May 14, 2009
CMS, in the FY 2008 and FY 2009 IPPS regulations, finalized changes relating to hospitals serving Medicare/Medicaid beneficiaries that require such hospitals and their physician owners to disclose physician ownership information to patients. The disclosure requirements become effective June 8, 2009.
The requirements require disclosure by the hospital and by the physician. The hospital must furnish written notice to each patient at the beginning of the patient's hospital stay or outpatient visit that the hospital meets the Federal definition of a "physician-owned hospital" and that the list of physician owners or owners who are immediate family members of physicians is available upon request. For purposes of this requirement, the hospital stay or outpatient visit is deemed to begin with the provision of a package of information regarding scheduled preadmission testing and registration for a planned admission/service. The specific requirement is as follows:
"To furnish written notice to each patient at the beginning of the patient's hospital stay or outpatient visit that the hospital is a physician-owned hospital, in order to assist the patient in making an informed decision regarding his or her case, in accordance with Sect. 482.13(b)(2) of this subchapter. This notice should disclose, in a manner reasonably designed to be understood by all patients, the fact that the hospital meets the Federal definition of a physician-owned hospital specified in Sec. 489.3 and the list of the hospital's owners or investors who are physicians or immediate family members (as defined at Sec. 411.325 of this chapter) of physicians is available upon request and must be provided to the patient at the time the request for the list is made by or on behalf of the patient. For purposes of this paragraph (u) (1), the hospital stay or outpatient visit begins with the provision of a package of information regarding scheduled preadmission testing and registration for a planned hospital admission for inpatient care or an outpatient service."
The hospitals must also require that each physician owner who is a member of the hospital's medical staff agree, as a condition of continued medical staff membership, to disclose in writing to all patients referred to the hospital that he or she (or an immediate family member) holds an investment interest in the hospital. Disclosure by the physician must be made at the time of the referral. The specific requirement is as follows:
"To require each physician who is a member of the hospital's medical staff to agree, as a condition of continued medical staff membership or admitting privileges, to disclose, in writing, to all patients the physician refers to the hospital any ownership or investment interest in the hospital that is held by the physician or by an immediate family member (as defined at Sec. 411.351 of this chapter) of the physician. Disclosure must be required at the time the referral is made."
CMS may deny a provider agreement to a hospital that does not have procedures in place to notify patients of physician ownership in the hospital. Likewise, CMS may terminate a provider agreement with a physician-owned hospital if the hospital fails to comply with the disclosure and medical staff requirements above. The regulation also requires disclosure if a physician is not always on the premise. Here, the specific requirement is as follows:
"In the case of a hospital as defined in Sec. 489.24(b), to furnish written notice to all patients at the beginning of their hospital stay or outpatient visit if a doctor of medicine or a doctor of osteopathy is not present in the hospital 24 hours per day, seven days per week, in order to assist the patients in making informed decisions regarding their care, in accordance with Sec. 482.13(b)(2) of this subchapter. The notice must indicate how the hospital will meet the medical needs of any patient who develops an emergency medical condition, as defined in Sec. 489.24(b), at a time when there is no physician present at the hospital. For purposes of this paragraph, the hospital stay or outpatient visit begins with the provision of a package of information regarding scheduled preadmission testing and registration for a planned hospital admission for inpatient care or outpatient services."
To prepare for the June 8th effective date, physician-owned hospitals should:
- Prepare a notice of ownership disclosure that would be included in the patient admissions materials and also could be posted on the wall of the waiting room or other public area of the hospital notifying patients that it is physician-owned. Such notice should either a) list the physician owners by name or b) notify patients that they may request the list of individual physician owners. A sample disclosure form that maybe used both in admissions material and as a wall sign utilizing option "a" is can be found by clicking here (.doc).
- Notify its physician owners of the requirement that the individual physicians must disclose in writing their ownership in the hospital to patients at the time of the referral and that their compliance with this requirement is a condition for continued medical staff privileges. The hospital should also amend its medical staff bylaws to require such disclosure.
- Periodically require physician owners to confirm that they are abiding by the disclosure requirements.
If you have any questions about the disclosure requirements please contact Scott Becker at (312) 750-6016 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Amber Walsh at (312) 750-3596 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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