The Medicare Payment Advisory Commission released a draft recommendation urging Congress to eliminate the "whole hospital" exemption in Medicare law that allows physicians to legally refer patients to hospitals in which they have a financial interest. The draft recommendation, however, supports establishing criteria to grandfather in existing physician-owned hospitals. A second draft recommendation would push Congress to authorize gain-sharing arrangements between hospitals and physicians. MedPAC will vote on both proposals in final form in January. Other notable draft recommendations released today include a proposal that Congress establish pay-for-performance incentives for hospitals, physicians and home health agencies.
Jamie Harris, chief financial officer at MedCath Corp., Charlotte, N.C., said the specialty hospital company doesn't support eliminating the whole hospital exemption. "We think it would be poor public policy to create more restrictions (on) physician involvement because those will permanently restrict the good opportunities that physicians have to improve quality and address the escalating costs of healthcare," Harris said. Carmela Coyle, senior vice president for policy at the American Hospital Association, said the draft recommendation shows that MedPAC wants "to deal with the very real issue of conflict of interest on behalf of physicians." -- by Mark Taylor