The state of Florida has temporarily suspended a Certificate of Need (CON) law that prevented ambulance companies from expanding services into neighboring counties.
The development comes after Florida permanently exempted from CON laws, under legislation introduced by Senate Health Policy Chairwoman Gayle Harrell (R-Stuart) and House Health Quality Chairwoman Colleen Burton (R-Lakeland), intermediate care facilities for people with developmental disabilities provided certain conditions are met. Governor Ron DeSantis signed the bill into law on June 20.
Florida lifted most CON requirements in 2019 but after the latest legislation, ambulance service remained subject to approval by local entities. Florida is one of five states that require a CON for ambulance services.
In an open letter April 16, attorneys Anastasia P. Boden and Mollie R. Williams of the Pacific Legal Foundation (PLF) urged Florida join to join 18 states in suspending all CON for the duration of the pandemic. The letter stated CON laws “prioritize the financial interests of incumbent operators over the public interest. These laws are anti-competitive and unfair barriers to earning a living under any circumstances, but they are especially pernicious in the middle of a pandemic when health care providers must be free to adapt to changing circumstances.”
The Case Against CON for Ambulances
Boden and Williams were prompted by a particular case involving ambulance service in Florida’s, Lee County.
Last year, the Lee County Board of Commissioners denied an out-of-county company from providing ambulance service within its jurisdiction. After the outbreak of COVID-19, the company, Brewster Ambulance Service, reapplied for a CON but was again turned down.
Shortly after the release of the PLF letter, the state suspended the CON requirement for ambulance service until the end of the pandemic. PLF is now calling on Florida to make the suspension permanent along with repealing the state’s remaining CON laws.
“We’re pleased that the CON suspension in Florida has allowed health care entrepreneurs like Brewster to respond freely to facts on the ground,” PLF’s Anastasia Boden told Health Care News. “Even after the pandemic, Florida and other states should consider permanent CON repeal. Entrepreneurs are in the best position to judge when they should expand, not bureaucrats or potential competitors.”
The coronavirus pandemic illustrates the need to end CON laws, says Mollie Williams, PLF attorney. “Given the latest spike in COVID in Florida, it’s great that the government acted to suspend the CON requirement for ground ambulances when it did,” Williams said. “This move allowed providers like Brewster to adapt and meet the growing need for ambulance services. As a result, people are getting the care they need during this medical emergency.”
A Mission Gone Awry
CON laws restrict competition in health care markets by limiting new diagnostic, surgical, and ambulatory care centers and even new equipment in local hospitals.
Rooted in the National Health Planning and Resource Act of 1974 (NHPRA), CON laws were seen as a way for states to cut health care costs by reducing redundancy. The NHPRA was repealed during the Reagan administration after it failed to produce the desired cost savings, but most states have held on to their CON laws, bowing in particular to the fierce resistance of established providers.
CON decisions are often made by local governments, which frequently allow existing providers—including health care conglomerates—to serve on review panels. In practice, CON laws put the burden of proof on new providers, who must prove to local officials and competitors there is a “need” for their facilities or services.
Tackling CON as Unconstitutional
PLF is also involved in a lawsuit challenging Kentucky’s highly restrictive CON laws involving ambulance service.
Aberdeen, Ohio-based Legacy Medical Transport often takes patients to medical facilities in nearby Kentucky. But under Kentucky’s CON laws, Legacy cannot transport the patients back to their homes in Ohio. PLF has taken up the ambulance company’s cause in what the legal foundation hopes will be a precedent-setting case. In Legacy Medical Transport v. Adam Meier, PLF will argue Kentucky’s CON laws are unconstitutional.
In a paper released in February by the Regulatory Transparency Project of the Federalist Society, the Goldwater Institute’s Christina Sandefur states CON laws “violate a host of constitutional provisions, including anti-monopoly clauses found in several state constitutions. Enabling existing providers to use the law to bar others from entering an industry or offering a service is the very definition of a government-created monopoly.
“Few state courts so far have directly addressed whether CON laws violate state anti-monopoly clauses, but several have noted that they are inherently anti-competitive,” writes Sandefur.
Bonner R. Cohen, Ph.D., (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.
Internet Info:
Christina Sandefur, “Competitor’s Veto: State Certificate of Need Laws Violate State Prohibitions on Monopolies,” Regulatory Transparency Project, The Federalist Society, February 26, 2020: https://www.heartland.org/publications-resources/publications/competitors-veto-state-certificate-of-need-laws-violate-state-prohibitions-on-monopolies