The legislative package approved recently by the House repealing Medicare's sustainable growth-rate formula for paying doctors contains a grab bag of other provisions. It's the typical congressional something-for-everyone approach to gaining agreement on a measure.
But one group that didn't get what it wanted is physician-owned hospitals. The Affordable Care Act includes a prohibition on new physician-owned hospitals and expansion of existing facilities, unless they get explicit backing from the CMS.
Physician-owned hospitals have been seeking to get the ban reversed since the ACA became law five years ago. Such a proposal was included in a discussion draft of legislation dealing with short hospital stays put forth by House Republicans last year.
Physician Hospitals of America, which represents roughly 70 facilities, also had hoped to get the moratorium lifted as part of the SGR package. The organization believed it had bipartisan support for doing so.
But the organization says those efforts were scotched by opposition from the American Hospital Association and the Federation of American Hospitals, which represent not-for-profit and investor-owned hospitals, respectively.
“We are hearing from our bipartisan supporters on the hill that the FAH and AHA are threatening to oppose the SGR package if Congress dares to restore our pre-ACA ability to add inpatient beds or operating rooms when necessary, even if we tie the ability to expand to CMS' own standards for quality,” said Dr. R. Blake Curd, president of Physician Hospitals of America.
Tom Nickels, the AHA's senior vice president for federal relations, points out that AHA supported including the ban in the ACA and opposes lifting it. "There's nothing new about that," Nickels said. "We've been against it for a long time."
Andrew Wachler, managing partner with Wachler & Associates law firm, explained that the thinking behind the ban was concern that physician-owned hospitals will “cherry pick” patients needing treatments with high profit margins such as orthopedic surgery.
Physician Hospitals of America is still hoping to get the provision added to the SGR package. The House passed the bill—which also includes a two-year extension of the Children's Health Insurance Program—last Thursday by an overwhelming margin. But the Senate failed to take action on it before adjourning for spring break until April 13.
That leaves a two-week window in which to push for inclusion of the physician-owned hospital provision. Given the consensus support for the legislation in the House, there isn't expected to be much appetite for re-opening the package.
“It may be difficult, because then the House has to also agree, but we'll see," Curd said.