2023 South Carolina Legislative Session: Healthcare 

PDF

As was discussed in the previous article providing a general summary of the South Carolina legislative session, the 2023 regular session concluded on May 11^th.  Legislators did not adopt a Sine Die Resolution giving Governor McMaster the authority to order their return. He exercised that authority on May 16^th, calling for a special session to debate and approve S.474, which the Senate subsequently agreed to on May 23^rd.

Below are key pieces of legislation related to healthcare, including S. 474, that were enacted this year.

S.474, Act No. 70 (“The Fetal Heartbeat and Protection from Abortion Act”)—During the special session called by Governor McMaster, the General Assembly passed S. 474, legislation that is effectively an attempt to update the 2021 “Fetal Heartbeat Bill,” which was ruled unconstitutional in late 2022 by the South Carolina Supreme Court on the basis that it infringes on the state’s constitutional right to personal privacy. The revised version takes into account certain conditions put forth in the opinions of State Supreme Court Justices in overturning the 2021 Act while still prohibiting abortions after six weeks except in cases of rape, incest, jeopardy to the mother’s life and health, or where a fatal fetal anomaly exists. The changes reduce the previous timeframe from twenty to twelve weeks for abortions performed as a result of rape or incest, but contrary to the version approved in 2022, it does not require confirmation of a fatal fetal anomaly by a third-party expert. Failure to comply with the prescribed abortion prohibitions is considered a felony offense and will result in revocation of any applicable medical license. “Abortion,” as defined in the Act, also prohibits chemically-induced abortions, while contraceptives are intended to be protected. S.474 was approved on May 24^th and signed into immediate effect of law by the Governor on May 25^th. A lawsuit contesting the law was filed by Planned Parenthood South Atlantic and other groups on May 26^th, and Circuit Court Judge Clifton Newman issued a temporary injunction on the law until the Supreme Court can reconsider arguments from the State and plaintiffs. On June 27^th, the Court heard arguments from both parties and has yet to issue a ruling.

S. 164, Act No. 20 (CON Repeal)—On May 16^th, Governor McMaster signed into law S. 164, which repeals nearly all Certificate of Need (“CON”) requirements currently administered by DHEC, effective January 1, 2027. The revised law maintains that nursing homes will continue to be subject to CON approval beyond the repeal date. In the term prior to 2027, certain facilities will not be subject to CON requirements, including the construction of a hospital with not more than 50 beds in a county where no hospital is presently operating. The bill also includes a prohibition on hospitals using economic criteria unrelated to the quality of care or professional competence in determining an individual’s qualifications for initial or continuing hospital medical staff, membership, or privileges.  This applies to new contracts or renewals of contracts entered into on or after the effective date of this section (5/16/23). Notably, a provision added by the Senate to prohibit hospitals from instituting non-compete clauses in contracts was stricken from the final compromise. In order to address concerns about the impact of the CON repeal on healthcare in rural areas, a CON study Committee was created to address this issue.  The Study Committee is directed to submit its findings and recommendations to the General Assembly by January 1, 2024.

S. 399, Act No. 60 (Bifurcation of DHEC)—Legislation to split the Department of Health and Environmental Control (DHEC) into a Department of Public Health and a Department of Environmental Services was enacted on May 19^th. A phase-in period of one year was incorporated into the Act. In contrast to the version initially approved by the Senate, the new Public Health agency will not incorporate the Department of Mental Health (DMH), the Department of Alcohol and Other Drug Abuse Services (DAODAS), the Department of Disabilities and Special Needs (DDSN), and the Department on Aging until further analysis by the Department of Administration can be conducted. Veterans homes operated by DMH will be transferred to the Department of Veterans Affairs.

S. 520, Act No. 30 (Pharmacy Benefits Managers)—This update to statutes related to Pharmacy Benefits Managers (PBM) was driven by the community pharmacy groups to address what they deemed overly burdensome and abusive practices of vertically integrated PBMs. The bill puts restrictions in place on PBMs with regard to audits, claw-backs, and requirements to use PBM-affiliated pharmacies. There are provisions of concern to FQHCs and cancer specialists regarding network participation for specialized delivery drugs and high-cost prescription drugs. The effective date of the legislation was extended to January 1, 3024, to help come into compliance with these requirements. S.520 was signed into law by Governor McMaster on May 16^th and takes effect on January 1, 2024.

Conclusion

The 2023 session was the first of a two-year legislative cycle. Therefore, all legislation not enacted continues and will be in order upon their return in January. If the Maynard Nexsen South Carolina Public Policy & Government Affairs team can assist in any way, please contact Bob Coble at bcoble@maynardnexsen.com.