(Jackson, MS): On Thursday, Federal District Court Judge Carlton W. Reeves handed a first-round legal victory to a Jackson physical therapist in his challenge to Mississippi laws that are preventing him from opening up a new home health care business in Jackson. Charles “Butch” Slaughter filed his lawsuit in December 2020, after a 40-year-old moratorium on new home health agencies prevented him from expanding his clinic to offer in-home physical therapy to homebound patients. Even if this ban didn’t exist, he still might not be able to provide in-home services, since his competitors could use Mississippi’s Certificate of Needs (CON) laws to force him to battle them in court over whether the community really needs a new home health agency. The Mississippi Justice Institute, a non-profit, constitutional litigation center and legal arm of the Mississippi Center for Public Policy, is representing Slaughter.
In his order denying the state’s motion to dismiss the suit, Judge Reeves notes that “It is no secret that significant financial interests are at stake when it comes to CON laws.” Judge Reeves explains that “Rent-seeking businesses make a sort-of ‘extra-legal’ contract with politicians: money and votes for the politicians, regulations that ensure a monopoly for the interest group. Meanwhile, consumers lose out. Without the market competition that normally regulates businesses’ behavior, the monopoly can charge otherwise unsustainably high prices for otherwise unsustainably mediocre products.”
“The home health moratorium and CON program are unconstitutional laws designed to protect health care monopolies from competition,” said MJI Director Aaron Rice. “We are thrilled that the court recognized that the government shouldn’t be in the business of reducing access to health care to line the pockets of powerful industry insiders, especially during a global pandemic.”
Slaughter saw a critical need for Mississippi patients to receive care in their homes, especially during the pandemic when many people are seeking alternatives to nursing homes and other care facilities that have been prone to outbreaks. His dream, though, was ended by the state’s moratorium and CON laws, which say that there is no need for new home health agencies in Mississippi, despite the fact that the number of patients seeking home care in the state has at least tripled while the moratorium has been in place. Rather than encouraging new businesses to respond to this increased demand, Mississippi’s laws allow large health care companies to monopolize home health services in the state.
Numerous studies have shown that CON laws do not reduce health costs and can serve as a barrier to patients getting the care they need. In 2004, the Federal Trade Commission and the United States Department of Justice issued a joint report, concluding, “CON programs are not successful in containing health care costs, and that they pose serious anticompetitive risks that usually outweigh their purported economic benefits.”
“No one should be banned from offering safe, cost-effective, and needed health care services just because other businesses don’t want competition,” said MJI volunteer attorney Seth Robbins. “Health care costs are already out of control and these laws only make that worse. Mississippi’s home health moratorium and CON laws are unconstitutional, and we’re looking forward to proving it at trial.”
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