Several major hospital groups and systems are pushing for the Trump administration to halt a proposed expansion of certain physician-owned hospitals in an upcoming payment rule.
Several groups posted comments on the Centers for Medicare & Medicaid Services’ (CMS') proposed hospital payment rule for 2021, furious about the change. Hospitals also opposed the elimination of the Inpatient Only Procedure List that details which procedures aren’t payable under the Outpatient Prospective Payment System (OPPS).
CMS proposed in the annual OPPS rule a few months ago to remove any limits on certain physician-owned hospitals. The agency wanted to remove restrictions on such hospitals that qualify as high “Medicaid” facilities.
Certain changes for these hospitals include eliminating caps on number of operating rooms and beds that can be approved and a limit on the frequency a facility can apply for an expansion.
Several hospital industry groups said that the proposals would create conflicts of interest created when physicians self-refer patients to the facilities they own.
“Such a change flouts decades of evidence, including from as recently as August, that [physician-owned hospitals] cherry-pick healthy patients, provide few emergency services or uncompensated care, and are penalized for unnecessary hospital readmissions at 10 times the rate of non-physician owned hospitals,” said the American Hospital Association (AHA) in comments.
The Federation of American Hospitals (FAH) added in its comments there is no requirement that a high Medicaid facility “serve a high number of Medicaid patients.”
The rule requires a facility to have a higher percentage of Medicaid admissions than other hospitals in the same county. FAH said in an analysis that only 24 facilities either currently or soon could qualify.
But other provide- and physician-owned hospital groups said in comments that the changes are long overdue. They said physicians own a stake in approximately 250 hospitals across the country.
They claim provisions in the Affordable Care Act that capped expansion of beds, operating rooms and procedure rooms have stifled competition and growth.
“By removing unnecessary barriers for expansion, the proposal should increase access to care for Medicaid beneficiaries while not eliminating Stark physician-self referral protections or allowing unlimited hospital expansion,” according to comments from 28 provider groups including Physician Hospitals of America, which represents physician-owned facilities.
Payment cut fights continue
Several major health systems alongside the AHA and FAH decried cuts to payments under the 340B drug discount program and to off-campus clinics to bring the payments more in line with physicians' offices.
“The CMS policy appears to intentionally and specifically take money away from safety-net providers serving minority and low-income communities and shift it to hospitals serving more affluent, more predominantly White patients and communities,” wrote the Henry Ford Health System.
Both payment cuts have landed CMS in court as hospitals sued to stop them. Federal appeals courts have sided with CMS on both the 340B and site-neutrality cuts, ruling that the agency has the authority to install the cuts.
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Groups were also livid with CMS’ proposal to get rid of the inpatient-only list over a three-year period. The list features procedures that require more than 24 hours for a patient to recover.
The elimination will start with the removal of more than 200 musculoskeletal procedures.
“The IPO list serves as an important programmatic safeguard ensuring that Medicare beneficiaries undergoing any of the 1,740 procedures on the IPO list receive inpatient care and monitoring, and its proposed elimination without any clinical analysis arbitrarily removes an important patient safety mechanism,” the FAH said in comments.
Hospital system University of Pittsburgh Medical Center also added in comments that a “number of these procedures should remain and be performed in the inpatient hospital only.”
But some specialized centers were in favor of the change. The MD Anderson Cancer Center said that the change will allow physicians to “designate a patient as inpatient or outpatient based on expert clinical judgment and enable hospital outpatient departments to receive separate payment for services that are deemed safe and appropriate to be provided to outpatients.”