Medicare Compliance & Reimbursement

Government likely to extend moratorium on payments for new physician-owned hospitals.

Do some physician-owned specialty hospitals have racist patient-acceptance policies?

While they made no outright accusations, a trio of representatives in the House thinks the issue deserves some more government investigation. The representatives also feel that until the government gets more information on physician-owned specialty hospitals, the Medicare and Medicaid payment moratorium for new physician-owned facilities should stand.

In a letter dated July 28 to Centers for Medicare and Medicaid Services Administrator Mark McLellan, reps. John Lewis (D-GA), Charles Rangel (D-NY) and Pete Stark (D-CA) asked CMS to investigate the racial makeup of patients in specialty hospitals owned by doctors, according to a report from the Kaiser Family Foundation.

The three charge that facilities may be more likely to accept white patients than minority patients, because facilities may view white patients as more profitable. MedPAC Report Riles Reps The representatives began fretting over the facilities after receiving the findings of a May analysis of physician-owned specialty hospitals, prepared by the Medicare Payment Advisory Commission for the Senate Finance Committee. According to the analysis, among patients discharged from cardiac specialty hospitals in 2002:
   92.1 percent were white;
   3.6 percent were black;
  1.7 percent were Latino; and
  2.6 percent were classified "other." The report also says that during the same span, among discharged cardiac patients from community hospitals:
   85.2 percent were white;
   9.6 percent were black;
   2.2 percent were Latino; and
   3.1 percent were classified "other." In their letter, the representatives suggest "possible discrimination based on ethnic or racial factors may be prevalent in the physician-owned specialty hospital industry." CMS should continue the moratorium on paying Medicare and Medicaid claims for new physician-owned specialty hospitals "until this analysis is complete and these questions are satisfactorily answered and resolved," according to the representatives.

The moratorium, which was slated to expire in June, has been Medicare law since 2003. However, CMS has made some administrative maneuvers that will likely extend that date until at least New Year's Eve.