The two heavyweights of the hospital lobby collectively took one on the chin last month, when the CMS landed a knockout blow by allowing a moratorium on specialty hospitals to expire Aug. 8. But both the American Hospital Association and the Federation of American Hospitals say they are reluctant to put away the gloves just yet and vow a rematch."We will continue to fight physician ownership of hospitals," says Mary Beth Savary Taylor, vice president of federal relations for the AHA. "We believe that physician self-referral to limited-service hospitals should be banned." "Payment reforms are one thing," says federation spokesman Richard Coorsh. "But they do not address the underlying problem, which is the conflict of interest in the area of physician-owned hospitals." In the other corner, however, the victors are celebrating. In a statement, Jim Grant, president of the American Surgical Hospital Association, said, "This day has been a long time coming, and we are glad to finally witness its arrival." In lifting the ban and issuing a final report on the matter, the CMS says it found little evidence supporting the hospital lobby’s claim that specialty hospitals self-select healthier and better-insured patients, leaving sicker and lesser-insured patients for acute-care hospitals. They also claimed that physicians are economically motivated to refer patients to facilities in which they have an ownership stake rather than to other facilities that may offer comparable or even better care. "This final report is a comprehensive review of the evidence on specialty hospitals and a comprehensive path forward to address concerns that have been raised," CMS Administrator Mark McClellan says. However, the CMS did place some disclosure requirements and business restrictions on physician-owned specialty hospitals that treat Medicare and Medicaid patients.
NEW RULES OF THE GAMEThe CMS will now require physician-owned specialty hospitals to: • Disclose physician ownership and compensation arrangements to the CMS and patients. • Be subject to a $10,000-per-day fine for failing to make those disclosures. • Comply with all federal physician ownership and anti-kickback statutes and regulations. • Provide emergency care for patients regardless of their ability to pay.