Congress targets MD-owned specialty hospitals

For a while new, some key members of Congress have been gearing up [1] to impose new regulations on physician-owned specialty hospitals, particularly since a Texas incident where a patient died at a specialty hospital after elective surgery. Now, legislation has been filed that would place some significant restrictions on such facilities. Not surprisingly, the trade group representing these hospitals is outraged, while the American Hospital Association--whose members lose revenue to physician-owned ventures like these--supports it.

The House version of the pending mental health parity bill, which passed this week, would require such hospitals to submit annual reports outlining their ownership structure. It also would bar physician-owners from picking up more than an aggregate 40 percent of the total value of the investment interest in the hospital--or even an entity whose assets include the hospital. Meanwhile, individual doctors couldn't invest more than 2 percent in a hospital. (Since all of this is structured to impact only hospitals that take Medicare, in theory it appears that hospitals could escape the limits by declining Medicare patients.)

On top of all of that, if such a facility admits a patient but doesn't have a doctor available, it would be required to let the patient know. Interestingly, it doesn't seem to do anything beyond that to address the issue of patient safety, which legislators have said is a key concern. Let's see if that happens in future iterations of the bill, or if this really is all about who gets the profits here.

To learn more about these limits:
- read this Modern Healthcare piece [2]
- read the text of this provision [3] in the legislation

Related Articles:
Congress considers specialty hospital regulation. Report [1]
Physician-owned hospitals: A conflict of interests? Report [4]
Texas specialty hospitals do lucrative business. Report [5]
Partnership building 10 doctor-owned hospitals. Report [6]