HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

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Friday, May 20, 2005

Specialty Hospital Legislation Proposed

As many of you are probably aware, specialty hospitals have been a subject of dispute over the past year.  As the eighteen-month moratorium on physician referrals to such hospitals in which they have an owership interest sets to expire, we see new a proposal to make such a moratorium permanent for future specialty hospitals.  Last week on May 11, 2005, Senators Grassley and Baucus introduced legislation that would prohibit physicians from referring Medicare and Medicaid patients to new speciality hospitals in which they hold an ownership interest.  According to the brief summary provided by the American Health Lawyers Association,

The Hospital Fair Competition Act of 2005 would essentially exclude specialty hospitals from the "whole hospital" exemption in the Stark physician self-referral law. Opponents of specialty hospitals have argued that these types of limited service facilities are more akin to a whole hospital subdivision than a whole hospital and therefore should fall outside the protection of the whole hospital exemption. . . .

The permanent ban in the bill would not apply to hospitals already in operation or under development before November 18, 2003. These "grandfathered" specialty hospitals would, however, be subject to certain restrictions on increasing their number of physician investors and expanding their scope of services, according to a summary of the bill.

For text of the legislation, please click here.  [bm]

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