J. Justin Wilson
J. Justin Wilson · November 20, 2019

Raleigh, N.C.—Today, a state superior court judge denied the North Carolina Department of Health and Human Services’ motion to dismiss a constitutional challenge to a law that bans medical providers from purchasing an MRI scanner without first obtaining special permission—called a “certificate of need,” or CON—from the government. The court cleared the way for the case to proceed, in a first-round victory for Dr. Gajendra Singh who is represented by the Institute for Justice (IJ).

“The court correctly rejected the government’s argument that Dr. Singh needed to apply for a CON before bringing this case,” said IJ Attorney Renée Flaherty, who argued the motion. “No one should have to go through an unconstitutional process in order to challenge it. We look forward to showing that North Carolina’s CON law unconstitutionally favors existing businesses at the expense of Dr. Singh and other medical providers.”

In July 2018, IJ and Dr. Singh, a Winston-Salem surgeon, and his business, Forsyth Imaging Center, sued the Department of Health and Human Services, alleging that North Carolina’s CON law is unconstitutional because it bans medical providers from offering services patients need solely to protect existing providers from competition. In order to receive a CON, providers must persuade state officials that new services are “needed” through a cumbersome process that resembles full-blown litigation and allows existing businesses, like established hospitals, to oppose their applications. Even after a CON is granted, existing providers can appeal the decision. Dr. Singh should not have to go through such a burdensome process just to provide affordable services that patients need.

“This decision clears the way to litigate the question at the heart of this case: Can the state ban Dr. Singh from providing low-cost MRI services for patients who can least afford them just to protect established providers from competition? We’re ready to explain to the court why, under the North Carolina Constitution, the answer is no,” said IJ Attorney Josh Windham, who also represents Dr. Singh.

Dr. Singh opened Forsyth Imaging Center to provide high-quality, affordable imaging services to patients who need them. Through both his surgical practice and personal experience, Dr. Singh discovered that patients in Winston-Salem were struggling to afford expensive diagnostic scans from local providers—and more, that patients were finding it almost impossible to determine their out-of-pocket costs upfront.

So far, Dr. Singh has successfully acquired most of the diagnostic equipment needed to provide these much-needed scans, but he has been prevented by the CON law from purchasing what is often the most crucial and expensive tool patients need: an MRI scanner. There is no reason Dr. Singh cannot provide safe MRI scans, but because the hospital down the street already has an MRI scanner, he cannot buy one. The North Carolina Constitution specifically outlaws state-enforced monopolies and requires that laws be applied evenly to protect citizens’ right to pursue their chosen businesses.

“We are very excited that our lawsuit will continue. I believe in the free market and doctors’ rights to provide affordable care, and the CON law makes that impossible. Winning this case would allow us to expand our services and help more people who are currently trapped in a system plagued by high costs,” said Dr. Singh.