Hospitals strongly oppose House bill allowing more physician self-referrals

The American Hospital Association (AHA), representing several other industry associations and groups, wrote to the Committee on Ways and Means for the U.S. House of Representatives opposing H.R. 2513, the Promoting Access, Competition, and Equity Act of 2015. The legislation would loosen restrictions on physician self-referral and growth of physician-owned hospitals. According to the letter, if made law, the Act would potentially destabilize and increasingly burden taxpayers and employers. The associations are also concerned that the Act would impair patient safety.

Self-referrals

The bill was introduced in the House on May 21, 2015, by sponsor Representative Sam Johnson (R-Texas). Currently, section 1877 of the Social Security Act, known as the Stark Law, prohibits physicians from referring patients for certain health services that are reimbursable by Medicare to an entity with which the physician or an immediate family member has a financial relationship. According to the AHA letter, “self-referral to physician-owned hospitals leads to cherry-picking of higher margin and healthier patients.”

The AHA and the other organizations, including America’s Essential Hospitals, Association of American Medical Colleges, and Children’s Hospital Association, believe that the Act would allow physician-owners to steer their most profitable cases to the facilities they own, resulting in “gaming” of the Medicare program. The letter notes that community hospitals depend on a balance of services to bring in the resources that allow them to provide treatment such as behavioral health and trauma care. In another letter, Rick Pollack, the AHA’s executive vice president, describes physician self-referral as “the antithesis of competition.” Pollack’s letter expressed concerns that health care resources would be wasted under the potential legislation. Both letters mentioned Congress’s efforts to end self-referral arrangements following the Medicare Prescription Drug, Improvement, and Modernization Act (P.L. 108-173).