The American Hospital Association and other large hospital groups have made a "quid pro quo" deal with the Obama administration and Democrats in Congress to support healthcare reform in exchange for legislation that would prove "devastating" for physician-owned hospitals, the industry trade group Physician Hospitals of America claims.
"To put this anti-competitive issue into the deal between the Administration, Congress, and the hospital associations makes no sense and demonstrates the desperation of many hospitals to remove healthcare decisions from the hands of those who should have the biggest say, the physicians and patients," says Molly Sandvig, executive director of the Sioux Falls, SD-based PHA, which represents about 220 physician-owned hospitals in 32 states.
Sandvig says draft language in the 852-page House healthcare reform legislation is nearly identical to "anti-physician hospital language" placed in the SCHIP bill in January, and the language is expected to be included in the Senate Finance Committee bill too.
"The language included in the draft House healthcare reform proposal, if passed as is, would have a devastating effect on physician hospitals. Existing physician hospitals would 'whither on the vine' since they would not be able to grow to meet the needs of the healthcare marketplace," Sandvig says. "From Jan. 1, 2009 on, hospitals owned by physicians that do not yet have Medicare Provider Numbers, would not receive their certification if the physician-owners refer patients to their hospitals. Obviously, many hospitals currently under development would be unable to open and hundreds of millions of dollars could be lost."
On Wednesday, AHA President/CEO Rich Umbdenstock, Catholic Health Association of the United States President/CEO Sister Carol Keehan, and Federation of American Hospitals President Chip Kahn, issued a joint statement of support for healthcare reform.
They also specifically said they were "pleased to see restrictions on physician self-referral to hospitals in which they have an ownership interest" in draft legislation.
Rick Wade, a spokesman for the American Hospital Association, says AHA has been consistently opposed to physician-owned hospitals. "Our members have an enormous problem with physician self-referral, and we've been consistent in trying to rein that in in the legislative process," Wade says. "We think there is an enormous conflict-of-interest problem here, and we are not doing anything differently in the health reform debate that we haven't done all along on this issue."
Sandvig cited five areas in the House draft bill that would damage physician-owned hospitals:
- Existing hospitals would not be forced to "buy-down" physician ownership but would rather be able to remain at the aggregate percentage of physician ownership that they had as of date of enactment.
- The majority of existing hospitals would not be allowed to grow or expand in any way. Provisions allowing expansion based upon very stringent and limiting requirements are included in the bill, but according to PHA calculations, would only allow nine physician hospitals in the country to apply to HHS for the right to grow.
- All under development hospitals that did not have a Medicare Certification number by Jan.1, 2009, would not be grandfathered. In other words, they would not be allowed to continue to take Medicare and Medicaid patients if the physicians who own the hospital continue to refer to that hospital.
- The whole hospital exemption to Stark laws would not apply for any hospitals not in existence as of Jan. 1, 2009. This would not allow a physician to refer a Medicare/Medicaid patient to a hospital in which he or she owns an interest, and thus, severely restrict the future growth of physician owned hospitals.