Georgia Supreme Court to hear case on Certificate of Need laws

ATLANTA — The Georgia Supreme Court will hear arguments Monday on an appeal challenging the state’s Certificate of Need laws allowing existing hospitals to veto new competing hospitals’ attempts to expand their operations and buy new equipment.

Dr. Hugo Ribot and Dr. Malcolm Barfield, OB/GYNs who own an outpatient surgery center in Cartersville, sought to expand their surgery center in October 2014. Lawyers representing them said that, even to allow other qualified doctors to operate there, they had to spend “huge” amounts of money and time demonstrating a “need” for more surgical services in the Cartersville area while fighting pushback from nearby competitor hospitals.

Ultimately, after six months, the Georgia Department of Community Health denied the doctors’ CON application.

A Goldwater Institute lawsuit is seeking to end the CON program, so patients can get “better, more cost-effective health care, and so doctors can stop wasting resources proving a ‘need’ before they can serve the public,” the legal team representing the physicians said.

A Georgia trial judge upheld the program last September, and the fate of Georgia CON will be decided by the state’s highest court. Goldwater is bringing this lawsuit under a state constitutional provision preventing governments from establishing monopolies.

“More than a dozen other states have similar provisions; if this lawsuit is successful, it would pave the way to eliminate these anti-competitive measures in those states as well,” officials from Goldwater said. “Monday’s oral argument will be an important step toward giving Georgians the lower-cost, high-quality health care they need.”

A case summary from the Georgia Supreme Court said that the state is challenging the trial court’s failure to dismiss the case based on procedural grounds, arguing that the doctors may not seek a declaratory judgment because there is no “actual controversy” between the parties and “the ends of justice” do not require a declaratory judgment.

The state is also arguing that the doctors do not have standing to challenge the constitutionality of the CON laws because they have not shown they suffered any injury.

“Also, because the center is attempting to challenge an entire chapter of the Georgia Code and all of the regulations promulgated under that chapter, it would have to have standing for each of the statutes and regulations challenged, which it cannot show,” the case summary said. “Indeed, many of the statutes and regulations involved in the certificate of need process do not even apply to the center , e.g. specific review considerations for open-heart services or psychiatric inpatient programs.

“Finally, to the extent that the center is in fact challenging the denial of its own certificate of need application, under the Georgia Code, a person is not entitled to judicial review unless he has ‘exhausted all administrative remedies available within the agency and … is aggrieved by a final decision in a contested case. The fact that one basis, or even the sole basis, of a respondent’s complaint … is a constitutional attack, does not eliminate the necessity for agency review as a prerequisite to judicial review,’” the state argues.

The state also argues that the center and its owners had 30 days to appeal the DCH’s decision and could have raised any constitutional objections they had in an administrative appeal hearing, and they did not.

The outcome could have significant implications on the development of the health care industry in Georgia going forward. The case, labeled in the court docket as Women’s Surgical Center LLC et al v. Berry et al, is expected to be heard at 10 a.m. from the state Supreme Court building on Capitol Square in Atlanta.