U.S. District Judge Michael Schneider in Tyler, Texas, did not issue a ruling on the HHS motion for summary judgment but he did set a provisional trial date of Dec. 9 for the lawsuit brought by Physician Hospitals of America and the Texas Spine and Joint Hospital against HHS Secretary Kathleen Sebelius seeking to strike down a section of the Patient Protection and Affordable Care Act that contains new restrictions on physician ownership of hospitals.
Physician-owned Texas Spine and Joint Hospital, located in Tyler, opened in 2002 and was in the midst of a $35 million renovation project to expand to 10 operating rooms from seven and to 40 inpatient beds from 20 when the healthcare reform law passed and put a halt to any expansion of existing physician-owned hospitals.
Government attorneys have argued that the hospital should have exhausted administrative appeals before filing a lawsuit, but orthopedic surgeon Michael Russell, M.D., a partner with the hospital and the president of PHA, said that process is for pursuing Medicare payments.
“This is not a monetary claim, so that argument by the Department of Justice is incorrect,” Russell said. “We're not making a Medicare benefit claim; if we were, then you'd have to jump through the HHS hoops. This is a constitutional claim.”