Calif., Other States Scrutinize Regulatory Boards After Ruling

California and other states are more closely scrutinizing regulatory boards and commissions, including those related to various health care trades, after the Supreme Court ruled that one such panel violated federal antitrust laws, the AP/Washington Times reports (Welsh-Huggins, AP/Washington Times, 12/5).

Background

The Supreme Court in February ruled that the North Carolina State Board of Dental Examiners violated federal laws intended to curb unfair competition when the board attempted to block lower-cost competitors in other industries from offering teeth-whitening services (California Healthline, 2/26).

The justices in a 6-3 decision rejected the board’s arguments that it was acting in consumers’ best interests when it hindered non-dental professionals from offering teeth-whitening services.

According to the AP/Times, similar legal challenges have been filed throughout the country, including in:

  • Alabama;
  • Missouri; and
  • Texas.

Meanwhile, Consumers Union has warned Ohio and other states that regulatory boards the states created could violate antitrust laws. In a letter sent in May to Ohio Attorney General Mike DeWine (R), Consumers Union said that Ohio and other states have “created ‘state’ boards that are directly controlled by members of the very trade or profession they purport to regulate.”

Details of States’ Scrutiny

According to the AP/Times, states are concerned that boards consisting of practicing professionals could attempt to put competitors out of business through actions such as cease-and-desist letters (AP/Washington Times, 12/5).

For instance, the California Office of the Attorney General in a September statement said the North Carolina case “has brought both the composition of licensing boards and the concept of active state supervision into the public spotlight, but the standard it imposes is flexible and context-specific,” adding, “This leaves the state with many variables to consider in deciding how to respond. Whatever the chosen response may be, the state can be assured that [the case’s] ‘active state supervision’ requirement is satisfied when a non-market-participant state official has and exercises the power to substantively review a board’s action and determines whether the action effectuates the state’s regulatory policies.”

OAG said the state might take measures “to guard against antitrust liability for board members [that] include changing the composition of boards, adding lines of supervision by state officials and providing board members with legal indemnification and antitrust training” (California OAG statement, 9/10).

Meanwhile, the office of Ohio Gov. John Kasich (R) in October told boards to talk to attorneys about any questions they might have about regulatory action.

However, regulatory board advocates have urged states not to overreact to the Supreme Court ruling.

For example, the Federation of Associations of Regulatory BoardsĀ  in May sent a letter to U.S. attorneys general arguing that boards staffed by licensed professionals help protect the public. FARB Executive Director Dale Atkinson wrote, “Governmental boards and their volunteer members must be protected in carrying out these vital public protection mandates” (AP/Washington Times, 12/5).

Source: California Healthline