Physician Self-Referral Ban Suggested in AHA Proposed Health Reform Package

The American Hospital Association (AHA) has sent a legislative health reform proposal to Congress recommending a number of significant changes including a renewed ban on physician self-referrals.

In the 13-page proposal, “Health for Life: Better Health. Better Health Care,” the AHA outlined a five-point plan to cover the uninsured through expansions in Medicaid and SCHIP programs, temporary COBRA insurance extensions and amendments to the Pension Protection Act. It also recommends:

  • health information technology loans and grants;
  • improving hospital access to capital by bolstering the Federal Housing Administration’s Section 242 Program, which insures hospital mortgage loans for hospital construction, rehabilitation and equipment projects;
  • legislative changes to increase the supply of nurses through grants to nursing programs and a nurse loan repayment program;
  • a temporary increase in the federal match to state Medicaid programs; and
  • the reversal of several federal regulations, such as payment cuts to teaching hospitals.

The most controversial proposal is the AHA’s renewed call for a ban on physician self-referral, which, if adapted, could doom a variety of popular delivery models such as physician-owned hospitals. Citing a conflict of interest, the hospital trade and lobbying organization said the ability for physicians to self-refer “needs to be addressed through legislative action.”

To support the proposal, the AHA describes a hospital industry racked by recession. Hospitals were hit by 15 percent interest rate hikes on bonds last year and many postponed planned expansions and equipment purchases while seeing an 8 percent increase in uncompensated care for the third quarter of 2008 compared to the same period in the previous year. At the same time, the ranks of the uninsured grew to 47 million, hospitals reported profit margins fell to a negative 1.6 percent versus a 6.1 percent positive margin the third quarter of 2007. More than half polled in an AHA survey planned to cut staff and one quarter said they would reduce services.

The AHA proposal is pushed by U.S. Reps. Robert Brady (D-Pa.) and Joe Wilson (R-S.C.).

Read the AHA health reform proposal (pdf).

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