On October 18, the North Carolina Supreme Court issued a decision that keeps alive a case that may decide if the Certificate of Need (CON) law is unconstitutional. See Singleton v. NCDHHS, 260PA22. The Court vacated the lower court's ruling and revived the Singleton case. Singleton sought a ruling specific to his case, but the Court decided to have the lower court revive that case and examine the validity of the CON law in their entirety. Currently, the NC CON law prohibits healthcare providers from acquiring certain medical equipment or developing new health services, health service facilities, and health service facility beds without the prior approval of the NC Department of Health and Human Services.
Is it time to get rid of CON laws? In 2023, North Carolina enacted significant reforms to the CON laws through Session Law 2023-7 ("Access to Health Options"). Enacted on March 27,2023, this legislation primarily aimed to expand Medicaid but also included significant changes to the CON program. Key changes included:
Exempting psychiatric facilities, chemical dependency treatment facilities, and related beds from CON requirements,
Raising the CON threshold for diagnostic centers from $1.5 million to $3 million,
Increasing the dollar threshold for replacement equipment from $2 million to $3 million, and
Adding an annual inflation adjustment to the CON thresholds.
But is it enough? Has the CON law failed in its essential purpose? The primary purpose for the CON laws is to (1) control costs by regulating the establishment and expansion of healthcare facilities, thus preventing unnecessary duplication of services, (2) improve access to care by ensuring healthcare services were distributed equitably across the State, and (3) promote high quality of care by requiring State approval of new facilities and services that met the needs of the community. Empirical evidence, however, has shown major disadvantages of the CON law such as (a) healthcare costs are actually rising due, in part, to limited competition and lack of innovation, (b) reduction to access to care due to longer wait times and further travel by patients to get healthcare services, and (c) the process is complex, time-consuming, and an administrative burden to caregivers. The Singleton case may get decided in 2025 and determine the face of CON in North Carolina.
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