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North Carolina Surgeon Challenges State’s CON Law

September 12, 2018

A Winston-Salem surgeon is suing to overturn North Carolina’s certificate of need (CON) law, arguing it prevents health care providers from improving services for their patients.

Dr. Gajendra Singh filed a lawsuit in North Carolina Superior Court after state officials prevented him from purchasing an MRI machine for his imaging center. The officials ruled the need for the service had already been met because some area hospitals were offering MRIs.

In response to the decision, Singh decided to rent a mobile MRI machine two days a week, which forced him to charge more for the service than would be necessary if he were allowed to purchase and install a permanent machine at his center. It also decreased the number of MRIs he could perform.

‘Last Nail in the Coffin’

Singh performs several types of complicated surgeries, and his patients often need MRI services. The state’s CON laws make the cost of performing MRIs prohibitive for him, Singh says.

“Patients have been coming to my office for many years, patients who have been working at Walmart, making $20,000 a year, and they went to the emergency room last week and got a $10,000 bill [to pay],” Singh said. “These kinds of things happen all the time. But last year when I had my own experience with the cost of an ultrasound, that was the last nail in the coffin. It pushed me over the edge, and I decided, ‘You know what? I’m going to try and do my own low-budget imaging services.’”

In 2017, Singh began performing ultrasounds and x-rays. He ran into a major problem when he tried to purchase and install an MRI machine.

“There is such a need for low-cost MRIs, but the hospital here charges $4,000 to $10,000 for the service,” Singh said. “My goal is to provide services and charge only what I need to pay my bills. For example, a non-contrast MRI can be done here for just $500.”

Expensive, Convoluted Process

Once the state makes a decision, providers have little practical recourse, Singh says.

“In North Carolina, the state decides if there is a need for an MRI machine in this county,” Singh said. “You can’t just go out and buy an MRI machine, and you can’t apply to buy one, either, because the state has decided there’s no need. Now, suppose you fought it and spent your money and proved the need. That doesn’t mean you get the exclusive right to fill that need.”

‘A Pretty Strong CON Law’

Terry L. Stoops, vice president for research and director of education studies at the John Locke Foundation, says North Carolina’s CON law is particularly restrictive.

“We have a pretty strong CON law here in North Carolina,” Stoops said. “And there is a pretty tight restriction on the supply of health care equipment in North Carolina because of those laws. A lot of other states have recognized that putting some sort of artificial barrier on the supply of health care equipment does nobody any good. It raises prices and makes it more difficult for those in rural communities to access the type of health care services they need.”

The state should at least loosen the laws, Stoops says.

“Repeal would be the ideal, but I think members of our general assembly are starting to recognize the need to at least reform our CON law,” Stoops said.

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Artz has more than 20 years’ experience in nonprofit organizations, publishing, newspaper reporting, and public policy advocacy.
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