North Carolina Courts Can End the CON

Tuesday, a three-judge panel heard oral arguments in a case challenging the constitutionality of North Carolina’s certificate of need (CON) statute — a law that artificially limits the supply of health care to protect politically proficient providers from competition. 

The case revolves around Dr. Jay Singleton, an eye surgeon suing the North Carolina Department of Health and Human Services (NCDHHS) to perform surgeries at his private practice in Craven County. The state has determined there is no need for additional surgery centers in his community, so Dr. Singleton is forced to perform surgeries at a nearby hospital, where they are significantly more expensive for his patients. 

Singleton is arguing that the CON law violates the North Carolina Constitution’s prohibition against monopolies and protections for citizens to enjoy the “fruits of their own labor.” Last October, the North Carolina Supreme Court ordered the trial court to hear the case after the lower court had initially dismissed it. 

Last month, the North Carolina Supreme Court issued an opinion ending judicial deference — the practice of judges deferring to agency interpretations of regulations in legal disputes. In a separate ruling issued the same day, the Supreme Court established judicial review over CON disputes.  

The court ruled against the NCDHHS and awarded Pinnacle Health Services a CON to deploy a magnetic resonance imaging (MRI) scanner in Wake County.  

In the opinion, the Court notes that the legislature enacted the CON Act to control costs and ensure access to health care, especially in rural areas. The court calls these “laudable goals,” but warns, “laudable intent can be easily manipulated by bureaucrats left unchecked.” 

Despite the law’s intent, decades of research show that CON is associated with higher health care costs, fewer health service facilities, and reduced health care access in rural areas. In fact, this case is a prime example of the CON Act’s failure to meet its “laudable goals.”  As the court notes:  

“In North Carolina, health care providers cannot simply develop, acquire, or expand health care facilities or services based on market demand. Instead, providers must obtain a Certificate of Need (CON) from the North Carolina Department of Health and Human Services (the Agency) before they can acquire or offer a ‘new institutional health service.’” 

The dispute began in 2021, when the NCDHHS determined a need for an additional mobile MRI machine in Wake County. That year, NCDHHS initially awarded the CON to Duke Health over Pinnacle. The CON has since been mired in litigation for four years, while patients in Wake County wait for the MRI machine. 

An AFP Foundation study details a similar case. In 2018, the state health plan identified a need for a mobile PET scanner. These imaging devices are vital for diagnosing terrible ailments such as cancer, heart disease, and brain disorders, for which early detection is critical to patient outcomes. PET scanners can detect these conditions before other imaging devices.  

Several providers vied for the CON. The case was finally settled in the Court of Appeals in 2021. The PET scanner was not deployed until more than 3 ½ years after the state determined a need for it. 

These examples are not exceptional. AFP Foundation finds that competing providers appealing CON approvals are delaying the development of approximately $2 billion in already-approved health care investments since 2020. Additionally, AFP Foundation’s analysis of CON applications from January 2012 – February 2025 finds that NCDHHS denied approximately $4.2 billion in proposed health care investment.  

However, the true value of health care investment forgone over the last 15 years is certainly much greater than the $4 billion in capital expenditures on denied CON applications. The state’s CON law prevents many providers, like Dr. Singleton, from ever applying to offer services they otherwise would. 

Dr. Singleton, represented by the Institute for Justice, originally filed suit in April 2020. If the trial court finds in favor of Dr. Singleton’s facial claims and rules that the CON Act is unconstitutional, NCDHHS will almost certainly appeal.  

And like the other CON disputes highlighted here, Dr. Singleton’s case could drag on for several more years. However, the state legislature does not have to wait for the courts — lawmakers can and should abolish this costly barrier to affordable and accessible health care.  

Thomas Kimbrell is a policy analyst at Americans for Prosperity Foundation.