Lawmakers: Acupuncture board’s actions could be illegal restraint of trade

A pair of North Carolina occupational licensing boards warring over who may lawfully use acupuncture needles for treatment and therapy could thrust the state into another constitutional embarrassment, state Sen. Andy Wells said Tuesday.

The N.C. Acupuncture Licensing Board and the N.C. Board of Physical Therapy Examiners have taken turns suing each other in a situation that resembles an antitrust case the N.C. Board of Dental Examiners lost in February 2015 at the U.S. Supreme Court. Occupational licensing boards are state entities.

Wells, a Catawba County Republican, said the Acupuncture Board might be at risk of illegally restraining trade — the basis for the Federal Trade Commission’s legal victory against the Dental Board. He also said the Acupuncture Board’s legal fees have put the board deeply in debt.

“We’re creating a barrier to entry for professionals in the state of North Carolina, and the only ones I see coming out well among the licensees is the attorney,” Wells said during a meeting of the Joint Legislative Administrative Procedure Oversight Committee.

Occupational licensing costs practitioners statewide between $20 million and $30 million a year, he said. Virginia and South Carolina collect much less in the licensing fees, while lawsuits have driven up North Carolina’s costs even more.

The committee received Acupuncture Board financial statements for 2016 and 2017, and Wells said it appears the board accumulated $336,000 in legal fees during those years. The board collects only $112,000 a year from licensing fees, its only funding source.

“You spent roughly three times your entire annual income on legal cases,” Wells told Mike Tadych, Acupuncture Board attorney. Meanwhile, the board is $152,000 in the hole.

Tadych said the Acupuncture Board hires not only his firm but also outside lawyers to represent the board in lawsuits. The attorneys are allowing the board to make deferred payments. Supporters of both occupational licensing boards have solicited donations to offset their legal costs, Tadych said.

“If we want financial answers, we’ll have to get financial heads involved in that, not attorneys,” Wells told Carolina Journal after the meeting. “Maybe we need to get accountants, or the [state] auditor’s staff to look through that.”

Wells said the Dental Board case made North Carolina “kind of the national poster child for licensing.” The FTC has told the state another issue has attracted its attention, Wells said — without citing the acupuncture controversy — and he worries the state could lose another high-profile ruling.

The Dental Board got in trouble when it sent cease-and-desist letters to people performing teeth whitening services without a dental license. The FTC sued, saying the board violated federal antitrust law by abusing government power to protect an existing industry.

The Acupuncture Board also sent cease-and-desist letters, and was sued by a group of physical therapists and ballerinas who said they needed dry needling to maintain peak performance. They filed a federal antitrust claim, which is on hold pending resolution of a state court case filed by the Acupuncture Board against the Physical Therapy Board. That case could be heard in February in Wake County Superior Court.

In a 6-3 majority opinion, the U.S. Supreme Court ruled that, even though the Dental Board was a public agency, it could be sued because it wasn’t under direct supervision of the state.

“That’s a serious situation when the U.S. Supreme Court says the state of North Carolina is restraining trade in any fashion,” Wells told CJ after the meeting.

Although the state flirted with the idea of creating an Occupational Licensing Commission to ensure direct state supervision of licensing boards, Wells told CJ problems persist.

“The boards have by and large said [they] don’t want to be supervised,” he said.

Wells said he was concerned the boards chose the courts for resolution rather than asking the General Assembly to intervene. He took issue with the Acupuncture Board and Physical Therapist Board raising outside funds from donors as another erosion of direct state government supervision.

Acupuncture Board chairwoman Mary Majebe and Physical Therapy Board attorney Jordan John Silverstein debated whether physical therapists using “dry needling” techniques to relieve neuromuscular pain were practicing acupuncture, which requires greater clinical training and coursework.

The two sides also disputed whether evidence showed physical therapy patients treated with dry needling techniques suffered injuries.

Questioned by Sen. Dan Barrett, R-Davie, Tadych said he could not provide any data about possible injuries. In part, he said, physical therapists filing medical reports code dry needling as manual therapy, making it impossible to isolate injuries that might have involved a needle.