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New Lawsuit Challenges Nebraska’s Non-emergency Medical Transportation Cartel

Omaha and Lincoln home health business owner sues state over certificate of need law that keeps him from helping patients

Omaha, Neb.—If you are allowed to drive a home health patient to get groceries, can that passenger also get her prescription filled? In Nebraska, that would be against the law unless you had permission from the government to operate a non-emergency medical transportation company. And, by the state’s certificate of need or “CON” law, the only way to get permission is for the existing transportation companies to allow you to operate. Today Omaha and Lincoln home health business owner Marc N’Da teamed up with the Institute for Justice (IJ) to file suit asking Nebraska courts to strike down the law for violating the state’s constitution.

Marc N’Da is an American success story and a problem solver. He came to the United States as a political refugee with just $60. He worked his way through college and graduate school. When he saw seniors in his community struggling to get good health care, he started his home health business, Dignity Home Care. Now he wants his employees to be able to drive patients to the pharmacy and regular doctors’ appointments, but his competition will not allow the state to give him a “certificate of public convenience and necessity.”

“Marc’s employees can drive patients to Wal-Mart but not the Wal-Mart pharmacy. That makes no sense,” said IJ Attorney Will Aronin. “The Nebraska Constitution does not allow government power to be used simply to protect favored businesses from competition. If you meet the qualifications to open a business, your competitors should not be able to stop you from operating.”

Dignity Home Care is already approved to transport patients for routine errands. In 2017, Marc applied for the non-emergency medical transport certificate and the government found that he was “fit, willing, and able” to provide service. Yet it is not enough to be qualified, an applicant must also prove that the business is “required by public convenience and necessity.” And the government bases this determination on whether the existing companies object. When the state denied his application, Marc had to shelve his plans to purchase additional vehicles and hire new employees.

“I’ve seen patients stranded at doctors’ offices or miss appointments because of the poor service offered by the companies they are forced to use right now,” said Marc. “The current cartel doesn’t care about their customers because they know that the government will protect their business. All I want is the opportunity to compete and help raise the quality of service for everyone.”

Nebraska’s CON requirement originated in a long-debunked effort to control costs. Because CONs intentionally limit the supply of health services, a number of states have waived certain requirements in light of the COVID-19 epidemic. In fact, Nebraska waived its CON to allow hospitals to add beds or convert beds in order to care for COVID-19 patients.

Starting in 1974, Congress offered incentives for states to pass CON laws, hoping that they would restrain rising health costs. However, just 12 years later the federal government reversed course after studies showed that costs were not being controlled. And while the Bush, Obama and Trump administrations have all encouraged states to eliminate CONs, only a dozen states have done so.

“CONs fail to control costs, but they succeed at keeping competition out of health care,” said IJ Senior Attorney Justin Pearson. “Now especially is the time to increase access to medical care. Nebraska’s CONs limit patient access and choice for the benefit of a few connected insiders.”

Nebraska’s CON law grants extraordinary power to a handful of companies, allowing them to protect their private interests. Marc’s suit maintains that the CON law violates three different provisions in the Nebraska Constitution: the prohibition on special legislation, the guarantee of due process of law, and the prohibition on granting special privileges or immunities.

The Institute for Justice is a nonprofit public interest law firm that fights for the right to earn an honest living. IJ is currently challenging medical CON laws in Kentucky, North Carolina and Iowa. IJ also has a long history of challenging transportation cartels across the country.

Marc N’Da and IJ Attorney Will Aronin are available for interviews via phone and teleconference services. To schedule, please contact Andrew Wimer, IJ Assistant Communications Director, (703) 298-5938 or awimer@ij.org.

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