AHA president testifies against physician self-referral

Rich Umbdenstock, president and CEO of the American Hospital Association (AHA), testified at a House Ways and Means Health Subcommittee hearing this week, speaking out against the practice of self-referral. The hearing sought ways to improve competition in Medicare and Umbdenstock took the opportunity to urge legislators to maintain the ban on physician self-referral to physician-owned specialty hospitals and to limit their growth.

“We are strongly opposed to the practice of self-referral, which skews the marketplace in favor of physician owners who self-refer the healthiest and wealthiest patients to their own facilities,” Umbdenstock said in his testimony.

The  Ethics in Patient Referrals Act, commonly referred to as the “Stark Law,” currently places certain limitations on physician referrals. One famous exception to the Stark Law is the “whole hospital” exception, which permits physicians to refer patients to hospitals the physician has an ownership stake in as long as that stake is in the entire hospital and not a specific subdivision. In 2010, Congress updated the whole hospital exception, saying it was only allowed for existing physician-owned hospitals that had a Medicare provider number as of Dec 31, 2010.

There has been a push recently to loosen many of the Stark Law’s restrictions, including the whole hospital exception, and Umbdenstock says the AHA opposes all such changes. One bill he calls out by name is H.R. 976, the Patient Access to Higher Quality Care Act, which was introduced in 2015 by Rep. Sam Robert Johnson (R-Texas).

“The AHA opposes any changes that would expand use of the whole hospital exception beyond grandfathered hospitals or that allow grandfathered hospitals to expand or increase their capacity beyond what is allowed in current law,” Umbdenstock said.

During his testimony, Umbdenstock presented three AHA-supported recommendations for changing the current healthcare system to the benefit of hospitals: “creating an Anti-kickback safe harbor for clinical integration programs; refocusing the Stark law on ownerships arrangements; and standardizing the merger and review process between the two federal antitrust agencies.”