State's decision on who gets MRI scanner being appealed

A state agency has ruled in favor of Coastal Carolina Healthcare's request to buy a multimillion-dollar MRI machine. But that decision is already being appealed by a  medical competitor, Eastern Carolina Internal Medicine.

The N.C. Division of Health Service Regulation said in a written decision that Coastal Carolina Healthcare has most effectively proved its need for a magnetic resonance imaging scanner, which is commonly called an MRI machine.

The state said that Eastern Carolina Internal Medicine had not adequately shown that an MRI would be a cost-effective or sustainable purchase for its practice, and said that the machine would serve a "significantly lower percentage" of Medicare and Medicaid patients if it went there.

The two New Bern medical practices have to compete for one state-issued certificate of need for the equipment because the 2008 State Medical Facilities Plan says that only one new MRI scanner is needed for the Craven-Jones-Pamlico counties region. The certificate does not pay for the machine, which costs around $2 million, according to estimates from both practices.

Magnetic resonance imaging is used to detect a variety of medical problems, from damage to bones and organs to brain disorders and cancer and heart disease.

The certificate of need would allow Coastal Carolina Healthcare to own another fixed MRI scanner at its medical practice, bringing the total to two. Eastern Carolina Internal Medicine has one MRI scanner - a mobile unit that it rents on a part-time basis.

The state issued its findings in October, after extending its own projected decision deadline by about two months. An appeal of the decision was filed late last month, said Helen Alexander, the team leader for certificates of need in Eastern North Carolina.

"At this point, it is a contested case, and those go through a discovery phase, mediation and a hearing in front of an administrative law judge," Alexander said Wednesday.

As long as the decision is contested, neither practice can buy an MRI machine.

Because the state's decision is under litigation, leaders at both medical practices would say little about it.

"I don't really have any comment," said Stephen Nuckolls, the chief executive officer of Coastal Carolina Healthcare. "I think the documents speak for themselves."

In 67 pages worth of findings, state regulators challenged Eastern Carolina Internal Medicine's numbers, and sometimes, the lack of them.

Coastal Carolina Healthcare said in its application that a new MRI scanner would reduce its average patient-scan bill to $929, which is $49 less than the current charge.

"ECIM did not demonstrate that ... a fixed MRI scanner will have a positive impact upon the cost-effectiveness of the proposed services," the state said in its findings.

The state called for more "historic data" about patients referred to other providers for MRI scans.

Craig Holton, the chief operating officer of ECIM, said his practice has "clearly demonstrated a need and complied with the state's requirements."

"I'm still in disbelief," he said. "I can't say a whole lot more than that except that we'll continue to ask questions and fight for our patients."