On January 11, 2016, the Federal Trade Commission (FTC) and Department of Justice, Antitrust Division (DOJ) submitted a letter to Governor Nikki Haley recommending that South Carolina repeal certificate of need laws (CON) that that require some health care providers to get state approval before opening new facilities or services and making certain large purchases. The FTC/DOJ letter was in response to a request from Haley for the agencies to provide input on South Carolina House Bill 3250, which would narrow and ultimately repeal CON laws.
Consistent with their long-standing opposition to CON laws, the FTC and DOJ argued that, though “CON laws, when first enacted, had the laudable goals of reducing health care costs and improving access to care,” they “can prevent the efficient functioning of health care markets in several ways that may undermine those goals.” Among other things, the FTC and DOJ claim that “CON laws create barriers to entry and expansion, limit consumer choice, and stifle innovation.” They also “can deny consumers the benefit of an effective remedy following the consummation of an anticompetitive merger.” Finally, the FTC and DOJ claim that “the evidence to date does not suggest that CON laws have generally succeeded in controlling costs or improving quality.”
South Carolina House Bill 3250 is currently in the state senate after receiving near-unanimous approval in the House in April.
The FTC/DOJ Letter is available by clicking here.
Reporter, John Carroll, Washington, D.C., + 1 202 626 2993, jdcarroll@kslaw.com.
