Court Holds Certificate of Need Laws May Be Unconstitutional

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The validity of certificate of need laws throughout the western United States is in question as a result of a decision issued August 22, 2011, by the Ninth Circuit Court of Appeals. In a case initiated by a hospital in Yakima, Washington, the court of appeals ruled state certificate of need regulations will be struck down as unconstitutional if they impose more than an “incidental” burden on interstate commerce.

This ruling is particularly significant for hospitals and other health care providers in Washington, Alaska, Oregon, Montana, Nevada, and Hawai`i. These states fall within the boundaries of the Ninth Circuit Court of Appeals and have CON laws. California, Arizona, Nevada, and Idaho, which also are within the Ninth Circuit, do not enforce CON laws.

The case was sent back to the district court where the hospital will have the burden of proving that the state’s CON regulation of angioplasty (percutaneous coronary interventions or PCI) imposes a burden on interstate commerce that “is clearly excessive in relation to the putative local benefits” of such regulation.

At the same time, the court of appeals affirmed the dismissal of an antitrust challenge to Washington’s CON regulation of PCI procedures.

Please see full advisory below for more information.

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