The AHA May 26 urged Congress to reject legislation aimed at loosening current restrictions on the growth of physician-owned hospitals.

“Physician self-referral is the antithesis of competition,” AHA Executive Vice President Rick Pollack wrote leaders of the House Ways and Means Committee. “It allows physicians to steer their most profitable cases to facilities they own – facilities that often call 9-1-1 to handle their emergencies and are frequently located in the most affluent areas.”

Pollack’s letter took aim at H.R. 2513, the “Promoting Access, Competition and Equity Act," which would loosen limits on expansion of physician-owned hospitals. Reps. Sam Johnson, R-Texas, and Ruben Hinojosa, D-Texas, introduced the bill last week.

Pollack said the legislation would promote neither access nor competition. “By cherry-picking the highest-paying procedures, physician-owners inflate health care costs and drain essential resources from community hospitals, which depend on a balance of services and patients to provide indispensable treatment, such as behavioral health and trauma care,” he stated. “By increasing the presence of these self-referral arrangements, H.R. 2513 would only further destabilize community care.”

The AHA reinforced the message when it joined seven other national hospital groups in writing the committee on May 27 to oppose H.R. 2513. In addition to the AHA, the letter was signed by America’s Essential Hospitals, the Association of American Medical Colleges, Catholic Health Association of the United States, Children’s Hospital Association, Federation of American Hospitals, Premier healthcare alliance, and VHA Inc. 

The AHA’s letter to Ways and Means came a week after AHA President and CEO Rich Umbdenstock called on Congress to preserve the five-year-old ban on physician self-referral to new physician-owned hospitals and restrictions on the growth of existing physician-owned hospitals.   “Conflict of interest is inherent in self-referral,” said Umbdenstock, who testified May 19 at a House Ways and Means Health Subcommittee hearing on improving competition in Medicare.

The 2010 Affordable Care Act banned physician self-referral to new hospitals in which the doctor has an ownership interest.  

In his testimony, Umbdenstock said physician-owned hospitals provide less emergency care and lead to use of more health care services and contribute to higher costs.

“To again allow for the proliferation of self-referral to physician-owned facilities would prove to be a giant step backward for both health care consumers and taxpayers,” Umbdenstock told the panel. “We urge you to reject efforts to change the carefully crafted compromise contained in law and help protect community hospitals and access to care for all who need it. Common sense changes in current law to allow providers to work more closely together would go much further toward fostering competition and improving health and health care.”

Specifically, he said the AHA recommends three statutory changes to enhance hospitals’ ability to improve health and health care: creating an Anti-kickback safe harbor for clinical integration programs; refocusing the Stark law on ownership arrangements; and standardizing the merger and review process between the two federal antitrust agencies.