John W. Eriksen and Nivedita B. Patel, Members of the Firm in the Health Care & Life Sciences practice, in the firm’s Washington, DC, office, were quoted in Law360 Healthcare Authority, in “DC Lawmakers Target 'Onerous' Certificate-of-Need Law,” by Mark Payne. (Read the full version – subscription required.)

Following is an excerpt:

Competing concerns in the District of Columbia about regional healthcare competition and patient costs are animating a debate about a proposed redesign of the district's certificate-of-need requirements.

If signed into law, the recently introduced D.C. legislation would allow some doctors to more easily set up shop, expand practices or even sidestep the certificate-of-need, or CON, process altogether, according to councilmembers backing the reform bill.

Other interests, including insurance industry players, say a revamped CON process could have unintended consequences, including higher patient costs. …

The CON Reform Movement

While D.C. is perhaps unique in its current approach to CON laws, its attempts to change them are nothing new. Numerous states have altered or repealed their CON laws in recent years, according to the National Conference of State Legislatures, while others have introduced legislation to make changes.

The plethora of state and local CON laws can be traced back to President Richard Nixon. In 1974, he signed the National Health Planning and Resources Development Act, which incentivized states to adopt CON laws amid concerns that duplicative healthcare services were contributing to price increases.

John Eriksen, a member at Epstein Becker Green, said that in the ensuing decades, so much changed in the industry that reforms were clearly needed. The COVID-19 pandemic sparked a new wave of lawmaker interest in changing CON requirements.

"I think that it's fair to say that the general trend in the CON revision is to update and clarify and loosen in a positive way," he said.

Confusion Over Bill's Language

According to Eriksen, the D.C. law was drafted in 1980, and its interpretation has become muddled since its introduction, sometimes confusing practices on whether they need to request a CON to hire a new doctor or purchase a piece of medical equipment.

"Because it's so antiquated, it is open to misapplication and misinterpretation because there are a lot of instances where we're really trying to stick the square peg into the round hole," Eriksen said. …

CON Legal Challenges

Amid the national trend toward CON reform, numerous doctors and other medical providers have filed lawsuits challenging CON laws around the country. Some state supreme courts, including in North Carolina and Georgia, have weighed in.

In one of the bigger CON decisions of 2023, the Sixth Circuit found part of Kentucky's CON law unconstitutional.

Nivedita Patel, a member at Epstein Becker Green, told Law360 that the proposed legislation in D.C. could get out in front of any potential litigation that might challenge the district's current law.

While there has been no litigation so far, she said "that's why these reforms are taking place, to prevent that."

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