HHS Secretary Michael Leavitt told executives at the Federation of American Hospitals' annual meeting that the dispute over physician ownership of specialty hospitals would be resolved, "but it won't be today." Answering questions from audience members after his address, Leavitt declined to disclose his agency's likely response to the issue, saying there would be plenty of discussion and debate in coming weeks. The federation on Monday said specialty hospitals threatened the health of general acute-care facilities and petitioned HHS to rewrite the whole-hospital exemption in the physician self-referral law to exclude specialty hospitals. The Medicare Payment Advisory Commission is expected to release its final report on the impact of specialty hospitals next week.
Leavitt subsequently spoke at the National Governors Association meeting, where the only round of applause resulted from a comment by Brookings Institution senior fellow Henry Aaron. Aaron said that it would be better if the federal government financed long-term care than the states. States are grappling with rising Medicaid expenditures, of which long-term care is a large component. -- by Ralph Loos