Physician Law : Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

According to the Congressional Budget Office (CBO), the Chairman’s mark for the Healthy Futures Act of 2009 proposed by Senator Max Baucus will be paid for, in part, through a reduction in Medicare payment rates.  Specifically, according to a blog post by the CBO,  the legislation would "substantially reduce the growth of Medicare’s payment rates for most services". 

The CBO also acknowledges that it's estimated cost projections is based on the proposed legislation and legislation currently in effect such as the current Sustainable Growth Rate system pursuant to which physicians are already scheduled to see a major reduction in Medicare reimbursement.  Lower reimbursement means physicians will likely need to see more patients (the bill would result in an estimated 29 million more insured patients) than they are currently seeing to generate the same revenue.  

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The original Stark II regulations included an 18 month moratorium on an exception to Stark that would have permitted physician to invest in specialty hospitals. Since expiration of that moratorium some physicians seeking more control over their practice environments have embarked on a mission to develop specialty hospitals as an alternative to the traditional acute care hospital setting.  However, hospital groups and certain legislators have also (unsuccessfully so far) attempted to ban physician ownership in these hospitals permanently. 

Efforts to ban physician ownership in these hospitals continue and in fact, if passed, the health care reform bill proposed by the Senate Finance Chairman, Max Baucus, would effectively prohibit physician ownership of specialty hospitals unless those hospitals had a Medicare Provider Agreement in place on November 1, 2009. This means that physicians who have invested money in hospitals that are under development could expect to lose their entire investment.

Support for Mr. Baucus’s ban on physician ownership in hospitals would appear, however, to not be unanimous in the Senate, according to a September 15, 2009 letter from Senator Diane Feinstein to Mr. Baucus.  In that letter, Ms. Feinstein states that “as the federal government continues to spend hundred of billions of dollars in federal funds to create jobs and stimulate the economy, it is nonsensical to approve legislation that will force ongoing construction on desperately needed projects to come to a halt.” Ms. Feinstein concludes her letter by requesting that Mr. Baucus consider changes to his proposed legislation that will allow facilities currently under construction to be brought to completion.

Physicians concerned about these developments should contact their representatives and professional societies.

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