Medicare Pay, Physician-Owned Hospitals Considered in Health Care Competition Hearings
By Emma Freer

Federal lawmakers recently considered several bills related to transparency and competition in the health care industry, including two that could alleviate Texas physicians’ long-standing concerns about inequitable Medicare payments and a prohibition on physician-owned hospitals.  

The Texas Medical Association, the Physicians Advocacy Institute (PAI), and others in organized medicine applauded the U.S. House Energy and Commerce Committee’s Health Subcommittee, which tackled the legislation during an April 26 hearing.  

“Physicians are encouraged by Congress’s willingness to discuss solutions that level the playing field for physician-led health care, which promotes affordable, high-quality care and a strong patient-physician relationship,” PAI Chief Executive Officer Kelly Kenney said in an April 26 statement. TMA CEO Michael Darrouzet is vice chair of PAI's board.  

The Health Subcommittee discussed draft legislation that would implement site-neutral Medicare payments, which TMA President-Elect Rick Snyder, MD, says is a meaningful step toward reforming the “broken system” of Medicare physician payment. 

“It is essential Congress take steps to pay physicians for the care they provide to vulnerable patients at the same rate as other health care entities like hospital outpatient clinics when they are performing the exact same service,” he said in an April 27 statement

PAI added the measure would help address increasing consolidation in health care – which has contributed to rising costs – while enabling private physician practices to remain viable.  

“This ‘site of service’ payment differential has created powerful incentives for large, well-financed hospitals to expand their outpatient services, a key aspect of hospital-driven consolidation,” PAI wrote in an April 26 news release.   

Nearly three-quarters – 73.9% – of U.S. physicians found themselves in employed positions by the start of 2022, up from roughly a quarter in 2012, according to a recent PAI survey

During the hearing, lawmakers also considered the Patient Access to Higher Quality Health Care Act (House Resolution 977) by U.S. Rep. Michael Burgess, MD (R-Texas), which would end a federal moratorium on physicians owning hospitals. 

Representative Burgess, an obstetrician-gynecologist in Lewisville who serves on the subcommittee, criticized the ban during the hearing.  

“Hospitals are buying doctors and yet doctors can’t buy hospitals,” he said. “It just fundamentally makes no sense.” 

Dr. Snyder echoed these concerns, saying the ban “has crippled patient access to timely and affordable care.”  

And PAI’s Ms. Kenney elaborated on the bill’s upsides during a period when many hospitals, especially those in rural and underserved areas, are at risk of closure.  

“Given a choice, many patients would opt for a hospital where physicians direct their care, rather than one guided by large, national corporations,” she said. 

PAI also cited several studies showing physician-owned hospitals:  

Both bills remain with the subcommittee. Find TMA’s comment letters to federal leadership on this topic and many others in TMA's Advocacy Center.  


Last Updated On

May 09, 2023

Originally Published On

May 09, 2023

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Emma Freer

Associate Editor

(512) 370-1383

Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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