Specialty hospitals spring up after ban ends

On Tuesday, the federal moratorium on government payments for doctor-owned, for-profit hospitals expired. Already, plans are underway in Indiana and Texas fro two new physician-owned hospitals. Cincinnati-based Prexus Health Partners is planning a 30-bed surgical hospital in New Albany, IN, and in Texas University Hospital Systems will be opening a 72-bed acute-care hospital in September.

Critics of specialty hospitals--including the AHA--say that doctor-owned hospitals have an unfair advantage because doctors can "cherry-pick" the best-insured patients, leaving poor patients to be treated in other facilities. In a press release Tuesday, CMS Administrator Mark B. McClellan acknowledged these complaints. "Specialty hospitals often achieve high levels of service, but especially under current payment methods, there have been questions about whether they focus on profitable patients rather than quality care." Lifting the ban on specialty hospitals comes with a price: They will now be fined $10,000 a day if they don't report on their financial structures. They must also disclose physicians' financial ties to patients.

- check out the Modern Healthcare report on the two planned hospitals
- see this press release for more on CMS's plan for specialty hospitals

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