A doctor in Georgia has challenged the constitutionality of the state's certificate-of-need law, charging that it violates a clause prohibiting state-sponsored business monopolies.
If successful, the rare constitutional challenge of a CON statute could reshape the landscape of healthcare in Georgia, potentially triggering a flood of ambulatory surgery centers and specialty clinics that would compete with hospitals for high-margin patients.
Josh Archer, the attorney who filed the lawsuit last month in Fulton County Superior Court, Atlanta, said he intends to hire economists for a comprehensive statewide survey he said would show that the 25-year-old CON law has never served its intended purpose of keeping healthcare costs low by closely monitoring the development of all types of new facilities.
He said there is little substance to the conventional wisdom that the CON law "keeps healthcare costs down by limiting bed space so the market doesn't get saturated."
"In fact," he said, "some economists say it has the absolute opposite effect-it keeps healthcare costs high, it keeps the system inefficient and it actually hurts indigent care."
Archer, a partner in the Atlanta office of Balch & Bingham, said a lawsuit highlighting that contradiction could have a profound impact on CON laws across the nation. He said the discovery phase of the case may take up to six months.
Georgia Attorney General Thur-bert Baker filed a motion asking the court to dismiss the suit, contending the challenge has no legal merit.
Proponents of the state's tough CON law, which mandates review for any multispecialty ambulatory center in excess of $1.4 million, say the "nuisance lawsuit" has no chance of success.
"This law was passed to keep a stable healthcare environment and ration healthcare in a way that is not self-serving to one organization," said Monty Veazey, president of the Georgia Alliance of Community Hospitals, a coalition of about 80 not-for-profit hospitals that has been challenging CON violations for several years.
Archer and partner Michael Bowers, a former Georgia attorney general, filed the suit on behalf of Robert Cowles, a Greensboro physician who plans to build an oncology clinic. This is the first time the constitutionality of the CON law has been challenged in Georgia. In all, 36 states and the District of Columbia impose such supervision on healthcare construction and services.
North Carolina's Supreme Court overturned the CON statute in the 1970s on largely technical grounds, said Robert Fitzgerald, director of the state's division of facility services. State lawmakers reworded the law about a year later and passed another statute that has survived court challenges, Fitzgerald said.
In Florida, part of a CON law dealing with open-heart programs in hospitals was ruled unconstitutional about a year ago, said Kim Reed, a spokeswoman with the state's Agency for Health Care Administration. That decision helped lead to the passage of a law this month to deregulate open-heart surgery programs and angioplasty services, a measure Gov. Jeb Bush is expected to sign into law.
"The CON law has been hotly debated in Georgia for decades," said Thomas Piper, director of Missouri's CON program and a national expert on the issue. He added that CON challenges on a constitutional basis are rare and this could be an act of desperation.