Court allows lawsuit to proceed which could set major precedent for NC health care

RALEIGH (WTVD) -- A Wake County Superior Court judge is allowing a lawsuit to proceed that could dramatically change how doctors and hospitals operate in the open market.

The suit, filed by Dr. Gajendra Singh, a general surgeon in Winston-Salem, challenges the constitutionality of North Carolina's law on Certificates of Need (CON), which is the process through which state regulators approve granting a license to provide certain medical services.

Doctor wants to lower MRI prices for patients; is suing to do so

The Department of Health and Human Services and the North Carolina Healthcare Association are named as defendants in the case, and jointly filed a motion to dismiss. The motion was denied on Nov. 15, thus allowing the case to proceed.

According to the NC Department of Health and Human Services' website, the CON law "restricts unnecessary increases in health care costs and limits unnecessary health services and facilities based on geographic, demographic and economic considerations."

Dr. Singh's issue emanates from his desire to purchase a new MRI machine for his practice and lower prices for patients by adding competition to the other provider of an MRI. Singh, though, cannot legally do that without a CON, and the state thus far has not determined there is sufficient need for a new MRI machine in Singh's area.

"We're trying to make health care really affordable where a patient can come and not worry about it," Dr. Singh told ABC11. "I've been on the other side of the fence where I didn't have enough money. I grew up poor. I understand, and I feel how much it costs."

In a lawsuit filed in July 2018, Singh's attorneys label the law "arbitrary, irrational, and protectionist legislation" because it infringes on his right "to participate in the health-care market."

"No one's going to tell you that you can't open up a new pizza shop because the other businesses won't be able to make money and they're going to shut down," Singh said. "We have an open free market for almost everything."

The concept of the open market, however, is where this case may be emblematic of the overall debate on health care in America: is medicine part of the capitalist system or should there be some government regulation to maintain an even playing field?

CON laws date back to the 1970s when Congress enacted federal legislation, but lawmakers later repealed the law and granted states the autonomy to impose CONs or not.

A hearing on the state's Motion to Dismiss the lawsuit will be held this month at Wake County Superior Court.

Despite some efforts to repeal, North Carolina's General Assembly has maintained CON laws in the Tar Heel State. The current rules stipulate that CONs apply to "all new hospitals, psychiatric facilities, chemical dependency treatment facilities, nursing home facilities, adult care homes, kidney disease treatment centers, intermediate care facilities for mentally retarded, rehabilitation facilities, home health agencies, hospices, diagnostic centers, and ambulatory surgical facilities."

Cody Hand, Vice President of the North Carolina Healthcare Association, said he understands Singh's issue but maintains that patients can't afford to have medicine be a totally free-market environment.

"The supermarket that opens up on the corner may or may not make a go of it in the next few years. We don't have a luxury in health care of trying to new things," Hand told ABC11. "We have patients that depend on us being there every day and all day. Competition is a good thing except when one of the competitors is free from the onus of being required to service everyone who walks through the door."

According to Hand, states that have repealed CON laws have had other consequences, including doctors over-prescribing services because they're being forced to maintain a bottom line. He said CONs also enable the state to apply high standards for care.

"Our fear is that removing that barrier, the CON, for entry, that out of state interest will come in without a focus on quality and instead a focus on profit," he said.

No future court date has been set yet for a future hearing or the start of the case.

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