Skip to main content

PHA Backs Repeal of Ban on Physician-Owned Hospitals

 |  By John Commins  
   March 23, 2011

Physician Hospitals of America is lobbying Congress in a long-shot attempt to repeal a section of the Patient Protection and Affordable Care Act that curtails new construction or expansion of physician-owned hospitals.

Two bills, HR 1159, introduced by Rep. Doc Hastings (R-WA) and HR 1186, introduced by Rep. Sam Johnson (R-TX), would both repeal Section 6001 of PPACA, which now prohibits future physician investment in hospitals, caps existing physician investments, and restricts existing physician-owned hospitals from expanding.

PHA President Michael Russell, MD, said the ban on physician-owned hospitals reduces access to care even as PPACA brings more than 30 million new patients into the public health system.

"Much-needed expansion projects were halted at over 30 existing hospitals and more than 40 hospitals are in a state of uncertainty because they were not certified by Medicare in time to meet the Dec. 31 deadline," Russell said. "Passage of this legislation would undo the harm to communities imposed by the current law, help improve access to quality health care services, preserve the right of patients to choose where they receive their health care, and protect much needed jobs during our down economy."

It's not clear if the bills have any support. The repeal effort may find some backers in the Republican-controlled House, but it is unlikely to gain much traction in the Senate, which is controlled by Democrats. In addition, the American Hospital Association, the Federation of American Hospitals, and other powerful healthcare provider organizations lobbied for the restrictions on physician-owned hospitals in PPACA, and they would more than likely lobby heavily against repealing the ban.

AHA has raised questions about financial conflicts of interests and the safety of physician-owned hospitals. PHA claims that the restrictions are about eliminating competition.

AHA, FAH, and others have complained to Congress that physician-owned hospitals cherrypick healthier, insured patients for higher reimbursement, and that self-referrals threaten community hospitals' ability to provide services such as emergency departments, NICUs, and burn units.

Critics of physician-owned hospitals also point to a Congressional Budget Office report showing  that cutbacks to physician-owned hospitals could save more than $2 billion for 10 years. Proponents of the physician-owned hospitals say the numbers are off-base.

There are 275 physician owned hospitals in 33 states that provide general acute care, long-term acute care, emergency medicine, multispecialty, women's, children's, rehabilitation and psychiatric.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.