Congress chose not to include language on physician ownership in either the large stimulus package or the omnibus appropriations bill that just passed the House and will be taken up by the Senate next week. By so doing, Congress has provided PHA members more time to work the issue.

Now that these possible threats are behind us, PHA is turning its attention to the possibility of threats in a Medicare package (rumored to be up for consideration this June or later), as well as other new challenges…

Yesterday, President Barack Obama released a summary of his fiscal year 2010 budget and included physician owned hospitals in a larger package of Medicare spending cuts and policy changes. As part of the Administration's proposals to promote "efficiency and accountability" in Medicare, the budget proposes addressing "financial conflicts of interest in physician-owned specialty hospitals." (click here or click here to view the 4 pages that pertain to Health and Human Services) The budget did not assign a score to the provision, nor did it discuss in any detail how the President would accomplish this goal, whether through legislative or regulatory action. More complete budget documents will be released over the next several weeks, shedding further light on this provision. In the meantime, PHA will gather as much intelligence as possible to mount a response to this action.

The budget announcement is only the first step in a long sequence of events that must take place before any final legislative action. Once the complete budget has been sent to Congress, the Congressional Budget Committees will develop the Congressional Budget Resolution which will then guide the work of the other Committees. The resolution may include specific instructions to Committees on a number of policy changes, including this one. At this point it is not clear how the Budget Committees will handle the issue of physician ownership, since they are not bound by the Administration's proposals. However, including this provision in the budget adds a new element of complexity to PHA's tasks in Washington.

Placing the recommendation in the Medicare portion of the President's budget suggests that the next stage in the fight over physician ownership of hospitals will be in the context of Medicare legislation which, as I noted earlier, will most likely be taking shape over the next several months. We do not yet know if Medicare will get wrapped into a larger health reform package or be considered on its own. There are still many unknowns in the legislative process on health and budget issues, but PHA will provide information as it becomes available.

Even though the President has included physician ownership in his budget, ultimately it is Congress that will decide what changes are made to Medicare. This means that it is very important to keep working with both Democrats and Republicans in Congress to influence the final decisions.
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