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CON challenge before high court

March 11, 2012

By JACK ELLIOTT JR.
Associated Press

JACKSON — Mississippi’s certificate-of-need law, which limits where hospitals can locate and expand and what services they can provide, is back before the state Supreme Court.
From its inception by the federal government in 1974, the CON program has led to Herculean legal battles, most of them among Mississippi’s largest hospitals.
Congress created the CON program to help rural areas struggling to recruit and retain doctors, clinics and hospitals.
Hospitals, for the most part, fear competition as threats to their financial survival. Aggressive action by one medical center brings opposition from others.
So the medical wars have waged off-and-on nearly 40 years, usually in population centers from the Gulf Coast to Jackson to the Memphis suburbs.
There’s been little discussion in the Mississippi Legislature about repealing the CON law, as many states have done. The National Conference of State Legislatures lists Mississippi as among about two dozen states with some CON law.
In 1999, Republican Gov. Kirk Fordice proposed repealing it.
“Competition has always been part of the health care mix in this country,” Fordice said. “A certificate of need has become nothing more than a certificate of regulation and litigation. We need to reconstruct ... allowing hospitals to operate in a free market environment that promotes health care and enhances quality.”
Now, the University of Mississippi Medical Center has gotten into the fray. And, again, the Mississippi Supreme Court is the referee.
The key issue is whether UMMC, as a competitor in the hospital marketplace, must abide by the same CON laws as the other 100-plus hospitals in Mississippi.
UMMC filed a CON application for authority to buy and install a new linear accelerator on its Jackson campus. The equipment is used for cancer radiation treatment.
According to the lawsuit, UMMC withdrew the application and took the position that it was not subject to the CON laws that every other hospital in the state must follow. UMMC bought the equipment and installed it without a CON.
UMMC contends if the CON laws apply to it, then the CON laws are unconstitutional since the state College Board, which governs the medical center, is created by the state constitution.
UMMC said the equipment is necessary for its ongoing education mission.
It also argues its role is unique in that it is the state’s only academic health science center and teaching hospital. UMMC contends its statewide mission would be diminished if it were subject to regulation under the CON law.
The state Department of Health said UMMC is subject to the CON laws but didn’t need a CON for the linear accelerator.
St. Dominic-Jackson Memorial Hospital, Health Management Associates and Mississippi Baptist Medical Center take the view that the CON laws apply to UMMC as to all hospitals. They contend in their lawsuit that since linear accelerators are among the items of major medical equipment for which CON’s are required in the law, UMMC should have gotten one.
The case was filed in Hinds County Chancery Court. It came before the Supreme Court after Chancellor Patricia Wise denied motions by each side to rule in their favor and dismiss the opposite party’s claims.
UMMC entered into this fray armed with an attorney general’s opinion that it could be exempt from CON law in certain instances where services or equipment are needed for the institution’s teaching and research mission. Discretion is left up to the Health Department.
An attorney general’s opinion does not carry the weight of law but is designed to provide public entities a level of protection in court.
The other hospitals argued that UMMC’s linear accelerator will not be used exclusively for research purposes.
They said UMMC’s CON application states that 50 percent of the linear accelerator’s use will be for clinical, and thus profitable, purposes.

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