The American Hospital Association is calling on Congress to permanently ban the practice of self-referral of patients to new physician-owned specialty hospitals.
Congress placed an 18-month moratorium on the construction of new physician-owned specialty hospitals under the Medicare Modernization Act of 2003. The moratorium is set to expire in June.
In a new report, the American Hospital Association (AHA) contends that physician-owned specialty hospitals have led to increased costs and the increased use of health care services, forced cutbacks in other services at full-service hospitals, and placed access to emergency and trauma services at risk.
“This practice strips full-service hospitals of critical resources needed to provide a full array of services that the community expects,” George Lynn, chairman of AHA's board of trustees and president of AtlantiCare in Atlantic City, N.J., said during a press conference that was sponsored by AHA.
AHA examined the impact of physician-owned specialty hospitals on patients, communities, and full-service hospitals. When specialty hospitals entered a community, access to emergency and trauma care was put at risk, the report found. Investments in new technologies were delayed or cut altogether, Mr. Lynn said. The report also found that physician-owned specialty hospitals focused on higher-reimbursed services.
But Randolph B. Fenninger, Washington representative for the American Surgical Hospital Association (ASHA), the trade group for physician-owned specialty hospitals, said continuing the moratorium is unnecessary. Instead, Mr. Fenninger said the ASHA supports making changes to the current diagnosis-related-group prospective payment system to better reflect the cost of care.
The Medicare Payment Advisory Commission has recommended that Congress extend the moratorium by 18 months, to study the impact of the hospitals and implement payment changes.