Appeals court ruling could affect CON laws
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