- The Iowa Legislature has exempted birthing centers from requiring a certificate of need to open.
- A Des Moines midwife who had sued the state over the regulation has dropped her suit and plans to open her planned facility
- Certificate of need, required in many states, aim to control health care costs but are criticized for limiting competition.
A Des Moines midwife who sued the state for permission to open a new birthing center may have lost a battle in court, but ultimately, she has won the war.
Caitlin Hainley of the Des Moines Midwives Collective sought to open a standalone birthing center in Des Moines, essentially a single-family home repurposed with birthing tubs and other equipment needed to give birth in a comfortable, home-like environment.
To do so, the collective alleged in its 2023 lawsuit, would have required going through a lengthy, expensive regulatory process that would give already established maternity facilities, such as local hospitals, the chance to argue against granting what is known as a certificate of need for the new facility, essentially vetoing competition.
A federal district judge ruled in November that Iowa’s certificate-of-need law is constitutional, finding that legislators had a rational interest in protecting existing hospitals and health care providers.
But while losing the first round in court, the collective’s cause was winning support in a more important venue: the Iowa Capitol. Iowa legislators in their 2025 session passed a bill, which Gov. Kim Reynolds signed on May 1, removing birth centers from the definition of health facilities covered by the certificate-of-need law. The law will formally take effect July 1.
With the law enacted, Hainley and the collective, which had appealed the district court ruling, moved to dismiss their appeal. On Friday, June 6, the federal appeals court did so, vacating the district court’s judgment in the process.
The change in the law and the end of the lawsuit clear the way for the collective to move forward with its birthing center plan, their attorneys at the Pacific Legal Foundation said in a statement.
“Our client can now pursue her freestanding birthing center without worrying about the state’s onerous certificate-of-need law,” said Wilson Freeman, a lawyer for the public interest law firm, which defines its mission as defending Americans’ liberties “when threatened by government overreach and abuse.”
“This is a victory for our policy team and client, who were instrumental advocates and driving forces behind the bill,” Freeman said.
The collective, in an emailed statement, said it is still looking for the ideal space for its center, preferably in central or northeast Des Moines, but that other challenges remain, particularly in securing reimbursement from insurers for the services that would be provided there.
What is a certificate of need?
More than 30 states have some form of a certificate-of-need law governing health care facilities, according to the National Conference of State Legislatures, and in theory, they are meant to protect the public and reduce costs by “restricting duplicative services and determining whether new capital expenditures meet a community need.”
In Iowa, the law has sometimes resulted in the denial of major health care investments. Among the most noteworthy: The state Health Facilities Council in 2021 rejected a proposed $230 million University of Iowa hospital campus in North Liberty at the urging of officials from other area providers.
Opponents of the certificate requirement regard it as an unwarranted intrusion into the free market that shields underperforming providers from healthy competition.
“We think that government bureaucrats are in a poor position to decide whether a business should be allowed to compete,” Jim Manley, another Pacific Legal attorney, told the Register in 2023. “It wouldn’t make any sense for the state of Iowa to decide whether McDonald’s should be able to open up across the street from Burger King. The consumer decides who wins in that fight.”
In her November 2024 ruling, Chief District Judge Stephanie Rose noted it’s a bit more complicated when it comes to health care. Full-service hospitals are required by law to provide money-losing emergency services and other medical care, and allowing standalone facilities to siphon off patients from their other, more lucrative medical specialties is a reasonable concern for policymakers, she wrote.
But the midwife collective, in its lawsuit, argued that it wasn’t actually in direct competition with maternity wards at Des Moines’ major hospitals. Most of the women who would use a birthing center, they argued, would otherwise simply have midwives come to them when they gave birth in their own homes.
Iowa’s new law suggests legislators now agree Hainley and midwives like her should not have to demonstrate they will not harm incumbent hospitals. By lifting the certificate of need requirement, they have removed a major hurdle for the Des Moines Midwife Collective’s project and other standalone birthing centers across the state.
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