House and Senate conferees have now definitively agreed on an 18-month moratorium on new specialty hospital construction, but the language might allow some specialty hospitals to open during the moratorium, according to reports by a lobbyist for the specialty hospitals.
The agreement, which was considered only a tentative "framework" on Monday night, was hammered out Tuesday night into a definite deal that basically only needs details to be filled in, says Randy Fenninger, who represents the American Surgical Hospital Association.
The provision is part of the Medicare reform bill, which conferees have been negotiating for weeks. They expect to finish the work and sign a conference committee report by Nov. 21, but it is not clear whether they can hold to that date, Fenninger says.
When the report is signed, the moratorium on new specialty hospitals would immediately go into effect, he says, citing conversations and e-mails with staff on the conference committee. That means it would be in effect "retroactively," even before the Medicare bill is signed into law, he says.
Meanwhile, Fenninger says the conference committee has limited the extent of the moratorium.
Rather than deny Medicare certification to new specialty hospitals during the 18 months, as conferees had discussed previously, the agreement would simply deny Medicare reimbursements to physician-investors for work at the new specialty hospital, he says.
But the provision would not bar physician-investors from billing other insurers for work at the new facility, nor would it stop noninvestors from billing Medicare for work in the specialty hospital, Fenninger says.
Fenninger says it is not clear whether a new specialty hospital could survive an 18-month ban on Medicare payments to its investors.
Meanwhile, the conference committee says specialty hospitals already "under development" when the moratorium begins will be grandfathered in, but Fenninger says it is not clear what in meant by "under development."
"You can spend one or two million dollars on a project before you even turn over the dirt," he says. If these projects are frozen out by the moratorium, physician-investors might sue the federal government to get their money back, he adds.
A recent GAO report said 26 specialty hospitals are under development, but Fenninger thinks the number may be higher.
Fenninger says he also would like conferees to move the effective date of the moratorium to at least Jan. 1, to give investors time to develop plans that have already been started.
"We want people to be able to prepare for this and not violate the law unintentionally," he says.