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Take another look at the lawsuit by those radiologists challenging Virginia’s certificate of need (CON) law.

So ruled, unanimously, a three-judge U.S. Court of Appeals panel in Richmond, Virginia, on Wednesday. The court revived a lawsuit that a U.S. district judge had tossed out a year ago.

Colon Health Centers of America, which specializes in CT colonography (so-called virtual colonoscopy), and Progressive Radiology, a radiologist-owned full-service imaging practice, filed the lawsuit earlier in 2012, as we reported at the time. The two companies wanted to open clinics in Virginia after establishing themselves in nearby states. They said Virginia’s CON law, which requires applicants for new medical facilities to demonstrate a public need for the facilities, discriminates against out-of-state competition.

The radiology companies claimed the CON law violated their equal protection and due process rights under the U.S. Constitution and unconstitutionally restricted interstate commerce. In September 2012, U.S. District Judge Claude M. Hilton rejected those claims.

The appeals court agreed with the dismissal of the equal protection and due process arguments and also agreed that the law didn’t violate the Constitution’s Commerce Clause on its face, according to Associated Press reporter Larry O’Dell. However, Judge J. Harvie Wilkinson III wrote for the panel that there may be a commerce violation in practice:

It is entirely possible that in-state interests frequently commandeer the process to derail the applications of out-of-state firms, but whether this outcome actually obtains cannot be resolved without examining the functioning of the statute in practice.

In other words, the panel instructed the lower court to actually examine the plaintiffs’ claim that local health care providers thwart out-of-state competition by forcing lengthy and expensive fact-finding procedures.

“The district court gave a serious claim the back of its hand,” Wilkinson wrote. “This was error.”

Darpana Sheth, an attorney for the plaintiffs, said, “The court today made clear that the Constitution prohibits this kind of economic protectionism and that courts have a duty to seriously engage with the facts of legal challenges like this.” Sheth works for the Institute for Justice, a libertarian law firm headquartered in Arlington, Virginia, that represented the radiology companies. She was quoted in a news release by the firm.

The Virginia attorney general’s office did not immediately comment.

Related CME seminar (up to 29.75 AMA PRA Category 1 credits™): UCSF Radiology Review: CLINICAL HIGHLIGHTS


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