WakeMed accuses rival Duke University Health System of attempting to block competition in a new court filing linked to a certificate-of-need dispute. The two health care providers are battling for state permission to add new equipment for radiation cancer treatment in Wake County.
Neither provider can add the equipment without a government-mandated CON. The dispute has reached the North Carolina Court of Appeals.
“WakeMed has built a thriving cancer center with medical and surgical oncology services but cannot offer the full range of cancer treatment without a linear accelerator (LINAC) to provide radiation oncology,” WakeMed’s lawyers wrote Wednesday. “Duke already has four LINACs and approval for a fifth that should already have been in operation, but for repeated delays by Duke.”
“Duke also directly benefits from WakeMed’s inability to offer radiation oncology in the form of a steady stream of WakeMed patient referrals and tens of millions in revenue annually,” the court filing continued. “Accordingly, Duke has repeatedly moved to block WakeMed from obtaining its own LINAC, first by opposing the opportunity for any provider to apply for a LINAC, then by reversing course and applying for the only available CON to acquire a sixth LINAC that it does not need, and again by appealing the Agency’s decision to approve WakeMed to obtain a LINAC.”
State regulators from the Department of Health and Human Services chose WakeMed over Duke and UNC/Rex in September 2023 to get a CON for a new linear accelerator in Wake County. “The Agency both concluded that Duke’s application was not approvable as submitted and that WakeMed’s application was the most comparatively favorable proposal and therefore awarded the CON to WakeMed,” WakeMed’s lawyers wrote.
Both Duke and UNC/Rex initially challenged the decision. UNC/Rex later dropped its case.
An administrative law judge reversed state regulators’ ruling in February. The judge threw out WakeMed’s new CON but did not award a CON to Duke.
WakeMed challenges the ALJ’s decision. “The Final Decision in this case plays into Duke’s consistent efforts to block competition and prevent WakeMed from developing the full range of cancer care by making multiple errors of law to reverse the Agency’s decision,” according to the WakeMed court filing.
The court filing points to negative impacts for patients.
“Patients’ difficulty accessing cancer care is what led WakeMed to develop its own cancer program,” WakeMed’s lawyers wrote. “Without a LINAC, WakeMed must refer (send) its patients to either Duke or UNC/Rex for radiation therapy.”
“However, referring radiation therapy patients to other providers is inadequate — dividing cancer care between multiple health systems (called fragmentation of care) hinders communication and leads to delays in care, higher cost, poor outcomes and poor patient and family experience, as WakeMed has encountered,” the court filing argued. “WakeMed’s patients wait more than three times longer than the average patient in the service area to begin radiation therapy. Also, WakeMed cancer patients who need radiation could avoid significant barriers posed by having to travel to another system for treatment if WakeMed had a LINAC.”
Duke and UNC/Rex operated nine LINACs in the affected service area in 2023, according to the WakeMed court filing. Both competitor health systems already have state permission to add one new LINAC apiece. Duke won approval for a new LINAC in 2021 but does not expect it to be in service until 2029. UNC/Rex has had approval for a new LINAC since 2016 but “had made no apparent progress” in adding the machine by late 2023.
Since the machine is considered a “new institutional health service” under N.C. Gen. Stat. § 131E-176(16), WakeMed cannot add its own LINAC without a CON.
Duke’s lawyers filed a competing brief Wednesday emphasizing DHHS regulators’ mistakes in judging Duke’s CON application.
“Ultimately the ALJ determined that the application submitted by Duke was conforming to all applicable statutory and regulatory review criteria as well as the applicable performance standards,” Duke’s lawyers wrote. “The ALJ’s decision determined that the Agency’s review of the application submitted by Duke was in error and that the erroneous review substantially prejudiced Duke’s rights. The ALJ then reversed the Agency’s decision to award WakeMed a CON.”
Duke’s lawyers seek a court decision that award the CON to Duke.
“To be clear, Duke does not appeal the ALJ’s well-reasoned findings and conclusions of law determining that the Agency erred in this review and that error substantially prejudiced Duke’s rights,” according to the court filing. “However, despite substantial evidence in the record that the CON would have been issued to Duke but for the error by the Agency regarding Duke’s conformity, the ALJ erred by failing to order that a CON be issued to Duke following the reversal of the Agency’s decision to issue the CON to WakeMed.”
The Appeals Court has not yet scheduled the case for arguments.
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