bill could forbid doctors from referring Medicare or Medicaid
patients to specialty hospitals in which the doctors have
an ownership interest.
Hospital Fair Competition Act of 2005 would bar such so-called
"self-referrals." The bill's sponsors, Senate
Finance Committee Chairman Chuck Grassley (R-IA) and ranking
Democrat Max Baucus (D-MT), cite recent studies that show
physicians only treat the least sick, and most profitable,
patients in their own specialty hospitals. (See PBI, Vol.
6, No. 18.)
the bill would "grandfather" existing specialty
hospitals and allow them to operate under the current rules.
The existing hospitals wouldn't be allowed to increase their
physician investors or the percentage of each physician's
individual investments, scope of services or number of beds
or operating rooms.
bill also would instruct the Department of Health and Human
Services to set rules for so-called "gainsharing"
arrangements, where hospitals reward physicians for delivering
care more efficiently. Congress' current moratorium on physician-owned
specialty hospitals is set to expire on June 8, and the
bill would take effect on that date.
Centers for Medicare and Medicaid Services opposes extending
the current moratorium. But CMS agreed to halt approvals
of new specialty hospitals for another six months while
it studies payment options.
at least one powerful legislator has called the Grassley-Baucus
bill DOA. House Energy & Commerce Committee Chairman
Joe Barton (R-TX) said he won't even mark up the bill, in
a May 12 hearing on specialty hospitals.
by law, HHS issued its recommendations on reforming payments
to specialty hospitals. HHS recommended:
reforming the DRG system to make it less tempting for
physicians to game the system between specialty hospitals
and outpatient departments;
* reforming ambulatory surgery center payment rates to
refine the "crude" nine-tier price structure
and remove undue price differentials;
* looking more closely at whether new specialty hospitals
really meet the definition of a hospital; and
* examining whether specialty hospitals are meeting all
the Medicare requirements for hospitals, including the
conditions of participation.
expects to have revised its policies around specialty hospitals
by January 2006.