Wednesday, August 17, 2022

Treasurer Folwell Submits Motion to File Amicus Curiae Brief in Certificate of Need Lawsuit Criticizes Certificate of Need Law for Damaging the Affordability of Medical Care and Patients’ Access to Rural Hospitals

Criticizes Certificate of Need Law for Damaging the Affordability of Medical Care and Patients’ Access to Rural Hospitals
Raleigh, NC
Aug 17, 2022

(Raleigh, N.C.) — State Treasurer Dale R. Folwell, CPA, sought to become a party to a lawsuit filed in 2020 challenging the state’s Certificate of Need (CON) laws. The lawsuit was filed Dr. Jay Singleton, a New Bern eye surgeon who challenged the state’s CON law that requires him to secure a government issued certificate of need before he can perform most eye surgeries at his vision center. The CON 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 protecting patients and payers from unnecessary costs.

Dr. Singleton’s lawsuit was recently 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. Now, Dr. Singleton has filed with the Supreme Court of North Carolina to review his case. On Monday, August 15, 2022, Treasurer Folwell filed an amicus curiae, or “Friend of the Court,” brief in support of Dr. Singleton’s request.

“As ‘keeper of the public purse’ and having responsibility for 750,000 members of the State Health Plan, I felt it was my duty to become part of Dr. Singleton’s lawsuit,” Treasurer Folwell said. “We spend $4 billion a year of taxpayer’s 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 must go through the courts to achieve that change.”

In the filing, Treasurer Folwell holds the position that CON law violates Article I, Sections 19, 32, and 34 of the North Carolina Constitution. He also notes CON laws create an uneven playing field that protects existing large health care providers. This decreases the accessibility, quality, and affordability of health care while these large hospitals’ profits dramatically increase to the detriment of North Carolinians.”

The State Health Plan, a division of the N.C. Department of State Treasurer, provides health care coverage to nearly 750,000 teachers, current and former lawmakers, state university and community college personnel, active and retired state employees and their dependents. It is one of the largest purchasers of health care and prescription drugs in North Carolina. For more information, visit the SHP website.