Disclosure of Specialty Hospital
Ownership | Prohibition of Referrals to Physician-Owned
Facilities | Restrictions on Referrals to Rural
Facilities | Ownership-Related Bills Stopped in Their
Tracks
Prior to the start of the 2005 legislation session, the Texas
Hospital Association (THA) announced it would aggressively advocate
restrictions on physicians' ability to own health care facilities,
including specialty hospitals, ambulatory surgical centers, and
imaging facilities. THA argued that physician ownership of
health-related facilities provides unfair competition to community
hospitals. The Texas Association of Business (TAB) joined THA in
its efforts. Together, the groups promoted six bills. Several
of the bills asked for an outright prohibition on referrals to
facilities in which a physician or family member had an ownership
interest, and penalized physicians. Others limited physician
referrals to those facilities.
TMA argued that competition in the health care market - not
monopolies - promotes lower costs, timely access to services, and
health care innovation. Studies conducted by Medicare Payment
Advisory Commission (MedPac) and the Centers for Medicare and
Medicaid Services (CMS) documented that specialty hospitals perform
comparably to community hospitals on quality. Numerous surveys also
have shown that patients enjoy the convenience of specialty
hospitals.
Many large hospital systems joined TMA in the fight restricting
physician ownership, noting that partnering with physicians creates
new opportunities for both parties to improve patient care and
lower costs. Moreover, specialty hospital issues are largely being
addressed at the federal level, where they are reformulating
reimbursement policies relating to specialty and community
hospitals to better account for the health care costs of high-risk
patients.
Sen. Jane Nelson (R-Lewisville) led the fight to promote health
care competition, filing SB 872. The TMA-backed bill requires
physicians to disclose their ownership interests in specialty
facilities and directs the Texas Department of State Health
Services (DSHS) to conduct a study regarding specialty hospitals.
Of the half-dozen bills billed filed, it was the only bill to
pass.
Disclosure of Specialty Hospital Ownership
SB 872 by Senator Nelson and Rep. Dianne Delisi (R-Temple)
amends the occupations code to expand the definition of
"unprofessional conduct" to include directing a patient to a
facility in which a physician or an immediate family member has an
ownership interest unless the physician has disclosed in writing
the ownership interest and informs the patient that he or she may
choose to have services provided at an alternate facility. The bill
also requires physicians with ownership interests to notify DSHS,
which must adopt rules relating to notification. A financial
interest in a specialty facility does not include ownership in
publicly traded shares, including mutual funds, or securities.
SB 872 also directs DSHS to conduct a study on the impact of
specialty hospitals on community hospitals, the referral patterns
of physicians with ownership interests in specialty hospitals, and
the range of services provided within such facilities, particularly
focusing on emergency services and charity care. DSHS must issue
its findings to the legislature by Dec. 1, 2006.
Lastly, SB 872 establishes an Advisory Panel on Health Care
Associated Infections, comprising physicians, nurses, and hospital
representatives, to study and recommend definitions and
methodologies for collecting and reporting data relating to
hospital infection rates, and process measures or infection rates.
The panel must present its recommendation to the legislature by
Nov. 1, 2006.
Prohibition of Referrals to Physician-Owned Facilities
HB 3316 by Rep. Betty Brown (R-Terrell) and SB 1622 by Sen. Jon
Lindsey (R-Houston) would have prohibited referrals to a
facility where there is ownership interest. The bill also provided
for a study relating to services that are provided in a hospital,
ambulatory surgical center, or imaging center and that are provided
by a physician with an ownership interest in the facility. A
facility would have been required to disclose the name of each
physician who has any ownership interest. The disclosure would have
been required to be: 1) posted prominently at the facility; 2)
provided to each patient before the patient receives services at
the facility; 3) stated in advertising, brochures, and similar
materials that publicize the facility; and 4) stated on any
Internet site maintained by the facility.
Restrictions on Referrals to Rural Facilities
HB 3317 by Representative Brown and SB 1241 by Sen. Frank Madla
(D-San Antonio) related to self-referrals made in rural areas
or in counties with 50,000 people or less. Had the bill passed,
health care providers would not have been able to refer patients
for designated health services to an entity:
Ownership-Related Bills Stopped in Their Tracks
Self-Referral Ban
House Bill 3281 by Rep. Senfronia Thompson (D-Houston) would have
banned physician self-referral to clinical labs, physical therapy
services, rehabilitation, diagnostic imaging services, and
radiation therapy services. The prohibition would have been in
effect for all services regardless of the payer. Any referrals to
facilities in which the physician had a financial interest would
have automatically been assumed to be fraudulent. TMA strongly
opposed the bill.
Prohibition of Referrals to Physician-Owned Facilities
HB 3316 by Rep. Betty Brown (R-Terrell) and SB 1622 by Sen. Jon
Lindsey (R-Houston) would have prohibited referrals to a
facility where there is ownership interest. The bill also provided
for a study relating to services that are provided in a hospital,
ambulatory surgical center, or imaging center and that are provided
by a physician with an ownership interest in the facility. A
facility would have been required to disclose the name of each
physician who has any ownership interest. The disclosure would have
been required to be: 1) posted prominently at the facility; 2)
provided to each patient before the patient receives services at
the facility; 3) stated in advertising, brochures, and similar
materials that publicize the facility; and 4) stated on any
Internet site maintained by the facility.
Restrictions on Referrals to Rural Facilities
HB 3317 by Representative Brown and SB 1241 by Sen. Frank Madla
(D-San Antonio) related to self-referrals made in rural areas
or in counties with 50,000 people or less. Had the bill passed,
health care providers would not have been able to refer patients
for designated health services to an entity:
- In which the health care provider or the health care
provider's immediate family member is directly or indirectly an
investor or has an investment interest; and
- Which is located within a 30-mile radius of a hospital that
is:
a) Located in a county with a population of 50,000 or less,
b)Designated as a critical access hospital, or
c)Designated as a sole community hospital.
Physician Ownership TMA Staff Contacts:
- Yvonne Barton, Legislative Affairs, (512) 370-1359
- Helen Kent Davis, Governmental Affairs, (512) 370-1401
- Michael Reed, Health Care Delivery, (512) 370-1409
- Lee Spangler, JD, Office of the General Counsel, (512)
370-1337
Overview
|
Tax Reform
|
Scope of Practice
|
Inadequate Health Plan Networks
(Balanced Billing)
|
Managed Care/Insurance Reform
|
Texas State Board of Medical
Examiners Sunset and Physician Licensure
|
Agency Sunset Review
|
Corporate Practice of Medicine
|
Health Care Funding
|
Medicaid and CHIP
|
Indigent Care and the
Uninsured
|
Workers' Compensation
|
Professional Liability Reform
|
Medical Education/Workforce
|
Child Health, Safety, and
Nutrition/Fitness
|
Public Health
|
Border Health
|
Rural Health
|
Mental Health
|
Trauma/EMS
|
Prescription Drugs
|
Medical Science
|
Long-Term Care
|
Abortion
|
Transplantation/Organ Donation
|
Table of Contents