While the Internal Revenue Service is under pressure to force not-for-profit hospitals to disclose more about their operations in their annual filings, the CMS is forging ahead with plans to require physician-owned hospitals to disclose whom those physicians are and what theyre getting out of the deal.
The CMS on May 18 began its 90-day collection of public comment on a proposal to require 500 specialty and competitor hospitals to submit detailed reports disclosing ownership, investment and compensation arrangements.
But Cindy Morrison, vice president for public policy with Sioux Falls, S.D.-based Sanford Health, said collecting information doesnt go far enough, a view shared by the American Hospital Association. That type of disclosure doesnt do much to help patientspatients hold trust in their physicians judgment, said Morrison, who testified before the Senate Finance Committee on the issue a year ago on behalf of Sanford and a coalition of hospitals lined up against their physician-owned competitors.
Officials in the specialty hospital industry say theyre fine with the disclosure but question the CMS narrow approach. If the issue at hand truly is one of conflict of interest, conflicts of interest are pervasive in the hospital industry, said Scott Clark, vice president and general counsel for Chicago-based National Surgical Hospitals, which has partnerships with facilities in nine states.
If theres going to be disclosure, there should be disclosure of all financial interests between a physician and a hospital, Clark said. That should require all hospitals to disclose directorships, salaries, bonuses, consulting arrangements, lease arrangements, anytime that there is a significant financial arrangement between the two parties.
Clarks argument echoes one laid out in a letter to the Treasury Department from two of his industrys most persistent critics in Congress, Sens. Max Baucus and Chuck Grassley (See box left).
Nevertheless, Paul Kerens, senior executive officer of the Kansas City Orthopaedic Institute in Leawood, Kan., said the request from the CMS is not a huge burden and not much of a surprise either. Weve been under scrutiny, I think, from the beginning, said Kerens, who also is president of the Kansas Surgical Hospital Association.
Kerens and peers at other scrutinized hospitals say they have few objections with the actual information sought. Tom Malasto, president and CEO of the Indiana Heart Hospital in Indianapolis, said his for-profit venture was crafted to be efficient but still in harmony with the charitable mission of its not-for-profit majority owner, Community Health Network.
Like anything, sometimes a few bad apples make it difficult for others, Malasto said. I think the specialty hospital industry itself will continue to be under the watchful eye of many regulatory authorities.