Certificate-of-need laws were designed to regulate the development of new healthcare facilities, equipment purchase, and to avoid repeated or unnecessary services from saturating markets.
However, many healthcare leaders have criticized the laws, arguing that they restrict competition and place an unfair burden on newer or smaller healthcare organizations, instead favoring increasingly large and corporate institutions.
Several recent updates point to increased support in several states for their repeal. In North Carolina, for example, an ophthalmologist has been embroiled in a five-year-long legal fight against the state laws, which he claims are unconstitutional.
Jay Singleton, MD, owner of Singleton Vision Center in New Bern, N.C., originally filed a lawsuit in April 2020, alleging that under current law, he can only perform an “incidental” amount of surgeries, as state planners “projected no need” for his services around New Bern.
Dr. Singleton’s case was first dismissed in Wake County Superior Court on June 11, 2021. On Oct. 18, 2024, the state Supreme Court issued an unsigned, unanimous four-page ruling that gave the case new life while leaving open the question of CON laws’ constitutionality. He takes his case back to court this week.
The lawsuit has been a point of tension in North Carolina, which is a highly competitive state for healthcare with several major universities and health systems within a small radius. Richard Saver, a professor of law at the University of North Carolina Chapel Hill, told Becker’s in 2024 that the exact effects of CON’s repeal in the state could be hard to predict, but that it would likely heat up competition between rival health systems, namely Winston-Salem-based Novant Health and Charlotte-based Atrium Health.
“This may vary region by region,” Mr. Saver said. “In highly competitive markets like we have here in the Research Triangle, or in other segments of the state, the major health systems are still going to be competing with each other, and there may be competitive pressures because of that to lower cost to entrance,” should CON be overturned.
North Carolina is already on track to eliminate its CON laws by January 2026. As an interim measure, since Nov. 1, 2023, ASCs in counties with populations over 125,000 have been exempt from CON approval, already spurring new facility development in high-demand regions.
North Carolina is one of seven states that have been re-evaluating its CON laws in recent years. Montana repealed its CON law in 2021, and has seen a 12.5% increase in the number of ASCs, home health agencies and inpatient addiction treatment centers as a result. According to an October report by the Frontier Institute, the repeal has lessened the barrier to entry for providers in the state, and has already increased patient access to same-day surgical care, especially in rural areas that previously lacked these facilities.
In Massachusetts, CON laws have sparked recent criticism for restricting access to imaging services. Lexington-based internist Amy Boutwell, MD, told Valley News Oct. 11 that she recently had to refer a patient out of state for follow-up imaging because nearby hospitals had a five-month waitlist. The closest independent imaging center she could find was 30 miles away in Nashua, N.H., which had next-day availability and lower costs.
Valley News cited Massachusetts’ CON law as a contributing factor, noting that it requires state approval for new healthcare facilities and major equipment acquisitions, including MRI machines.
