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Understanding the “whole hospital exception” to the Stark laws
By Dr. David Edward Marcinko MBA CMP®
www.CertifiedMedicalPlanner.org
This was a big week for healthcare reform, wasn’t it? Some provisions of the PP-ACA requiring the employer mandates were delayed another year; until January 1, 2015.
But, before passage of the ACA in 2010, the “whole hospital exception” to the Stark law allowed physicians to have an ownership interest in a hospital to which those physicians refer patients, provided the physician is invested in the whole hospital and not a subdivision of the hospital, with no limitations as to the amount or extent of physician ownership, on either an aggregate or individual basis.
Prohibitions
Now, according to colleague Robert James Cimasi MHA, AVA, ASA, MCBA, CMP®, of www.HealthCapital.com, The ACA completely prohibits physician-owned hospitals which were not Medicare-certified by December 31, 2010.
[1] The ACA allows hospitals with a provider agreement prior to December 31, 2010 to continue Medicare participation if they meet the following four criteria: (1) located in a county with a population growth rate of at least150% the state’s population growth over the last 5 years; (2) have Medicaid inpatient admission percentage of at least the average of all hospitals in the county; (3) located in a state with below-national-average bed capacity; and, (4) have bed occupancy rate greater than state average. [2]
Grandfathered
A very limited number of physician-owned hospital existing in 2010 met or were close to meeting all 4 of criteria.[3] The Reconciliation Act provided a limited exception to the ACA growth restrictions for grandfathered physician owned hospitals that treat the highest percentage of Medicaid patients in their county (and are not the sole hospital in a county).[4]
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Assessment
Based on these provisions, the 2010 healthcare reform legislation will likely have a considerable negative impact on physician-owned hospitals, in terms of impeding development of new hospitals and expansion of existing hospitals.
Conclusion
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OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
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Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Hospitals: http://www.crcpress.com/product/isbn/9781439879900
Physician Advisors: www.CertifiedMedicalPlanner.org
[1] “Section-by-Section Analysis with Changes Made by Title X and Reconciliation included within Titles I-IX,” Democratic Policy Committee, http://dpc.senate.gov/healthreformbill/healthbill96.pdf (Accessed 5/24/2010).
[2] “Section-by-Section Analysis with Changes Made by Title X and Reconciliation included within Titles I-IX,” Democratic Policy Committee, http://dpc.senate.gov/healthreformbill/healthbill96.pdf (Accessed 5/24/2010).
[3] “Healthcare Reform: A Brief Analysis on How it Impacts ASCs and Physician-OwnedHospitals – 10 Observations”, By Scott Becker, Leigh Page, and Rob Kurtz, Becker’s Hospital Review, http://www.beckersorthopedicandspine.com/news-a-analysis/legal-a-regulatory/1193-healthcare-reform-abrief- analysis-on-how-it-impacts-ascs-and-physician-owned-hospitals-10-observations (Accessed 5/20/10).
[4] “Section-by-Section Analysis with Changes Made by Title X and Reconciliation included within Titles I-IX,” Democratic Policy Committee, http://dpc.senate.gov/healthreformbill/healthbill96.pdf (Accessed 5/24/2010).
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Filed under: CMP Program, Health Economics, Practice Management | Tagged: ACA, CMP, Dr. David Marcinko, physician owned hospitals, Reconciliation Act, robert james cimasi, Stark law, www.CertifiedfMedicalPlanner.org | 2 Comments »
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