A moratorium on new construction of specialty hospitals could become part of Congress' reconciliation of Senate and House versions of the Medicare reform bill as early as this week, lobbyists for specialty hospitals report.
But these lobbyists add that a General Accounting Office report on specialty hospitals, to be released Wednesday, will show that even a moratorium, which would be much milder than the Senate version, would be overkill.
In the Senate-House conference committee, "there's a great deal of talk about a moratorium," and it would be the predictable Capitol Hill compromise, says Randy Fenninger, a lobbyist in Washington for the American Surgical Hospital Association.
While, the Senate version would tighten rules on physician investments in specialty hospitals, the House bill simply merely calls for a one-year study of specialty hospitals' impact on acute care hospitals.
It is not clear how long a moratorium would last, but it probably would be for the length of the study, Fenninger says. However, he maintains that even a one-year break could wreak havoc on the specialty hospital industry.
Fenninger says specialty hospital companies that partner with physicians are built on growth, and "a moratorium could bring their business to a screeching halt." Also, a moratorium on any building might even prevent an existing facility from expanding, he says.
Lorin Patterson, a lawyer in Overland Park, Kan., who represents specialty hospitals, adds that when the Ohio House passed a moratorium on specialty hospitals in the summer, it caused a frenzy of specialty hospital applications to beat the bill's deadline.
Even though the bill has not passed the Ohio Senate, Ohio officials report they received 56 petitions for new specialty hospitals before the bill's Sept. 15 deadline--and this in a state that has only a few specialty hospitals right now.
Critics also question the need for a study after the GAO issued one report on specialty hospitals in May and will follow up with a second one this week.
Fenninger, who received an advance copy of the report to comment on, says he believes the second GAO report will lay to rest fears that specialty hospitals are unfairly competing with acute care hospitals.
"There's nothing in that report that would justify federal action," he says.
For example, Fenninger says the report finds that noninvestors are responsible for more admissions to specialty hospitals than investors are.
"That's a pretty good indication that physicians like the (specialty hospital) model, even when they are not getting any money (from the profits)," he says.
He adds that the GAO also finds specialty hospitals have about the same margins as not-for-profit community hospitals, while the high profit-makers tend to be the for-profit acute care hospitals.
Congressional aides have little to say about the discussions. But Brian Weiss, a spokesperson for Sen. John Breaux (D-La.), the author of the tough specialty hospital provision in the Senate version, said Breaux is "optimistic that some version of his amendment will pass."