A federal appeals court has revived a lawsuit challenging a Virginia law that requires state approval for new medical facilities.
A three-judge panel of the 4th U.S. Court of Appeals ruled Wednesday that judge who dismissed the lawsuit must consider whether Virginia’s “certificate of need” program violates the Commerce Clause of the U.S. Constitution by putting out-of-state health care providers at a disadvantage.
The lawsuit was filed by Colon Health Centers of America and Progressive Radiology, two out-of-state companies that want to open clinics in Virginia. Under state law, applicants for new medical facilities must demonstrate a public need for the services. The aim is to avoid development of excess capacity and protect the economic viability of existing providers.
The plaintiffs say such economic protectionism is unconstitutional.