Members of Congress seek moratorium extension 

Specialty hospitals to be addressed in 2005

Forty-eight U.S. representatives and senators have sent a letter to House Republican and Democratic leaders in which they note that the moratorium on the growth of specialty hospitals imposed by the Medicare Modernization Act expires in June 2005, and they said it’s "imperative that Congress be poised to address the issue early next year."

The letter, sent in early October, also said Congress must act swiftly to address physician ownership arrangements that present conflicts of interest.

"They are positioning for this to be included in the Medicare agenda next year," says Michael J. Lipomi, MSHA, president of the American Surgical Hospital Association in San Diego, and CEO of Stanislaus Surgical Hospital, Modesto, CA.

Earlier this year, Same-Day Surgery reported that in an American Hospital Association issue paper on limited-service providers, the organization stated that one of its priorities was to extend the 18-month moratorium to allow Congress to consider and act on studies related to limited-service providers.

Congress has called for two studies on surgical hospitals to be conducted:

  • The Washington, DC-based Medicare Payment Advisory Commission (MedPAC) is studying any differences in costs of services furnished to patients in specialty hospitals and general hospitals. Also, MedPAC is studying the extent to which specialty hospitals treat patients within certain DRGs, in areas such as cardiology, as compared to specialty and general hospitals.

MedPAC also will determine the financial impact of physician-owned specialty hospitals on local full-service community hospitals. The agency also will determine how the current DRG system should be updated to better reflect the cost of providing care in a hospital setting.

MedPAC will compare the proportion of patients received, by type of payer, of specialty and full-service hospitals.

  • The Department of Health and Human Services is determining the percentage of patients admitted to physician-owned hospitals who are referred by physicians with an ownership interest, as compared to patients referred to full-service community hospitals.

"Congress, in their wisdom, has ordered independent studies that will show the true benefit of competition," Lipomi says. "At the end of the day, the reality is that specialty hospitals pose no threat to the established hospital industry," he adds.