care unit. The new hospital is slated to create approximately 400 jobs for area residents and generate substantial tax revenue for the community, including an estimated $2.8 million to the Fort Mill School District, more than $500,000 to the Town of Fort Mill and more than $700,000 to the county on an annual basis.

The hospital will serve as a sister facility to Piedmont Medical Center, and Masterton will serve as its CEO.

Phillip Lenski is the latest in a more than decade-long effort to bring a new hospital to an expanding population in the Fort Mill area.

In 2006, the state's Department of Health and Environmental Control approved a certificate of need for Piedmont. Carolinas HealthCare and Presbyterian, the other applicants, challenged. Three years later, an administrative court judge ruled that DHEC misinterpreted the state's health plan in awarding the certificate to Piedmont.

In September 2011, DHEC ruled that Carolinas HealthCare's proposal best complied the certificate of need certificate in the states health plan.

Piedmont and Presbyterian appealed that decision to the S.C. Administrative Law Court. Just before the appeal was heard, Presbyterian withdrew from the process.

Over four weeks in April and May, Lenski heard attorneys debated whether a CMC-Fort Mill hospital would affect Piedmont.

Attorneys for Piedmont argued a CMC-Fort Mill hospital would financially harm PMC and York County physicians. Adverse economic impact is one of the factors DHEC can consider in reviewing the certificate of need applications.

Witnesses for Piedmont testified that the Rock Hill hospital would see a drop of about 3,100 cases -- or $12.5 million in revenue -- if Carolinas HealthCare is awarded the Fort Mill hospital.

Piedmont attorneys said losing patients to Carolinas HealthCare over the years has changed the mix of payers, with Piedmont seeing an increase in the number of people insured by Medicare, Medicaid or having no insurance. If that trend of losing patients and revenue to CMC continues, Piedmont will see a "slow death," said former CEO Charlie Miller.

He testified the shift in patients may mean Piedmont will become "the hospital that it was in the 1980s."

Carolinas HealthCare attorneys said a CMC-Fort Mill hospital would not economically harm PMC because northern York County residents are already getting their health care from Carolinas Medical Center. A CMC-Fort Mill hospital would allow them to get health care closer to home, Carolinas Healthcare attorneys said. CMC officials estimated that they are already serving more than 50 percent of the patients in the Fort Mill-Tega Cay area. It is an area with a high percentage of insurance-carrying patients.

Quality of health care was also debated.

Doctors testifying for Piedmont said the loss of patients could affect their medical skills because of their need to have a certain number of cases to maintain their proficiency, especially in the more complicated specialties.

During DHEC's review of applications, Piedmont officials said a continued loss of patients and revenues to Carolinas HealthCare hospitals in Pineville, N.C., and/or Fort Mill could force PMC to close some operations and make cuts in its emergency department.

PMC, however, is expanding it emergency department. The emergency department is the largest source of hospital admissions. The emergency department expansion is part of Piedmont's strategy to compete with Carolinas HealthCare in York County. Piedmont has recruited more physicians, which would likely increase the number of referrals to PMC. The third part of PMC's strategy was reversing the decision on who gets to build the Fort Mill hospital.

Also to be consider is Gov. Nikki Haley's veto last June of $1.7 million in DHEC funding for the certificate of need program. Haley said the program restricts access to health care, drives down quality and drives up cost.

DHEC director Catherine Templeton has suspended the certificate program for a year, saying the practical effect of the suspension is that health care operators can expand or build facilities without a certificate of need. The law, however, still requires a certificate of need for projects costing more than $600,000.

The legality of DHEC's decision is being considered by the S.C. Supreme Court this week.

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