Policy & Regulation News

Bill Urges More Patient Access to Physician-Owned Hospitals

The bill will lift ACA bans on physician-own hospitals that purportedly limited patient healthcare access.

A proposed bill could lift ACA bans on physician-owned hospitals to allow more patient healthcare access.

Source: Thinkstock

By Sara Heath

- Oklahoma Senator James Lankford introduced a Senate bill to repeal Affordable Care Act (ACA) bans on new construction of physician-owned hospitals (POHs). Bill supporters say the bans currently limit patient healthcare access.

The Patient Access to Higher Quality Health Care Act of 2017 also calls for POHs to participate in Medicare and Medicaid.

Under the ACA, POHs can be exempt from these bans if they meet certain requirements, according to CMS.

Physician-owned hospitals usually choose to completely forgo providing treatment to Medicare and Medicaid patients as a result of these ACA provisions, according to the post on Lankford’s website. As a result, Medicare and Medicaid beneficiaries see a vast reduction in healthcare access.

This issue is exacerbated as more healthcare organizations drop Medicare and Medicaid patients due to low program reimbursements, Lankford maintained.

“The Patient Access to Higher Quality Health Care Act of 2017 will increase competition, which will lower health care costs and expand quality of care by empowering smaller physician-owned hospitals to innovate and tailor their services to the communities they serve,” Lankford explained in a statement.

“We need strong general care hospitals in Oklahoma, but that should not preclude smaller innovative hospitals from also providing care,” he continued.

Representative Sam Johnson (R-TX) introduced the legislation to the House of Representatives in March of this year.

“Physician-owned hospitals are small in number, so there is plenty of room in the health care market,” Johnson said in a statement. “It makes no sense to prohibit good hospitals from serving their communities. This bill is about doing the right thing. Americans want, need, and deserve quality, affordable health care options.”

Both the Senate and House bills have received approval from several industry stakeholders, including the Physician Hospitals of America (PHA).

"We applaud Senator Lankford for supporting high-quality, more affordable care options for Medicare and Medicaid patients,” PHA President Blake Curd, MD, said in a public statement. “Once enacted, this bill will improve patient access, increase quality and competition, and lower the cost of care.”

PHA was joined by other notable signatories such as the American Medical Association in urging Congress to pass the legislation.

“This arbitrary ban on new and expanded POHs is bad for our entire health care system and penalizes patients who deserve the right to receive care at the hospital of their choice,” the letter stated.

“POHs inject much-needed competition into the hospital marketplace, incentivizing traditional hospitals to improve and innovate,” the signatories continued. “And POHs allow doctors, who know patient care best, to be more involved in some of the day-to-day decision-making of the hospitals.”

Critics argue that physician-owned hospitals often engage in a practice known as self-referral, which is when a physician refers a patient to a facility that she owns or in which she has some financial interest.

Sections of the Social Security Act prohibit physician-self referral, according to CMS. Physician self-referral bans are intended to reduce innate conflicts of interest that may arise in physician-owned hospitals, CMS states.

Following the bill’s introduction to the House of Representatives, some industry leaders spoke out in opposition. Notably, the American Hospital Association (AHA) and the Federation of American Hospitals (FAH) penned a joint letter urging Congress not to pass the bill.

“For more than 15 years, community hospitals, policymakers, the business community and governmental advisory bodies have grappled with overutilization and higher healthcare costs caused by self-referral to physician-owned hospitals,” the organizations wrote in the letter. “Conflicts of interest are inherent in these arrangements, whereby physicians refer their patients to hospitals in which they have an ownership interest.”

The bill was referred to the House Subcommittee on Health in March, where it has since been in debate.


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