Appeal Filed to Block Law Prohibiting Physician Ownership of Hospitals

This is an update on a blog post I recently wrote about a provision in the Affordable Care Act that prohibits the creation of new physician owned hospitals.    In March a Texas Federal Court ruled that the provision was constitutional.  The plaintiffs, the Physician Hospitals of America and Texas Spine and Joint Hospital filed an appeal to the U.S. Court of Appeals, 5^th Circuit and the Texas Medical Association and the Physicians Foundation filed amicus briefs to support the lawsuit.  Of note, this is the only lawsuit out of 24 filed challenging provisions of the Affordable Care Act that the Texas Medical Association has gotten involved with.

I will be keeping a close eye on the developments with this lawsuit.

More information can be found in the December 2011 issue of Texas Medicine:

Conde, C. Doctor and Owner, Texas Medicine (December 2011).

Original  Blog Post:

Sunday, September 18, 2011

National Ban on Physician Ownership of Hospitals

One of my goals in life was to own a hospital.  Thanks to a recent law passed by Congress, it doesn’t look like that is going to happen.  A part of the Patient Protection and Affordable Care Act prohibits physician-owned hospitals from obtaining a Medicare provider number (meaning they cannot bill and receive payment from Medicare or Medicaid, which is a large proportion of hospital income).  All existing physician-owned hospitals that were operating as of March 23, 2010 were grandfathered in (meaning the law won’t apply to them).  Physician-owned hospitals that were under development at the time of the law passing were allowed to proceed with development as long as they obtained their Medicare provider numbers before the end of the year.  After December 31, 2010, physician ownership and investment in hospitals was completely banned.  The grandfathered hospitals will also be banned from increasing bed numbers, operating rooms or increasing the percentage of physician ownership.

According to a recent Texas Medical Association article, physician-owned hospitals are safer and have higher patient satisfaction ratings; “a 2005 Department of Health and Human Services study…found physician-owned hospitals have lower complication and mortality rates, as well as higher nurse-to-patient rations, than do general hospitals….CMS patient satisfaction ratings…show 85.1 percent of patients gave physician-owned hospitals a rating of nine or ten on a scale of ten, compared with a national hospital mean of only 64 percent.”

I believe physician are the right fit for owning and running a hospital, especially those with business and/or legal training and experience on top of their medical experience

More information on this issue can be found in the August 2010 edition of Texas Medicine.  Ortolon, K., Quashing Ownership.  Texas Medicine, 106:8; 29 (August 2010).