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Specialty hospitals spared

This article was originally published in The Gray Sheet

Executive Summary

Updated analysis in the Medicare Payment Advisory Commission's August Report to Congress shows "growth rates of angioplasties and defibrillator implantation when measured separately are not significantly higher in markets with physician-owned cardiac hospitals," and the facilities have no significant effect on the ratio of low- to high-severity cases performed (1"The Gray Sheet" April 24, 2006, p. 6). A moratorium on Medicare enrollment of physician-owned specialty hospitals, in effect since 2003, ended Aug. 8 with CMS' release of its own report to Congress. "We do not believe that a continuation of the suspension is warranted," the report states, and "we are not recommending legislative action at this time" to curtail physician ownership of the facilities. CMS is refining the hospital inpatient and ambulatory surgical center payment systems to prevent skewed practice patterns by reducing incentives for physician owners to self-refer the most profitable patients. Cardiac specialty hospitals will see an aggregate reduction of 5% in their payment weights in 2009 when the new cost-based weights for inpatient payments are fully adopted (2"The Gray Sheet" Aug. 7, 2006, p. 3)...
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