FAH Hospital Policy Blog

Perspectives on health policy affecting America's hospitals and the patients we serve.

FAH Policy Blog Team

FAH Opposes Bill That Would Allow Patient Cherry-Picking at Physician-Owned Hospitals

Today, FAH and American Hospital Association (AHA) sent a letter to every U.S. Senator urging them to oppose any legislation that would repeal the part of the Affordable Care Act that limits self-referral to physician-owned hospitals (POHs).

Recently, Sen. James Lankford (R-OK) reintroduced The Patient Access to Higher Quality Health Care Act of 2019 (S. 2860), which seeks to repeal the ACA’s limit on self-referral to physician-owned hospitals. Repealing this ban would lead to these facilities cherry-picking patients and increasing health care costs on taxpayers.

The letter cites a study by Dobson | DaVanzo to highlight the harmful effects this practice has had on the hospital industry, including that POHs treat fewer medically complex patients as well as enjoy margins nearly three times those of non-POHs.

The FAH/AHA joint letter states, “The empirical record is clear that these conflict-of-interest arrangements of hospital ownership and self-referral by physicians result in cherry-picking of the healthiest and wealthiest patients, excessive utilization of services, and patient safety concerns.”

The letter urges the Senate to reject any legislation that would weaken the current law.

You can find the complete letter here.

Back in June, the companion House bill (H.R. 3062) was introduced by Rep. Michael Burgess, M.D. (R-TX), Ranking Member of the Energy and Commerce Subcommittee on Health and Rep. Vicente Gonzalez (D-TX). This bill is similar to the legislation introduced by former Rep. Sam Johnson (R-TX) in previous Congresses.