A CMS official said preliminary findings showed that general acute-care hospitals treated more severely ill patients than competing speciality facilities, but specialty hospitals contributed a greater proportion of net revenue to uncompensated care and taxes.
The official, Thomas Gustafson, deputy director for the CMS' Center for Medicare Management, was testifying during a Senate Finance Committee hearing on whether to extend a moratorium on physician self-referral to specialty hospitals past the scheduled June expiration. The House Ways and Means health subcommittee was expected to hold a separate hearing on the matter later today.
Gustafson said the CMS found that dollar-for-dollar, specialty hospitals provided less uncompensated care than general hospitals; however, when taxes were added, the combination significantly exceeded general hospitals' uncompensated care as a percentage of net revenue. The CMS has yet to submit to Congress its final report on specialty hospitals.
Separately, the Medicare Payment Advisory Commission, in its final report to Congress on physician-owned specialty hospitals, formally recommended extending the moratorium until Jan. 1, 2007. As previously reported, the commission voted in favor of the recommendation in January.
The report also recommended refining DRGs to discourage "cherry-picking" of healthier and more profitable patients, and it said Congress should authorize HHS to allow and regulate gain-sharing arrangements between doctors and hospitals. The commission approved both recommendations in January. Read the MedPAC report.