A North Carolina appeals court has upheld the constitutionality of the state's process for granting certificates of need (CON) for healthcare facilities.
In May the court denied an appeal by the Raleigh Orthopaedic Clinic and Hope Women's Cancer Center in Asheville, in which the healthcare organizations argued that the state's CON process is unconstitutional because it gives legislative power to the governor and an advisory council of private citizens. They argued that the system allows for conflicts of interest because the advisory council is exempt from the state's ethics laws. The plaintiffs also claimed that the state's CON process violates due process and healthcare providers' right to access to the state's courts.
In North Carolina, an advisory health coordinating council makes a medical facilities plan that maps out the state's needs for the coming year for health services such as operating rooms and imaging centers. In 2007, after a draft of the plan was announced, the Raleigh Orthopaedic Clinic petitioned for 6 ORs in Wake County to be added to the 2008 plan, and the Hope Women's Cancer Center petitioned to have an imaging center added in its area. The advisory council added 4 ORs to the plan but no MRI facility.
Both healthcare organizations sued the state in 2008 to challenge the process. In March 2009, a trial court sided with the state, saying that the CON process does not violate any rights of the 2 organizations. The healthcare organizations appealed, but the court found the CON system appropriate.
"The council, which is comprised of individuals knowledgeable in the provision of health care services, makes the need determinations," wrote Judge Howard Manning in a decision issued on May 4. "Citizens, including plaintiffs, are afforded the opportunity to provide input with respect to the necessity of various health care services."
While the lawsuit was proceeding in early 2009, the orthopedic clinic applied for and received a CON for a 4-OR surgery center in Wake County. The project, a joint venture with Rex Healthcare, should be completed in 2012, says Karl Stein, executive director of Raleigh Orthopaedic Clinic. "We're working on acquiring the land."
Meanwhile, the clinic remains a party to the lawsuit. "The manner in which the certificate of need law is enforced is unconstitutional," says attorney Noah H. Huffstetler of Raleigh, who is representing the orthopedic clinic and the cancer center.
The current system allows advisory board members from competing healthcare facilities to make decisions that may be financially motivated in favor of their employers rather than the healthcare providers and patients of the state, says Mr. Huffstetler. "It needs to be set up in a way that it's enforced fairly."
The plaintiffs have appealed their case to the Supreme Court of North Carolina and expect to learn in August whether their appeal will be heard.
Kent Steinriede
