An 18-month moratorium on physician self-referrals to specialty hospitals officially ended, with both sides in the debate expressing satisfaction and promising to continue the fight. Jim Grant, president of the American Surgical Hospital Association, called the end of the moratorium "a great day for patients" but said the specialty hospital industry still must work to fend off threats. The CMS has said it will delay certification of new specialty hospitals through January 2006, effectively extending the moratorium, while the agency considers changes to the Medicare reimbursement system to address differences between community and specialty hospitals. In a joint statement, the American Hospital Association and the Federation of American Hospitals said the agency's decision "provides Congress with sufficient breathing room to approve legislation" by the end of the year to resolve an "inherent conflict of interest" in physician ownership of specialty hospitals. The federation wants the whole-hospital exemption in self-referral law revised to exclude specialty facilities.
General acute-care hospitals argue that specialty hospitals offer only the most profitable services and handle less complicated cases. Specialty hospitals say they provide better care. Although Congress is considering extending the ban, which began Dec. 8, 2003, as part of the Medicare Modernization Act, the legislation faces stiff opposition from some powerful lawmakers. The CMS expects to revise Medicare DRGs to recognize differences in patient severity between general acute-care and specialty hospitals and will review specific DRGs that may be overpaid. -- by Michael Romano