Medicare Compliance & Reimbursement

Specialty hospitals will be in for a major overhaul of how they structure deals with physicians if legislation introduced April 1 works its way through Congress. Rep. Pete Stark (D-CA) - architect of the physician self-referral laws - and Rep. Jerry Klec-zka (D-WI) crafted the Hospital Investment Act of 2003 to put restrictions on physician ownership of specialty hospitals that typically limit their services to highly profitable areas such as cardiac care and orthopedic surgery. Stark and Kleczka worry that such facilities end up bleeding much-needed revenue from full-scale hospitals without providing the range of services most communities need. The legislation would permit physicians to refer patients to a hospital in which they have an ownership interest only if the interest was purchased on terms that were available to the public - a move designed to stifle what Stark calls "sweetheart deals" between hospitals and referring doctors. Violations would be punished by fines of up to $15,000 per referral and $100,000 per scheme. Lesson Learned: Specialty hospitals should brace themselves for a significant overhaul in the way they structure their businesses.