By Dale Folwell, State Treasurer
The N.C. Supreme Court recently ruled in favor of New Bern eye surgeon Dr. Jay Singleton. The Court vacated a Court of Appeals’ decision and ruled that Mr. Singleton’s claims were both as-applied and facial constitutional challenges, so they directed the case to be heard by a three-judge panel.
In 2020, Dr. Singleton filed a lawsuit challenging the state’s Certificate of Need (CON) laws that require him to secure a government-issued certificate of need before he can perform most eye surgeries at his vision center. The law forces Dr. Singleton to perform most surgeries at New Bern’s Carolina East Medical Center at significantly higher costs to the patient. His lawsuit contends that the CON law violates three sections of the North Carolina Constitution.
North Carolina’s CON law requires that health care providers that want to expand or open facilities in a particular area must first prove to the satisfaction of the North Carolina Department of Health and Human Services that the new or expanded service is needed by the community.
Ostensibly, the purpose of CON regulation is to limit spending and cost by discouraging providers from acquiring unnecessary medical equipment. However, studies show CON laws protect incumbent providers from competition rather than protect patients and payers from unnecessary costs. The federal government has reached the same conclusion and repealed its CON laws.
In June of 2022, Dr. Singleton’s lawsuit was dismissed by a unanimous decision of a N.C. Court of Appeals three-judge panel largely on technical grounds. Dr. Singleton then petitioned the court to rehear the case to address the actual issues, but that was denied. Dr. Singleton then filed with the Supreme Court of North Carolina to review his case. In a unanimous decision, the Court vacated the lower court’s decision, sending the case back to the trial court. The decision will compel the lower court to address whether the CON law violates the North Carolina Constitution’s law of the land, anti-monopoly, and exclusive-privilege clauses.
“As ‘keeper of the public purse’ and having responsibility for nearly 750,000 members of the State Health Plan, I am very pleased with the Court’s decision,” Treasurer Dale Folwell said. “We spend $4 billion a year of taxpayers’ money providing medical and pharmaceutical coverage for those that teach, protect and otherwise serve the people of this state. CON laws are exactly what they sound like – a con. Every year the hospital cartel, through the North Carolina Healthcare Association, prevents any meaningful change to CON laws. Now, we have an opportunity for the courts to finally recognize that these laws are unconstitutional.”
