- A little known provision of the Affordable Care Act is threatening the existence of physician-owned hospitals, Washington Examiner reports.
- Under Sec.6001 of the ACA, hospitals that are partly or wholly owned by physicians are barred from expanding, and new ones can’t be established unless they forego Medicare and Medicaid reimbursement.
- The result, according to Physician Hospitals of America: 37 hospitals were not built, 40 nearly completed construction projects did not get done and 20 major expansions were nixed — at a loss of $200 million in tax revenue and 30,000 lost jobs.
Lawmakers inserted the ban into the ACA at the urging of nonprofit community and for-profit hospital that claimed doctors at physician-owned hospitals steer patients to their hospital for financial gain. They argued these hospitals seek out healthier patients and those in need of high-cost medical treatments, pushing up costs to the government.
There are currently 250 such hospitals across 33 states and few, if any, could survive without Medicare or Medicaid funds. By contrast, there are 5,000 public or for-profit hospitals in the U.S. In 2016 the share of physician-owned practices dropped below 50% for the first time, according to the American Medical Association.
A 2016 report in Health Affairs looked at 106 physician-owned hospitals in Texas to see if owners took preemptive action before the March 23 and December 31, 2010, trigger dates for the ACA restrictions, and if they later modified their practices to maximize profitability under the new regime. The researchers found a burst of activity as doctors raced to form hospitals ahead of the deadlines, but noted hospitals formed after the deadlines were not viable entities.
The researchers concluded that the law was more damaging to physician-owned hospitals than any other legislative actions over the prior 20 years.
Legislation has been introduced in the House and Senate to repeal the ban, but neither chamber’s ACA overhaul bill includes such language. The American Hospital Association and Federation of American Hospitals have strongly opposed removing the ban on physician-owned hospitals.