Judge dismisses lawsuit challenging North Carolina’s certificate-of-need law

(The Center Square) – A Superior Court judge has dismissed a North Carolina eye surgeon’s lawsuit challenging the state’s certificate of need (CON) law.

Dr. Jay Singleton asked the court to stop the enforcement of the CON law because it violated his rights to perform all outpatient surgeries at his New Bern facility. Singleton’s attorneys argued the law promotes “unconstitutional monopolies.”

Attorneys for the state argued that Singleton bypassed other “administrative remedies” before seeking action; therefore, the court should not have jurisdiction over the case. Judge Michael O’Foghludha, however, dismissed the doctor’s claim because of a higher court’s decision in a similar case in 2010 to uphold the law.

Hope Women’s Cancer Center in Asheville and Raleigh Orthopedic Clinic filed a lawsuit challenging the law’s constitutionality. Hope wasn’t able to obtain a CON for a magnetic resonance imaging (MRI) scanner because of the law, and the orthopedic clinic could not increase its number of operating rooms. The Court of Appeals dismissed the case against the state and public health officials, citing the CON law was “rationally related to a proper governmental purpose.”

John Locke Foundation legal senior fellow John Guze and Singleton’s attorneys argued the Hope case was different.

According to the Mercatus Center at George Mason University, North Carolina has the strictest CON law in the continental U.S. There are 27 services regulated under the law, researchers said.

North Carolina’s CON law “prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services,” the state agency’s website reads. It also is required ahead of certain medical services.

The law requires Singleton to perform most outpatient surgeries at a hospital. Singleton’s attorneys said physicians must obtain a CON from the state to operate a “formal” surgical facility, but officials have decided there isn’t a need for new surgical facilities in Singleton’s area through 2022. Singleton said doing the procedures at a hospital cost his patients and their insurance providers thousands of dollars.

Guze, who filed a brief supporting Singleton, said the fact the CON law dictates when and where Singleton can perform some of the same procedures he performs at his facility proves there’s no health or safety justification for the law.

“This is a clear case of economic protectionism that harms North Carolinians and is forbidden by North Carolina’s Constitution,” Guze said. “Not only is the CON law unconstitutional, as Dr. Singleton asserts, but it directly harms patients and taxpayers by making health care more expensive and less accessible.”

North Carolina lawmakers have filed at least eight bills this legislative session to reform or repeal the state’s CON laws.

Critics of CON laws believe they reduce access to health care and result in price inflation.

According to the National Conference of State Legislatures, price inflation can occur when a hospital cannot fill its beds and fixed costs must be met through higher charges for the beds that are used.

The North Carolina Department of Health and Human Services; its secretary, Dr. Mandy Cohen; Gov. Roy Cooper; House Speaker Tim Moore, R-Cleveland; and Senate Leader Phil Berger, R-Rockingham, were named in the lawsuit.

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