CINCINNATI (CN) — The Sixth Circuit heard oral arguments Wednesday in a challenge to Kentucky regulations that govern who can provide medical transport services within the commonwealth.
In a federal lawsuit originally filed in 2019, Ohio-based Legacy Medical Transport LLC and its owner Phillip Truesdell claim that Kentucky arbitrarily prevents certain businesses from providing ambulance services through its restriction of government-issued certificates.
These so-called certificates of need are required for any medical transportation company wishing to transport a patient within Kentucky, and the process for obtaining them allows established companies to protest against and veto a new certificate.
Legacy is based just a mile from the Kentucky border and argues it is being unfairly shut out from providing services in the Bluegrass State.
“Plaintiffs are fit, willing, and able to operate in Kentucky. The only barrier to providing their services is the certificate requirement. Plaintiffs seek to vindicate their rights to compete across state lines and to earn a living in the occupation of their choice, free of arbitrary and discriminatory barriers,” the lawsuit states.
However, the challenge hit a snag when U.S. District Judge Gregory Van Tatenhove ruled last September that the rules are not unfairly restrictive.
“A certificate of need is only required to conduct intrastate transports within Kentucky and for interstate transports of Kentucky residents if the transport originates in Kentucky. This type of restriction is not uncommon. In fact, at least nineteen other states restrict new entrants into ground ambulance services areas, including seven other states that also require a certificate of need,” Van Tatenhove wrote.
Legacy appealed the ruling to the Sixth Circuit, which heard from both sides during a roughly 30-minute hearing Wednesday.
Attorney Joshua Polk argued on behalf of the Ohio company and said the rules violate the U.S. Constitution's commerce clause, which restricts states' ability to limit interstate commerce.
“For several years, Mr. Truesdell and his family ambulance business have been operating successful in Ohio less than a mile away from the Kentucky border. But despite being only a stone’s throw away, they are currently prohibited from practicing in Kentucky, due to protectionist law that allows incumbent providers to veto new competition in violation of the commerce clause,” Polk said.
Throughout the hearing, members of the three-judge panel questioned Polk on whether there was any evidence in the record that shows in-state providers are more likely to receive the certificates than out-of-state companies.
The attorney responded by saying that such evidence is not needed because the state's counsel has already conceded the rules are meant to protect in-state providers.
Polk added that only one time has an out-of-state company succeeded in beating a protest to its application, and in that specific circumstance they showed that a competing in-state business had poor response times to calls which in one case led to death.
Arguing on behalf of the state was David Lovely, deputy general counsel for Kentucky’s Cabinet for Health and Family Services. He told the panel that Legacy and Truesdell are simply unhappy with the district court’s ruling.
“Now appellants want to relitigate, add to arguments, and frankly make some misrepresentations about fact,” Lovely said.
The judges asked Lovely about the market impacts of the law. He responded by saying that the economics are better left to policymakers than the court, and that evidence presented by Legacy regarding the impacts was not specific to Kentucky or the ambulance market.
Attorney David Dirr argued for First Care Ohio LLC, a business that intervened in the case, and told the judges that the law does not discriminate against out-of-state ambulance service providers.
“In this case the appellants haven’t offered any evidence of discrimination against out-of-state providers,” Dirr said. “Out-of-state and in-state providers have been approved at the same rates, under the CON process, and there is just no evidence that they are being discriminated against. They all have an equal shot.”
Polk closed the hearing by saying that the arbitrary nature of the approval process harms Kentucky residents because companies are restricted from easily entering the market to alleviate service shortages.
The panel was comprised of U.S. Circuit Judges John Bush, Eric Murphy and Richard Griffin. Bush and Murphy are both appointees of Donald Trump while Griffin was appointed to the Sixth Circuit by George W. Bush.
The judges did not indicate when they would issue a decision in the case.
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