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Ap­peals court rul­ing could af­fect CON laws

Modern Healthcare - - The Week - Joe Carl­son

Rul­ing that hos­pi­tals’ in­ter­state­com­merce rights may trump state cer­tifi­cate-of-need laws, the 9th U.S. Cir­cuit Court of Ap­peals in Seat­tle de­cided that the state of Wash­ing­ton didn’t have clear con­gres­sional au­thor­ity to pre­vent a hos­pi­tal from per­form­ing lu­cra­tive elec­tive pro­ce­dures like stent im­plan­ta­tion and laser an­gio­plasty.

Le­gal ex­perts say the ap­peals judges’ rea­son­ing in Yakima Val­ley Me­mo­rial Hos­pi­tal v. Wash­ing­ton State Depart­ment of Health on Aug. 19 could un­der­cut state CON laws passed after 1986 in the cir­cuit. States in the 9th Cir­cuit with CON laws in­clude Alaska, Hawaii, Mon­tana, Ne­vada, Ore­gon and Wash­ing­ton.

“I don’t think peo­ple had spent a lot of time ques­tion­ing whether or not states could have cer­tifi­cate-of-need leg­is­la­tion un­til this de­ci­sion,” said Dou­glas Ross, a part­ner with law firm Davis Wright Tre­maine in Seat­tle. “It was as­sumed, un­til this hos­pi­tal chal­lenged it, that states could have cer­tifi­cate-of need-reg­u­la­tion.”

In the case at is­sue, Yakima (Wash.) Val­ley Me­mo­rial Hos­pi­tal chal­lenged a 2008 cer­tifi­cate-of-need law that said state of­fi­cials could grant only one cer­tifi­cate of need to per­form per­cu­ta­neous coronary in­ter­ven­tions for ev­ery 300 pro­ce­dures likely to be needed in a given com­mu­nity each year. The hos­pi­tal’s di­rect com­peti­tor al­ready holds the sole cer­tifi­cate for the com­mu­nity, likely un­til 2022.

At­tor­neys for Yakima Val­ley Me­mo­rial ar­gued that the cer­tifi­cate-of-need law vi­o­lated the “dor­mant com­merce clause”— the Supreme Court in­ter­pre­ta­tion of the Con­sti­tu­tion that gives Congress, not states, ex­clu­sive power to re­strain in­ter­state trade in more than an “in­ci­den­tal” way.

Yakima Val­ley Me­mo­rial said the state’s law gov­ern­ing per­cu­ta­neous coronary in­ter­ven­tions un­con­sti­tu­tion­ally re­stricted its abil­ity to find out-of-state pa­tients to treat, doc­tors to hire, and med­i­cal sup­plies to buy. That kind of re­stric­tion on in­ter­state trade re­quires a spe­cific au­tho­riza­tion by Congress to be le­gal, ac­cord­ing to the hos­pi­tal.

At­tor­neys for the state ar­gued that Congress gave all states clear au­thor­ity to reg­u­late med­i­cal need in 1974 when it passed the Na­tional Health Plan­ning and Re­sources De­vel­op­ment Act, es­tab­lish­ing pro­cesses for

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