A bill introduced by an influential senator and aimed at boosting reimbursement to small, rural hospitals could find itself hamstrung by a congressionally sensitive provision to all but stymie physician ownership of hospitals.
In his rural healthcare package introduced last month, Iowa Sen. Chuck Grassley, the senior Republican on the Senate Finance Committee, would allot a larger share of Medicare dollars to so-called tweener hospitals, or those facilities too large to be designated as critical-access but too small to prosper under the federal payment system.
There are eight such hospitals in Grassleys home state and about 450 of them across the country (See related editorial, p. 23).
It is absolutely imperative that these tweener hospitals get the assistance they need in order to keep their doors open, Grassley said in a written statement that accompanied the legislation. They are often not only the sole provider of healthcare in rural areas, but are also significant employers and purchasers in the community.
But the Grassley bill includes languagebacked by the hospital lobbythat puts a number of restrictions on physicians in terms of how big of a stake they can have in a hospital. The bill would prohibit new physician-owned hospitals built after this September. Those hospitals in existence would have to report to HHS the names, number and ownership percentage that physicians have in a facility. The bill also caps the allowable ownership percentage.
Those restrictions have been a long-running sore spot between the doctor and hospital communities and have proven divisive on Capitol Hill as well.
Some members of Congress appear eager to get the measure passed. In this legislative year alone, the provision has shown up in an agriculture bill, a war-funding measure, a mental-health parity bill and earlier drafts of the Medicare legislation that raised physician reimbursement.
Everyone thinks were a pay-for and that they can make money off of us, said Randy Fenninger, a lobbyist for Physician Hospitals of America, which represents doctor-owned facilities. A pay-for refers to a provision that would be used as a cost-offset.
That perception comes courtesy of the Congressional Budget Office, which earlier this year said that the provision, if enacted, would ultimately save Medicare money over the years, though howand by how muchvaries. At different times and for different pieces of legislation, the CBO has said that the ban could save a little more than $2.4 billion over 10 years.
Tim Fry, manager of government affairs at the National Rural Health Association in Washington, says the provision has merit and would ensure that small, rural hospitals can continue to exist. We have had concerns that in a rural setting, those types of hospitals dont serve the broader community, he said.
An NRHA position paper charges that physician-owned specialty hospitals carve out the more-profitable services, which could ultimately siphon much-needed dollars away from rural hospitals already struggling with a low volume of patients.
Nevertheless, the bill faces an uphill climb. By Fenningers count, the Grassley legislation must first find consensus among other senators who want to move the package, and then find those lawmakers who would back the ownership restriction. Getting that agreement has been tough, he said.
Maggie Elehwany, vice president of government affairs and policy at the National Rural Health Association, said she supports the Grassley package. The smaller hospitals are often the economic hub to some of these communities, she said.