NC Supreme Court to Hear Oral Arguments on Anti-Competitive Certificate of Need Law

RALEIGH, N.C.—Tomorrow, the Supreme Court of North Carolina will hear oral arguments by the Institute for Justice (IJ) on behalf of Dr. Jay Singleton, challenging the state’s anti-competitive “certificate of need” law. That law makes it illegal for doctors to offer new health care services, build new facilities, or buy new equipment without obtaining a special permit called a “certificate of need” (CON). This comes after a ruling by the North Carolina Court of Appeals that affirmed a lower court’s decision to dismiss IJ’s lawsuit.

Dr. Jay Singleton owns an ophthalmology practice in New Bern. Dr. Singleton’s practice includes a state-of-the-art operating room, but because of North Carolina’s CON law, he is legally required to perform surgeries at the local hospital, CarolinaEast, which charges thousands of dollars more.

The CON law has nothing to do with safety, quality, or ease of access for potential clients. Instead, a state agency has determined there is no “need” for Dr. Singleton’s operating room because there is already a hospital two miles down the road. That determination looks even more arbitrary in light of last year’s CON reform bill—fittingly titled “An Act To Provide North Carolina Citizens With Greater Access To Healthcare Options”—which exempted operating rooms in urban counties (where 67% of North Carolinians live) from the CON law entirely. Rural providers like Dr. Singleton—and his patients who seek more affordable access to care—remain out of luck.

“The CON law is a classic case of regulatory capture,” said Josh Windham, an attorney at IJ. “Decades ago, established health care providers somehow convinced lawmakers that the best way to promote access to care would be to restrict safe, affordable, innovative providers from entering the market. That doesn’t protect the public—it protects incumbent providers’ bottom line. Fortunately, the North Carolina Constitution rejects this kind of naked protectionism. We’re delighted that the Court decided to hear this case and look forward to explaining why the CON law is not a legitimate use of government power.”

This case is part of IJ’s effort to ensure that state courts provide meaningful protections for economic liberty, and that they reject laws that merely shield incumbent businesses from competition. IJ currently has similar cases challenging CON laws in Nebraska and protectionist restrictions on telehealth in South Carolina.

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To arrange interviews on this subject, journalists may contact Phillip Suderman, IJ’s Communications Project Manager, at [email protected] or (850) 376-4110. More information on the case is available at: https://ij.org/case/north-carolina-con-ii/