Without explanation, the CMS withdrew its proposal for a regulation governing specialty hospitals, which was included in a regulatory agenda in the May 27 Federal Register. The agenda, a sort of department wish list, is published semiannually to generate public comment. The proliferation of specialty hospitals and the potential threat they pose to general acute-care hospitals have been hot topics in recent months. Earlier this year, CMS Administrator Tom Scully said he hoped to close what's known as the whole-hospital exemption loophole in self-referral laws. The loophole allows physicians to refer patients to specialty hospitals in which they hold financial stakes. Meanwhile, the American Hospital Association, the Federation of American Hospitals and several state hospital associations have lobbied lawmakers to investigate whether for-profit specialty hospitals siphon off the most lucrative business, such as orthopedic surgery and cardiac care. In May the General Accounting Office released a report indicating that specialty hospitals treat healthier patients than general hospitals. The current version of the Senate Medicare reform bill contains an amendment that would remove the whole-hospital loophole for future specialty hospitals but not for existing facilities. A similar provision has been proposed in the House.
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